Dr. Sailendra Nath Sinha and Another v. Jasoda Dulal Adhikari and Another

., S.C.R. SUPREME COURT REPORTS 1263 Dr. SAILENDRA NATH SINHA AND ANOTHER _I958_ # v. [. ] Septnnber zr . JASODA DULAL ADHIKARI AND ANOTHER (JAFER IMAM and J. L. KAPUR JJ.) _Offecial_ _Liquidator-Powers of-Prosecution of Director of_ _Company-If direction of Court necessary-Court giving direction,_ _if bottnd to hear_ _Director-Indian Companies Act, r9r3 (VII of r9r3),_ _ss._ _r79_ _and_ _237(r)._ The Official Liquidator got a complaint under ss. 120-B, 406, 467 and 477A, Indian Penal Code filed before the Presidency Magistrate against the appellants one of whom was a past director and the other the Managing Director of the Bank of Commerce Ltd., which was in compulsory liquidation. The appellants applied to the Presidency Magistrate for dismissal of the con'lplamt on the ground that the Official Liquidator was incompetent to prefer the complaint as there was no sanction of the Company Judge. This was dismissed. The appellants then applied to the High Court for quashing the criminal proceedings on the ground that the prosecution was _ab_ _initio_ void because of the absence of a prior direction judicially given by the High Covrt under s. 23'7(1) of the Indian Companies Act. The High - Court rejected the application. _Held,_ that a direction of the Court under s. 237(1) of the Indian Companies Act was not a co14dition precedent to the prosecution of the appellants by the Official Liquidator. In fact, a valid and proper direction had been given by the Court under s. 237(1) to the Official Liquidator for the prose<>Ution of the appellants. In giving a direction under this section the Court could act _ex_ _parte_ and it was not necessary to give to the appellants any opportunity of being heard. Section 179 of the Companies Act deals with the powers of liquidators to institute or defend legal proceedings with the sanction of the Court and s. 239(1) deao!s with the powers of the Court to give directions **for** **prosecution of delinquent directors, etc.** **In** **the present case,** the Cour~ had made an order under s. 179 giving liberty to the Official Liquidator to institute or defend legal proceedings, and the Official Liquidator was entitled to lodge the complaint against the appellants even without a direction under s. 237(1). CRIMINAL APPELLATE JURISDICTION: Criminal AppeafNo. 28 of 1956. Appeal by special leave from the. judgment aqd order dated June **21,** 1954, of the Calcutta High Court in Criminal Revision No. 811of1953. 1264 SUPREl\IE COURT REPORTS [1959] _1958_ _Ranadeb_ _Clwudlzury_ and _P._ _K._ _Ch'-itteijee,_ for t.hc -- appellants. **Dr.** _**Sni!t:n/HI**_ _**,\'afi;**_ s'"'""' .. /,.,.,"" _B._ _Sen_ and _P._ _K._ _Bose,_ for the re8ponclent.i. _v_ 1958. Srptcmbcr 11. The Judgnwnt of the Court _**fa5nda !Jitlfll**_ _**A.JJ;rfl(ni**_ **6-** \\'a,~ **lkli\·Pred** **b)'** _A·'_ _[011]_ _"'_ KAPt:m J.-This appeal by special leave raises a ~: _**!(up"'**_ _**J.**_ q1w;tion of interpretation of s. 237 of the lnclian Companies Act. Appellant No. **1** is one of the past directors of the Bank of Commerce Ltd., now in liquidation and appellant ~o. 2 was its l\Ianaging Director. The Bank was ordered to be wound up by the High Court of Calcutta on August 7, 1950, and one G. K. Dutt, Bar-at-law was appointed it$ Official Liquidat-0r hut on September 7, 1950, the Officit11 Receiver,,.aR appointed in place of Dutt. On .July 23, Hl52, respondent Xo. I filed in Court of the Presidency lllagistrate a complaint agai1rnt the appellant under ss. 120B, 406, 467, 477A, Indian Penal Code and 182A of the Indian Companie.-; Act and stat.Pd that. he was doing so under the authority of the ofliciid liquidator and th•~ officfal • liquidator had obtained the directions of the High Court tn file the romplaint. On :\Iiiy 5, 1953, the appellant applie<l to the l'residrncy :IIagistrate for dismiss~! of the compbii11t as being without 1 he samtion of tho Company .J'udgc anrl then·forc the official liquidator in his official capacity was incomprtent to prefer the complaint, being the creation of the st11tute h" could only act within the four corners of the statute. He possessed only those powPrs which the •tat.11te confrrrct! 