Mehar Singh, J. ( 1 ) IN this appeal undersection 10-D of the Companies Act, 1956 (Act 1 of 1956 ). hereinafterto be referred as the Ac, by Sushil Kumar Sanghi appellant from theorder, dated 26/11/1964, of the Companies Tribunal made undersection 240, read with section 10-A (1) (b), of the Act accepting theapplication made by the respondent, Mr. R. R. Kini, who has been appointed as Inspector by the Central Government to investigate into the affairsof Asia Udyog (Private) Limited, hereinafter to be referred as the Udyog ,company under section 235 (e) of the Act, and ordering the appellant toanswer such questions as may be put to him by the petitioner (respondent)with regard to the affairs of the Udyog Limited from and after 13th Febuary1953, the main question for consideration is whether the appellant is oris not entitled, in the facts and circumstances of the case, to protectionof Article 20 (3) of the Constitution, which says that no person accused orany offence shall be compelled to be a witness against himself. ( 2 ) ON report by the Registrar of Companies, Delhi, under sub-section (6) of section 234 of the Act concerning the affairs of the Udyogcompany, the Central Government being of the view that it was desirablethat inspectors bo appoint"d to investigate into affairs of that company and toreport thereon, it, by notification No. 2 (9)-CL I/62, of 19/04/1963. appointed Mr. R. R. Kini (respondent), Legal Adviser, and Mr. S. M. Dugar Senioraccounts Officer, in the department of Company Law Administration, as Insoectors t investigate into the affairs of that company for the period from 1/01/1953, to date and even for the period prior thereto, should theinspectors, consider necessary to do so, and to report thereon pointing outinter alia all irregularities and contraventions in respect of the provisionsof the Act or of the Indian Companies Act, 1913, or ofany other law for the time being in force and the person or persons whoare responsible for such irregularities and contraventions. The Inpectorswere to complete their investigation and make he report within threemonths from the date of the notification, but as that was not possible,that time was extended from time to time. ( 3 ) IT was Mr. R. R. Kini alone, who took up the investigation ofthe Udyog Company. The appellant was asked to appear before him on 16/07/1964, which he did.
( 3 ) IT was Mr. R. R. Kini alone, who took up the investigation ofthe Udyog Company. The appellant was asked to appear before him on 16/07/1964, which he did. and on that day a part of his statement wasrecorded. On the next day. that is to say on 17/07/1964, when theappellant appeared again to continue his statement, he moved two applications objecting to being questioned by the Inspector, which applicationswere dismissed on 31/07/1964. The appellant was to appear before theinspector on 13/08/1964 to continue his statement, but on August13 he wrote informing the Inspector that he was not going to appear anyfurther before him. This he seems to have also conveyed to him orally. ( 4 ) ON that the Inspector moved an application before the Tribunalunder sub-section (3) of section 240, read with section 10-A (1) (b), ofthe Act certifying the refusal of the appellant to appear before him andto answer the questions in the investigation of the affairs of the Udyog Company. The appellant raised a large number of objections before the Tribunal to that application of the Inspector. The Tribunal repelled allthe objections and made an order as already stated above. In this appealby the appellant it is that order of the Tribunal which is being questioned. A charge-sheet is pending in a criminal case against the appellantalong with a number of others in the Court of the District Magistrate ofdelhi in connection with conspiracy to commit criminal, breach of trustinregard to the funds of Dalmia Jain Aviation Limited of which theappellant was one of the dirctors and for commission of various offencesin pursuance of the conspiracy. A copy of the charge-sheet is annexure r. 2 in which there are a number of charges for offences under section120-B, read with section 409, and sections 409, 465, 467 and 477-A of thepenal Code. Items 3 and 36 in the charge-sheet concern the appellant. those items are- "3. Investigations made by me have revealed that a criminalconspiracy having for its objects the commission of the criminal breachof trust of the funds and assets of Dalmia Jain Airways Limited, Delhi,and the offences for forgery and falsification of accounts came intobeing in or about 1946 at Delhi and continued to exist till 1953, duringwhich period its ramification spread over other places in India. Allthe accused mentioned above were parties to the criminal conspiracy. 36. On 25-3-195.
