Case Laws Companies Act Raja Narayan Lal Bansilal Vs Maneck Phiroz Mistry and Other

PETITIONER:
RAJA NARAYAN LAL BANSILAL

Vs.

RESPONDENT:
MANECK PHIROZ MISTRY AND AN OTHER.

DATE OF JUDGMENT:
31/08/1960

BENCH:
GAJENDRAGADKAR, P.B.
BENCH:
GAJENDRAGADKAR, P.B.
SINHA, BHUVNESHWAR P.(CJ)
WANCHOO, K.N.
GUPTA, K.C. DAS
SHAH, J.C.

CITATION:
1961 AIR 29 1961 SCR (1) 417
CITATOR INFO :
R 1964 SC1552 (10)
R 1967 SC 295 (10,72)
RF 1969 SC 707 (42)
RF 1970 SC 940 (13,14)
F 1973 SC1196 (19)
R 1978 SC1025 (34,35)
RF 1981 SC 379 (67)
D 1988 SC 113 (5)
ACT:
Company-Investigation into affairs of-Inspector appointed
under old Act, if can exercise powers under new Act-
Constitution-Testimonial compulsion-Whether Provisions for
Production of documents and evidence offend guarantee-Equal
protection of the law-If provisions for investigation and
Production of evidence offend guarantee-Indian Companies
Act, 1913 (VII of 1913), S. 138 Companies Act, 1956 (1 of
1956), SS. 235, 239, 240, 645 and 646, Constitution of
India, Arts. 14 and 20(3).

 

HEADNOTE:
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 carried on in fraud of
contributories and they disclosed an unsatisfactory state of
affairs and that a case had been made out for an
investigation under s. 138. Thereupon, the Central
Government, on November 1, 1955, appointed an Inspector to
investigate the affairs of the company and to report
thereon. The Inspector was 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Companies Act, 1913, was repealed by the Indian Companies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 of
investigation. On July 26, 1956, the Central Government
accorded approval under s. 239(2) of the new Act to the
Inspector exercising his powers of investigating into and
reporting on the affairs of the company. In May 1957 the
Inspector served notices upon the appellant calling upon him
to attend his office on the date and the time specified for
the purpose of being examined on oath and to produce certain
account books and papers relating to the company. The
appellant challenged the investigation and contended : (i)
that since the Inspector was appointed under the old Act he
had no jurisdiction to exercise the powers referable to the
provisions of the new Act, (ii) that s. 240 of the new Act
which provided for 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 powers on inspectors for investigation and S. 240
offended Art. 14 of the Constitution.
418
Held, that the Inspector appointed under S. 138(4) of the
old Act must be deemed to have been appointed under s. 235
of the new Act and had authority and power to issue notices
under 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 of the old Act and on coming into force
of the new Act, have effect as if it was made under the
new Act. Section 646 which provided that nothing in the new
Act shall affect the operation of S. T38 of the old Act as
respects inspectors was not an exception or proviso to S.
645 and the two sections being saving sections had to be
read as independent of and in addition to, and not as
exceptions to, each other.
Held, further that S. 240 of Indian Companies Act, 1956, did
not offend Art. 20(3) of the Constitution. For invoking the
constitutional right against testimonial compulsion
guaranteed under Art. 20(3) there must be at the relevant
stage a formal accusation against the party pleading the
guarantee relating to the commission of an offence which may
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 was no
accusation, formal or otherwise, against any specified
individual. The mere fact that a prosecution may ultimately
be launched against the alleged offenders would not
retrospectively change the complexion or character of the
proceedings held by the Inspector when he makes the
investigation.
Maqbool Hussain v. The State of Bombay, [1953] S.C.R. 730,
S. A. Venkataraman v. The Union of India, [1954] S.C.R.
1150, M. P. Sharma v. Satish Chandra, District Magistrate,
Delhi, [1954] S.C.R. 1077, Thomas Dana v. State of Punjab,
[1959] Supp. 1 S.C.R. 274 and Mohammed Dastagir v. The
State of Madras, [1960] 3 S.C.R. 116, relied on.
Held, further that SS. 239 and 240 of the Indian Companies
Act, 1956, did not violate Art. 14 of the Constitution.
These sections denied the company and persons in charge of
the management of such companies the ordinary protection
afforded to witnesses under S. 132 of the Evidence Act and
under S. 161(1) and (2) of the Criminal Procedure Code. As
they were entrusted with the financial interests of a large
number of citizens it was legitimate to treat such companies
and their managers as a class by themselves and to provide
for necessary safeguards and checks against abuse of power
by the managers. The basis of the classification is founded
on an intelligible differentia which has a rational relation
to the object sought to be achieved.
Shri Ram Krishna Dalmia v. justice Tendolkar, [1959] S.C.R.
297, applied.

 

JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 268 of 1959.
419
Appeal from the judgment and decree dated September 3, 1958,
of the former Bombay High Court in Appeal No. 28/1958.
A. V. Viswanatha Sastri, Ganpat Rai and I. N. Shroff, for
the appellant.
M. C. Setalvad, Attorney-General for India, B. Sen and T.
M. Sen, for the respondents.
1960. August 31. The Judgment of the Court was delivered
by
GAJENDRAGADKAR J.-The appellant Raja Narayanlal Bansilal of
Bombay is the Managing Agent of a Limited Company named the
Harinagar Sugar Mills Limited. By virtue of the power
conferred on him by s. 137 of the Indian Companies Act, 1913
(VII of 1913), the Registrar wrote to the mills on November
15, 1954, that it had been represented to him under s.
137(6) that the business of the company was carried on in
fraud, and so he called upon the company to furnish the
information which he required as set out in a part of his
letter (Ex. A). On April 15, 1955, the Registrar made a
report (Ex. AA) to the Central Government under s. 137(5)
of the said Act. This report showed that according to the
Registrar the affairs of the company were carried on in
fraud of contributories and they disclosed an unsatisfactory
state of affairs. The report pointed out that the appellant
was the Managing Agent of the company as well as its
promoter, and that it was suspected that under a fictitious
name of Bansilal Uchant Account the company was advancing
money to the several firms owned by the appellant which were
ostensibly purchased from the company’s funds. The report
further stated that between the years ending in September,
1942 and 1951 about Rs. 19,200 were paid for Harpur Farm and
Rs.;. 39,300 for Bhavanipur Farm, and accounts disclosed
that the Uchant Account was chiefly operated upon for
purchasing such lands out of the funds of the company though
the purchase in fact was for and on behalf of the appellant.