011 him. This ripplicMio11 was diRmissed by the l.'re.,idency :llagistrntc on June 13, 1953. . The >tppellant. then applied to thp, High Court for q11aohing the criminal proceedings 011 the ground that the prosccut.ion waA _ab_ _initio_ void because of the absence of prior direct.ion judicially given by t.he High Cclllrt under s. 237(1) of the Indian Companies Act . The High Court found against the 1tppellanh and discharged the rule. The lcamed Chief Just.ice held that the provisions of s. 237(1) are no bar to a prosecution by.the liquidator; that under s. 23i(I) there is - " nothing in the_ nature of a judicial procl!edings" ; On tb.e application of the official liquidator Bachawat J. an January 15, 1951, made an order which must be taken to be one under s. 179. In this order it was said: S.C.R. SUPREME COURT REPORTS 1265 that it could •not be said that the order was not a _z958_ valid direction under s. 237.(1).. He said: _D_ _N_ _h_ - . h '" _5_ _**at**_ [.] 1 _**en**_ _[d ]_ _**ra**_ _**at**_ " There can e no quest10n m t e present case b _Sinha_ & _Anoth"_ that the relevant facts were all placed before the _v._ Company Judge, because they are all set out in the _Jasoda Dula/_ repor1; of Adhikary and the affidavits annexed tlrnreto _Adhihari_ & to which the order expressly refers and with reference _Another_ to which the liberty to bring legal proceedings was _**Kapur].**_ expressly given. In view of those circumstances, it is .impossible to say that the Company Court had not before it all the facts on which the prosecution is based or that it did not apply its mind to the considerations relevant to section 237(1) ". He also held that clause (a) of s. 179 empowers the liquidator to institute or defend legal proceedings in the name ofthe company and that it was expressly concerned with the powers of the liquidator \vhereas s. 237 dealt with the powers of the Court to give directions. P. B. Mukherji J. gave a concurring judgment. After referring to the history of s. 237, - he held that under that section the Company Judge can act _ex parte_ and it was not necessary for him to hear a director or an officer of the company comptained against and that direction given under that section was not a condition precedent to a prosecution by the official liqnidator nor is it the intention of that section to impinge on the powers of a criminal court under the Code of Criminal Procedure. Leave to appeal having been refused by the Calcutta High Court, the appellants have come to this Court in pursuance of special leave . _**Kapur].**_ "And it is further ordered that the said applicant be at liberty to institnte or defend any suit or prosecution, or other legal proceedings, civil or .criminal in the name and on behalf of the said Bank and to continue all pending suits and execntfon proce.edin.gs by or against the said Bank and for that pll.rpose to #### engage advocate~, Vakils and other lawyers . . and to' 1266 SUPRE)lE COURT REPORTS [1959] _195&_ pay out of the assets of the said Bank tn his hands all - costs of and incidental _ID_ such suits, prosecutions _**Dr.**_ _**SailtJ/dra**_ _**Nath**_ d I I I d" - " _Sfoha_ .s. _A>ioth"_ an 1 or cga procee mgs . v. On,Jul.v 22, 1952, the official liquidator obtained the _]•soda_ _Dula/_ order from Banncrji J. which the High Court has _Adhikari_ .s. held, 'and in our opinion rightly, to be an order ·under _**Another**_ s. 23i(l) of the Indian Companies Act. This order _Kapur_ _]._ On Aug~st 5, 1953, the official liquidator took out ruisfeasancc proceedings under s. 235 of the Companies Act. and the appellants then applied to the High Court for quashing the criminal proceedings already started on the ground of commencement of proeeedu1gs under s. 235. This application was also heard with the rule which was issued on June 29, 1953, and it wa• diomisscd by the same judgment by which the rule was di•charged, i.e., of .June 21, 1954. The general schPme of the Companies Act is that the Court should have complete control of all proceed . ingH in winding up and it was therefore urged that the official liquidator was not authorised to do anything either witlwut t.he sanction of the Court or without its di'rectiouH. Section l iO deal; with the powers of official - liquidator. It provides: - said: " It is ordered that the said applicant be at liberty to take such civil or criminal proceedings as he may think necessary over the report of the said J asoda Dula! Adhikary read with the affidavits of H. Sen Gupta and ~epa.l Chandra Adhikary read with the affidavit.s of H. Sen Gupta and Xepal Chandra Mitra as set out in the said Exhibit "A" ". '.!'he passage already quoted from the judgment of the learned Chief,T ust-ice shows that all the relevant facts were before the Company,Judge, as they were all set out in the affidavits placed before him. The complaint was then filed on July 23, 1952. During the penclen,py of the complaint the appellants took an appeal against • the order of the Company Judge dated July 22, 1952, but it was dismissed OQ the objection ta.ken by the liquidat~ir that it was an administ.rative order and n'ot a judicial order. •.. S.C.R. SUPREME COURT REPORTS 1267 "The offi1iial liquidator ·shall have power, with _'95_ _[8 ]_ the sanction of the court, tei dq the fo!lowing things: _Dr. Sailendra Nath_ (a) to institute or defend any suit **<tr** prosecution _Sinha_ & _Anath"_ or other legal proceeding, ci vii or criminal in the name v. and on behalf of the company ; ............ ". _J_ _asada Dulal_ Under s. 180 the Court may provide that the ~tficial _Adhikari"'_ liquidator may exercise any of the powers given under _**Another**_ s. 179 without the sanction or intervention of the _Kapur]._ Court. Section 183 deals with the exercise and control of liquidator's powers. Sub-section 3 authorises him to apply to the Court for directions in relation to any particular matter arising in the winding up. Sub _**Another**_ _Kapur]._ section 4 is a provision under which the official liquidator is entitled to use his own discretion in the administration of the assets of the company and in the distribution amongst the creditors. Sub-section 5 provides: "If any person is aggrieved by any act or decision of the ofiicial liquidator, that person may apply to the CQurt and the" Court may confirm, reverse or modify the act or decision complained of, and make such order as it thinks just in the circumstances ". T!J.ese provisions show that• s. 179 deals with the powers of the liquidator. Under s. 235 the Court has the pow~ to assess damages against delinquent directors and the Court may on the application of the liquidator or a creditor or a contributory examine into the conduct of a director and compel him to pay or restore money or property or to contribut~ such sum to the assets of the company by way of compensation in respect of any misfeasance on his part and this power may be exercised irrespective of the criminal liability of the director. Section 237 - deals with prosecution of delinquent directors and the relevant. portion of this section is : (1) "If it appears to the Court in the course of a winding up by, or subject to the supervision of; the Court, that any past or present director, manager or other officer, or any member, of the cmppan,y has been guilty of any offence in relation to the company for which he.is criminally liable, the Court may, either on • 161 1268 SUPREME COURT HEPORTS [1959) _i9:;8_ the application of any person intereste<l"in the winding .. _d_ _N h_ up or of itll own motiolJ'. direct the li11uidator either _D_ 1 _Sinha_ '· [5] '" & '" '" _A>iolher ai_ I . Hmse 1 f to :i:wosecute t c ouen er or to refer the •h "" d v. matter to the registrar. _Jasoda Dula/_ (2) If it appears to the liquidator in the course of _Adhihari_ 6- a voruntary winding U!J that any past or present _Another_ director, manager or other officer, or any member of _**J(apur**_ _**J.