Dnlat and Shamsher Bahadur,jj. ( 1 ) -- Thepetition of Barium Chemicals Limited, a public limited company with its registered office at Ramavaram in the State of Andhara Pradesh (hereinafter called the company) and its managing director P. N. Balasubramanian residing in New Delhi (hereafter REFERRED TO as the second petitioner) is. directed against the order (Annexure 1 )pessed on 19th of May, 1965, by D. S. Dang, the seventh respondent as Secretary of the Company Law Board (the first respondent) appointing respondents 3 to 6 "as Inspectors to investigate the affairs of the company since its incorporation in 1961 and to report thereon to the Company Law Board, inter alia all irregularities and contraventions in respect of the provisions of the Companies Act, 1956, or of any other law for the time being in force the person or persons responsible for such irregularities and contraventions". The second respondent is the Finace Minister of the Central Government at whose instance, according to the petitioners, the Company Law Board had been motivated in taking the impugned action. ( 2 ) THE petitioner-company was registered on 28th of July, 1961, with an authorized capital of one crore divided into one lakh shares of Rs. 100. 00 each, the primary object being to carry on business of manufacturing all types of barium compounds. It is claimed and not seriously contested that the petitioner-company is the first of its kind in India and is indeed amongst the few world concerns carrying on the manufacture of. barium compounds. The second petitioner was appointed the Managing Director of this company on 5th of December, 1961, and his remuneration at the rate of Rs. 25. 000. 00 per annum was approved by the Central Government on 30th of July, 1962. The erection of the plant was undertaken by L. A. Mitchell Limited of Manchester, in pursuance of a colla boration agreement between it and the company entered on 12th of October, 1961, and duly approved by the Govt. of India on 27th of November, 1961, after which a licence for import of machinery was granted. Subsequently, the public was invited to subscribe for shares on the strength of a prospectus issued by the directors of the company on 26th of February, 1962. The issued capital of the company of 50 lakhs is stated to have been over-subscribed on 12th of March, 1962. Subsequently, the public was invited to subscribe for shares on the strength of a prospectus issued by the directors of the company on 26th of February, 1962. The issued capital of the company of 50 lakhs is stated to have been over-subscribed on 12th of March, 1962. ( 3 ) ALL did not go well between the collaborators and the company and the designing itself was declared by Lord Poole who came to India to negotiate with the company as L. A. Mitchell had in the meantime been taken over by another financial group as detective. This visit was necessitated by a notice which was sent by the company to L. A. Mitchell Limited on 2nd of April, 1955, that if the plant was not put into running order by 1st of June, 1965, some alternative arrangements would have to be made and compensation claimed for damages and loss suffered by the company. The negotiations were climaxed by a meeting of the directors of the company with Lord Poole on 10th and 11th of May, 1965, when an undertaking is said to have been given by the collaborators that the contract would be completed with necessary "alternatives and modifications in accordance with the report of M/s Humphrey Glassgow, London" and that they would "spend the additional amount of 2, 50. 0001- that may be required for that purpose". It is claimed that the plant of the company is at the moment producing 25% of its installed capacity and according to the assurance of Lord Poole it would yield foll production results by April, 1966. ( 4 ) ACCORDING to the allegations made in the petition, the impugned order was issued at the instance of Shree T. T. Krishnamachari, the Finance Minister (hereinafter REFERRED TO as the second respondent) who prevailed upon the Company Law Board to pass it. The reason attributed in the petition is that the second respondent was animated by "personal hostility"against the second petitioner. In paragraph 24 of the petition, the reasans for the hostility of the second respondent with the. second petioner are enumerated and such points as have been pressed in arguments would be appropriately dealt with later. The reason attributed in the petition is that the second respondent was animated by "personal hostility"against the second petitioner. In paragraph 24 of the petition, the reasans for the hostility of the second respondent with the. second petioner are enumerated and such points as have been pressed in arguments would be appropriately dealt with later. It is claimed in the petition that the second respondent in pursuance of his designs against the company got the assistance of some former directors of the company who bore a personal grudge with the second petitioner and they submitted a report to the first respondent which has formed the basis of the order passed on 19th of May, 1965, which was prepared by the seventh respondent at the behest of the Finance Minister without obtaining the prior approval of the members of the Company Law Board who never applied their minds on the question whether such an order should be passed at all. In the assertion of the company, great significance altaches to the timing of the order which was passed on 19th of May, 1965 soon after the results were known of the meeting between the collaborators and the campany on 10th of May, 1965. According to the company, after the notices to L. A. Mitchell on 2nd of April, 1965, it explored the possibility of substituting Kali. Chemie of Hannover, West Germany, as collaborator in place of L. A. Mitchell. The discussion took place between S. B. Billimoria, who repesented the company and Dr. Bismerck on behalf of Kali Chemie and some other persons, and it was proposed, inter alia, that the German company would be prepared to "get the production on stream" and render assistance by Engineers and Chemists "without taking over any liability of investment, if the share capital of the company was distributed as under :- 49 per cent for Barium Chemicals 26 per cent for Kali-Chemie 25 per cent for T. T. Krishnamachari and Co. lt is suggested that T. T. Krishnamachari and Co. stood to benefit by this proposal as m conjunction with Kali-Chemie this concern would have acquired a predominant interest. The minute of the discussion which book place marked Annexure IV bears the date of 12th of May,. 1965, and the heading of the memorandum is in these words : "highlights of meeting with Kali-Chemie on 7-51-965-1st Stage of discussion. ". . The minute of the discussion which book place marked Annexure IV bears the date of 12th of May,. 1965, and the heading of the memorandum is in these words : "highlights of meeting with Kali-Chemie on 7-51-965-1st Stage of discussion. ". . According to the petitioner, the contemporary discussions in India with Lord Poole on behalf L. A. Mitchell, however, resulted in an agreement on 11th of May, 1965, where with the notice which had been given to them on 2nd April, 1965, was withdrawn. This turn of events against ,t. T. Krishnamachari andco,, so annoyed the second respondent that he got the Company Law Board through its Secretary to pass the impugned order. It is assumed by the company that the second respondent is intimately associated with and has an interest in T. T. Krishnamachari, and Co. , being a joint family concern of him and his three sons. This, broadly speak ing is the case set up in the petition which the respondents have refuted in the affidavits filed by Shree R. C. Dutt as the Chairman of the first respondent Company Law Board, Shree T. T. Krishnamacliari Minister of Finance the second respondent ; N. Chidabaram, Deputy Secretary to the Government of India; S. R. Ramamurthi, Regional Director Company Law Board :m. K. Bannarjee, Under Secretary to Government of India, Department of Company Law Administration: K. C. Chand Under Secretary Company Law Board, S. Rajagopalan, the third respondent Shrimati Saraswati Achuthan, the fifth respondent ; R. R. Kini, the sixth respondent and D. S. Dang, the seventh respondent. ( 5 ) IN the affidavit of r. C. Dutt, who is senior member of the Indian Civil Service and is the Chairman of the Company Law Board, it is stated that since the incorporation of the company in July, 1961, the board had been receiving various complaints " in regard to the conduct of the affairs of the petitioner company. One complaint was received-by the Special Police Establishment and forwarded to the department in November, 1963 by Shri D. Sen, Additional Inspector Genral of Police. On May 30, 1964 and July 9, 1964 the Board directly received two sets of memoranda from four directors of the Company, alleging serious irregularities and illegalities in the conduct of the petitioner company s affairs. On May 30, 1964 and July 9, 1964 the Board directly received two sets of memoranda from four directors of the Company, alleging serious irregularities and illegalities in the conduct of the petitioner company s affairs. The memoranda were supported by documentary evidence and details of the impugned transactions and the signatories offered to produce witnesses with knowledge of these transactions. " These complaints were enquired into in the first instance by S. R-Ramamurti. 