The differentiation based on a reasonable classification between banking companies and ordinary companies justifies the provisions of S.45G of the Banking Companies Act.

1. y these reports, made under S.45 G of the Banking Companies Act, the official liquidator asks for the public examination of ten persons - I shall call them respondents - the first nine of whom were directors (the first of them the managing director) of the banking company that is being wound up, and the tenth its auditor. The 2nd respondent died soon after the filing of the first of these reports, and he is beyond the reach of human examination.

2. Notice has gone to the remaining respondents and they have been heard as required by the proviso to sub-section (2) of the section. But, before considering the objections taken by them, I think it would be profitable to have a close look at the section and compare it with its parent section, now S.478 of the Companies Act, 1956.

3. S.45 G of the Banking Companies Act - so far as is material - runs as follows:

"45G. (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 banking 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 attend thereat and shall be publicly examined as to the promotion or formation or the conduct of the business of the banking company, or as to his conduct and dealings, in so far as they relate to the affairs of the banking company:

Provided that no such person shall be publicly examined unless he has been given an opportunity to show cause why he should not be so examined.

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And S.478 of the Companies Act as follows:

"478. Power to order public examination of promoters; directors etc.- (1) When an order has been made for winding up a company by the Court, and the Official Liquidator has made a report to the Court under this Act, stating that in his opinion a fraud has been committed by any person in the promotion or formation of the company, or by any officer of the company in relation to the company since its formation, the Court, may, after considering the report, direct that that person or officer shall attend before the Court on a day appointed by it for that purpose, and be publicly examined as to the promotion or formation or the conduct of the business of the company, or as to his conduct and dealings: as an officer thereof."

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4. The essential difference between the two provisions is that while S.478 of the Companies Act requires the liquidator to state that in his opinion a, fraud has been committed by the person whose public examination he seeks, S.45 G of the Banking Companies Act requires no allegation of fraud. All that it requires is an allegation that there has been an actor omission, whether amounting to fraud or not, by which loss has been caused.

5. There are other differences between the two provisions, but I do not think that they materially affect the scope of the inquiry. The more important of these differences are:

(1) While S.478 of the Companies Act applies to all officers of the company, S.45 G of the Banking Companies Act applies only to directors and auditors. (I am leaving out promoters).

(2) While S.478 of the Companies Act makes it quite clear that it is only that person against whom a fraud is alleged that can be summoned for public examination, the wording of S.45 G of the Banking Companies Act (following the wording of S.196 of the Indian Companies Act, 1913) is rather vague, and, on a literal