The Registrar also added that he had reason to believe that
the Managing
54
420
Agent was utilising the property of the company in some
cases for his personal gain, and concluded that, in his
opinion, a case had been made out for an investigation under
s. 138.
On receiving this report, on November 1, 1955, the ‘Central
Government passed an order under s. 138(4) of the said Act
(Ex. B) appointing the first respondent Maneck P. Mistry,
who is a Chartered Accountant, as an inspector to
investigate the affairs of the company from the date of its
incorporation. The said inspector was asked to point out
all irregularities and contraventions of the provisions of
the said Act or any other law, and make a full report as
indicated in a communication which was separately sent to
him. This separate communication (Ex. BB) prescribes the
mode of enquiry which should be adopted by inspectors. It
requires that while investigating the affairs of companies
the inspectors should bear in mind that for a successful
prosecution the evidence in support of a charge must be
clear, tangible and cogent, and that their reports should
specify with reference to the evidence collected during the
investigations the points specified under paragraph 2(a) to
(e). In the course of their investigation the inspectors
are asked to make use of the powers available to them under
s. 140 of the said Act including the right to examine a per-
son on oath. The investigation should be conducted in
private and the inspectors are not entitled to make public
the information received by them during the course of the
investigation.
Pursuant to the powers conferred on him by the said order
respondent 1 wrote to the appellant intimating to him that
he would examine him on oath in relation to the business of
the company under s. 140(2) of the said Act (Ex. C).
Meanwhile on April 1, 1956, the Companies Act of 1913 (VII
of 1913) was repealed by the Companies Act of 1956 (1 of
1956). For the sake of convenience we would hereafter refer
to the repealed Act as the old Act and the Act which came
into force on April 1, 1956, as the new Act. On July 26,
1956, the Central Government purported to exercise its power
under s. 239(2) of the new Act and
421
accorded approval to respondent 1 exercising his powers of
investigating into, and reporting on, the affairs of the
appellant including his personal books of accounts as well
as the affairs of the three concerns specified in the order.
These three concerns are M/s. Narayanlal Bansilal, who are
the Managing Agents of Harinagar Sugar Mills, the Shangrila
Food Pro ducts Limited and, Harinagar Cane Farm. It appears
that the appellant is the proprietor of the firm of
Narayanlal Bansilal. After this order was passed respondent
1 served upon the appellant the four impugned notices (Ex.
E collectively) on May 9, 1957, May 16, 1957, May 29, 1957
and June 29, 1957, respectively. These notices are
substantially identical in terms’ and so it would be
sufficient for our purpose to set out the purport of one of
them. The first notice called upon the appellant to attend
the office of respondent 1 on the date and at the time
specified for the purpose of being examined on oath in
relation to the affairs of the company, and to produce
before respondent 1 all the books of accounts and papers
relating to the said company as mentioned in the notice.
The appellant was further told that in default of compliance
with the requisition aforesaid necessary legal steps would
be taken without further reference to him. The notice
contains a list of twelve items describing the several
documents which the appellant was required to produce before
respondent 1.
After these notices were served on the appellant he filed a,
petition (No. 201 of 1957) in the Bombay High Court and
prayed that the High Court should issue a writ of certiorari
or any other appropriate direction, order or writ under Art.
226 of the Constitution calling upon respondent 1 to produce
the records of the case relating to the notices in question
and to set aside the said notices, the proposed examination
of the appellant and the interim report made by him. It
further prayed for a writ of prohibition or any other
appropriate direction, order or writ restraining respondent
1 from making any investigation under the said notices and
from exercising any powers of investigation under s. 239
and/or s. 240 of the new Act and/or
122
from investigating into the affairs of any persons or
concerns specified in the petition. The petitioner claimed
these writs mainly on two grounds. He first alleged that
since respondent 1 had been appointed under the old Act he
had no jurisdiction to exercise powers referable to the
relevant provisions of the new Act. This ground assumed
that the said relevant provisions of the new Act are valid,
but it is urged that the powers referable to the said
provisions are not available to respondent 1 since he was
appointed under the old Act. The other ground on which the
writs were claimed challenges the vires of ss. 239 and 240
of the new Act. This challenge assumed an alternative form.
It is argued that s. 240 offends against the constitutional
guarantee provided by Art. 20(3) of the Constitution and it
is also urged that certain portions of ss. 239 and 240
offend against another constitutional guarantee provided by
Art. 14 of the Constitution. It is thus on these three
contentions that the petitioner claimed appropriate writs by
his petition before the Bombay High Court. These pleas were
resisted by the Union of India which had been joined to the
proceedings as respondent 2. Mr. Justice K. T. Desai, who
heard the petition, rejected the contentions raised by the
petitioner, and held that no case had been made out for the
issue of any writ. This decision was challenged by the
appellant before the Court of Appeal in the Bombay High
Court; the Court of Appeal agreed with the view taken by
Desai, J., and dismissed the appeal. Thereupon the
appellant applied for and obtained a certificate from the
High Court, and it is with the said certificate that he has
come to this Court by his present appeal. On his behalf Mr.
Viswanatha Sastri has raised the same three points for our
decision.
Let us first examine the question whether or not the first
respondent has jurisdiction to exercise the powers under the
relevant provisions of the new Act. It is common ground
that if respondent 1’s powers to bold the investigation in
question are to be found in the relevant provisions of the
old Act and not those of the new Act the impugned notices
issued by him would be
423
without authority and jurisdiction. In dealing with this
question it is necessary to examine the broad features of
the relevant sections of the two Acts.
