Banking Regulation Act, 1949
45G. Public examination of Directors and Auditors
(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) or any person in the promotion 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.
(3) The official liquidator shall take part in the examination and for that purpose may, if specially authorized by the High Court in that behalf, employ such legal assistance as may be sanctioned by the High Court.
(4) Any creditor or contributory may also take part in the examination either personally or by any person entitled to appear before the High Court.
(5) The High Court may put such questions to the person examined as it thinks fit.
(6) The person examined shall be examined on oath and shall answer all such questions as the High Court may put or allow to be put to him.
(7) A person ordered to be examined under this section may, at his own cost, employ any person entitled to appear before the High Court who shall be at liberty to put to him such questions as the High Court may deem just for the purpose of enabling him to explain or qualify any answer given by him:
PROVIDED that if he is, in the opinion of the High Court, exculpated from any charges made or suggested against him, the High Court may allow him such costs in its discretion as it may deem fit.
(8) Notes of the examination shall be taken down in writing, and shall be read over to or by, and signed by, the person examined and may thereafter be used in evidence against him in any proceeding, civil or criminal, and shall be open to the inspection of any creditor or contributory at all reasonable times.
(9) Where on such examination, the High Court is of opinion (whether a fraud has been committed or not):-
(a) that a person, who has been a Director of the banking company, is not fit to be a Director of a company, or
(b) that a person, who has been an Auditor of the banking company or a partner of a firm acting as such Auditor, is not fit to act as an Auditor of a company or to be a partner of a firm acting as such Auditor, the High Court may make an order that the person shall not, without the leave of the High Court, be a Director of, or in any way, whether directly or indirectly, be concerned or take part in the management of any company or, as the case may be, act as an Auditor of, or be a partner of a firm acting as Auditors of, any company for such period not exceeding five years as may be specified in the order.