B.N. Banerjee, J. - (1.) The circumstances under which there was an order, made on April 11, 1963, for investigation into the affairs of the Petitioner company, under Sec. 237 of the Companies Act 1956, a further order under Sec. 209(4) of the Act, made on September 6, 1963, for inspection of the books and accounts of the said company and the circumstances under which the completion of the investigation was delayed and, therefore, extended from time to time and reason why the personnel of the inspectorate was changed have all been dealt with in my judgment in New Central Jute Mills Co. Ltd. v/s. Deputy Secretary : 70 C.W.N. 280, and I need not recount the details. By the above judgment, I upheld the action taken against the Petitioner company but criticised the manner in which the investigation was being carried on in the following language: I am constrained to observe that from April 11, 1963 to June 12, 1964, during which period S.P. Chopra acted as the sole inspector and thereafter from June 13, 1964 to June 30, 1964, during which S.P. Chopra acted along with a co -inspector, time and opportunity were wasted and no progress1 was made in the investigation. There is a note by S.P. Chopra, annexed to the affidavit -in -opposition, explaining his difficulties and the reasons for the slow progress. That document is dismal reading. He admits that at the beginning of the investigation, the Petitioner company showed signs of co -operation. He further admits that the Petitioner company prepared statements as required by him and submitted minute books when called for by him. Thereafter he himself created situations after situations by insisting upon signature of the management on statements supplied to him at his own request by sitting over the minute books of the company, by refusing to return the original minute books, even after the Petitioner company offered to supply certified copies of the books for his use by deputing members of his staff to do 'part of the work' on his behalf and the like. Antagonism thus generated degenerated into wordy battles, deliberate non -co -operation and complaints against each other, in course of which S.P. Chopra felt insulted and personally insecure, for reasons best known to him. It appears to me that the energy of both sides was dissipated in petty -fogging disputes and ultimately S.P. Chopra recommended 'drastic action'. Some drastic steps, by way of seizure of documents etc. have already taken place, but I need not advert to that at this stage, because that is the subject -matter of another Rule which is now pending. I do not know how the new co -inspectors, Puri Bafna combination, will work, and I can only hope that they will not commit the same mistakes to which S.P. Chopra fell a victim The powers with which inspectors are invested under the Companies Act, are very wide and if legal remedies were resorted to in proper time, much time and energy might have been saved. I have adverted to this aspect of the matter at some length, because although the Respondents might have acted within their jurisdiction the carriage of the investigation has not been so far worthily done.
(2.) In this Rule, I am concerned with the validity of the action taken in seizing the books and documents of the Petitioner company in circumstances hereinafter related.
(3.) Sec. 240A of the Companies Act, dealing with seizure of documents by inspector, is couched in the following language: 240A. (1) Where in the course of investigation under Sec. 235 or Sec. 237 or Sec. 239 or Sec. 247, the inspector has reasonable ground to believe that the books and papers of, or relating to, any company or other body corporate or any managing agent or secretaries and treasurers or managing director or manager of such company or other body corporate, or any associate of such managing agent or secretaries and treasurers may be destroyed, mutilated, altered, falsified or secreted, the inspector may make an application to the Magistrate of the First Class or, as the case may be, the Presidency Magistrate, having jurisdiction for an order for the seizure of such books and papers. (2) After considering the application and hearing the inspector, if necessary, the Magistrate may by order authorise the inspector - - (a) to enter, with such assistance, as may be required, the place or places where such books and papers are kept; (b) to search that place or those places in the manner specified in the order; and (c) to seize books and papers he considers necessary for the purposes of his investigation. (3) The inspector shall keep in his custody the books and papers seized under this Sec. for such period not later than the conclusion of the investigation as he considers necessary and thereafter shall return the same to the company or the other body corporate, or, as the case may be, to the managing agent, or the secretaries and treasurers or the associate of such managing agent or secretaries and treasurers or the managing director or the manager or any other person, from whose custody or power they were seized and inform the Magistrate of such return. (4) Save as otherwise provided in this section, every search made under this Sec. shall be carried out in accordance with the provisions of the Code of Criminal Procedure, 1898, relating to searches made under that Code.;