We will begin with the old Act. Section 137 of the old Act
deals with investigation by the Registrar. Section 137(1)
provides that where the Registrar on’ perusal of any
document which a company is required to submit to him is of
opinion that any information or explanation is necessary in
order that such document may afford full particulars of the
matter to which it purports to relate he may, by a written
order, call on the company to furnish in writing the
necessary information or explanation within the time to be
specified in the order. Section 137(5) requires the
Registrar to make a report in writing to the Central
Government if no information is supplied to him within the
specified time, or if the information supplied to him
appears to him to disclose an unsatisfactory state of
affairs, or does not disclose a full and fair statement of
the relevant matters. Thus s. 137(1) to (5) deal with the
investigation which the Registrar is empowered to make on a
persual of the document submitted to him by a company under
the provisions of this Act. Section 137(6) deals with a
case where if it is represented to the Registrar on
materials placed before him by any contributory or creditor
that the business of a company is carried on in fraud or in
fraud of its creditors or in fraud of persons dealing with
the company or for a fraudulent purpose, he may, after
following the procedure prescribed in that behalf, call for
information or explanation on matters to be specified in his
order within such time as he may fix, and when such an order
is passed the provisions of s. 137(2) to (5) would be
applicable. This sub-section provides that if at the end of
the investigation the Registrar is satisfied that the
representation on which he took action was frivolous or
vexatious he shall disclose the identity of the informant to
the company. This provision is obviously intended as a
safeguard against frivolous or vexatious representations in
respect of the affairs of any company. The provisions of
this section are substantially similar to the provisions of
s. 234 of the new Act.
424
affairs of companies by inspectors, authorises the Central
Government to appoint one or more competent inspectors to
investigate the affairs of any company and report thereon in
such manner as the said ,Government may direct. The
appointment of competent inspectors can be made by the
Central Government in four classes of cases as specified in
s. 138(1) to (4). It would be relevant to refer to two of
these cases. Under s. 138(1) a competent inspector can be
appointed in the case of a banking company having a share
capital on the application of members holding not less than
one-fifth of the shares issued, and under s. 138(4) in the
case of any company on a report by the Registrar under s.
137(5). This section substantially corresponds to s. 235 of
the new Act.
The other sections of the old Act to which reference must be
made are ss. 140, 141 and 141A. Section 140(1) imposes upon
all persons who are. or have been officers of the company an
obligation to produce before the inspectors all books and
documents in their custody or power relating to the company.
Section 140(2) empowers the inspector to examine on oath any
such person, meaning a person who is or has been an officer
of the company in relation to the business of the company
and to administer an oath to him. Section 140(3) provides
that if a person refuses to produce a book or a document or
to answer any question he shall be liable to a fine not
exceeding Rs. 50 in respect of each offence. Section 141
provides that on the conclusion of an investigation the
inspectors shall report their opinions to the Central
Government, and shall forward a copy of their report to the
registered office of the company ; and it also provides that
a copy of the said report can be delivered at their request
to the applicants for the investigation. Then we have s.
141A which deals with the institution of prosecutions.
Section 141A(1) provides that if from any report made under
s. 138 it appears to the Central Government that any person
has been guilty of any offence in relation to the company
for which he is criminally liable the Central Government
shall refer the
425
matter to the Advocate-General or the Public Prosecutor.
Section 141A(2) lays down that if the law officer who is
consulted under (1) considers that there is a case in which
prosecution ought to be instituted he shall cause
proceedings to be instituted accordingly-, That in brief is
the scheme of the relevant provisions of the old Act.
We will now examine the scheme of the relevant provisions of
the new Act. It has already been noticed that ss. 234 and
235 of the new Act are substantially similar to ss. 137 and
138 of the old Act. Section 239 of the new Act provides for
the powers of the inspectors to carry on investigation into
the affairs of related companies or of managing agent or
associate. The sweep of the enquiry authorised by this
section is very much wider than that under the corresponding
section of the old Act. Sub-section (1) of this section
authorises an inspector to investigate the affairs of a
company and also the affairs of any other body corporate or
person specified in cls. (a) to (d) if he thinks it
necessary so to do. These clauses include several cases of
body corporate which may have any connection direct or
indirect, immediate or remote, with the affair of the
company whose affairs are under investigation. It is
unnecessary for our purpose in the present appeal to
enumerate the said cases serially or exhaustively. It is
conceded that the three other persons who have been called
upon by respondent 1 to produce documents and give evidence
fall within the purview of s. 239. As a result of the
provisions of s. 239(1) the inspector has to report not only
on the affairs of the company under investigation but also
on the affairs of other bodies or persons who have been
compelled to give evidence and produce documents during the
course of the enquiry. The only safeguard provided against
a possible abuse of these extensive powers is that in the
case of any body corporate or person referred to in cls.
(b)(ii), (b)(iii), (c) or (d) of subs. (1) the inspector
shall not exercise his relevant power without first having
obtained the prior approval of the Central Government
thereto.
Section 240 of the new Act imposes an obligation
426
on the corporate bodies and persons in respect of which or
whom investigation is authorised by s. 239 to produce all
books and papers and to give all assistance in connection
with the said investigation ; that is the result of s.
240(1). Section 240(2) empowers the inspector to examine on
oath any of the persons referred to in sub-s. (1) in
relation to the relevant matters as specified. Section
240(3) deals with a case where a person refuses to comply
with the obligation imposed on him by s. 240(1) or (2) ; and
it provides that in such a case the inspector may certify
the refusal under his hand to the court, and the court may
thereupon enquire into the case, hear witnesses who may be
produced against or on behalf of the alleged offender,
consider any statement which may be offered in defence, and
punish the offender as if he had been guilty of contempt of
the court. Section 240(4) deals with a case where the
inspector thinks it necessary for the purpose of his
investigation that a person whom he has no power to examine
on oath should be .examined, and it provides that in such a
case he may apply to the court, and the court may, if it
thinks fit, order that person to attend and be examined on
oath before it on any matter relevant to the investigation.
This sub-section provides for the procedure to be followed
in examining such a witness. Section 240(5) lays down that
notes of any examination under sub-s. (2) or (4) shall be
taken down in writing, and shall be read over to or by, and
signed by, the person examined, and may thereafter be used
as evidence against him. Having thus made elaborate
provisions for the production of documents and evidence in
the course of the investigation by the inspector, s. 241
deals with the inspectors’ report and provides that
inspectors may, and if so directed by the Central Government
shall, make interim reports to that Government, and on the
conclusion of the investigation shall make a final report to
it. Section 241(2) provides for the supply of the copy of
the said report to the several parties concerned as
specified in cls. (a) to (e).
That takes us to s. 242 which deals with prosecution.
