The main legal point established in the judgment is that S.45G of the Banking Companies Act, 1949 does not contravene Art.20(3) of the Constitution as it does not apply to persons accused of any offence, and the public examination is a preliminary stage of enquiry to collect evidence and decide whether any acts or omissions caused loss to the banking company.

1. Two questions of law have been raised before us by Dr. Seyid Muhammad on behalf of K. Joseph Augusthi, the appellant in Civil Appeal No. 254/1963. Both of them are related to S.45G of the Banking Companies Act, 1949 (No. X of 1949) (hereinafter called the Act). The first question raised has reference to the validity of the said section, and the second to its true scope and effect. Dr. Seyid Muhammad contends that the answers given by the Kerala High Court to both these questions are erroneous. According to him, S.45G is unconstitutional inasmuch as it contravenes the fundamental right guaranteed to the citizens of this country by Art.20 (3) of the Constitution. He also argues that in making an order for the public examination of the appellant, the High Court has misconstrued the scope and effect of the relevant provisions of the said section.

2. The appellant Joseph Augusthi was the Managing Director of the Palai Central Bank Limited from 26-1-1927 to 8-8-1960; K. George Thomas and George Joseph who are the appellants in the two other appeals Nos. 255 and 256 of 1963 respectively, were the Directors of the said Bank; the first of them was the Director from 14-1-1935 to 8-8-1960 and the latter from 26-1-1927 to 8-8-1960.

3. An application for the winding up of the said Bank was made before the Kerala High Court by the Reserve Bank under S.38(3)(b)(iii) of the Act. The said provision justifies the making of an application by the Reserve Bank in case in the opinion of the Reserve Bank, the continuance of the banking company in question is prejudicial to the interests of the depositors. On the 8th August, 1960, an order was passed on the said application appointing the Official Liquidator of the High Court the Provisional Liquidator of the Bank. The order of winding up then followed on the 5th December, 1960, and on the 8th December, 1960, an Official Liquidator was appointed under S.39 of the Act. After the Official Liquidator came on the scene, he made three reports to the High Court - report No. 192 on the 17th August, 1961; report No. 242 on the 29th September, 1961 and report No. 350 on the 4th December, 1961. All these reports were made under S.45G (1) of the Act. The appellants filed their objections on the 23rd November, 1961 to the first two reports. The matter was then considered by the learned single judge of the Kerala High Court and after hearing the parties, he made an order directing the public examination of the three appellants under S.45G (2).

4. This order was challenged by the appellants by preferring three appeals before a Division Bench of the High Court. The Division Bench agreed with the view taken by the learned single judge and dismissed the three appeals. The appellants then applied for and obtained certificates from the High Court and it is with the said certificates that they have come to this Court by the present three appeals.

5. The first point which has been argued before us by Dr. Seyid Muhammad is that S.45G is unconstitutional because it contravenes the fundamental rights guaranteed by Art.20(3). In order to appreciate this argument, is necessary to read S.45G(1) & (2):

"(1) Where an order has been made for the winding up of a banking company, the official liquidator shall submit a report whether in his opinion any loss has been caused to the hanking company since its formation by any act or omission (whether or not a fraud has been committed by such act or omission) of any person in the promotion or formation of the banking company or of any director or auditor of the banking company.

(2) If, on consideration of the report submitted under sub-section (1), the High Court is of opinion that any person who has taken part in the promotion or formation of the banking company or has been a director or an auditor of the banking company should be publicly examined, it shall hold a public sitting on a date to be appointed for that purpose and direct that such person, director or auditor shall a