1. A. S" Regional Director of the Company Law Board at Madras who recommended an urgent and comprehensive investigation into the affairs of the company. This report was examined in the Company Law Board by the Under Secretaries M. K. Banerjee and K. C. chand who agreed with the recomendations made by its Regional Director at Madras. The complaints were further examined by the seventh respondent as Secretary of the Company Law Board who recomended a deeper probe into the affairs of the company. The matter was enven tually placed before the deponent R. C. Dutt for orders sometime in December, 1964 and he having formed the opinion that investigation was necessary the case was forwarded to the Finance Minister who agreed with this decision to investigate into the affairs of the company. ( 6 ) THE decision so reached in December, 1964, could not be implemented for a variety of reasons, some of these being the deputation abroad of the seventh respondent, delay in arranging necessary search and seizure of the relevant records, the pre-occupation of officers with other urgent work and the dislocation of work as a result of language riots in the South in the month of February, 1965. These obstacles were overcome sometme in. the begining of May, 1965, and tine final draft of the impugned order was finalised by the seventh respondent, on 3rd of May, 1965. The order was drawn up on 19th of May, 1965, and it has been repudiated by R. C. Dutt that it was passed under any kind of duress or pressure of the second responedent. Great stress has been laid on the necessity of impounding the records and papers relating to the affairs of the. company before giving any kind of publicity to the decision which had actually been reached in December, 1964. It appears from paragraph 14 of the affidavit of R. C. Dutt. Great stress has been laid on the necessity of impounding the records and papers relating to the affairs of the. company before giving any kind of publicity to the decision which had actually been reached in December, 1964. It appears from paragraph 14 of the affidavit of R. C. Dutt. that while the Company Law Board was aware of the unique position of the petitioner-company which had obtained a licence for the manufacture of barium chemicals and had entered into a collaboration, agree ment with L. A. Mitchell of Manchester he disowned any other knowledge to which reference had been made in the petition. The Company Law. Board, according to this affidavit, was influenced, inter alia, by the following. circumstances in making the order for investigation:- " (1) Delay burigling and faulty planning of this project resulting in double expenditure for which the collaborators had put the respoosibility upon the Managing Director, petitioner N o. 2. (2) Since its floatation the company has been continuously showing tosses and nearly one-third of its share capital has been wiped off ; (3) The shares of the company which to start with were at premium were being quoted on the Stock Exchange at half their face, value. . (4) Some eminent persons who had initially accepted seats on. . the Board of directors of the company subsequently severed their connections with it due to difference with petitioner No. 2 on account. of the manner in which the affairs of the company were being conducted. " , It was further stated, in paragraph 16 of this affidavit that there were circumstances to suggest that "the business of the company was being conducted with intent to defraud its creditors, members and others persons and further that the persons concerned in the management of the affairs of the company had in connection therewith been guilty of fraud, misfeasance aaid other misconduct towards the company and its members. " These considerations according to the affidavit, prevailed not only with the deponent but the ether functionaries of the Company Law Board to make the report which they did undeterred by any considerations relatable to the interest of the Minister. " These considerations according to the affidavit, prevailed not only with the deponent but the ether functionaries of the Company Law Board to make the report which they did undeterred by any considerations relatable to the interest of the Minister. It was asserted that the Company Law Board had not acted with an "evil eye" or "unequal hand" and the coinpany has not been arbitrarily picked up for discriminatory treatment -entitling it to claim the protection of Article 14 of the Constitution. ( 7 ) S. R. Ramamurthi, as Regional Director of the Company Law Board at Madras deposed about the enquiry made by him into the complaint which had been submitted against the company. This deponent is a senior member of the Indian Administrative Service and has deposed that he was not in any way influenced by any extraneous considerations in rtiaking his report that. investigation was necessary. He hasfurther deposed that in February, 1965, a representative of the Company Law Board had come to Madras to make some searches but this purpose could not be achieved at that time owing to the outbreak of language riots, 104 M. K. Banerjee, Under Secretary, made an examination of the reports and the report of Ramamurthi in the Secretariat and has affirmed in his affidavit that the Department had been receiving complaints against the company right from September, 1961, and on a scrutiny of the material he endorsed the recommendation of the Regional Director that the investigation was called for. To the same effect is the affidavit of K. C. Chand, another Under Secretary attached to the Company Law Board. He has also reiterated his independence and impartiality in dealing with the whole matter. ( 8 ) THE other affidavits to which reference need be made at this stage are those of the second and the seventh respondents. In the affidavits of D. S. Dang, the seventh respondent, objection has been taken with regard to the verifications made in the petition in respect of its various allegations. He has affirmed the receipt of complaints by the Company Law Board relating to the affairs of the company and to the existence of circumstances which suggested the need for action under section 237 of the Companies Act. He has affirmed the receipt of complaints by the Company Law Board relating to the affairs of the company and to the existence of circumstances which suggested the need for action under section 237 of the Companies Act. This deponent has stated that the draft order was finalised by him on 3rd of May, 1965, with the assistance of the departmental solicitors and the approval of the Chairman. The fair copy of the impugned order was signed by him on 19th of May, 1965. ( 9 ) THE second respondent has deposed in his affidavit that he learnt for the first time about the allegations made in the petition on 28th of May ,196 5, on a report to him about the interview which the second petitioner had with R. C. Dutt, Chairman of the Company Law Boar that day. Though it is somewhat of a digression, it may be mentioned that after some searches had been conducted by the Inspectors of Ramavaram, Hyderabad and New Delhi between 25th ana 27th May, the second petitioner obtained an interview with the Chairman of the Company Law Board and claims to have handed over to him a memorandum D-7 containing as many as twenty-four fairly detailed grievances including nention of the interest and malafides of the second respondent. The airman of the Company Law Board has deposed that when he apprised the second respondent of this interview he was asked by the Finance Minister to request the Prime Minister to nominate another Minister to deal with the matter and the Prime Minister passed an order on 31st May, 1965, nominating the Home Minister to deal with it. The submission of the learned counsel for the petitioner that this by itself is proof of the complicity of the second respondent can hardly be accepted. the Minister repudiated the suggestion of any hostility towards the second petitoner and deposed that the order which was eventually passed on 19th of May, 1964, had actually been proposed to him in December, 1965, and he had given his approval to it at that sime. He denied his interest. the business of Messrs. T. T. Krishnamachari and Company in these words .- "i deny that I am actively or otherwise interested in the but- ness of. He denied his interest. the business of Messrs. T. T. Krishnamachari and Company in these words .