Section 242(1) provides inter alia that if from
427
any report made under a. 241 it appears to the Central
Government that any person has in relation to the company
been guilty of any offence for which he is criminally
liable, the Central Government may, after taking such legal
advice as it thinks fit, prosecute such person for the
offence, and it imposes on all officers, and agents of the
company, except those prosecuted, to give the Central
Government all assistance in connection with the prosecution
which they are reasonably able to give. That broadly stated
is the position with regard to the relevant provisions of
the new Act.
Mr. Sastri has drawn our pointed attention to the fact that
the scope and nature of the enquiry authorised by the new
Act are very much wider than under the old Act, and he has
characterised the relevant ,powers conferred on the
investigating inspectors as draconian. He, therefore,
contends that unless it is established that these powers are
available to the inspector appointed under the relevant
provisions of the old Act the impugned notices must be set
aside; and his argument is that these powers are not
available to the inspector appointed under the old Act. The
decision of this question will depend mainly on the con-
struction of ss. 645 and 646 of the new Act.
Section 644 provides for the repeal of the enactments
mentioned in Schedule XII; the old Act is one of the
enactments thus repealed. Ordinarily the effect of the
repeal of the old Act would have been governed by the
provisions of s. 6 of the General Clauses Act (10 of 1897),
but in the case of the new Act the application of the said
section is subject to the provisions of ss. 645 to 657 of
the Act; that is the effect of s. 658 which provides that
the mention of particulars in ss. 645 to 657 or in any other
provisions of this Act shall not prejudice the general
application of s. 6 of the General Clauses Act, 1897, with
respect to the effect of repeals. In other words, though s.
6 of the General Clauses Act will generally apply, its
application will be subject to the provisions contained in
as. 645 to 657; this position is not disputed.
It is now necessary to consider s. 645. It reads thus:
55
428
“Nothing in this Act shall affect any order, rule,
regulation, appointment, conveyance mortgage, deed, document
or agreement made, fee directed, resolution passed,
direction given, proceeding taken, instrument executed or
issued, or thing done, under or in pursuance of any previous
companies law; but any such order, rule, regulation,
appointment, conveyance, mortgage, deed, document,
agreement, fee, resolution, direction, proceeding.
instrument or thing shall, if in force at the commencement
of this Act, continue to be in force, and so far as it could
have been made, directed, passed, given, taken, executed,
issued or done under or in pursuance of this Act, shall have
effect as if made, directed, passed, given, taken, executed,
issued or done under or in pursuance of this Act.”
The effect of this section is clear. If an inspector has.
been appointed under the relevant section of the old Act, on
repeal of the old Act and on coming into force of the new
Act, his appointment shall have effect as if it was made
under or in pursuance of the new Act. Indeed it is common
ground that if s. 645 had stood alone and had not been
followed by s. 646 there would have been no difficulty in
holding that the inspector appointed under the old Act could
exercise his powers and authority under the relevant
provisions of the new Act, and the impugned notices would
then be perfectly valid. Incidentally we may refer to the
provisions of a. 652 in this connection. Under this section
any person appointed to any office under or by virtue of any
previous company law shall be deemed to have been appointed
to that office under this Act.
It is, however, urged that the authority of the inspector
which is in dispute is governed by s. 646.
This section provides:
“Nothing in this Act shall affect the operation of section
138 of the Indian Companies Act, 1913 (VII of 1913), as
respects inspectors, or as respects the continuation of an
inspection begun by inspectors, appointed before the
commencement of this Act; and the provisions of this Act
shall apply to or in relation to a report of inspectors
appointed under the said section 138 as they apply to or in
relation to a report
429
of inspectors appointed under section 235 or 237 of this
Act.”
The argument is that the expression ” nothing in this Act ”
includes s. 645 and so s. 646 should be read as an exception
or proviso to s. 645; and if that is so, all matters covered
by s. 138 of the old Act must continue to be governed by
the said Act and not by any of the provisions of the new
Act. We are unable to accept this argument. In
appreciating the effect of the provisions of s. 646 it is
necessary to bear in mind that it occurs in that part of the
new Act which deals with repeals and savings. Sections 645
to 648 are the saving sections, and ordinarily and in the
absence of any indication to the contrary these saving
clauses should be read as independent of, and in addition
to, and not as providing exceptions to, one another. It is
significant that whereas s. 646 provides for the continuance
of the operation of s. 138 it does not make a corresponding
provision for the continuance of the operation of a. 140 of
the old Act which deals with the powers of the inspector to
call for books and to examine parties. Besides, it may
perhaps not be accurate to suggest that having regard to the
provisions of s. 645, s. 646 is wholly redundant. It would
be possible to take the view that cases falling under s.
138(1) of the old Act are intended to be covered by s. 646
as they would not be covered by s. 645. In regard to the
case of a banking company covered by s. 138(1) s. 646 will
come into operation and that may be one of the reasons for
which s. 646 was enacted. It may be that the case of the
banking company may also be covered by s. 35 of the Banking
Companies Act 10 of 1949, but since a. 138(1) applied to the
said case until the old Act was repealed the Legislature
may-have, as a matter of caution, thought it necessary to
provide for the continuance of the operation of s. 138 by
enacting s. 646. However that may be, we feel no difficulty
in holding that s: 646 should not be construed as a proviso
to s.645 but as an additional saving provision. The words
used in s. 645 are so clear, and the policy and object of
enacting the said provision are in our opinion so
emphatically expressed, that it
430
would be unreasonable to hold that s. 646 was intended to
provide for such a radical exception to s. 645. Where the
Legislature enacts a saving section as a matter of abundant
caution the argument that the enactment of the said section
was not wholly necessary cannot be treated as decisive or
even effective. Therefore, in our opinion, the High Court
was right in coming to the conclusion that the inspector
appointed under s. 138(4) of the old Act must by legal
fiction, which is authorised by s. 645, be deemed to have
been appointed under s. 235 of the new Act, and if that is
so, respondent 1 had authority and power to issue the
impugned notices under s. 240 of the new Act. The challenge
to the validity of the impugned notices on the ground that
respondent 1 had no authority to issue the said notices
must, therefore, fail.
That takes us to the question as to whether the relevant
provisions of s. 240, which empower respondent 1 to issue
the relevant notices by which the appellant was called upon
to give evidence and to produce documents, offend against
the fundamental constitutional right guaranteed by Art.
