Malhotra v Malhotra & Anor

This is an application by the defendants, Mr Rajinder Kumar Malhotra and Mr Rajiv Malhotra for an order for an inquiry as to damages under the cross-undertaking in damages given by the claimant, Mr Rakesh Malhotra, in support of a without notice injunction granted on 26 March 2012 by Gloster J. The injunction was discharged by an order dated 16 November 2012 made by Walker J following a judgment given on 30 October 2012. The judge’s order provided that any application by the defendants to enforce the cross-undertaking in damages had to be brought within six months.

By their application dated 15 May 2013 and draft order attached, the defendants seek to recover damages that they say they have suffered as a result of the injunction granted on 26 March 2012 and continued until its discharge on 16 November 2012. In essence, their case is that the injunction curtailed their ability to regain control of companies that were being mismanaged by the claimant and as a result, substantially reduced the value of their shareholdings in those companies. The application is opposed by the claimant on the ground that the defendants have failed to adduce credible evidence that they have suffered loss and damage as a result of the granting of the injunction. He says that if there was any damage it was not caused by the injunction, and is recoverable only by the companies, not by the defendants, under the “reflective loss” principle.

The question to be decided at this time is whether as the claimant says, the court should dismiss the application for an inquiry, or whether as the defendants say, the objections taken are better dealt with during the substantive inquiry, and an order should be made.

The evidence before the court is in the form of witness statements made by Mr Rajinder Kumar Malhotra and Mr Rakesh Malhotra, and a witness statement by Mr Sneha Jaisingh the lawyer acting for claimant in proceedings between the parties which are currently taking place in India. At the end of the first hearing on 17 January 2014, I asked Mr Tom Weisselberg, counsel for the defendants, to prepare a draft Points of Claim for the inquiry into damages. The reason was that if the defendants could not plead a credible case then the inquiry should not go any further, and if they could then it would be clear what their case was. Counsel prepared a draft for the adjourned hearing on 24 January 2014, and this has helped to identify the issues.

As the defendants say in their skeleton argument, these proceedings are part of a wider unfortunate family dispute – the claimant is the son of the first defendant and the brother of the second defendant and is locked into a bitter family struggle over the control of certain Indian companies. The facts are set out in detail in the judgment of Walker J ([2012] EWHC 3020 (Comm)) and I need not repeat them.

The dispute arises out of the restructuring of the business, which was founded by the first defendant in 1949. The English court came to be involved because contractual documentation was governed by English law and included LCIA arbitration provisions.

The proceedings concern an Indian company called Transauto & Mechaids Private Limited (“Transauto”), which is owned by the first defendant, and a number of its subsidiary companies owned by the first defendant through Transauto (or through personal shareholdings). These subsidiaries, which are collectively referred to as the “Affiliated Companies”, and each of which is an Indian company, are Vidyut Metallics Private Limited (“VMPL”), Unique Properties and Securities Private Limited (“Unique”), Supermax International Private Limited (“SIPL”), R.C.C. (Sales) Private Limited (“RCC”) and Emerald Investment Private Limited (“Emerald”).

Following the restructuring, ownership of these companies remained in Mr Malhotra senior, the first defendant, but the Board of Transauto was controlled by his son, the claimant. At the beginning of 2012, the dispute led to the institution of legal proceedings. Again, these are set out in detail in the judgment of Walker J. It is however necessary to recapitulate the main points, since they have featured in the claimant’s submissions on this application.

On 3 February 2012, four petitions were issued in the Mumbai court by the first defendant and others under the Indian Companies Act 1956. They concerned four companies, namely Transauto, Unique, VMPL and SIPL, which together with their board members, were the respondents to the petitions.

On 9 February 2012, the Mumbai court made an order for interim relief pending the outcome of the proceedings which included the following:

On 11 February 2012 a similar petition was issued in the Chennai court which concerned RCC. In that case however, the court declined an application by the petitioners for interim relief. (These proceedings have since been discontinued, and an EGM was held on 30 November 2012, at which the board of directors of RCC was replaced with directors favourable to the first defendant.)

The Transauto petition sought the removal of the board of directors of the company. In an effort to regain control, on 20 March 2012, the first defendant served notices on the board of directors calling upon the company to convene an extraordinary general meeting for the purpose of removing the directors and appointing replacements.

