LexRAJA NARAYANLAL BANSILAL versus MANECK PHJHOZ MISTHY AND ANOTHER.
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1 S.C.R. SUPREME COURT REPORTS 417 RAJA NARAYANLAL BANSILAL v. MANECK PHJHOZ MISTHY AND ANOTHER. (B. P. SINHA, c .. J., P. B. GAJENDRAGADKAR, K. N. \;VANCHOO, K. C. DAs GUPTA and J. c. SHAH, JJ.) Company-Investigation into affairs of-Inspector appoi11tcd 11nder olcf Act, if can exercise po<ecrs"under ·new Act-Constitution-- Testimonial compulsion-Trhether provisions for production of docu- ments and evidence offend guarantee-Equal protection of the lm<'-- If provisions for investigation and production of evidence offend g·uarantcr-Indian Companies Act, r913 (VII of I9IJ), s. I JS-- Indian Companies Act, I956 (I of I95fi), ss. 235, 239, 240, 645 and 646, Constitution.of India, Arn. I4 and 20(3). On November 15, 1954, the Registrar wrote to the company of which the appellant was the Managing Agent under s. 137, Indian Companies Act, -1913, that it had been represented to him that the business of the company was carried on in fraud and called upon it to furnish certain information. On April 15, 1955, the Registrar made a report to the Central Government under s. 137(5) to the effect that in his opinion the affairs of the company were carrie<l on in fraud of co11ntrihutories and they disclosed an unsatisfactorv state of affairs and that a case had been n1ade out for an investigation under .s. 138. Thereupon, the Central Government, on November I, 195j, appointed an Inspector to investigate the affairs of the company and to report thereon. The Inspector \Vas authorised under s. 140 to examine any person on oath, and he wrote to the appellant that he would examine him on oath in relation to the business of the company. On April 1, 1956, the Indian Companies Act, 1913, was repealed. by the Indian Companies Act, 1956, which conferred wider and more drastic powers o( investigation. On July 26, 1956, .the Central Government accorded apprornl under s. 239(2) of the new Act to the Inspector exercising his powers of investigating into ancl reporting on the affairs of the company. In May 1957 the Ins- pector served notices upon the appellant calling upon him to attend his office on the date and the time specified for the pur- pose of being examined on oath and to produce certain account books and papers relating to the company. The appellant chal- lenged the investigation and contended: (i) that since the Inspector was appointed under the old Act he had no jurisdiction to exercise the po\vers referable to the provisions of the new Act, (ii) that s. 240 of the new Act which provided !or the production of documents and evidence at such investigations offended Art. 20(3) of the Constitution, and (iii) that s. 239.of the new Act which conferred po\vers on inspectors for investigation antis. 240 offended Art. 14 of the Constitution. 1960 ,-l11g11st 3r. - - 418 SUPRE:\IE COt;RT REPORTS [ J!)(\J] 1960 Held, that the Inspector appointed under s. 138(4) of the old Act must be deemed tn ha,·e been appointed under s. 235 of the Uaja .\'aruya11lal nt\V Act and had authority and pov;er to issue notices under Ra,,<ilal s. 240 of the new Act. Section 645 of the new Act provided that "· the appointment of an Inspector under the old Act shall, on repeal ff/a,,rck Pliiiv:: of the old :\ct and cin coming into force of the nc\v ,\ct, have 1\fistry (. .. Anvtlur effect as if it was n1a<le under the nc\v Act. Section 646 '''hich provided that not.hi:1g in the new Act shall affect the O]'eration of s. 138 of the old Act as respects inspectors was not an exception or proviso to s. 645 <ind the l\\'O se:ctions being saving sections had to be read as independent of and in atldition to, and not as exceptions to, each other. Hdd, further thats. 240 of Indian Companies Act, HJ56, did not offend Art. 20(3) of .the Constitution. For invoking the con- stitutional right again5t testimunial compulsion guaranteed un.ler Art. 20(.1) there must !Jc at the relevant stage a formal accusation against the party pleading the guarantee relating to the commission of an offence which rnay result in a prosecution. The enquiry undertaken under s. 240 by the Inspector was in substance an enquiry into the affairs of the company; at this stage there \Vas no accusation, formal or other\l.·ise, against any specified individual. The mere fact that a prosecution may utli- mately l>e launched against the alleged offenders would not fl~trospecti\'ely cliangc the complexion or character of tlu~ proceedings held
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