**_ the company has been guiJt.y of any offence in relation to the company for which he is criminally liable, he shall forthwith report the matter to the registrar and shall furnish to him such information and give to him such access to and facilities for inspecting and taking copies of any documents, being information or documents in the possession or under the control of the liquid11t-0r relating to the matter in question, as Jie may require. (3) Where any report is made under sub-section (2) t-0 the registrar, he may, if he thinks fit, refer the matter to the Central Government for further enquiry, and the Central Government shall t.hemupon inYcstigate the matter and may, if they think it expediei1t, • apply to the Court for an order conferring on any person designated by thf Central Government for the purpose with respect to the company concerned ttll such po,rnrs of investigating the affairs of the company as are prov1ded by this Act in the case of a winding up by the Court. .. (4) If on any report to the registrar under subs. 2 it appears t{) him that the case is not one in which proc(.,>edings ought to be taken by him, he shall inform the liquidator accordingly, and thereupon, "subject to the preYious sanction of the Court, the liquidator may himself take proceedings against the offender. (5) lf it appears to the C-0urt in the course of voluntary winding up that any past or present director, manager or other officer, or any member, of the company has been guilty as aforesaid, and that no report with respect to the matter has been mado by tho liquidator to the registrar, the Court may, on the a11plicatio1\ of iruy person interested in the winding up - or of its' own motion, direct the liquidator to make such a. report! an~ on a report being made accordingly, ## .. ##### • I~ was this section which the appellants pressed in support of the argument that without the order of the Court the official liquidator cannot lodge.a criminal com plaint against a past director and if he does so the proceedings will be _ab_ _initio_ void. All that sub-s. (1) requires is that if the Court finds in the course of winding up that any past or present director, etc., has been guilty of any offence in relation to the company t)le Court may either on the 1j.pplication of the person interested or of its own motion direct the liquidator to prosecute the offender or to refer the matter to the registrar. In the latter case if the registr~r finds that the prosecution ought to be instituted he can do so if advised by the Advocate-General or the public prosecutor. But emphasis was placed by counsel for the appellan1<,s on the proviso that no prosecution could be· undertaken without first giving the accused person an opportunity of making a statement to the registrar or of being heard and it was urged that if the registrar cannot institute prosecution without first giving an opportunity to the person accused to file an explanation, no directions could be given by the judge unless the pfirsons accused are first allowed an opportunity of giving an explanation. But this contention must be repelled. Under s. 237 (1) the Court may direct the liquidator to himself prosecute thA offender or· to refer th~ matter. to the registrar. Giving an oppor-. tunity to the offender before such direct.ion is given by S.C.R. SUPREME COURT REPORTS 1269 the provisions• of this section shall have effect as _r958_ thou~~ the report has _been• m~e in pursuance of the _Dr. S«ilendra_ _Nath_ prov1s10ns of sub-sect10n (2). _Sinha_ &· _Another_ (6) If, where any matter is reported or referred to v. the registrar under this section, he considers that the _Jasoda Dula/·_ case ill one in which a prosecution ought to beo insti- _Adhikari_ & tuted, he shall place the papers before the Advocate-. _Another_ General or the public prosecutor and if advised to do _Kapur_ _J •_ . so institute proceedings : Provided that no. prosecution shall be undertaken without first giving the accused person an opportunity of making a statement in writing to the registrar and of being heard thereon.,, # .. 1270 SCPRE:ME COURT REPORTS [Hl59) _r938_ tho Court is not a prerequisite of the **8"** udgc making .- - _h_ an order under sub-s. (1). Umler 8ub-s. (6) the regist.rar _I»._ _s.,,,.,d.,._ .~·at . . d t . I tr d - l ""'"''•",, <?, _A_ _**110**_ 1, _**ner**_ 1s reqmre - give t 1c 011cn er an opportumt _**J**_ v to s 10w v. cause before a prosecution is undertaken. That is a _Jasoda_ _liulal_ far step from saying that s. 237(1) of the Compani"s _AJMk•"_ - _e>_ Act requires a Judge t<J giYc the offender an oppor_Anolh"_ tnnity before he gires a direction for prosecution hy _**/{ap11r**_ _**j.