Banerjee, J. - (1.) The petitioner-company claims to carry on business as managing agent of certain public limited companies, namely, Rohtas Industries Ltd., New Central Jute Mills Co. Ltd., Jaipur Udyog Ltd., Bharat Collieries Ltd., S.K.G. Sugar Ltd., Dehri-Rohtas Light Railway Co. Ltd., Plywood Industries Ltd., and Albion Plywood Ltd. The petitioner-company has a paid up capital of Rs. 5,00,000 and claims to have built up a general reserve of Rs. 25 lakhs. The petitioner-company further claims to be running its business on sound principles and in strict compliance of the provisions of law. These facts are pleaded in order to emphasise upon the contention that the petitioner-company should have been treated as beyond reproach. The measure put by the petitioner-company upon itself is not, however, an agreed measurement and is disputed in the affidavit-in-opposition.
(2.) On April 11, 1963, the Central Government made the following order against the petitioner-company : "Whereas the Central Government is of the opinion that there are circumstances suggesting that the business of Sahu Jain Limited, a company having its registered office at 11, Clive Row, Calcutta (hereinafter referred to as the said company), is being conducted with intent to defraud its creditors, members or other persons and the persons concerned in the management of its affairs have in connection therewith been guilty of fraud, misfeasance or other misconduct towards the said company or its members ; And whereas the Central Government consider it desirable that an inspector should be appointed to investigate the affairs of the said company and to report thereon ; Now, therefore, in exercise of the several powers conferred by Sub-clauses (i) and (ii) of Clause (b) of Section 237 of the Companies Act, 1956 (1 of 1956), the Central Government hereby appoints Shri S. Prakash Chopra of Messrs. S.P. Chopra & Co., Chartered Accountants, 31F Connaught Place, New Delhi, as inspector to investigate the affairs of the said company for the period from September 1, 1958, to date and should the inspector so consider it necessary, also for the period prior to September 1, 1958, and to report thereon to the Central Government pointing out, inter alia, all irregularities and contraventions in respect of the provisions of the Companies Act, 1956, or of the Indian Companies Act, 1913, or of any other law for the time being in force and person or persons who are responsible for such irregularities and contraventions ; The inspector shall complete the investigation and submit six copies of his report to the Central Government not later than four months from the date of issue of this order unless time in that behalf is extended by the Central Government; A separate order will issue with regard to the remuneration and other incidental expenses of the inspector."
(3.) The petitioner-company objected to the order in writing on June 12, 1963, in the following language : "It is alleged in the preamble of the said order that the Central Government is of the opinion that there are circumstances suggesting that our business is being conducted with intent to defraud our creditors members or other persons and the persons concerned in the management of the company's affairs have in connection therewith been guilty of fraud misfeasance or other misconduct towards the company or its members. These allegations are entirely unfounded and false. We deny that there are any circumstances suggesting as indicated in the preamble. We feel that the above order has been made because of extraneous circumstances. If, however, there are any materials in the possession of the Central Government on the basis of which the Central Government has formed the above opinion, we would request you to kindly furnish the same to us at the earliest.";