These steps prompted the claimant to issue proceedings in England seeking an anti-suit injunction. His case was that the Indian proceedings sought to undo the arrangements that had been made for working capital under the restructuring agreements, and that the proceedings were a breach of the LCIA arbitration clause.

At an ex parte hearing on 26 March 2012, Gloster J granted the injunction. There are two parts to notice. Firstly, the order restrained the defendants from continuing the five sets of proceedings that had been commenced in India in February 2012. Secondly, it prevented the defendants from holding the extraordinary general meeting of Transauto at which the directors (who were on the claimant’s side) would be replaced.

In the usual way, the claimant provided a cross-undertaking in damages in case it was subsequently held that the order should not have been granted. The undertaking provided that, "If the Court finds that this Order has caused loss to the Respondents or any of them or any other party served with or notified of this Order and decides that the Respondents or other party should be compensated for that loss, the Applicant will comply with any Order that the Court may make to that effect". The “Respondents” are the defendants, Mr Rajinder Kumar Malhotra and Mr Rajiv Malhotra.

The reference to “other party” reflects the fact that, as a term of granting the order, in the usual way the claimant also had to undertake to comply with any order that may be made to compensate third parties notified of the injunction. It is not in dispute that the Affiliated Companies can qualify as third parties for these purposes, and so could (in principle) make their own application. The defendants’ case is that they are precluded from applying under the cross-undertaking because of malicious action taken by the claimant in the Indian courts to prevent them regaining control of the companies.

As I have said, the order in the English proceedings was discharged on 16 November 2012 pursuant to Walker J’s judgment of 30 October 2012. However, the Indian proceedings continued, evidence as to their course being contained in the fifth witness statement of Mr Rajinder Kumar Malhotra, and in the chronology attached to Mr Jaisingh’s witness statement.

The first defendant explains in his evidence that an extraordinary general meeting of Transauto occurred on 31 October 2012, and that he succeeded in replacing the directors of Transauto and expected to be able to regain control of the Affiliated Companies.

However, this did not happen. I do not think that it is in dispute that this was because of further action in the Mumbai court, though the parties differ as to what happened and whether what happened was appropriate or not. As a matter of fact, following a hearing on 7 November 2012, the court recorded that an undertaking had been given by counsel that the status quo would be retained pending the hearing of the petitions. This was referred to in argument as the “status quo undertakings”.

The first defendant says that the record of the undertaking was a mistake and that no undertakings had been given, and that this was corrected on 3 January 2013 as regards Transauto. Similar orders were made in relation to the other four companies the subject of the Mumbai proceedings on 31 January 2013. However by then, the claimant had filed applications under section 45 of the Indian Arbitration & Conciliation Act 1996. Although these were dismissed on 31 January 2013, the claimant lodged appeals, and on 7 February 2013 obtained a stay pending appeal. At the time of the hearings before me, these appeals are still pending. The consequence (and this is not as I understand it in dispute) is that the injunction obtained from the Mumbai court on 9 February 2012 and the status quo position reflected in the order of 7 November 2012 remain in force. The first defendant has not in fact yet succeeded in replacing the boards of the Affiliated Companies.

The defendants’ application under the cross-undertaking only concerns the second aspect of the order, namely the prohibition on the holding of the Transauto EGM. It is not suggested that the anti-suit injunction itself caused any recoverable loss.

As argued at the hearing, the basis for the claim is straightforward, namely that the effect of the injunction was to prevent the defendants from regaining control over Transauto which in turn prevented them from regaining control over the Affiliated Companies. If the injunction had not been in place, it is contended, the defendants would have replaced the directors of Transauto and effected a change of control over the running of that company (and its subsidiaries the Affiliated Companies). The injunction prevented the removal of directors who are hostile to the defendants.

As a result of the claimant's actions in obtaining the injunction, it is contended, the defendants were prevented from making substantial profits from leasing the assets of the Affiliated Companies and investing dividends that would have been distributed to them. It had the effect of depriving the defendants of those dividends and reduced the value of their shareholdings. As I have said, these points are developed in draft Points of Claim.

The defendants identify the following heads of loss:

Loss of rents. As a result of the grant of the injunction, the defendants have suffered losses in respect of missed opportunities to lease out and develop certain properties owned by the Affiliated Companies. It is estimated that losses in excess of £232,000 have been suffered.

Loss of investments. As a result of the grant of the injunction, the defendants were prevented from making certain investments with dividends that they would have received from the Affiliated Companies. It is estimated that losses of £1,003,292 have been suffered.