**_ the liquidator or for reference to the registrar. It was further urged that under sub-s. (4) in the case of voluntary liquidation, the liquidator has to proceed after obtaining the sanction of the Court and therefore it was urged that the liquidator cannot institute criminal proceedings without such sanction in the case of winding up by tho Court. Whatever may be the case of a liquidator under voluntaPy winding up sub-s. (1) of s. 237 makes no s11ch pro. vision in the case of compulsory liquidation. Our att{)ntion was drawn t.o 8ome passages from the ] ndian Companies Act hy Sircar & Sen, 1937 Editio11. At page 624 it is stated that the object of the section is to provide against abuses and indiscriminate commence. ment of prosecutions and also for the first time a provision has been made,under this sect ion for proscc11tions being conducted as crown prosecutions. In 'a passage at page 628 it is stated: "The application should be made on a petition ,·erified by an affidavit in which materials must lie set out sufficient to make out a prima facie case. "But before the Court can exercise its jurisdiction it must come to the conclusion that in the course of winding up the person intended to be charged under this section has been guilty of an offence in relation to the company for which he is criminally li!lble. But such a finding is not to prejudice tho accused i11 any way in his trial. Per Chitty J. in re Charles Denham & Co. Ltd. L.T. 570 at 571." The procedllre under s. 237(1) as stated in this Look at the same page is as follows : #### .. .. - It is m;1t quite settled as to whether the liquidator sho!Md make the application upon notice to any 'one. Generally the application shoulti be _ex_ _parte,_ but ##### • Indian Companies Act was then referred to : " Proceedings will accordingly be taken by the Director of Public Prosecutions (or Lord Advocate) or not at all ". But this is because of the peculiar and express language of s. 334 under which the Judge can only direct the liquidator to refer the matter to the Director of Public Prosecutions or to Lord Advocate as the case may be. In the English Act, specfal,proviflion has bee11 made f"r England saving the institution oL S.C.R. SUPREME COURT REPORTS 1271 the Court may•direct notice to be given to any person _r958_ who is in its opinion entitled oo - be heard ". . h _D 5 r._ _ai_ .1 _en d ra_ _N h at_ These passages do not support the content10n t at _Sinha_ & _Anoth"_ before a prosecution can be validly instituted against v. a past director the sanction of the Court is necessary. _}•soda Dnlal_ Mr. Chaudhuri then relied on an observatitm of _Adhikari_ & Buckley J. _In Re London and_ _Globe_ _Finance Corpora-_ _Another_ _tion(')_ also quoted in Sircar & Sen's book at page _625._ _Kapur]._ There the principles guiding the Court in ordering pro _Kapur]._ secutions have been laid down as follows: "I have next to consider upon what principles I ought to exercise the power given me by s. 167 of the Companies Act, 1862, to direct the official receiver to institute and conduct a prosecution at the expense of tb.e assets. It is obvious that no one legitimately can or ought to institute a criminal prosecution with a view to his personal profit. Neither should a prosecution be instituted from motives of vengeance against the offender. The motive of every prosecution ought to be to inflict punishment upon the criminal for the proper enforcement of the law and for the advantage of the State and with a view to deter others from doing the like ". This passage does not support the giving of an opportunity to the offender before the Judge can give direction nor do they affect the powers of'the liquidator to start a prosecution or the criminal court. to entertain a complaint when filed by the liquidator. The following passage from Buckley's Company Law und~r the commentary under s. 334 of the English Companies Act, 1948, which corresponds to s. 237 of the (r) (1903) r Ch. _728, 733·_ 1272 SUPRE.ME COGRT REPORTS (1959] _1958_ criminal proceedings by private prose~tors. l\Icrcly 0 .,. because no such provisi"n lrns been made in regard to _D_ **r'..lOltn•1u** 1 _/_ n·11/1~ 1 ] _51_ _[,,r.a""' ]_ _[A•"'"" ]_ [,.cot. ][and ][docs not affect ] [the ][argument. ] _v_ l\Ir. Choudhuri then relied on certain English cases _Jusoda_ _D1<fol_ 1lealing with the mode of giving directions. In _Adh•kaoi_ {~ _re_ _ll'o!thern Counties Bank Limited(')_ the,Judgll had _Ano""'_ ordcrcd t.he