20(3). It has been strenuously urged before us that the
main object of the present investigation is to discover
whether the appellant has committed any offenses, and so by
compelling him to give evidence and produce documents he is
denied the constitutional protection against self
incrimination.
Article 20(3) provides that ” no person accused of any
offence shall be compelled to be a witness against himself
“. It may be assumed that the appellant is being compelled
to be witness against himself in the present proceedings;
but even so the question which arises for our decision is
whether the appellant can be said to be a person who is
accused of any offence as required by Art. 20(3). Mr.
Sastri has contended that the words ” person accused of any
offence ” should not receive a narrow or literal
construction; they should be liberally interpreted because.
the clause, in which they occur enshrines a fundamental
constitutional right and the scope and reach of the said
right should not be unduly narrowed down. In support of
this
431
general argument Mr. Sastri has naturally relied on the
historical background of the doctrine of protection against
self-incrimination; and he has strongly pressed into service
the decisions of the Supreme Court of the United States of
America dealing with the Fifth Amendment to the Constitution
of the United States. The said Amendment inter alia
provides that ” no person shall be compelled in any criminal
case to be a witness against himself “. It would be noticed
that in terms the Amendment refer to a criminal case, and
yet it has received a very broad and liberal interpretation
at the hands of the Supreme Court of the United States of
America. It has been held that the said constitutional
protection is not confined only to criminal cases but it
extends even to civil proceedings (Vide: McCarthy v.
Arndstein(1)). As observed by Mr. Justice Blatchford in
Charles Counselman v. Frank Hitchcock (2) ” it is impossible
that the meaning of the constitutional provision can only be
that a person shall not be compelled to be a witness against
himself in a criminal prosecution against himself. It would
doubtless cover such cases but it is not limited to them.
The object was to insure that a person should not be
compelled, when acting as a witness in any investigation, to
give testimony which might tend to show that he himself had
committed a crime. The privilege is limited to criminal
matters, but it is as broad as the mischief against which it
seeks to guard “.
In support of his plea that a liberal interpretation should
be put on an article which enshrines a fundamental
constitutional right Mr. Sastri has also invited our
attention to the observation made by Mr. Justice Bradley in
Edward A. Boyd and George H. Boyd v. United States (3).
Says Bradley, J., ” illegitimate and unconstitutional
practices get their first footing in that way, namely by
silent approaches and slight deviations from legal modes of
procedure. This can only be obviated by adhering to the
rule that constitutional provisions for the security of
person and
(1) (1924) 69 L. Ed. 158. (2) (1892) 35 L. Ed. 1110.
(3) (1886) 29 L. Ed. 746,752.
432
property should be liberally construed “. The learned judge
has also added that any compulsory discovery by extorting
the party’s oath, or compelling the production of his
private books and papers, to convict him of crime or to
forfeit his property, is contrary to the principles of a
free government, and is abhorrent to the instincts of an
American. It may suit the purposes of despotic power; but
it cannot abide the pure atmosphere of political liberty and
personal freedom”. In regard to this eloquent statement of
the law it may, however, be permissible to state that under
the English Law the doctrine of protection against self-
incrimination has never been applied in the departments of
Company Law’ and Insolvency Law. There is no doubt that
under s. 15 of the English Bankruptcy Act when a public
examination of a debtor is held he is compelled to answer
all questions as the court may put, or allow to be put to
him, and that the answers given have to be signed by him and
can be used against him in evidence (Vide: In Re: Atherton
(1)); similar is the position under s. 270 of the English
Companies Act. However, the general argument for the
appellant is that in construing Art. 20(3) we may take some
assistance from the broad and liberal construction which has
been placed on the apparently narrow and limited words used
in the Fifth Amendment to the Constitution of the United
States of America..
Thus presented the argument is no doubt attractive, and its
validity and effectiveness would have had to be fully and
carefully examined if the question raised in the present
appeal had been a matter of first impression ; but the
construction of Art. 20 in general and Art. 20(2) and (3) in
particular has been the subject matter of some decisions of
this Court, and naturally it is in the light of the previous
decisions that we have to deal with the merits of the
appellants case in the present appeal. In Maqbool Hussain
v. The State of Bombay (2) this Court had occasion to
consider the scope and effect of the constitutional
guarantee provided by Art. 20(2). A person against whom
proceedings
(1) (1912) 2 K.B. 251.
(2) [1953] S.C.R. 730.
433
had been taken by the Sea Customs Authorities under s. 167
of the Sea Customs Act and an order for confiscation of
goods had been passed was subsequently prosecuted before the
Presidency Magistrate for-an offence under s. 23 of the
Foreign Exchange Regulations Act in respect of the same act.
It was urged on, his behalf that the proceedings taken
against him before the Sea Customs Authorities was a
prosecution and the order of confiscation passed in the said
proceedings wag a punishment, and. so it was argued that the
constitutional guarantee afforded by Art. 20(2) made his
subsequent prosecution under s. 23 of the Foreign Exchange
Regulation Act invalid. This plea was rejected. In dealing
with the merits of the plea this Court had to consider the
meaning of the words ” prosecuted and punished ” used in
Art. 20(2). Article 20(2) provides that no person shall be
prosecuted and punished for the same offence more than once,
and the question raised was whether the proceedings before
the Sea Customs Authorities constituted prosecution, and
whether the order of confiscation was punishment under Art.
20(2). In construing Art. 20(2) this Court considered Art.
20 as a whole and examined the interrelation of the relevant
terms used in the three clauses of the said article. ” The
very wording of Art. 20 “, observed Bhagwati, J., ” and the
words used therein” convicted “, ” commission of the act
charged as an offence “, ” be subjected to a penalty “, ”
commission of the offence “, ” prosecuted and punished “, ”
accused of any offence ” would indicate that the proceedings
therein contemplated are of the nature of criminal
proceedings before a court of law or a judicial tribunal.
and the prosecution in this context would mean an initiation
or starting of proceedings of a criminal nature before a
court of law or a judicial tribunal in accordance with the
procedure prescribed in the statute which creates the
offence and regulated the procedure “. Having thus construed
Art. 20(2) in the light of the relevant words used in the
different clauses of the said article, this Court naturally
proceeded to enquire whether the Sea Customs Authorities
acted as a judicial tribunal in holding proceedings
434
against the person. The scheme of the relevant pro. visions
of the Act was then examined, and it was held that the said
authorities are not a judicial tribunal with the result that
the “I adjudging increased rate of duty or penalty and
confiscation” under the provisions of the said act did not
constitute a judgment or order of a court or judicial
tribunal necessary for the purpose of supporting the plea of
double jeopardy. In the result the conclusion of this Court
was that when the Customs Authorities confiscated the gold
in question the proceedings taken did not amount to a
prosecution of the party nor did the order of confiscation
constitute a punishment as contemplated by Art. 20(2).