- "i deny that I am actively or otherwise interested in the but- ness of. Messrs T T. Krishnamachari and Company," He disclaimed any knowledge of the discussions which had taken m the month of May between the company and Kali-Chemie on the land and the company and Lord Poole on the other, as also of the e of termination which had been given to L. A. Mitchell on 2nd of 1,1965. The impact of the decision of 10/11th of May, 1965 on the impugned order was repudiated, ( 10 ) AFTER these affidavits had been filed by the respondents, the second petitioner filed a "rejoinder affidavit", the broad features of which may briefly be set out. The power of the chairman of the Company Law Board to pass the impugned order without reference to the other members is quetionedthe opinion formed by the chairman is assailed on the ground that neither he nor the officials on whose reports he relied had applied their minds to the problem, more particularly about the affairs of the company being conducted in fraud of the creditors. The "established practice" of the Board that the Chairman should pass an order under section 237 (b ). of the Companies Act with the apporval of the Finance Minister is challenged. The reasons assigned for the delay in implementing the order passed in December, 1964, have been impugned and it is deposed that "none of the reasons alleged outweighed the necessity for immediate seizure of books if books were being destroyed and books were necessary for investigation decided upon as early as in December, 1964". The Inspectors, who have been appointed have been stigmatised as "henchmen" of the Government and it is asserted that some chartered accountant should have been appointed to investigate the affairs. It may, however, be mentioned that two of the four Inspectors are qualified chartered accountants though employed in the Ministry. It is reiterated that the Finance Minister was vitally interested in T. T. Krishnamachari and Co. and the agreement reached with Lord Poole on 10th of May, 1965, was the impelling reason for making an order of enquiry and was passed by the officials of the Company Law Board on the instigation of the second respondent. It is reiterated that the Finance Minister was vitally interested in T. T. Krishnamachari and Co. and the agreement reached with Lord Poole on 10th of May, 1965, was the impelling reason for making an order of enquiry and was passed by the officials of the Company Law Board on the instigation of the second respondent. Reliance was placed on a letter of 30th of March, 1955, written by Kali-Chemie to show its interest in the second respondent for whom special thanks were expressed for his readiness to put up the necessary plant. . This letter which is Annexure B. I filed with the rejoinder, came into the hands of the second petitioner from the records of T. T. Krishnamachari and Co. and according to its contents the second respondent When be was Minister for Commerce was on friendly - terms with the representative of Kali-Chemie who used to visit him along with the General Manager of T. T. Krishnamachari and Co. and the German firm had expressed appreciation of some help given to it by the second respondent. It was further asserted that one Kriegstein a representative of Kali-Chemie, visited India in March, 1965, and had been frequently seeing the General Manager of T. T. Krishnamachari and Co. , and also the second respondent. There can be no manner of doubt that some more matter was sought to be introduced in this rejoinder and the respondents had no opportunity of controverting it. It is worth observing that no affidavit of Kriegstein or other representatives of Kali-Chemie are produced and it is not possible to say that the affidavit of the second petitioner itself has absolved him from the liability of establishing malice. When both parties have sworn affidavits and produced documents the question that the burden of proving has been shifted to the respondents is hardly of any importance. ( 11 ) THE Attorney-General, appearing for the respondents, has emphasised that some of the allegations made in the rejoinder affidavit are different from and irreconciliable with the contents of the petition and should consequently be ignored. ( 11 ) THE Attorney-General, appearing for the respondents, has emphasised that some of the allegations made in the rejoinder affidavit are different from and irreconciliable with the contents of the petition and should consequently be ignored. It is pointed by him that whereas in the petition the case of the company was that the impugned order was pasted by the seventh respondent on the asking of the Minister implying thereby that the Chairman of the Company Law Board was by-passed the position in the re j oinder affidavit is that the order of 19th of May, 1965, had been agreed upon between the different respondents. We do not think that this conclusion can be spelled out from the assertions and counter-allegations made in the affidavits of the parti es. The seventh respondent being the Secretary of the Company Law Board could not havesigned the order without the authority of the Chairman and the elucidation of the assertion made in the rejoinder does not lead to an inference that a different stand has been adopted. ( 12 ) IT has been vigorously contended by Mr. Garg, the learned counsel for the petitioner, that the allegations made in the petition entitle him to call for crose-examination of the persons who have filed affidavits in reply. Indeed in the rejoinder it is stated that "it is essential further for the ends of justice that the petitioner be allowed to cross-examine respondent No. 2 on the two most important questions in the case, firstly bis interest in M/s. T. T. Krishnamachari and Co. and secondly the reasons for his request that the Prime Minister asks some other Minister to deal with the-matter. . . . . . . . . ". It is to be remembered that the object of a prerogative writ under Article 226 of the Constitution is to obtain an expeditious remedy and it is in the forefront of such a petition that a motion of this kind is the only efficacious and speedy way of redress. Undoubtedly, a Court entertaining a prerogative writ can in suitable cases record such evidence as it finds necessary keeping in view the points for determination. Reliance has been placed by the learned counsel on a recent judgment of the Supreme Court in B. Venkataratnam and others v. The Registrar of Co-operative Societies, Andhra Pradesh and others. Undoubtedly, a Court entertaining a prerogative writ can in suitable cases record such evidence as it finds necessary keeping in view the points for determination. Reliance has been placed by the learned counsel on a recent judgment of the Supreme Court in B. Venkataratnam and others v. The Registrar of Co-operative Societies, Andhra Pradesh and others. Civil Appeal No. 321 of 1965 delivered on 6th of May, 1965, more particularly the observations of Mr. Justice Raghubar Dayal, who said :- ". . . . . . IF the petitioners had desired to question the accuracy of what was stated by the Minister in his affidavit it was open to them to have requested the High Court for recording evidence with respect to the truth or otherwise of the allegations made by them against the Minister and it would have then been for the High Court to consider whether it would record such evidence or not to determine the question of fact in regard to the allegations. "mr. Justice Subha Rao, in a sparate judgment, said : - "while frivolous petitions deserve to be dismissed 171 limine and in appropriate cases penal action taken against persons filing such petitions, in. petitions wherein respectable persons filed affidavits, it is not only advisable but also the duty of the High Court, in public interests, to take evidence of the deponents in order to test their evidence by cross-examination and arrive at the truth. " Reference may be made to another Supreme Court decision of 0. S. Rowjee v. State Andhra Pradesh where in dealing with the question of frequency of allegations of mala fides and improper motives on the part of those in authority in recent times it was said that it has become the duty of the Court to scrutinise such cases with care so as to avoid being in any manner influenced by them ; it was observed that it would conduce to a more stisfactory disposal and consideration of them if those against whom allegations are made come forward to place before the Court either their denials or their version of the matter so that the Court may be in a position to judge as to whether the onus that lies upon those who make allegations of mala fides on the part of authorities have disharged their harden of proving it. ( 13 ) AS would be apparent from these authorities the question whether any evidence should be called remains one for determination of High Court and it is always for the petitioner to discharge the burden of establishing mala fides. The principal foundation of the present petition that the impugned order was passed under the influence and pressure of the Second respondent by the officials of the Company Law Board has been denied and it may well be asked what useful purpose can be served by summoning for cross-examination those who were responsible for the decision when it has been made clear in their affidavits that they had exercised their independent judgment on the material on which it was based. Lord Goddard C. J. in R. V. Stokosky (Yorks) Justices ,quoted a. _ passage of Lord Hewart, C. J. sitting with Avory and Shearmen JJ: that:- : "for something like fifty or sixty yeurs never order had been made on the Crown side for the cross-examination of a deponent. It was enough to add that such an order was not likely to be made except in very special circumstances, and that no such special circumstancea had been shown in the present case". The authority to allow cross-examination cannot be doubted, but such recourse has to be followed in exceptional cases. Mr. Garg also relied on a Full Bench decision of Dulat, Grover and Pandit JJ. in Surinder Nath Uttam v. The State of Punjab, where it was said that :- "when an allegation is made that a particular order or decision is mala fide and the allegation is denied, the Court Will ordinarily enquire into the question of fact but it always has the discretion to direct the. petitioner to have the matter decided in regular action if such a course is considered necessary and expedient for a proper disposal of the case in view of all the facts and circumstances. " It is not in every case when an allegation of mala fides is made that it Is necessary for a court