As regards the Affiliated Companies, the defendants’ skeleton argument asserts as follows: “In addition, the Affiliated Companies have themselves suffered losses as a result of their mismanagement. As matters stand, however, the Defendants have still not been able to regain full control over Transauto or the Affiliated Companies and are not therefore able to quantify the extent of those losses, or indeed the cause of those losses. Following the discharge of the Injunction, the Claimant has continued his strategy of maliciously and improperly seeking to prevent the Defendants from controlling their companies. He has used the Indian judicial system to create further delays in order to prevent the Defendants from being able to regain control over their companies.”

However the defendants “hope and expect that Transauto and the Affiliated Companies will, at some point, be able themselves to seek damages from the hostile directors and/or the Claimant - but as matters currently stand that is not possible and it is not currently clear on what basis such claims could be based”.

On his part, the claimant submits that in support of their application for an inquiry as to damages on the cross-undertaking, the defendants have to adduce credible evidence that they have suffered loss and damage as a result of the grant of the injunction, having regard in particular to the relevant principles of causation and remoteness. It is contended that they have manifestly failed to discharge that burden.

It is said that the alleged failure to lease out various properties that are owned by the Affiliated Companies is highly speculative and fanciful, and that these activities were in any case prevented by the Mumbai injunction which the first defendant himself obtained on 9 February 2012. Similar submissions are made as to loss said to be caused by the alleged failure to invest certain liquid funds that are owned by the Affiliated Companies. In any case, no bar existed so far as RCC is concerned.

Apart from the points which are made in respect of each of these different heads of loss, the claimant contends that there is a further fundamental difficulty with the defendants’ application (which is said to apply to both the heads of loss), namely that it falls foul of the reflective loss principle.

Before considering the rival contentions, I should note that at the hearing (1) the defendants did not pursue a third head of claim for losses in the approximate sum of £985,983 said to be sustained by Transauto and the Affiliated Companies; this has to do with alleged general mismanagement of those companies, by which they are said improperly to have incurred certain tax liabilities and litigation costs; it was accepted that this was insufficiently particularised to be pursued; and (2) the claimant does not for present purposes pursue a contention made in his evidence that the injunction was properly granted and was only discharged in return for undertakings. He accepts, as he clearly has to, that for the purposes of deciding whether or not to order an inquiry under the cross-undertaking, the court has to proceed on the basis that the injunction should not have been granted.

There was no dispute between the parties as to the law as regards ordering an inquiry as to damages pursuant to the undertaking in damages given on the grant of the injunction. The leading authority is Yukong Line Ltd v Rendsburg Investments Corp [2001] 2 Lloyd’s Rep 113, where Potter LJ sets out the principles at [32]-[34]. The case was dealing with the discharge of a freezing injunction, but the principles apply in the present case also where the injunction which has been discharged prohibited the holding of an EGM.

The case shows that the court has a discretion whether or not to enforce the undertaking in damages. It may enforce it by a summary award in damages, but more usually, the court, having exercised its discretion to enforce the undertaking in damages, may order an inquiry as to damages (see Yukong at [32]).

If it is established that an injunction was wrongly granted, albeit without fault on the claimant’s part, the court will ordinarily order an inquiry as to damages in any case where it appears that loss may have been caused as a result (see Yukong at [32], the italicisation being in the text of the judgment). Since the injunction should not have been obtained, prima facie the claimant ought to bear the loss. At [33], Potter LJ cites with approval Graham v Campbell(1877) 7 Ch. D p. 490 at p. 494 to the effect that the undertaking ought to be given effect except under “special circumstances”.

At [35], Potter LJ explains what the applicant for the inquiry has to show by way of evidence of loss, and the approach to be taken by the court on the application. The applicant must adduce some credible evidence that he has suffered loss as the result of the making of the order. The court will not order an inquiry if it appears to be pointless to do so because the intended claim for damage is plainly unsustainable. That may be because it is clear that the order is no more than the factual context for loss which would have been suffered regardless of the granting of the order, or it may equally be clear that the damage is too remote.

However, at the stage of exercising its discretion whether to order an inquiry, the court does not ordinarily hear protracted argument on whether the suggested loss will be recoverable. If the applicant shows that he has suffered loss which was prima facie or arguably caused by the order, then the evidential burden of any contention that the relevant loss would have been suffered regardless of the making of the order in practice passes to the claimant and an inquiry will be ordered (see Yukong at [35]).

