M SUBBARAYULU Vs. AMBUJA PETROCHEMICALS LTD

JUDGEMENT

(1.) THIS appeal preferred under Section 483 of the Companies Act, 1956, read with Clause 15 of the letters patent is directed against the order of the learned Company Judge dated 26-3-2002 in C. A. No. 531 of 2000 in RCC No. 4 of 1997. C. A. No. 531 of 2000 was filed by the Official Liquidator in RCC No. 4 of 1997 under Section 457 (1) of the Companies Act, 1956 ('the Act'), read with Rule 94 (11) (b) of the Companies (Court) Rules, 1959 seeking the following relief:

(2.) THE learned Company Judge by his order dated 9-11-2000 allowed the CA 531 of 2000 and passed the following order:

(3.) THE validity of the above order is assailed by Mr. B. Adinarayana Rao, the learned counsel for the appellant mainly on the ground among other grounds that it was made in utter violation of principles of natural justice and without hearing the appellant. The learned counsel contended that the finding of the learned Company Judge that the appellant-official liquidator has misused his office is a very serious charge, which has the effect of tarnishing even the image and integrity of the appellant and if it is allowed to stand, it would also violate his civil liberties and freedoms and that such a finding could not have been recorded by the learned Company Judge without giving an opportunity to the appellant to explain his conduct. Admittedly, the order impugned in the appeal was passed by the learned Company Judge without giving any opportunity to the appellant to explain his conduct. It is brought to our notice, at the time of hearing, by the learned counsel for the appellant and which is not seriously disputed by the learned Additional Advocate-General that the appellant laid down his office as official liquidator in this Court on 5-3-2002 and his successor joined the office on 13-3-2002. However, the learned Additional Advocate-General would contend that the observation made by the learned Company Judge that the appellant has misused his office is well-justified and records of the court would substantiate the same beyond any doubt and, in that view of the matter, it is not a fit case where the Appellate Court should step in and interfere with the order of the learned Company Judge. The impugned order, which has the effect of affecting civil rights and liberties of the appellant, was made by the learned Company Judge without hearing the appellant. There is no controversy on this aspect. We are also of the considered opinion that this is not a case where the court should invoke the technique of post-decisional hearing. It is not even the contention of the learned Additional Advocate-General that the learned Company Judge had no time to spare and that he could not have waited for making the impugned order to avoid or prevent some public mischief and, therefore, it became imperative for the learned judge to pass the impugned order. The affected person should be appraised before an adverse action is taken against him is well-settled principle of law flowing from Article 14 postulates. On that short ground, we are of the considered opinion that the order of the learned Company Judge under appeal cannot be sustained. Accordingly, we allow the appeal and set aside the order under appeal except the direction issued by the learned Company Judge to the Regional Director, Southern Regional of Company Affairs, Chennai, to file an affidavit in the manner and the mode indicated in the order. No costs.