to call evidence. The avowed object of the second. petitioner is to cross-examine the second respondent to elicit information about his interest in T. T. Krishnachari and Co. and the reasons which induced him to ask the Prime Minister to nominate someone else to deal with the file. The avowed object of the second. petitioner is to cross-examine the second respondent to elicit information about his interest in T. T. Krishnachari and Co. and the reasons which induced him to ask the Prime Minister to nominate someone else to deal with the file. On both questions we have the positive assertions of the Minister and the affidavits of the concerned officials that the considerations of the second respondent s interest did not enter into their calculations at all. After hearing the learned counsel for both parties, we are of opinion that the material which has been brought in the affidavits of the parties is ample and we do not think it right to protract these proceedings further by calling witnesses for cross-examination. The Attorney-General has further submitted that the information vouched in the affidavit of the petitioner does not warrant any further enquiry especially when the second petitioner has studiously eschewed from disclosing the source of information in respect of some of the crucial allegations made in his affidavit. By way of illustration, our attention has been invited to allegation contained in paragraph 21 of the petition that the first respondent never formed the opinion that the affairs of the company had been conducted with intent to defraud its creditors. The contents of this paragraph are stated towards the end to be true according to the record and the Attorney-General says no record has been produced to prove this positive assertion which if established may lead to an inference ofmalafides. Again, it is stated that the impugned order was passed at the instance of the second respondent who is unfavourably disposed towards the company and has personal hostility against the second petitioner and further that the seventh respondent had been prevailed upon to pass the order. This asseition is stated to be based. upon information which the second petitioner received and believed to be true. There is no disclosure of the source of information and the Attorneygeneral submits that the second petitioner should not be permitted to cross-examine witnesses in the hope that he may find material to substantiate such vague allegations. This asseition is stated to be based. upon information which the second petitioner received and believed to be true. There is no disclosure of the source of information and the Attorneygeneral submits that the second petitioner should not be permitted to cross-examine witnesses in the hope that he may find material to substantiate such vague allegations. Further, there is an allegation in Paragraph 27 that two of the directors of the company being friendly with the sons of the second respondent had discussed the affairs of the company with the Minister and they being inimical towards the second petitioner had been instrumental in persuading the second respondent to cause this order tobe made. This allegation is supported "by reasons which the petitioner believes to be true. "again, no source of information is disclosed and if the petitioner is allowed further enquiry it would mean that proof which is not forthcoming is sought to be brought in this manner for some of the basic allegations made in the petition, The Supreme Court in The State of Bombay v. Purshotta Jog Naik held that verification should invariably be modelled on the lines of Order 19, rule 3 of the Code of Civil Procedure, whether the Code applied in terms or not, and when the matter deposed to is not based on personal knowledge, the source of information must. be clearly disclosed. A Full Bench of the Patna High Court in Dipendra Nath Sarkar v. State of Bihar and others", has even held following the decision of Sir Lawrence Jenkins C. J. and Woodroffe J. in Padmabasi Dasi v. Rasik Lal Dhar, that where the provisions of Order 19, rule 3 of the Code of Civil Procedure have not been observed in an affidavit, it must be ignored. The affidavit filed in support of the petition has not disclosed information with regard to its principal allegations, and it cannot legitimately be urged in support of further inquiry that cross-examination may yield some results for the petitioner. The affidavit filed in support of the petition has not disclosed information with regard to its principal allegations, and it cannot legitimately be urged in support of further inquiry that cross-examination may yield some results for the petitioner. ( 14 ) THE argument of the learned counsel that the officials of the Company Law Board were pressured to a point that they felt compelled to give a report adverse to the company is founded on assumptions alone, these being that a Secretary of the Government would toe into the line which he conceives would neet with the desire of the Minister and all the officials Working under him being subordinate to the Minister would readily consent to do like-wise. It is to be observed that no personal dishonesty his been alleged against R. C. Dutt in the petition, nor has any such suggestion been nade during the course of arguments. Counsel for the petitioner wants us to infer that the Chairman of the Company law Board knew (1) the interest of the Finance Minister in T. T. Krishnachari and Co. , (2) the interest of T. T. Krishnamachari and Co, in Kali- Chemie and (3) of trade riyalry between T. T. Krishnamachari and Co. and the petitioner. The affidavits of the respondents and the other officials of the Ministry are clear and unambiguous on the point that there was an impartial and independent examination of the reports and that recommendation for investigation was made without any influence or pressure, and indeed in oblivion of the knowledge implicit in the aforesaid assumptions. ( 15 ) IT has been contended very strongly that the examination, if conducted at all, was of a perfunctory nature and did not satisfy the requirement of section 237 (b) of the Companies Act. Section 237 is to this effect "237. Without prejudice to its powers under section 235, the Central Government- (a) shall appoint one or more competent persons as inspectors to investigate the affairs of a company and to report thereon in such manner as the Central Government may direct, if (b) may do so if, in the opinion of the Central Government, there are circumstances suggesting. Without prejudice to its powers under section 235, the Central Government- (a) shall appoint one or more competent persons as inspectors to investigate the affairs of a company and to report thereon in such manner as the Central Government may direct, if (b) may do so if, in the opinion of the Central Government, there are circumstances suggesting. (i) that the business of the company is being conducted with intent to defraud its creditors, members, or any other persons, or otherwise for a fraudulent or unlawful purpose, or in a manner oppressive of any of its members, or that the company was formed for any fraud- ulent or unlawful purpose ; (u) that persons concerned in the formation of the company or the management of its affairs have in connection therewith been guilty of fraud, misfeasance or other misconduct towards the company or towards any of its members ; or (iii ). . . . . . . . :. . . . . . "relying on the rejoinder affidavit of G. Shanker, Secretary of the company, where it is stated in paragraph 43 that the total debts of the petitioner company on 31st of May, 1965, were Rs. 52. 62 lakhs out of which the loans advanced by the Andhra Bank Limited aggregated to Rs. 42. 72 lakhs, it is contended that the business of the company could not be said to have been conducted in fraud of the creditors when the Andhra Bank had shown its willingness even after the impugned order was passed to lend another sum of 10 lakhs on 14th of August, 1965. We are not entitled to go into the adequacy of the reason which induced the Company Law Board in reaching the conclusion which it did. It may be that the judgment of the Andhra Bank was erroneous or that it had lent large sum of money in the full hope and confidence that it was a soundinvestment. The Central Government has been given a discretion under section 237 to make an order of investigation in a variety of circumstances. The affidavit of R. C. Dutt has pointed to the various cirpumstances, whichinfluanced his decision. It is not open to this Court to scrutinise each one of these reasons with a view to make an inference of mala fide intentions. The affidavit of R. C. Dutt has pointed to the various cirpumstances, whichinfluanced his decision. It is not open to this Court to scrutinise each one of these reasons with a view to make an inference of mala fide intentions. Though the earlier two balance-sheets did show a loss there is some profit from the sale of barium compound which was produced in the year 1963-64. From it is sought to be deduced that the company had not been showing continuous losses as affirmed in the affidavit of R. C. Dutt. Some exceptions in the rejoinder have also been given about the reason which induced some of the directors to resign, Mr. Garg submits that many of the reasons mentioned in the affidavit of R. C Dutt do not merit a consideration under section 237 (b), e. g. , resignation of directors, quotation of shares below their face value and delay, bungling