This decision has been affirmed by this Court in the case of
S. A. Venkataraman v. The Union of India (1). In that case
an enquiry bad been made against the appellant Venkataraman
under the Public Servants (Inquiries) Act, 1850 (Act XXXVII
of 1850). On receiving the report of the enquiry
commissioner opportunity was given to the appellant under
Art. 311(2) to show cause, and, ultimately after
consultation with the Union Public Service Commission the
appellant was dismissed by an order passed by the President.
The order of dismissal was passed on September 17, 1953.
Soon thereafter on February 23, 1954, the police submitted a
charge-sheet against him charging him with having committed
offenses under ss. 161/165 of the Indian Penal Code ‘and s.
5(2) of the Prevention of Corruption Act. The validity of
the subsequent prosecution was challenged by the appellant
on the ground that it contravened the constitutional
guarantee enshrined in Art. 20(2). The appellant’s plea
was, however, rejected on the ground that the proceedings
taken against him before the commissioner under the
Inquiries Act did not amount to a prosecution. The relevant
provisions of the said act were examined, and it was held
that in an inquiry under the said Act there is neither any
question of investigating an offence in the sense of an act
or omission punishable by any law for the time being in
force nor is there
(1) [1964] S.C.R. 1150.
435
any question of imposing punishment prescribed by the law
which makes that act or omission an offence. Mukherjea, J.,
as he then was, who delivered the judgment of the Court, has
referred to the earlier decision in the case of Maqbool
Hussain (1), and has observed that ” the effect of the said
decision was that the proceedings in connection with the
prosecution and punishment of a person must be in the nature
of a criminal proceeding before a court of law or a judicial
tribunal, and not before a tribunal which entertains a
departmental or an administrative enquiry even though set up
by a statute but which is not required by law to try a
matter judicially and on legal evidence “. Thus these two
decisions can be said to have considered incidentally the
general scope of Art. 20 though both of them were concerned
directly with the construction and application of Art. 20(2)
alone.
Article 20(3) was considered by the Full Court in M. P.
Sharma v. Satish Chandra, District Magistrate, Delhi (2).
The question about the scope and effect of Art. 20(3) was
raised in that case by a petition filed under Art. 32 of the
Constitution. It appears that the Registrar of the Joint
Stock Companies, Delhi State, lodged information with the
Inspector-General, Delhi Special Police Establishment,
against the petitioners alleging that they had committed
several offenses punishable under the Indian Penal Code.
The lodging of this information was preceded by an
investigation into the affairs of the petitioners’ company
which had been ordered by the Central Government under a.
138 of the old Act, and the report received at the end of
the said investigation indicated that a well-planned and
organised attempt had been made by the petitioners to
misappropriate and embezzle the funds of the company by
adopting several ingenious methods. On receipt of the said
First Information Report the District Magistrate ordered
investigation into the offenses and issued warrants for
simultaneous searches at as many as thirty four places. By
their petitions the petitioners contended that the search
warrants
(1) [1953] S.C.R. 730. (2) [1954] S.C.R. 1077.
56
436
were illegal and they prayed that the same may be quashed
as being in violation of Art, 20(3). The plea thus raised
by the petitioners was ultimately rejected on the ground
that the impugned. searches did not violate the’ said
constitutional guarantee. Jagannadha das, J., who spoke for
the Court, observed that ” since article 20(3) provides for
a constitutional guarantee against testimonial compulsion
its words should be liberally construed, and that there was
no reason to confine the content of the said guarantee to
its barely literal import “. He, therefore, held that the
phrase ” to be a witness ” means nothing more than to
furnish evidence, and such evidence can be furnished through
the lips or by production of a thing or of a document or in
other modes. He also pointed out that the phrase was ” to
be a witness ” and not ” to appear as a witness ” and so the
protection afforded was not merely in respect of testimonial
compulsion in the court room but may well extend to compel
testimony previously obtained from him. The conclusion of
the Court on this part of the construction was thus stated.
The constitutional guarantee ” is available to a person
against whom a formal accusation relating to the commission
of an offence has been leveled which in the normal course
may result in prosecution ; whether it is available to other
persons in other situations does not call for a decision in
this case “. Since the First Information Report bad been
recorded against the petitioners in that case it followed
that the first test that a formal accusation relating to the
commission of an offence must have been leveled was
satisfied. The question which was then considered was
whether there was any basis in the Indian Law for the
assumption that a search or seizure of a thing or document
is in itself to be, treated as compelled production of the
same; and it was held that there would be no justification
for treating the said search or seizure as compelled
production; that is why the challenge to the validity of the
search warrants issued against the petitioners was repelled.
The effect of this decision thus appears to be that one of
the. essential conditions for invoking the constitutional
guarantee enshrined in Art. 20(3)
437
is that a formal accusation relating to the commission of an
offence, which would normally lead to his prosecution,, must
have been leveled against the party who is being compelled
to give evidence against himself; and this conclusion, in
our opinion is fully consistent with the two other decisions
of this Court to which we have already referred.
There are two other subsequent decisions of this’ Court to
which reference may be made. In Thomas Dana v. State of
Punjab (1), according to the majority decision ” prosecution
” in Art. 20(2) means a proceeding either by way of
indictment or information in a criminal court in order to
put an offender upon his trial. It would be noticed that
this conclusion is wholly consistent with the view taken by
this Court in the case of Maqbool Hussain (2) and S. A.
Venkataraman (3). In Mohammed Dastaqir v. The State of
Madras (4) this Court had to consider Art. 20(3). The
appellant in that case had gone to the bungalow of the
Deputy Superintendent of Police to offer him a bribe which
was covered in a closed envelope with a request that he
might drop the action registered against him. The police
officer threw the envelope at the appellant who took it up.
