Winding-up examination powers: court may summon persons with relevant information and control the scope of questions during enquiry.

In winding-up proceedings, section 195 of the Indian Companies Act, 1913 permits the court to summon persons likely to provide information about the company's trade, dealings, affairs or property. The court may exercise this discretion where the materials show that the persons summoned can give relevant evidence, and that discretion will not be disturbed unless arbitrary or capricious. The scope of examination and the questions to be asked remain under the control of the winding-up court, which must confine the enquiry to what is necessary for the winding up and avoid oppressive use of the power. The application was maintainable, and the court was not required to settle the questions in advance of examination.

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Issues: Whether the application under section 195 of the Indian Companies Act, 1913 was maintainable and whether the court could be asked to define in advance the questions to be put to persons summoned for examination in the winding-up proceedings.

Analysis: Section 195 empowers the court, after a winding-up order, to summon persons whom it considers capable of giving information concerning the trade, dealings, affairs or property of the company. On the facts placed before it, the court was justified in treating the appellants as persons likely to furnish relevant information about the debenture trust deed, hypothecation, possession of the receiver, sale of the company's properties and the disposition of sale proceeds. The discretion exercised was neither arbitrary nor capricious. The extent of examination and the questions to be asked fall within the control of the winding-up court, which must confine the enquiry to what is necessary for the winding up and ensure that the power is not used oppressively.

Conclusion: The application was maintainable, and the court was not required to settle the questions in advance of examination.

Final Conclusion: The order summoning the appellants for examination in aid of the winding-up was upheld, and the appeal failed.

Ratio Decidendi: In winding-up proceedings, the court may summarily summon persons capable of giving relevant information, and the scope of their examination lies in the court's discretion so long as the enquiry is confined to purposes of the winding up and is not oppressive.

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