As regards the defendants’ first head of loss, this is put as a loss of rents on various properties. It is said that the defendants lost the opportunity to lease out and develop the properties of the Affiliated Companies, which would have been fulfilled but for the injunction. The relevant companies are VMPL, SIPL, Unique and Emerald. Eight properties owned by the companies are identified, and the loss of rent is quantified at £232,791. In his evidence, the claimant makes various criticisms of the defendants’ case, particularly as regards the evidence in support. It is said in particular that a letter sent in connection with the redevelopment of certain of the properties was no more than a preliminary expression of interest.

As regards the alleged failure to make suitable investment returns on money held in the bank accounts of RCC, Unique, SIPL and VMPL, the defendants’ case is that this money could and should have been invested so as to make a minimum return of 15% per annum. On this basis, a loss of £1,003,292 is calculated. The claimant challenges this evidence on the basis that a 15% rate of return could not have been achieved. Further, in the case of RCC, no order was made by the Chennai court, so it was free to do as it chose.

In his response evidence, the first defendant did not deal with the detailed points as regards the rents and investment income which the claimant made in his evidence. The defendants’ position is that this is an evidential dispute which cannot be determined at this early interim stage. In the draft Points of Claim, the assertion is that quantification is a matter for expert evidence in due course. It is perhaps fair to say that since the defendants’ losses were subject to critical analysis to show why (in the claimant’s opinion) they were speculative and fanciful, response evidence might have been expected from the defendants in answer. On the other hand, the defendants are right to say that at this stage they need only adduce “some credible evidence” of loss. On that basis, I do not consider that any further analysis of the heads of loss would be useful, and this was the approach taken by the parties at the hearing. The claimant’s case at this juncture is not concerned with the detail, but with whether the loss can arguably be said to have been caused by the injunction, and if so, whether it is loss that can be claimed by the defendants, as opposed to the companies themselves.

As I pointed out earlier, although the English injunction has been discharged, the injunction granted by the Mumbai court on 9 February 2012 on the first defendant’s application (and the status quo undertakings of 7 November 2012) have remained in force, and remain in force pending the outcome of the clamant’s appeals.

In those circumstances, the claimant argues that the defendants cannot demonstrate that the lost rental opportunities were losses which were caused by the grant of the English injunction. That is because, even if the injunction had not been granted, the Mumbai injunction granted on 9 February 2012 would have prevented these companies from disposing of their immovable assets (whether by way of sale or creation of a leasehold interest) pending the hearing of the Mumbai petitions. That order was made on 9 February 2012 (i.e. before the English injunction was granted), and remained in place throughout the time that the English injunction was in force (and remains in place). As a result, even if the English injunction had not been granted, VMPL, SIPL, Unique and Emerald would not have been able to lease out any of the properties during the relevant period.

The same point is made by the claimant as regards the defendants’ second head of loss in respect of loss of investment income. Even if the English injunction had not been granted, the Mumbai order of 9 February 2012 would have prevented Unique, SIPL and VMPL from utilising, investing or dealing with the funds, monies and securities held by those companies pending the hearing of the Mumbai petitions. It follows, the claimant contends, that Unique, SIPL and VMPL (and a fortiori the defendants) cannot demonstrate that the loss they have suffered has been caused by the English injunction as opposed to the currency of the Indian litigation, and the Mumbai order.

I should note that it was not disputed at the hearing before me that the claimant is correct as a matter of fact to state that the property transactions and investment opportunities envisaged by the defendants under the first and second heads of claim would fall within the prohibitions in the Mumbai injunction of 9 February 2012. The defendants’ response to the claimant’s contention is most clearly stated in their draft Points of Claim. Their case is as follows.

The effect of the English injunction was to prevent the defendants from regaining control over Transauto (of which the first defendant is the 99.97% owner) which in turn prevented them from regaining control over the Affiliated Companies which were Transauto’s subsidiaries. If the English injunction had not been in place, the defendants would have replaced the directors of Transauto and effected a change of control over the running of that company and the Affiliated Companies. The injunction prevented the removal of the directors of Transauto and the Affiliated Companies who are hostile to the defendants.