While the appellant was still in the bungalow he was asked
by the police officer to produce the envelope and he took
out from his pocket some currency notes and placed them on
the table without the envelope. The notes were then seized
by the police officer and a rubber stamp of his office was
placed on them. On these facts it was urged that in relying
upon the evidence of compelled production of notes the
prosecution had , violated the provisions of Art. 20(3). In
support of this contention the general observations made by
this Court in the case of M. P., Sharma(5), were strongly
pressed into service. This Court, however, rejected the
appellant’s arguments and held that the prosecution did not
suffer from any infirmity. On the facts it was found that
though the offence had in fact been already committed
(1) [1959] Supp. 1 S.C.R. 274.
(2) [1953] S.C.R. 730.
(3) [1954] S.C.R. 1150.
(4) A.I.R. 1960 S.C. 756.
(5) [1954] S.C.R. 1077.
438
by the appellant, he had in fact not been accused of it at
the stage when the currency notes were produced by him; it
was also held that it could not be said that he was
compelled to produce the said currency notes, because he
might easily have refused to produce them, ,and so there was
no occasion for him to invoke the constitutional protection
against self-incrimination.
What then is the result of these decisions ? They show that
in determining the complexion and reach of its respective
sub-clauses the general scheme of Art. 20 as a whole must be
considered, and the effect of the inter-action of the
relevant words used ‘in them must be properly appreciated.
Thus considered the constitutional right guaranteed by Art.
20(2) against double jeopardy can be successfully invoked
only where the- prior proceedings on which reliance is plac-
ed must be of a criminal nature instituted or continued
before a court of law or a judicial tribunal in accordance
with the procedure prescribed in the statute which creates
the offence and regulates the procedure. It would be
noticed that the character of the said proceedings as well
as the character of the forum before which the proceedings
are initiated or conducted are treated as decisive in the
matter. Similarly, for invoking the constitutional right
against testimonial compulsion guaranteed under Art. 20 (3)
it must appear that a formal accusation has been made
against the party pleading the guarantee and that it relates
to the commission of an offence which in the normal course
may result in prosecution. Here again the nature of the
accusation and its probable sequel or consequence are
regarded as important.
Thus we go back to the question which we have already posed:
was the appellant accused of any offence at the time when
the impugned notices were served on him ? In answering this
question in the light of the tests to which we have just
referred it will be necessary to determine the scope and
nature of the enquiry which the inspector undertakes under
s. 240 ; for, unless it is shown that an accusation of a
crime can be made in such an enquiry, the appellant’s plea
under Art. 20(3) cannot succeed. Section 240
439
shows that the enquiry which the inspector undertakes is in
substance an enquiry into the affairs of the company
concerned. Certain documents are required to be furnished
by a company to the Registrar under the provisions of the
new Act. If, on examining the said documents, the Registrar
thinks it necessary to call for information or explanation
he is empowered to take the necessary action under s.
234(1). Similarly, under s. 234(7) if it is represented to
the Registrar on materials placed before him by any
contributory or creditor or any other person interested that
the business of the company is carried on in the manner
specified in the-said sub-section the Registrar proceeds to
make the enquiry. Thus the scope of the enquiry con-
templated by s. 234 is clear; wherever the Registrar has
reason to believe that the affairs of the company are not
properly carried on he is empowered to make an enquiry into
the said affairs. Similarly under s. 235 inspectors are
appointed to investigate’ the affairs of any company and
report thereon. The investigation carried on by the
inspectors is no more than the work of a fact-finding
commission. It is true that as a result of the
investigation made by the inspectors it may be discovered
that the affairs of the company disclose not only
irregularities and malpractice but also commission of
offenses, and in such a case the report would specify the
relevant. particulars prescribed by the circular in that
behalf If, after receiving the report, the Central
Government is satisfied hat any person is guilty of an
offence for which he is criminally liable, it may, after
taking legal advice, institute criminal proceedings against
the offending person under s. 242(1); but the fact that a
prosecution may ultimately be launched against the alleged
offender will not retrospectively change the complexion or
character of the proceedings held by the inspector when he
makes the investigation. Have irregularities been committed
in managing the affairs of the company ; if yes, what is the
nature of the irregularities ? Do they amount to the-
commission of an offence punishable under the criminal law ?
If they do who is liable for the said offence? These and
440
such other questions fall within the purview of the ins-
pector’s investigation. The scheme of the relevant sections
is that the investigation begins broadly with a view to
examine the management of the affairs of the company to
find out whether any irregularities have been committed
or not. In such a case there is no accusation, either
formal or otherwise, against any specified individual;
there may be a general allegation that the affairs are
irregularly, improperly or illegally managed; but who would
be responsible for the affairs which are reported to be
irregularly managed is a matter which would be determined at
the end of the enquiry. At the commencement of the enquiry
and indeed throughout its proceedings there is no accused
person, no accuser and no accusation against anyone that he
has committed an offence. In our opinion a general enquiry
and investigation into the affairs of the company thus
contemplated cannot be regarded as an investigation which
starts with an accusation contemplated in Art. 20(3) of the
Constitution. In this connection it is necessary to
remember that the relevant sections of the Act appear in
Part VI which generally deals with management and
administration of the companies.
It is well-known, that the provisions of the Act are
modeled on the corresponding provisions of the English
Companies Act. It would, therefore, be useful to refer to
the observations made by the House of Lords in describing
the character of the enquiry held under the corresponding
provisions of the English Act in the case of Hearts of Oak
Assurance Co. v. Attorney General (1). In that case Lord
Thankerton said ” it appears to me to be clear that the
object of the examination is merely to recover information
as to the company’s affairs and that it is in no sense a
judicial proceeding for the purpose of trial of an offence;
it is enough to point out that there are no parties before
the inspector, that he alone conducts the enquiry, and that
the power to examine on oath is confined to the officers,
members, agents and servants of the company “. We ought,
however, to add that the last
(1) 1932 A.C. 392.