and faulty planning of the project. No oppression has been alleged, nor is it the case of the respondents that the business has been conducted for a fraudulent unlawful purpose. ( 16 ) THE Attorney General has argued on the basis of the latest balance-sheet filed with the petition that it is possible to reach the cusion about the affairs of the company being conducted in fraud of the creditors and the share-holders. Without going into the details we would be content to observe that neither are we called upon to give a finding on this point which has been raised by the petitioner nor are we in the position of the Company Law Board to reach a conclusion as the entire material has not been placed before us. Mr. Garg submits on the authority of cases relating to detention order that if one or all the grounds of detention are irrelevant or groundless, the entire order of detention is invalid. Reference may be made to Shibban La! Mr. Garg submits on the authority of cases relating to detention order that if one or all the grounds of detention are irrelevant or groundless, the entire order of detention is invalid. Reference may be made to Shibban La! Saksena v. State of Uttar Pradesh, where in construing section 3 of the Preventive Detention Act, it was held that detention made on the subjective satisfaction of the Executive Government can be set aside on ground of wala fides if it is proved that one of the ground mentioned in the order s - unsubstantial or non-existent", on the principle that we would be left in doubt whether the remaining grounds would have been regarded as sufficient for the detention in the mind of the authority concerned. This view later was affirmed by Chief Justice Gajendragadkar in the Supreme Court decision of Rameshvar v-District, Magistrate in these words :- - "there is also no doubt that if any of the grounds furnished to the detenue are found to the irrelevant. . . . . . . . . and in that sense are foreign to the Act, the satisfaction of the detaining authority on which the- order of detention is based is open to challenge and the detention order liable to be quashed. . . . . . . . . " To bring the present case on parity with detention cases, it is urged that some of the grovnds for the order montioned in the affidavit of R. C. Dutt, cannot be given any consideration under the provisions of section 237. (b) and the entire order should, therefore, be set aside. It is not apposite to invoke the aid of the principle of detention cases in regard to the Orders made under section 237 (b ). The matters which the Central Government is to consider are so interlinked and intertwined that it is impossible to look in isolation at the circumstances which justify an order of investigation. The cumulative effect of the circumstances enumerated in the affidavits created an impression in the minds of the appropriate authorities that an order of probe or investigation was necessary. The matters which the Central Government is to consider are so interlinked and intertwined that it is impossible to look in isolation at the circumstances which justify an order of investigation. The cumulative effect of the circumstances enumerated in the affidavits created an impression in the minds of the appropriate authorities that an order of probe or investigation was necessary. It may be that apprehensions entertained by the counsel for the petitioner have not been wholly allayed in as much as the police reports to which reference is made in the affidavits have not been made available to the Court, but the persual of the affidavits tends to show that the matters had been given adequate consideration and the conclusion had been reached apparently on the material before the first respondent and the other officers concerned. ( 17 ) MUCH has been said by the learned counsel for the petitioner about the hostility evinced by the second respondent towards the second petitioner most of it resulting from trade rivalry between T. T. Krishna chari and Company, in which the second respondent had a vital interest, and the company. It is alleged that as a Minister for Commerce and Industry, the second respondent not only assisted his personal friends G. Easwara Iyer and Sundarama Iyer to obtain a licence for manufacture of 600 Enfield Motor Cycles but took steps to enable them to enjoy a monopoly. . A motor-cycle and scooter panel was constituted and under the guidance of the second respondent this panel recommended that the demand for motor-cycles in the country did not exceed 5000. Through the interventicn of the then Minister of Commerce Shri Lal Bahadur Shastri, the petitioner managed to get this monoply broken by obtaining a licence for Ideal Motors, Bombay, for manufacture of Jawa Motor cycles in collaboration with a Czechoslovakian firm in the year 1959. This allegation has been denied in the affidavit of N. Chidambaram, Deputy Secretary to the Government of India, who deposed that Ideal Motors of Bombay submitted an application in March 1955 for a licence to manufacture motor cycles and scooters. This application was rejected by the Standing Committee of Automobile Industry in June 1955 on the ground that the production was sufficient to meet the anticipated demand at that time. This application was rejected by the Standing Committee of Automobile Industry in June 1955 on the ground that the production was sufficient to meet the anticipated demand at that time. The Ideal Motors once again applied on 27th of September 1955 but this application also met with the same fate. Some years later, representations were made to the Government to increase the production of motor cycles and in 1959 the Ministry decided to review the position. Ideal Motors of Bombay was the only party which was interested in the manufacture of motor cycles and they were issued a licence on 9th of April, 1960. The second respondent in his affidavit has deposed that he had constituted committees of officials of different Ministries and they dealt with the applications for licenses. As Minister he had nothing to do with Ideal Motors or the persons who were granted licence to manufacture Enfield Motor Cycles. There seems to be substance in the pleas of the respondents as under the Registration and Licensing of Industrial Undertakings Rules, 1952, applications for licences had to bereferred under clause 10 to licensing committees consisting of one or more representatives of each of the Ministries of Commerce, Industry, Railways, Finance, Steel, Mines and Fuel and Labour and Employment and Production and of the Planning, Commission, though the representativeof the Ministry of Commerce was the Chairman of the Committee, it cannot be assumed as has been suggested by Mr. Garg, that all the high officers of the different Ministries would ponder to the anticipated wishes of the Minister. Again, review of applications for. licenses was to be done by a sub-committee of the Central Advisory Committee with powers not only of review of issued licenses but also of refusal, variation, amendment or revocation of them. This committee of review 13 also to advise the Government on the general principles to be followed in the issue of licenses. The complaint sent by the second petitioner may have been sent for disposal to any of these committees and there is no material to reach the conclusion that the second respondent: entertained animosity against the second petitioner for the reason that Ideal Motors had been given a license, particularly when it has been deposed on behalf of the respondents that this was the only company which had applied for the additional production which had been sanctioned by the Government. ( 18 ) AS a further pointer to the same conclusion it has been asserted by the petitioner that Kali-Chemie with whom the second petitioner had first started negotiations for Collaboration in 1959 had T. T. Krishnamachari and Company, as their selling agents in India. These selling agents approached the second petitioner through T. T. Narasimham, son of the second respondent, to secure the sole selling agency of the products of the company. The proposal not having been acceded to it is suggested that T. T. Krishnamachari and Company persuaded Messrs. Kali:. Chemie to stop further negotiations with the company. T. T. Krishnamachari and Company, also applied to obtain a license in the name of Messrs. T. T. Chemicals for establishment of a plant for the manufacture of barium chemicals. The second petitioner thereupon wrote. on behalf of Messrs. Transworld Trades who had secured a license for the same project earlier, to the then Minister of Commerce and Industry (Shri Lal Bahadur Shastri) on 23rd of December, 1960 and as aresult of his intercession the application of T. T. Krishnamachari and Company came to be rejected. Subsequently when Shri Lal Bahadur Shastri ceased to be a Minister for Commerce and Industry, the application of T. T. Krishnamachari and Company was revived and the license granted to them. The second petitioner this time moved the Prime Minister on 21st of May . 