Allthe accused mentioned above were parties to the criminal conspiracy. 36. On 25-3-195. 3 the Board of Directors of Dalmia Jain Aviationlimited consisting of R. Sharma (since dead), S. K. Sanghi accusedno. 18, G. Ramachandran accused No. 19, authorised S. N. Dudaniaccused No. 15 to dispose of the records of Dalmia Jain Airwayslimited and all the important and incriminating records were doneaway with. "it is said that previously the name of the Udyog Company wasralmia Jam Aviation Limited. One of the allegations against the accusedpersons, including the appellant, in that case is said to be that the fundsof Dalmia Jain Airways Limited were siphoned away through Dalmia Jainaviation Limited, now the Udyog Company, and then the offence of breachof trust of the funds and assets of Dalmia Jain Airways Limited wascommitted by the accused persons. The learned counsel for the appellanthas urged that the object of the questions in the investigation by theinspector has been to show inter-connection between Dalmia Jain Airways Limited and Dalmia Jain Aviation Limited so as to bring intopicture the offence of misappropriation of funds and assets of Dalmia Jainairways Limited by among others the appellant. He then points outthat answers so obtained from the appellant can be used as evidenceagainst him under sub-section (5) of section 240 of the Act, which is inthese terms- Notes of any examination under sub-sections (2) or (4)shall be taken down in writing and shall be read over to or by, and signedby, the person examined, and may thereafter be used in evidence againsthim . The learned counsel stresses that the nature of the questions thatwere being asked from the appellant by the Inspector revealed intimateand direct connection between the subject-matter of the prosecution that ispending against the appellant in the Court of the District Magistrate andthe nature of the investigation that is being conducted by the Inspector,in this way the appellant was placed in a situation in which he was beingcompelled to answer questions, the answers to which would incriminatehim for offences in the pending criminal case against him and would beavailable as evidence against him under sub-section (5) of section 240 ofthe Act. What the learned counsel has urged is that there has beencontravention of sub-article (3) of Article 20. This in substance is themain contention on the side of the appellant in this appeal.
What the learned counsel has urged is that there has beencontravention of sub-article (3) of Article 20. This in substance is themain contention on the side of the appellant in this appeal. No questionwas placed before the Tribunal, and none has been placed before thiscourt, that the Inspector asked the appellant to show thebearing of anysuch question on the charges against the appellant in the criminal casepending against him before the District Magistrate. Obviously in theabsence of the form and nature of the question objected to it is next toimpossible to reach a conclusion whether or not it may have any connection with that prosecution and tends to be an incriminating question foroffences subject-matter of that prosecution or for that matter of any otheroffence. The appellant gave answers to all questions before the Inspectoruntill before his refusal to continue with his statement. To that stage hetook no objection to the nature and character of the questions. Thelearned counsel for the appellant has pointed out that the appellant wasunrepresented by a legal adviser before the Inspector and he was not in a. position to take such a technical objection to the nature and character ofthe questions that were being put to him. It is said that there has been:a refusal on the part of the Inspector to allow the appellant legal aid ofa counsel. But the learned Additional Solicitor. General has stated atthe bar that there would be no objection by the Inspector to the presenceof a counsel for the purpose of aiding and advising the appellantto raise objections to the incriminating nature and character of anyquestion put to him. But of course such assistance will only be confinedto such advice. The learned counsel for the appellant has further referredto the final order made by the Tribunal that the appellant will answer suchquestions as may be put to him by the Inspector with regard to the affair ofthe Udyog Company and he says that in this there is no reservation that thequestions are to be subject to the limitation as in sub-article (3) of Article20. This, however, is an approach without substance because everytribunal which has the power to examine a person in any connection mustkeep in view the provisions of that Article.