441
observation is no longer true about the inspector’s powers
under s. 240 of the new Act. In the same case Lord
Macmillan observed that ” the object of the enquiry
manifestly is that the Commissioner may either by himself
directly or through the medium of a delegate obtain the
information necessary to enable him, to decide what action,
if any, he should take. The cardinal words of the section
are those which empower the Commissioner or his inspector to
examine into and report on the affairs of the society “.
Thus it is clear that the examination of, or investigation
into, the affairs of the company cannot be regarded as a
proceeding started against any individual after framing an
accusation against him. Besides it is quite likely that in
some cases investigation may disclose that there are no
irregularities, or if there are they do not amount to the
commission of any offence; in such cases there would
obviously be no occasion for the Central Government to
institute criminal proceedings under s. 242(1). Therefore,
in our opinion, the High Court was right in holding that
when the inspector issued the impugned notices against the
appellant the appellant cannot be said to have been accused
of any offence; and so the first essential condition for the
application of Art. 20(3) is absent. We ought to add that
in the present case the same conclusion would follow even if
the clause “accused of any offence ” is interpreted more
liberally than was done in the case of M. P. Sharma (1),
because even if the expression ‘accused of any offence” is
interpreted in a very broad and liberal way it is clear that
at the relevant stage the appellant has not been, and in law
cannot be, accused of any offence. Thus the tests about the
character of the proceedings and the forum where the
proceedings are initiated or intended to be taken are also
not satisfied; but, as we have already indicated, such a
broad and liberal interpretation of the relevant expression
does not appear to be consistent with the tenor and effect
of the previous decisions of this Court.
It is true that in his report the Registrar has made
(1) [1954] S.C.R. 1077.
442
certain allegations on which Mr. Sastri has relied. He
contends that the statements in the report do amount to
allegations of commission of offenses by the appellant.
What the Registrar has stated in his report in this
particular case cannot be relevant or material in deciding
the vires of the impugned section. The vires of the section
can be determined only by examining ‘the relevant scheme of
the Act, and we have already Been that such an examination
does not assist the appellants contention that Art. 20(3) is
contravened. Besides, what the Registrar has stated in his
report can hardly amount to an accusation against the
appellant; it is a report submitted by him to the Central
Government, and it is only intended to enable the Central
Government to decide whether it should appoint an inspector.
It is not as if the investigation before the inspector
begins on the basis that the Registrar is the complainant
who has made an accusation against the appellant, or that
the function of the investigation is to find out whether the
said accusation is proved or not. As we have already seen
an enquiry under s. 240 may require a large number of
persons to give evidence or produce documents but it cannot
be said that any accusation is made against any of the said
persons. In fact three persons have been served with
similar notices in the present enquiry which shows that the
inspector desires to obtain relevant evidence from them as
from the appellant. How can it be said that an accusation
has been made against the said three persons, and that
incidentally helps to bring out the real character and scope
of the enquiry. Therefore we do not think that the state-
ments made in the Registrar’s report, on which Mr. Sastri
relies can really assist us in deciding the question of the
vires of s. 240. It is also significant that the appellant
has not challenged the validity of the impugned notices on
any ground relatable to, or based on, the said report. The
challenge is founded on. the broad and general ground that
S. 240 offends against Art. 20(3).
We may incidentally add that it was in support of his
argument based on the Registrar’s report that
443
Mr. Sastri sought to rely on the decision of the Calcutta
High Court in Collector of Customs v. Calcutta Motor and
Cycle Co. (1). In that case certain notices had been issued
under s. 171A of the Sea Customs Act to certain persons to
appear before the customs officials and to produce certain
documents. The High Court took the view that ” it appeared
from the accusations made in the search warrants at the
instance” of the customs authorities and those made in one
of the notices by the customs authorities themselves, that
the accusations of criminal offenses could not be excluded ”
; and so it was held that the requirements of Art. 20(3)
were satisfied and the protection under the said article was
available to the persons concerned. In our opinion this
decision does not assist the appellant. It proceeded on the
finding that accusations of criminal offenses could be held
in substance to have been made against the persons
concerned, and it dealt with the other points of law on that
assumption. That being so, we think it unnecessary to
discuss or consider the said decision. Our conclusion,
therefore, is that s. 240 does not offend against Art. 20(3)
of the Constitution.
That still leaves the challenge to the vires of the said
section under Art. 14 of the Constitution, though we ought
to add that Mr. Sastri did not seriously press his case
under Art. 14, and we think rightly. The argument under
Art. 14 proceeds on familiar lines. It is urged that the
ordinary protection afforded to witnesses under s. 132 of
the Indian Evidence Act as well as the protection afforded
to accused persons under s. 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, and that violates equality
before the law. The scope and effect of Art. 14 have been
considered by this Court frequently.: It has been repeatedly
held that what Art. 14,prohibits is class legislation; it
does not, however,, forbid reasonable classification for the
purpose of legislation. If the classification on which
legislation is based is founded
57
444
on an intelligible differentia which distinguishes persons
or things that are grouped together from others left out of
the group, and if the differentia has a rational relation to
the object sought to be achieved, then the classification
does not offend Art. 14 (Vide: Shri Ram Krishna Dalmia v.
Justice Tendolkar (1)). Now in the light of this test how
can it be said that the classification made by ss. 239 and
240 offends Art. 14 of the Constitution ? A company is a
creature of the statute. There can be no doubt that one of
the objects of the Companies Act is to throw open to all
citizens the privilege of carrying on business with limited
liability. Inevitably the business of the company has to be
carried on through human agency, and that sometimes gives
rise to irregularities and malpractice in the management of
the affairs of the company. If persons in charge of the
management of companies abuse their position and make
personal profit at the cost of the creditors, contributories
and others interested in the company, that raises a problem
which is very much different from the problem of ordinary
misappropriation or breach of trust. The interest of the
company is the interest of several persons who constitute
the company, and thus persons in management of the affairs
of such companies can be classed by themselves as distinct
from other individual citizens. 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 as a
class by themselves and to provide for necessary safeguards
and checks against a possible abuse of power vesting in the
managers. If the relevant provisions of the Act dealing
with enquiries and investigations of the affairs of the
companies are considered from this point of view there would
be no difficulty in holding that Art. 14 is not violated
either by s. 239 or s. 240 of the new Act.
The result is the appeal fails and is dismissed with costs.
Appeal dismissed.
(1) [1959] S.C.R. 297.
445

 

 

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