1961, and it is claimed by him that as a result of his intervention the license was revoked. ( 19 ) TO repeat again, the second respondent has denied his association with T. T. Krishnamachari and company and the reliance on behalf of the petitioner on certain statements made on the floor of the House in Parliament by Shri Ashok Sen does not in any way lead to the conclusion that the repudiation is to be discredited. It is the concern of any business organisations to promote its interests and if there had been negotiations between the second petitioner and Kali-Chemie for collaboration, there was nothing improper in the firm of T T. Krishnamachari and Company to have made efforts for their own advancement. Again, the issue of license is a matter which rests with the committees to which reference has been made. T. T. Krishnamachari and Company was not granted a license in the first instance and the second application together with the. Again, the issue of license is a matter which rests with the committees to which reference has been made. T. T. Krishnamachari and Company was not granted a license in the first instance and the second application together with the. letter which had been addressed to Shri Lal Bahadur Shastri by. the second petitioner was placed before the Licensing Committee in the normal; course in its meeting of 13th of January, 1961. The application was again rejected but T. T. Krishuamachari and Co. was advised to apply again after six months when the position was to be reviewed. T. T. Chemicals Private Limited made a representation for reconsideration and as the Madras Government had also written to the Ministry to support their application for a license, the committee made a recommendation in its favour. The license, however, which was issued to T. T. Chemicals Private Ltd. on 25th" of May, 1961, was surrendered by them 15 months latter on 9th of August, 1962, as it was stated in the letter, which is marked X, that they would not be able to implement the project. All these facts have been deposed by Chidambaram and find ample support from the documents annexed with his affidavit. Exhibit 'x' is an order of the Government of India of 30. th of August, 1962, in which it is statedthatlicensees,namely,t:t: Chemicals had decided not to implement the scheme for which the license for barium chemicals had been granted and had surrendered the same. Under sub-section (1) of section 12 of the Industries (Development and Regulation) Act. 1951, the Central Government revoked this license. In Exhibit Y, which is a letter written by the Private Secretary to the Prime Minister to the second petitioner on 19th of July, 1961, it was pointed that the' appropriate Licensing Authority had reviewed the position in the matter relating to the complaint made by him. The constitution of the licensing Committees under clause 10 of the Registration and Licensing of Industrial Undertakings Rules, 1952 shows that the grant of license is to be considered as an integrated problem, different representatives of the various Ministries being represented in it. It cannot be accepted for a moment that these statutory committees would lend themselves to the sort of influence suggested by the company on the specious plea that they are all. subordinate to the Minister of Commerce. It cannot be accepted for a moment that these statutory committees would lend themselves to the sort of influence suggested by the company on the specious plea that they are all. subordinate to the Minister of Commerce. The sequence- of events s enumer ted in the affidavit of Chidambaram does not support the mference which is soug to be deduced by the petitioner's counsel that the revocation of the license was made as a result of the letter which the second petitioner had written to the Minister and the Prime Minister. It cannot, therefore,consequently be said that the second respondent was smarting undersome kind of grievance or that lie wanted to settle some old scores with the second petitioner, ( 20 ) ANOTHER suggestion of the ompany is that when the subscription list was opened for public on 12th of March, 1962, there was puldished a criticism by an industrial correspondent in the leading column of "hindu", Madras, regarding the inclusion of retired officers of the Indian Civil Service in the Board of Directors. On enquiry the second petitioner was told by the editor of the paper that the publication was at the "instigation" of the second respondent. The second respondent had denied his hand in this affair and it is asserted in the rejoinder that the matter deserves a further enq iry. It is only a far-fetched inference that can be drawn even if the facts as alleged m the petition are accepted and there seems to be some edge in the point which has been made by the Attorney-General that the allegation has been made to achieve the object of cross-examining the secondrespondent. ( 21 ) FINALLY, as a coping-stone of the arch, it has been very strenously urged that the timing of the order is a conclusive circumstance to show not only the mala fides of the concerned respondents, but also the active hostility of the second respondent towards the company and the second petitioner. The company having found in 1964 that L. A. Mitchell. had not taken the adequate and necessary steps to put the plant in full operation, negoliations had to be opened again with Kali-Chemie of Hannover who sent representatives to India to inspect the plant and the General Manager of their agents T. T. Krishnamachari and Sons accompanied him. There were some discussions between these representatives. had not taken the adequate and necessary steps to put the plant in full operation, negoliations had to be opened again with Kali-Chemie of Hannover who sent representatives to India to inspect the plant and the General Manager of their agents T. T. Krishnamachari and Sons accompanied him. There were some discussions between these representatives. and the directors of the company on 2nd of April. 1965, when the notice was actually sent to L. A. Mitchell. Further discussions were to be held in Germany on 7th of May, 1965, and on that occasion Kali-Chemie had expressed their readiness to enter into collaboration agreement in the place of L. A. Mitchell. The price of this collaboration was to be control of the company and this not having been accepted by a meeting held contemporaneously with Lord Poole of L. A. Mitchell in India on 10th/llth May, 1965, the second respondent, it is urged, came with a heavy hand on the. company in the shape of the proposed order for investigation. Though Prima facie the sequence of events does lend colour to the impression created in the mind of the second petitioner that the respondents were out to "destroy all that was achieved through the good offices of petitioner No. 2" in discussions with Lord Poole on IOth/llth of May, 1965, on closer examination there seems to be substance in the point which has been urged by the Attorney General that the near Synchronisation of events is more a matter of coincidence than of design. In the first place, as is clear from Annexure IV itself, the descussions between Kali-Chemie and the representative of tlie petitioner in West Germany on 7th of May, 1965, did not decide anything finally. Clause (b) of article 6 of this memorandum says:- "it too was suggested to give Mitchell a chance to get the plant running by June Ist next and in case Mitchell will not. be able to get the Production on stream, all contracts and verbal commitments will become null and void and Bariuchamicals will be free for any decision, to be taken afterwards and are still to make a claim for the sustained losses. "it is no doubt true that in return for their collaboration Kali-Chemie asked for re-organisation of capital which would have given it in conjunction with T. T. Krishnanuchari and Co. "it is no doubt true that in return for their collaboration Kali-Chemie asked for re-organisation of capital which would have given it in conjunction with T. T. Krishnanuchari and Co. a bare majority over the company in regard to management and in that sense T. T. Krishnamachari and Sons stood to gain. The cardinal proposal, however, was to let Mitchell have another chance to complete the contract and get the "production on stream" by 1st of June, 1956, and this is exactly the hope which was extended by Lord Poole three days later in. New Delhi to the Directors of tha company who as appears from the record of the discussion filed with the rejoinder, were by no means well disposed towards him. According to Anexure IV, there was just a bare chance of T. T. Krishnamachari and Co. , gaining some kind of control, but the whole matter was in a fluid condition and it eventually came to be decided by the Board of the Company that L. A. Mitchell should be given another opportunity a situation which was clearly envisaged and oven proposed as a first step by Kali-Chemie itself as Shown by Annexure IV. Again, the whole edifice of the petitioner's case is based on the foundations of conspiracy, collusion and subservience of the functionaries of the Company Law Board qua the second respondent and in the absence of even an allegation of dishonesty against the Chairman of the Company Law Board it is difficult to reach. a. conclusion in favour of the petitioner on the material placed on the. record. Some statements made in the Lok Sabha have been relied upon in the rejoinder in opposition to the denial of the second respondent that he is not intersted in T. T. Krishiiainachari and Co: After-all, it is in the fore front of the petitioners' case that there is cluse and intimate connection btween T. T. Krishnamachari and Co. and the second respondent and in certiorari proceedings the evidence in support of this conclusion should have been indicated in the petition itself. and the second respondent and in certiorari proceedings the evidence in support of this conclusion should have been indicated in