LexDR. SAILENDRA NATH SINHA AND ANOTHER versus JASODA DULAL ADHIKARI AND ANOTHER
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• ., • S.C.R. SUPREME COURT REPORTS 1263 Dr. SAILENDRA NATH SINHA AND ANOTHER I958 v. . • JASODA DULAL ADHIKARI AND ANOTHER (JAFER IMAM and J. L. KAPUR JJ.) • Offecial Liquidator-Powers of-Prosecution of Director of Company-If direction of Court necessary-Court giving direction, if bottnd to hear Director-Indian Companies Act, r9r3 (VII of r9r3), ss. r79 and 237(r). The Official Liquidator got a complaint under ss. 120-B, 406, 467 and 477A, Indian Penal Code filed before the Presidency Magistrate against the appellants one of whom was a past direc- tor and the other the Managing Director of the Bank of Com- merce Ltd., which was in compulsory liquidation. The appel- lants applied to the Presidency Magistrate for dismissal of the con'lplamt on the ground that the Official Liquidator was incom- petent to prefer the complaint as there was no sanction of the Company Judge. This was dismissed. The appellants then applied to the High Court for quashing the criminal proceedings on the ground that the prosecution was ab initio void because of the absence of a prior direction judicially given by the High Covrt under s. 23'7(1) of the Indian Companies Act. The High • Court rejected the application. Held, that a direction of the Court under s. 237(1) of the Indian Companies Act was not a co14dition precedent to the pro- secution of the appellants by the Official Liquidator. In fact, a valid and proper direction had been given by the Court under s. 237(1) to the Official Liquidator for the prose<>Ution of the appellants. In giving a direction under this section the Court could act ex parte and it was not necessary to give to the appel- lants any opportunity of being heard. Section 179 of the Com- panies Act deals with the powers of liquidators to institute or defend legal proceedings with the sanction of the Court and s. 239(1) deao!s with the powers of the Court to give directions for prosecution of delinquent directors, etc. In the present case, the Cour~ had made an order under s. 179 giving liberty to the Official Liquidator to institute or defend legal proceed- ings, and the Official Liquidator was entitled to lodge the complaint against the appellants even without a direction under s. 237(1). CRIMINAL APPELLATE JURISDICTION: Criminal AppeafNo. 28 of 1956. Appeal by special leave from the. judgment aqd order dated June 21, 1954, of the Calcutta High Court in Criminal Revision No. 811of1953. Septnnber zr . • • • • 1264 SUPREl\IE COURT REPORTS [1959] 1958 Ranadeb Clwudlzury and P. K. Ch'-itteijee, for t.hc -- appellants. • Dr. Sni!t:n/HI ,\'afi; • s'"'""' .. /,.,.,"" B. Sen and P. K. Bose, for the re8ponclent.i. v 1958. Srptcmbcr 11. The Judgnwnt of the Court fa5nda !Jitlfll A.JJ;rfl(ni 6- \\'a,~ lkli\·Pred b)' • A·' 011"' KAPt:m J.-This appeal by special leave raises a !(up"' J. • q1w;tion of interpretation of s. 237 of the lnclian Com- panies Act. Appellant No. 1 is one of the past direc- tors of the Bank of Commerce Ltd., now in liquidation and appellant ~o. 2 was its l\Ianaging Director. The Bank was ordered to be wound up by the High Court of Calcutta on August 7, 1950, and one G. K. Dutt, Bar-at-law was appointed it$ Official Liquidat-0r hut on September 7, 1950, the Officit11 Receiver ,,.aR appointed in place of Dutt. On .July 23, Hl52, respon- dent Xo. I filed in Court of the Presidency lllagistrate a complaint agai1rnt the appellant under ss. 120B, 406, 467, 477A, Indian Penal Code and 182A of the Indian Companie.-; Act and stat.Pd that. he was doing so under the authority of the ofliciid liquidator and th•~ officfal • liquidator had obtained the directions of the High Court tn file the romplaint. On :\Iiiy 5, 1953, the appel- lant applie<l to the l'residrncy :IIagistrate for dismiss~! of the compbii11t as being without 1 he samtion of tho Company .J'udgc anrl then·forc the official liquidator in his official capacity was incomprtent to prefer the complaint, being the creation of the st11tute h" could only act within the four corners of the statute. He possessed only those powPrs which the •tat.11te con- frrrct! 011 him. This ripplicMio11 was diRmissed by the l.'re.,idency :llagistrntc on June 13, 1953. . The >tppellant. then applied to thp, High Court for q11aohing the criminal proceedings 011 the ground that the prosccut.ion waA ab initio void because of the absence of prior direct.ion judicially given by t.he H
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