MEHTAB CHAND GOLCHA Vs. OFFICIAL LIQUIDATOR

JUDGEMENT

(1.) THE appeal before us is by Shri Mehtab Chand Golcha and others, who are standing trial in this Court for offences under Section 454(5) of the Indian Companies Act, 1956, hereinafter to be referred as the Act. They raised an objection before the learned Company Judge that Section 454(5A) of the Act was ultra vires the Constitution being violative of Article 14 thereof By his order dated 25th April, 1973, the learned Company Judge rejected the objections holding that Section 454(5A) of the Act was ultra -vires.

(2.) THE present appeal is directed against this order. The question that is confronting the appellants at the very thresh hold is whether the order is appealable and the appeal lies within this Court The learned Counsel bases his right of appeal on Section 483 of the Act, which we may read: Appeals from any order made, or decision given, in the matter of the winding -up of a company by the Court shall lie to the same Court to which, in the same manner in which, and subject to the same conditions under which, appeals lit from any order or decision of the Court in cases within its ordinary jurisdiction. The learned Counsel maintains that this section is wide enough to confer a right of appeal on an aggrieved party against any order made or decision given in the rnatter of winding -up of a Company and is not conditioned by any other limitations except regarding the procedural matters like that of filing the appeal within the period of limitation or payment of court -fee. It must, however, be said to the credit of the learned Counsel that he at once conceded that the words 'any order' occurring in the section are not to be construed to cover each and every kind of order that a Company Judge may pass but they should be taken to mean an order which in substance determines some right of the concerned party. In the present case, however, the learned Counsel maintains that the fundamental right of the party under Article 14 of the Constitution has been determined by the learned Company Judge regarding the mode of trial of the appellants.

(3.) IT is in the light of these provisions that we have to see whether Section 483 of the Act should be so construed as to confer a right of appeal on a party even in the exercise of the criminal jurisdiction by the Company Judge of this Court. We have no doubt that the procedure for the trial of offences under Sub -section (5) of Section 454 shall be governed by the Criminal Procedure Code, subject to the modifications contained in Sub -section (5 -A) of Section 454 of the Act. Section 5(i) of the Criminal Procedure Code lays down the procedure for the trial of offences that all offences under the Indian Penal Code shall be investigated, inquired into, tried and otherwise dealt with according to the provisions hereinafter contained (in the Criminal Procedure Code). Sub -section (2) of Section 5 Cr. P.C. lays down that all offences under any other law shall be investigated, inquired into, tried and otherwise dealt with according to the same provisions but subject to any enactment for the time being in force regulating the manner or place of investigating, inquiring into, trying or otherwise dealing with such offences. The combined effect of Sub -section 5(2) of the Criminal Procedure Code and Section 454(5A) of the Act is that the mode of trial for the offence in question shall be governed by the Code of Criminal Procedure subject only to the modification that the offence shall be tried by the Company Judge as a summons case but he has nevertheless to proceed in the same manner as a summons case to be tried by a Magistrate. The opening words of Section 483 of the Act make provision for appeals from any order made or decision given in the matter of the winding -up of a Company by the Court. The pointed question before us is whether once the Company Judge has taken cognizance of the offence and the accused is put on trial, an order pissed in the course of the trial can be taken to be a matter relating to the winding -up of the Company Having considered the matter, we are clearly of the opinion that such an order passed during the course of that criminal trial would be outside the periphery or orbit of matters tor the winding up of a Company. The Company Judge may be said to be dealing with the question of sanctioning prosecution by the Official Liquidator as a matter relating to the winding up of a Company but once this stage has passed and the court has taken cognizance of the offence it would cease to be a matter for the winding UP of the Company, though the offence may have been committed in relation to the administration of the affairs of a Company during winding up. The criminal case would then be dealt with in the exercise of the criminal jurisdiction of this Court. Up to the stage of sanctioning the prosection, the Company Judge would be exercising Civil jurisdiction.