Bhaskaran, Actg. C.J.
1. W.A. No. 51 of 1982 is by Sri. C.V. Karuppunni, one of the directors of Sudarsan Trading Co. Ltd., Calicut, and is directed against the dismissal of his writ petition, O. P. No. 7197 of 1981 ; O.P. No. 77 of 1982 is by Sri. V. P. Balaram, chief executive of the said company ; and O. P. No. 3949 of 1982 is by Sri. M. Velayudhan, the managing director of the said company.
2. Copies of the summons under Section 209A of the Companies Act, 1956 (the Act), dated November 30, 1981, addressed to the petitioner in O. P. No. 77 of 1982, the second petitioner in O. P. No. 3949 of 1982 and the petitioner in O. P. No. 7197 of 1981 (the appellant in W. A. No. 51 of 1982), were respectively marked as Exts. P-1, P-14 and P-15 in the set of documents produced in O. P. No. 77 of 1982. In O. P. No. 3949 of 1982, the summons addressed to the second petitioner therein is marked exhibit P-1 ; and the summons addressed to the petitioner in O. P. No. 7197 of 1981 (the appellant in W. A. No. 51 of 1982) is marked exhibit P-l in that writ petition. In all the three cases, the challenge being directed against the legality of these summons dated November 30, 1981, issued to the various petitioners, all these cases were heard together, and are being disposed of by this common judgment.
3. Sudarsan Trading Co. Ltd. is a company mainly transacting non-banking financial business. The first respondent, the Joint Director, Inspection, Company Law Board, Southern Region, Madras (for short 'the Board'), decided to inspect the books of account and other records of the company under Section 209A of the Act. The company, however, pointed out that the Board had already initiated investigation under Section 237B of the Act; that the Delhi High Court in Civil Writ Petitions Nos. 143 and 848 of 1974 had directed stay of proceedings and the Central Government counsel had given an undertaking before that court that no action would be taken further in the matter pending disposal of the writ petitions; and that it was when these writ petitions were pending on the file of the High Court of Delhi that the first respondent had decided to inspect the books of account and other records of the company. The material portion of the summons dated November 30, 1981, produced in the respective petitions as exhibit P-1 reads as follows :
'Whereas your attendance is required in connection with the inspection under Section 209A of the Companies Act, 1956, in the case of M/s. Sudarsan Trading Co. Ltd. you are hereby required personally to attend at the office of the Regional Director, Company Law Board, Southern Region, Shastri Bhavan, Block IV, 2nd floor, 35, Haddows Road, Madras 600 006, on the fourteenth day of December, 1981, at eleven O' clock a.m. to produce either personally or through an authorised representative the books of account or other documents specified overleaf and not to depart until you receive my permission to do so. If you intentionally fail to so attend and produce the books of account or documents, a fine up to Rs. 500 may be imposed upon you.'
4. On behalf of the petitioners, various contentions including the vires of Section 209A of the Act have been raised. The plea that investigation undertaken by the Board, under Section 237B of the Act, has been stayed by the High Court of Delhi and, therefore, inspection of books of account under Section 209A of the Act would not be permissible was not seriously pursued by Sri. K.K. Venugopal, the counsel for the petitioners. The stress laid by Sri. Venugopal centred round the scope of inspection of the books of account, etc., of the company by the first respondent or his subordinates by virtue of the power vested in them under Section 209A of the Act. It was his submission that the section falls under the head 'Accounts' in Part VI and the right of inspection in relation to the company would be restricted to that of the books of account. This position, according to him, is very clear from the provisions of the Act itself. He also contended for the position that the summoning of the books of account and personal attendance could be ordered only after the first respondent or his subordinates had undertaken an inspection of the books of account. In that connection considerable stress is laid on the expression 'making inspection' occurring in Sub-section (3) of the section. For the sake of convenience, we would quote Sub-sections (1) to (5) of the section, with which we are directly concerned in this case :
' 209A. Inspection of books of account, etc., of companies.--(1) The books of account and other books and papers of every company shall be open to inspection during business hours-
(i) by the Registrar, or
(ii) by such officer of Government as may be authorised by the Central Government in this behalf:
Provided that such inspection may be made without giving any previous notice to the company or any officer thereof. (2) It shall be the duty of every director, other officer or employee of the company to produce to the person making inspection under Sub-section (1), all such books of account and other books and papers of the company in his custody or control and to furnish him with any statement, information or explanation relating to the affairs of the company as the said person may require of him within such time and at such place as he may specify.