the petition itself. We would be driven to and roving sort of enquiry if we were to embark on an investigation to find what the Members of the Parliament meant when they considered the assertion made by the second respondent on the floor of the House that he had severed all connections with the joint family firm which consisted of his sons only. The transcending consideration must remain that the Chairman, the secretary and the officer in the Secretariat who were responsible for the impugned decision never knew about the connection of the second respondent with the firm of T. T. Krishnamachari and Co. and no dishonest motives having been attributed to any of these officials it cannot be said that T. T. Krishnamachari and Co. bearing as it does the name of the Finance Minister himself they must be deemed to have known not only the second respondent's interest in it but of his hostility towards the petitioner either as a rival trade competitor of this firm or otherwise. The burden of the rejoinder is that the second petitioner does not admit that the officials of the Company Law Board did not know of the hostility or the connection. This would be too flimsy an assumption to launch a further enquiry into the allegations by subjecting the officials, of the Company Law Board to cross-examination. There is nothing. on the record to gainsay what has been asserted by the seventh respondent that the decision of 3rd of May, 1965, was a mere affirmation of what had ' already been settled earlier in December, 1964. The point regarding the timing of the impugned order, therefore, loses much of its force in this perspective. ( 22 ) IT has been faintly suggested that even if it be assumed that the decision was made in December, 1964 it was used as a bargaining counter in the company's negotiations with Kali-Chemie. In other words, the decision to investigate into the affairs of the company was used as a sword of Democles for the petitioner to compel it to give benefits to T. T. Krishnamachai-i and Co. In other words, the decision to investigate into the affairs of the company was used as a sword of Democles for the petitioner to compel it to give benefits to T. T. Krishnamachai-i and Co. Whatever plausibility may be attached to such a suggestion by a cursory examination of the sequence of events and theallegations made in the petition it gets dissipated by a closer examination of the respondents' affidavits. It has been assumed throughout that the Company Law Board had the power to act as the Central Government under Section 237 (b) of the Companies Act. It becomes necessary at this stage to deal with the challenge of Mr. Garg that though the Company Law Board had been delegated the power of the Central Government to make an order of investigation it could not be exercised by the Chairman alone, even though in conceit with the Finance Minister who represented the - Central Government. The Board of Company Law Administration is constituted under Section 10-E of the Companies Act, which forms -part of the amended law enacted by the. Companies (Amendment) Act, 1963, on 30th of December, 1963. Under sub-section (1), this Board has to exercise and discharge such power and functions conferred on the Central Government " as may be delegated to it by that Government". The Company Law Board is to consist of not more than five members, but actually it consists of a chairman and a Member. The procedure of the Company Law Board, under sub-section (5) "shall be such as may be prescribed" and sub-section (6) says that, "in the exercise of its powers and discharge of its functions, the "company Law Board shall be subject to the control of the Central Government". Under the Company Law Board (Procedure) Rules, 1964, of 1st of February, 1964 the Chairman under clause 3 "may" with the previous approval of the Central Government, by order in writing distribute the business of the Board among himself and the other member or members, and specify the cases or classes of cases which shall be considered jointly by the Board". Under clause 3 of the Company Law- Board (Procedure) Rules, 1964, the Chairman of the Company Law Board promulgated a delegation order on 6th of February, 1964, in which three types of functions REFERRED TO in sub-clause (a) of clause I were to be exercised by the Board jointly. Under clause 3 of the Company Law- Board (Procedure) Rules, 1964, the Chairman of the Company Law Board promulgated a delegation order on 6th of February, 1964, in which three types of functions REFERRED TO in sub-clause (a) of clause I were to be exercised by the Board jointly. There were five classses of matters, including the appointment of special auditor and Inspector for investigation pursuent to section 237, which were to be exercised only by the Chairman. In the third category the residuary function of the Company Law Board under the Companies Act could have been exercised by the Member alone. ( 23 ) IT is the case of Mr. Garg that the powers under section 237 (b) exercisable by the Central Government have been delegated to the Company Law Board and this not being a matter of procedure could not have been retained for his exclusive decision by the Chairman. In other words, the allocation of business made in pursuance of clause 3 of the Company Law Board (Procedure) Rules, 1964, is ultra vires. The principle invoked by the learned counsel is that a distinction has to be made between power and procedure of the Board. Power being indivisible cannot he a subject-matter of allocation under the garb of a rule of procedure. . Reliance is placed on observations of Mr. Justice Bhagwati in the decision of Inamati Mallappa Basppa v. Besai Basavarj Anappa. The relevant passage is at page 704 where it is said that the powers of a Tribunal under Section 92 of the Representation of the People Act are separately enacted and further that "it will he noticed that the procedure for trial before the Tribunal and the powers on the Tribunal are treated separately thus distinguishing between the procedure to be followed by the Tribunal and the powers to be exercised by it. " Their Lordships of the Supreme Court were dealing with a special enactment in making the observations which they did. The Company Law Board, which is constituted under section 10-E of the Companies Act is given its powers and functions under subsection (1) audits constitution is to be of one Chairman and the remaining Members whose number is not to exceed four. The Company Law Board, which is constituted under section 10-E of the Companies Act is given its powers and functions under subsection (1) audits constitution is to be of one Chairman and the remaining Members whose number is not to exceed four. It can hardly be argued hat the procedure which may be prescribed under sub-section (5) cannot deal with the question of allocation of business betweeen the Chairbian and the other members and indeed clause 3 of Rules of ist of February, 1964 makes a mention that the distribution of businesss may be done by the Chairman. It would be pertinent to point out a passage of Mr. Justice Venkatarama Ayyar in Haris Chandra v. Triloki Singh, at page 454, where also the provision of section 92 of the Respresentation of the People Act came for consideration :- It is then argued that section 92 confers powers on the Tribunal in respect of certain matters, while section 90 (2) applies the Civil Procedure Code in respect of matters relating to procedure, that there is a distinction between power and procedure, and that the granting of amendment being a power and not a matter of procedure, it can be claimed only under section 92 and not under section 90 (2 ). We do not any see antithesis between 'procedure' in section 90 (2) arid 'powers' under section 92. When the respondent applied to the Tribunal for amendent, he took a procedural step acnd that, he' was clearly entitled to do under section 90 (2 ). The question of power arises only with reference to the order to be passed on the petition by the Tribunal. " What is clearly to be spelled out from this porouncement of the Supreme Court is that the Company Law Board has the power to; pass such orders as, are mentioned in sub-section (1) of section IO-E. The procedure of. reachig that decision can be governed in accordance with. sub-section (9) and the rules framed thereunder. In our opinion, there is nosubstance in the point raised by Mr. Gaig we would accordingly repel, it. ( 24 ) THE counsel for the petitioner has exhorted this Court to. declare the provisions of section 237 of the Companies Act-ultra vires on. ground of they being discriminatory. Section 237 with other provisions' relates to investigation of affairrs of a company in various circumstances. Gaig we would accordingly repel, it. ( 24 ) THE counsel for the petitioner has exhorted this Court to. declare the provisions of section 237 of the Companies Act-ultra vires on. ground of they being discriminatory. Section 237 with other provisions' relates to investigation of affairrs of a company in various circumstances. Such as investigation under section 235 may be done at the instance of the Central Government which appoints investigators when an applicationhas been made by members of the company or there is a. report to this effect by the Registrar. Section 237 has two parts; under elause (a) the Central Government may appoint inspectors to investigate the affairs of a company when the company has passed a special resolution to this effect or when the Court has declared