This, however, is an approach without substance because everytribunal which has the power to examine a person in any connection mustkeep in view the provisions of that Article. Merely because the Tribunalhas not made reference to that Article in the closing sentences of its orderdoes not mean that the Inspector is not to have regard to the provisionsof that Article. As has been pointed out there was no specific questionbefore the Tribunal with regard to which it could consider the applicability or otherwise of sub-article (3) of Article 20. A vague allegation wasmade before it that the questions that were likely to be put to the appellant would have the tendency to contravene that Article, but apparentlythe Tribunal could not possibly have taken note of any such vague allegation and passed an effective order. What was contended before it,and has been reiterated here, is that in view of the pending prosecutionof the appellant in the criminal case before the District Magistrate, theinvestigation by the Inspector be stopped altogether because its ramifications are likely to almost cover the same field as that prosecution. Thisagain is vague and it has not been shown how that is so. It has beensaid that copies of a large number of documents have been given to theaccused persons in that criminal case and a very large number of witnessesare cited and it is not practical for the appellant to state in definite detailwhat aspect of the prosecution in that criminal case is parallel to what partof the investigation before the Inspector. This surely in itself gives a replyto the argument of the learned counsel for the appellant that the Tribunalcould not possibly have made a blanket order stopping the enquiry onsuch a vague approach upon which it is impossible to bring to bear sub-article (3) of Article 20. There is no manner of applying that Articleexcept to something specific and definite from which it can be made outthat what is being sought from the party will provide evidence of an incriminating nature against him. Particularly is this so with regard to anoral statement that a party, as the appellant in this appeal, is required tomake under the law.
There is no manner of applying that Articleexcept to something specific and definite from which it can be made outthat what is being sought from the party will provide evidence of an incriminating nature against him. Particularly is this so with regard to anoral statement that a party, as the appellant in this appeal, is required tomake under the law. The learned counsel for the appellant has then suggested that the Inspector should prepare a list of questions before-hand andgive the list to the appellant to enable him to know which questions arelikely to incriminate him so that he may object to the same and maynot give answers. This is an extraordinary suggestion, for no investigation can possibly be conducted in this manner. It is not possible for theinspector to prepare a list of questions for an obvious reason that the runof the questions will depend to a very great extent upon the manner inwhich the answers are given and the information sought in question issupplied. The learned counsel has also made reference to certain parts ofthe Report of the Commissioner of Inquiry, commonly known as Bosecommission Report, and in it reference to Dalmia Jain Aviation Limited,the previous name of the Udyog Company, at pages 366, 417 and 419. The object of this has been that there has already been some kind of investigation with regard to the Udyog Company when its name was Dalmiajain Aviation Limited. It has not been quite clear how any reference tothat Company in the Report of the Bose Commission affects the powerof the Central Government under section 235 of the Act to appoint Inspectors to investigate the affairs of the Udyog Company or the jurisdictionof the Inspector to do so under the succeeding provisions of the Act. Itis thus clear that there is nothing in the present case upon which sub-article (3) of Article 20 can operate and it cannot possibly be applied toa vague allegation that the investigation that is being conducted by theinspectors may have some bearing or is likely to have bearing on certainaspects of the prosecution in the criminal case pending before the Districtmagistrate against the apellant, without saying definitely what aspect orwhat material of that case is being made subject-matter of the questioningin the present investigation.
The Tribunal because of section IO-A (I) (be)exercises the powers of the Court under section 240 of the Act and therelevant sub-section is sub-section (3 ). For the present purpose this muchof it is material ; If any such persons fails without reasonable cause orrefuses- (b) to appear before the Inspector personally when required todo so under sub-section (2) or to answer any question which if put to himby the Inspector in pursuance of that subsection, the Inspector may certifythe failure or refusal under his hand to the Court and make an applicationto the Court to hold an enquiry into the case ; and the Court may, thereupon, after taking such evidence, if any, as may be produced against or onbehalf of the alleged offender and hearing his explanation, if any, make anorder for the production by him before the Inspector of all such books orpapers within a date to be specified in the order or requiring such personto answer any question which may be put to him by the inspector. It isevident that in the facts of the present case the Inspector could only certifythe refusal of the appellant to appear before him personally and to answerany question which is put to him," and the Tribunal could only ordertheappearance of the appellant and require him, to answer any questionswhich may be put to him by the Inspector. This is, the limitation of thejurisdiction of the Tribunal. It could either direct the appellant to answerany questions put to him by the Inspector or dismiss the application ofthe Inspector with regard to any particular question or questions. Butunder this provision it has no jurisdiction to stop an investigation orderedby the Central Government under section 235 of the Act. This Court hasno power to do so either, hearing an appeal from the order of the Tribunal. ( 5 ) IT has then been further contended by the learned counsel forthe appellant that the tribunal, in spite of the application of the appellantin this behalf, did not take any evidence in support of the position takenby the appellant in reply to the application of the Inspector.