liquidator to ascertain by circular the _J(af""_ _J._ wishes of the creditors and after they had appeared t-0 oppose the starting of the prosecution, it was held (!) that it did not sufficiently appear that the offoncp, had heen committed and (2) that as 2/3 of the creditors opposed the application the prosecution should not be ordered as expenses will have to be paid from out of the money belonging t-0 the credit-Ors. The main question for decision in that case was whether tlio prosecution should he at the cost and expense of the assets of the com pitny but com petcncy of the liquidator to file the complaint was not in dispute. Reference was t.hcn made to Palmer's Company Precedents, 1952 Edition, Vol. II, again stating as to wher.leavc to prosecute should he given but the law stated there docs not support. the c1~se for the appellants. At page 605 it is stated _:_ ### .. "The summon8 will be ex partc, and should l1e Hnpported by affidavit showing a strong case for prosecution, and a!Ao the extent of the assets and liabilities. The <"Ourt is not willing when the assets are small, to sanction proceedings which may swallow up or largely reduce those asset8 ". The form at p. 607 doeH not show that 11nder the English Companies Act whp,n liberty is given to prosecute the perso'i1 accused is heard. All that is rliqnired is that the court will make its order upon affidavits etc. filed before it and it c1tn also order that. the costs and charges incurred by the liquidator shall be paid out of the assets of the company . It was next eonu•ml<·d that although the l!111gunge of s. 237 was not in the m·gativc form still the effect of the wmds was thn.t 110 prosecution could he instituted without the" sanction of the C-0urt being obtained by .the liquidator. In support of the st:bmissio\l counsel (•I ltH83l 31 ~'.R. _W>_ #### .. ' cedure laid down in that section. Section 237(1) does not lay down any procedure for the giving t>f directions and the provisions in regard to the action taken by the registrar do not have any relevancy to what the court should do before it gives directions. English cases that have been cited do not go to the extent of saying that no prosecution can be instituted without the sanction of the court. They deal with another subject and that is the circumstances in which the Judge would give directions for prosecution and would sanction the assets of the company to be expended in prosecution. Besides nowhere has it been stated that the coprt cannot give directions without first hearing the persons accused or that the directions of the Judge are a condition precedent to the lawful institution of criminal proceedings by the liquidator: S.C.R. SUPREME COURT REPORTS **1273** relied on _Th11 Queen_ _v._ _Cubitt_ (') which was a case _'95_ _[8 ]_ under the Sea Fisheries Act. which created certain _D_ _N_ _h_ _.cc_ d b 'd d. _r._ _5_ _aien_ [.-] 1 _[d ]_ '" _at_ ouences an y s. **11** prov1 e : _Sinha_ o;. _Another_ "The provisions of this Act ............... shall be v. enforced by sea-fishery officers", _J_ _osoda Dula/_ who ltre defined by that section and it was held that _Adhikari"'_ the effect of the words was that no one except the _**Another**_ sea-fishery officer could prosecute an offence under the _**Kapur**_ Act. But there are no such words of limitation in s. 237. In _Taylor_ _v._ _Taylor(')_ the words of the statute were "entitled to the possession or the receipt of the rents and profits" and it was held that the order under the statute could only be made upon a petition which was within the words above quoted and if there wM.s no such person no order could be made but that again was decided on the peculiar language of the statute. Counsel also relied on _Nazir_ _Ahmad_ _v._ _Crown(')_ where it was held that if the statute authorises the doing of an act in one way then it had to be done in .that way or not at all. _**Kapur**_ _]._ ·The argument of Mr. Choudhuri really comes to this that the complaint filed on behalf of the official liquidator was incompetent iIJ. the absence of a direc tion under s. 237 or without complying with the pro (I) (1889) 22 Q.B.D. 622. (2) (<875) I Ch. 426. - t3) (1936) L.R. 63 LA. 372, ~SI. 1274 SUPRE:l1E COURT REPORTS [1959] _1958_ On the other hand it ha.s been held tllat under s. 179 - of the Indian Comp&nie2 Act no sanction is rc_**Dr. Sailendra,\'ath**_ - <l f' - • - I _J_ _Sinha_ & _Anoth"_ qnirc. or commencing a prosecution. n, _asu:anti·ai_ v. _.Mamhil Akhaney_ v. _The_ _::Jtate_ _of Bombay(')_ a.t the in _Jasoda_ _Dula/_ stance of the official liquidator 11 report. was lodged _Adhika•i_ e;. with •the police against the Managing Directer of a _Anoth"_ Bank and the police submitted a c:hargc sheet to ### .. l _**Kap10**_ _**j.