that the affairs ought to be investigated under the aegis of the Central Government and clause (b) says that the Central Government may do so if it is of the opinion that there are circumstances enumerated in the three subclauses tojustify such an investigation. Sections 239 and 240 deal with powers of inspectors to carry investigation into affairs of the company and production of documents and evidence. Section 240-A authorises seizure of documents by inpectors and sections 24110 251 are concerned with the inspectors lesports and the consequential proceedings which may have to be started including prosecutions, winding up applications, recovery of damages and other allied matters. ( 25 ) AN order directing an investigation under section 237 does not dispose of anything finally and as observed by a Division Bench of the Madras High Court in Ramah Nadar v. Amritharaj is only analogous "to the issue of a commission for the purpose of looking into the accounts of the parties. " A mere direction to investigate cannot in the opinion of the Madras Court, constitute a legal grievance. ' The argument on ground of discrimination is two-fold. " A mere direction to investigate cannot in the opinion of the Madras Court, constitute a legal grievance. ' The argument on ground of discrimination is two-fold. In the first place, it is asserted that the drastic provisions of section 237 are hit by Article 14 and secondly that in any event these should be struck down on the gound that they do not provide for any opportunity to the Company of being heard before the Central Government passes such an order in contradistiction to section 234 where in a similar enquiry by a Registrar an opportunity is provided to the company to be heard before this official submits his report to the Central Government. An argument on ground of discrimination was addressed before their Lordship of the Supreme Court against sections 239 and 240 which, relate to the power of inspectors to carry investigation into the affair. , of the companies and production Of documents and evidence before them. Whatever may be said on this ground about the provisions relating to procedure of the investigation would apply mutatis mutandis to the order of investigation itself. The- matter is dealt with in the penultimate paragraph of the Supreme Court judgment in Raja Narayanlal Bansilal v. Maneek Phiroz Mistry, speaking for the Court, Chief Justice Ganjendrgadkar Observed thus:- That still leaves the challenge to the vires of the said section under Article. 14 of the Constitution, though we ought to add. that Mr. Sastri did not seriously press his case under Article 14, and we. think rightly. . . . . . . It is urged that the ordinaruy protectioin afforded to witnesses. under section 132 of the Indian Evidence Act as well as the protection-afforded to accused persons under section 161 (1) and (2) of. the Criminal Procedure Code, have been denied to the appellant in-the investigation which Respondent 1 is carrying on in regard to the affairs of his company. . . . . . It has been repeatedly held that what Article 14 prohibits is class legislation, it does not however, forbid reasonable classification for the purpose of legislation. . . the Criminal Procedure Code, have been denied to the appellant in-the investigation which Respondent 1 is carrying on in regard to the affairs of his company. . . . . . It has been repeatedly held that what Article 14 prohibits is class legislation, it does not however, forbid reasonable classification for the purpose of legislation. . . If 'persons in charge of the management of companies, abuse their position and make personal profit at the cost of the creditors, contributories and other interested in the Company, that raises a pioblem which is very much different from the problem of ordinary misappropriation or breach of trust. . . . . . a citizen can and may protect his own interest, but where the financial interest of a large number of citizens is left in charge of persons who. manage the affairs of the companies it would be legitimate to treat such companies and their managers a class by themselves and to provide for necessary safeguards and checks against a possible abuse of power vesting in the managers. " The provisions relating to investigation are modelledon the recent amendments in the Companies Act and are manifestly designed to meet the increasing necessity of controlling the administration of companies which are custodians of the monies belonging to the share-holders. It cannot reasonably be argued that State should deny to itself its undoubted right and duty of safeguarding the financial interests of the public when it is so required. ( 26 ) FOR the other wind of Mr. Garg's argument on ground of discrimination it is necessary to advert briefly to section 234 of the Companies Act which deals with the power of the Registrar to call information. A number of documents and returns have to be filed periodically by the company to the Ragistrar and if on a perusal of any documents which a company is required to submit to him under this Act the Registrar is of the opinion that an information or explanation is necessary he may call on the company to submit such document or information in writing. If such information or explanation is not furnished the Registrar under sub-section (3a) may require further information. Any refusal of neglect on the part of the company entails punitve punihment of fine under subsection (4 ). If such information or explanation is not furnished the Registrar under sub-section (3a) may require further information. Any refusal of neglect on the part of the company entails punitve punihment of fine under subsection (4 ). On receiving information or further information, if the Registrar thinks it necrssary, he may inspect or take copies of documents and where such information or documents disclose an unsatisfactory state of affairs or do not disclose a full or fair statement the Registrar may make a report in writing to the Central Government. If on the material placed before the Registrar it is represented to him by any contributory or creditor or any other person that the business of the company is being carried on in fraud of its creditors or of persons dealing with the company or otherwise for a fraudulent or unlawful purpose, he may, under sub-section (7) "after giving the company an opportunity of being heard, by a written order, call on the company to furnish in writting any information or explanation on matters specified in the order, within such time as he may specify therein; and the provisions of sub-sections (2), (3), (3a), (4) and (6) of this section shall apply to such order. " If upon inquiry the Registrar is satisfied that any representation on which he took action under this sub-section was frivolous or vexatious, he shall disclose the identity of his informant to the company, and it is to be inferred that in other cases he will make a report to the Central Government, It is contemplated in section 235 that the Central Government may make an order for investigation inter alia on the receipt of the report of the Registrar under sub-section (6) or sub-section (7) of section 234. ( 27 ) IT is argued by Mr. Garg that when the Registrar is required to submit a report to the Central Government on giving an opportunity to the company of being heard, it is imperative for the Central Government to do likewise and the absence of anysuch provision in section 237 (b) should render it nugatory on the ground that it discriminates between two companies similarly situated. The legislature in its wisdom has thought it necessary to invest the Central Government with the power to make an order for investigation into company's affairs on certain specified conditions. The legislature in its wisdom has thought it necessary to invest the Central Government with the power to make an order for investigation into company's affairs on certain specified conditions. It is well to mention that the ultimate power of making an investigation rests with the Central Government. Under manage the affairs of the companies it would be legitimate to treat such companies and their managers a class by themselves and to provide for necessary safeguards and checks against a possible abuse of power vesting in the managers. " ( 28 ) T provisions relating to investigation are modelledon the recent amendments in the Companies Act and are manifestly designed to meet the increasing necessity of controlling the administration of companies which are custodians of the monies belonging to the share-holders. It cannot reasonably be argued that State should deny to itself its undoubted right and duty of safeguarding the financial interests of the public when it is so required. see mentioned that this case has been argued for many days by learned counsel for both sides and voluminous material in the form of affidavits and documents has been placed on record. On broad general considerations, we feel convinced that the case set up by the petitioner 'has not been made out from this record and on the affidavits which have been filed, we see no reason to countenance the suggestion that all or any of the many functionaries of the Company Law Board concerned with the impugned order have. been overborne or over reached by the Finance Minister, on account of his prestigious position, undue pressure or unfair means. ( 29 ) THIS petition would accordingly be dismissed but in the citcumstances, we make no order as to costs.