(3) It shall also be the duty of every director, other officer or employee of the company to give to the person making inspection under this section all assistance in connection with the inspection which the company may be reasonably expected to give.
(4) The person making the inspection under this section may, during the course of inspection,--
(i) make or cause to be made copies of books of account and other books and papers, or
(ii) place or cause to be placed any marks of identification thereon in token of the inspection having been made.
(5) Notwithstanding anything contained in any other law for the time being in force or any contract to the contrary, any person making an inspection under this section shall have the same powers as are vested in a civil court under the Civil Procedure Code, 1908, while trying a suit, in respect of the following matters, namely :--
(i) the discovery and production of books of account and other documents, at such place and such time as may be specified by such person;
(ii) summoning and enforcing the attendance of persons and examining them on oath;
(iii) inspection of any books, registers and other documents of the company at any place. '
5. We find it difficult to agree with this argument inasmuch as the same expression ' making inspection ' occurs in Sub-section (2) of the section, and that would mean, if it is only after the inspection is over that the directors, officers or employees of the company are bound to produce books of account and other books and papers of the company to the officers, who are authorised in that behalf and who intended to inspect the books, that the inspection had to be done without the aid of books of account which might be rather impracticable, if not impossible.
6. We, however, find considerable force in the argument advanced by Sri Venugopal that the principles of ejusdem generis have to be applied in deciding the question as to the type of books and documents the inspecting officers are entitled to inspect. In other words, the documents and papers referred to in Sub-section (1) of the section must be those which have the character of books of account. The submission that in the guise of carrying out an inspection of books of account and other books and papers, the inspecting authorities cannot make a roving enquiry into all the affairs of the company merits serious consideration. We are of the opinion that the scope of inspection of books of account and other books and papers under Section 209A has its limits and has to be distinguished from the investigation of the company's affairs under Section 237 of the Act. Sri Venugopal submitted that the company would have no objection to the officers of the Board inspecting at the office of the company where the books of account and other books and papers have to be kept under the Act, which would include books of account, ledgers, documents, and vouchers described in item 1 of the notice dated November 30, 1981, in the instant case. In view of this offer made by Sri Venugopal, we consider that the writ appeal with the writ petitions could be disposed of with the following directions:
(1) A notice listing the actual ledgers, documents and vouchers to be inspected by the officers of the Board shall be served on the petitioner company not less than four weeks prior to the date of inspection, and such inspection in any one office of the company will be completed as expedi-tiously as possible, as far as possible within two weeks from the date of its commencement.
(2) It shall then be open to the respondents to inspect at the office of the company where the books of account and other books and papers have been kept under the Act, including ledgers and vouchers described in item 1 of the notice dated November 30, 1981.
(3) In case the respondents require to inspect books and documents other than those mentioned in Clause (2) above, they would seek appropriate directions from the company court.
(4) The question whether the petitioner company would be within its right to seek privilege on the ground that it is beyond the scope of inspection under Section 209A and would trespass into the arena of investigation under Section 237 of the Act, would have to be considered on the facts and circumstances of the case ; and no particular direction in that behalf is issued in this judgment.
(5) After inspection of books of account and other books and papers as contemplated by Sub-section (1) of the section, if the respondents require any statement, information or explanation relating to the affairs of the company from any director, officer or employee of the company, the respondents would be at liberty to exercise such rights as are available to them under Sub-sections (2) and (5) of the section.
7. The writ appeal and the writ petitions are disposed of with the above directions. There will be no order as to costs.
8. Carbon copy of this judgment may be granted to the counsel for the Central Government free of charge and to the counsel for the petitioners on usual terms if applied for in that behalf.