( 5 ) IT has then been further contended by the learned counsel forthe appellant that the tribunal, in spite of the application of the appellantin this behalf, did not take any evidence in support of the position takenby the appellant in reply to the application of the Inspector. When askedwhat possible type of evidence had the appellant in mind when making suchan application, the learned counsel has in, the face of the vague allegationsdetailed above, had to fall back into saying that the appellant would haveled evidence connected with the criminal case pending against him in thecourt of the District Magistrate, but the Tribunal could not be turned intosomething like a parallel Court trying the same thing as the Districtmagistrate has to try in that case. This approach on the facts is entirelymisconceived. In the face of the vagueness of the allegation on the side ofthe appellant that the questions which the Inspector will put to him, without knowing what questions the Inspector will put to him or what willbe the trend of those questions, would be likely to incriminate him, it wasquite impossible for the appellant to lead any evidence with regard to the same or for the Tribunal to permit the appellant to do so. The only manner inwhich evidence could have been attracted and even for that matter sub-article (3) of Article 20 could come into consideration was to deal withspecific and definite questions when put by the Inspector to the appellant. As a question is put and if sub-article (3) of article 20 is attracted, anobjection can be taken to a question and then the objection can be followedup. It has already been pointed out that the learned Additional Solicitor-Genral has said that the Inspector will allow the facility of the presenceof a legal adviser to the appellant to help him to know whether such an,objection ought or ought not to be raised with regard to a. particularquestion. ( 6 ) ANOTHER argument urged by the learned counsel on behalf of theappellant is that the Inspector, Mr. R. R. Kini, is a legal Adviser in thecompany Law Administration, and it is against principles of naturaljustice that an employee in the Company Law Administration and a Legaladviser to the Registrar of Companies should be conducting the investigation.
( 6 ) ANOTHER argument urged by the learned counsel on behalf of theappellant is that the Inspector, Mr. R. R. Kini, is a legal Adviser in thecompany Law Administration, and it is against principles of naturaljustice that an employee in the Company Law Administration and a Legaladviser to the Registrar of Companies should be conducting the investigation. This is a rather astounding argument because all investigations, are onthe side of the Government by and large conducted by Government Officials orgovernment agencies and it is not clear how any principle of natural justiceintervenes to stop such investigations. The argument is, to say the least,without any basis. The last argument urged by the learned counsel is that while thenotification appointing two Inspectors to carry on the investigation jointlyor severally, but only one Inspector has done so, and that one Inspectorcould not conduct either the investigation or approach the Tribunal as hehas done. The learned counsel is of the opinion that both the Inspectorsmust have acted in unison and as a body. This is obviously incorrect, forthere would be no point in empowering them to carry out the investigationjointly and severally if every time they are compelled to act jointly. Theobject of thus appointing two Inspectors with power to conduct theinvestigation jointly and severally is apparent that each one of the Inspectors may be able to carry on a part of the investigation by himself ona particular aspect of the affairs of the company. So that nothing turnsupon this argument. ( 7 ) THERE were, as stated, a num er of other arguments before thetribunal, none of which has been urged at the hearing here, and all thearguments that have been urged have been found to be unsound andunsupportable. This appeal fails and is dismissed with costs. ( 8 ) I agree.