Chittatosh Mookerjee, J. - (1.) Heilgers Limited, the petitioner No. 1, it an existing company within the meaning of the Companies Act, 1956. The petitioner No. 2 claims to be a share-holder of the petitioner No. 1 Company. The Company Law Board, the respondent No. 1, in exercise of the powers conferred by clause (b) of Section 237 of the Companies Act, 1956 read with Section 10E(1) of the said Act appointed three persons named in the said order as Inspectors to investigate into the affairs of the petitioner No. 1 Company in respect of the years 1969 onwards and to report to the Company Law Board pointing out, inter alia, all irregularities and contraventions made by the Company of the provisions of the Companies Act, 1956 and/or any other law and the person or persons responsible for such irregularities and contraventions. On 22nd August,1977 the petitioners obtained the present Rule, inter alia, praying for cancellation, withdrawal and decision of the said order dated 10th August, 1977 and for commanding the respondents to forbear from giving effect or further effect to the same. The respondents 1, 2 and 3 have filed an affidavit-in-opposition contesting the petitioners' case. The petitioners have filed an affidavit-in-reply to the same. The respondents have also produced true copies of a note of Sri N.D. Bhatia, the Additional Director (I&I), suggesting investigation and appointment of Inspector under Section 237(b) of the Companies Act, 1956 and also of the minutes of the 18th Meeting of the Company Law Board dated 30th of July, 1977 and the same have been collectively marked 'X' and have been kept with the records of this Rule.
(2.) Mr. B.N. Sen, the learned advocate for the petitioners, has submitted that the aforesaid order dated 10th August, 1977 under Section 237(b) of the Companies Act, 1956 is illegal, perverse and has been made without any application of mind and it is based on collateral grounds extraneous to Section 237(b) of the Companies Act, 1956. Mr. Sen has strongly relied upon the majority decision in Barium Chemicals Ltd. and Others v. Company Law Board and Others, AIR 1967 SC 295, and has submitted that the impugned investigation against the petitioner company under Section 237(b) of the Companies Act should be quashed.
(3.) The petitioners have not, however, disputed that the Central Government had delegated its power under Section 237 in favour of the Company Law Board, the respondent No. 1, which purported to pair the impugned order under sub-clauses (i) and (ii) of clause (b) of Section 237 of the Companies Act, 1956. I may now proceed to examine the question whether or not the Company Law Board had exercised the said powers after bonafide forming their opinion that there were circumstances suggesting existence of any of the facts specified in sub-clauses (i) and (ii) of Section 237 (b) of the Companies Act, 1956.;