**_ the l\Iagistrate. It was obse1Ted by Sinha J. 1tt page 502: "In terms the section lays down the powers of the official liquidator. Such a liquidator has to function under the directions oft.he court which is in charge of the liquidation proceedings. One of his powers is to institut{) prosecutions in the name and on behalf of the company under liquidation with the sanction oft.he court. This section docs not purport to impose any limitations on the powers of a criminal court to entertain a criminal prosecution launched in tho ordinary courso under the provisions of the Code of Criminal Procedure". - It was also pointed out in this ju<lgment that s. 1 i!l contains no words corresponding to the language of Drug Control Order, 1943, which was held to be a CO)ldition precedent for i1rntituting prosecution in the case of _Blisdeo_ _Aggarwal/a_ Y. _King Emperor(')_ nor n.re there any prohibitor)· wonls like those that arc contained in ss. 196 and 197 of the Criminal Procedure Cnde. In the formrr case no prosecution could be instituted without the prnvions sanction of the Provincial Go\•crument and the htt{)r provides that:' no court shq.ll take cognirnrwe ............... ". There are two cases clecidcd by two Indian High Courts· which support the submission of the respondents' counsel. lu _Emperor_ v. _Rishan Sahai_ (') it was held that the C<>mpanics Act nowhere pro\·ides that wit.hout the directions of a Judge no eriminal prosecntion can be instituted. In _1\frityunjoy Clwkrawrti_ v. _Pnn:ot_ _l(umar_ _Pal_ ('), it was hel<l that neither s. 1 i9 nor s. 237 in'.licatcs tl1nt if, the liquidator takes actiou without a 12j **[1945) F.C.R.** **93 .** l~i,,..J.R. 1933 tal. 153. **{I)** **[1956! S.C.H. 483.** l31 J.L.R. (1937) All. _i79·_ - S.C.R. . SUPREME COURT REPORTS 1275 direction of the Court this action would be illegal or _z958_ invalid or it would invalid~te u, prosecution. -.•- I h I fDr. _Sailendra Nath_ I t wo uld t us appear h that uot 1 on t e a'.1guage - _Sinha_ & _Another_ s. 237(1) as well as on precedent the complarnt made v. by the liquidator against the appellants suffers from no _;asoda n .. 1a1_ such .infirmity as to make the proceedings ml'!! and _Adhikari_ & void. The section contains no such words which _Another_ indicate that such a prosecution cannot be instituted by a liquidator without the sanction of the Judge or _**J(apur**_ _]._ that the Court cannot take cognizance of a complaint without such sanction or direction. Section 179 as the learned Chief Justice of Calcutta High Court has _**J(apur**_ _]._ rightly ·pointed out, deals with the powers of liquidators to institute or defend proceedings with the sanctiQn of the Court and s. 237(1) deals with the powers of the Court to give directions for prosecution of delinquent directors, etc. It was further urged on behalf of the respondents that in the case before us there was a proper direction under s. 237(]). The judgment of the High Court shows that before the learned Judge gave a direction on July 22, 1952, there were before him proper materials and, therefore, his sanction was perfectly valid, legal and proper. Before this order made by Ban. nerji J. there was an order of Bachawat J. dated January 15, 1951, under s. 179 and, trherefore, when the liquidator authorised his Assistant, respondent No. 1 to institute the proceedings he was entitled to do so. As we have said above even in the absence of such directions the legality of the criminal proceedings instituted• would not be affected. Noth_ing that we have said in this judgment must be taken to be an expression of opinion which in any way affects the control by the Judge of proceedings in windirig up or over the liquidators. We would, therefore, dismiss this appeal. - _Appeal dismissed ._ **162** -