The draft pleading goes on to make further submissions in relation to causation. Counsel for the defendants accepted in argument that it is not currently reflected in the first defendant’s evidence, but nevertheless constitutes the defendants’ case. What is pleaded is that once the defendants had regained control over the Affiliated Companies, they would have applied for the discharge or variation of the freezing injunction that had been obtained by the first defendant on 9 February 2012 from the Mumbai court. The Mumbai freezing injunction controlled the assets of Transauto, VMPL, SIPL and Unique, and was (and is) only necessary while the defendants do not have control over Transauto and those Affiliated Companies.

Having taken those steps, it is pleaded that that the defendants would have arranged for VMPL, SIPL, Unique and Emerald to have rented out the properties, and would have ensured that the Affiliated Companies paid them dividends which they would have invested themselves, or that they would have ensured that the companies invested monies that they held on account so as to obtain a greater return than that which the defendants believe was in fact obtained.

In summary therefore, the defendants’ case is that by preventing an EGM of Transauto to be convened, the English injunction prevented the defendants regaining control of the Affiliated Companies, which would (once under the defendants’ control) have achieved the rental income and investment returns they claim. The claimant on the other hand asserts that the alleged losses have nothing to do with the English injunction, because even if it had not been granted, the situation would have been no different as a result of the orders already made by the Indian courts.

In this regard, the claimant relies on Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd(1981) 33 ALR 578. There, the court held that the onus was on the party seeking to enforce the undertaking in damages to show that the damage was caused by the injunction, as distinct from being caused by the existence of litigation. The claimant cites the judgment of Stephen J at p.587 to the effect that it will only be if damage is suffered because of the grant of the injunction, and would not have been suffered but for it, that the court should compensate a defendant who claims damages under the undertaking. The claimant submits that as a matter of law, the applicant has to show that the wrongful grant of the injunction was the cause of the loss (without which the damage would not have been suffered).

I do not think that it is necessary to express a view on this reading of Air Express. This is because Yukong (supra) decides that the question at the time of the application for an inquiry is whether there is loss which was prima facie or arguably caused by the order. That is the test which I must apply at the stage of the application for an inquiry as to damages. Further, as the passages cited above show, Yukong also decides that this is not the occasion for protracted argument, which indeed the parties have avoided.

As it was put during the hearing, the defendants’ case is that the obtaining of the Mumbai injunction was a holding operation pending the calling of an EGM of Transauto and ultimately the regaining of control over the Affiliated Companies by the defendants. It appears to me that albeit presently untested on the evidence, this account is a credible one. The evidence is to the effect that the first defendant scheduled an EGM of Transauto to take place on 27 March 2012. In fact, it was postponed, but the first defendant’s evidence is that this was because he was unwell. He was not gravely ill, he says, and would have been able to attend a meeting within a week. In the event, the English injunction prohibiting the EGM intervened on 26 March 2012.

The claimant’s evidence is that the Indian courts would have been anxious to preserve the status quo. He maintains that if the injunction had not been granted by the English court, he would have applied for, and would have obtained, similar relief from the Indian court. The first defendant responds that this is simply conjecture.

In approaching this question, I bear in mind that all relevant companies are Indian companies. The English injunction was in force from 26 March 2012, and the first defendant’s evidence is that an EGM of Transauto was eventually held on 31 October 2012, in other words the day following the judgment given by Walker J. The Indian injunction on the other hand was in force beforehand and remains in force. On 7 November 2012—after the judgment of Walker J but before the formal discharge of English injunction on 16 November 2012—the “status quo undertakings” were given (or supposedly given) to the Mumbai court. Though these were subsequently taken off the record, there is a stay pending appeal. In those circumstances, there is clearly strength in the claimant’s assertion that the real cause of the loss claimed by the defendants is the Indian litigation, the effect of which one way or another has been to preserve the status quo pending final resolution of the matter.

On the other hand, the first defendant points out that he respected the order of the English court by not pursuing an EGM of Transauto, and submits that it is a matter of conjecture what the Indian courts might have ordered in the absence of the English injunction. At this stage, all that the defendants need show is an arguable case on causation. Further, as was clear from the submissions of Mr Roger Masefield QC, leading counsel for the claimant, the causation and reflective loss issues are interlinked. I shall now turn to the “reflective loss” issue therefore.

There is a large measure of agreement as to the applicable law. The principle as to the non-recoverability of “reflective loss” is well known (see Johnson v Gore Wood & Co[2002] 2 AC 1 at 35-36) and is summarised in Prudential Assurance v Newman Industries (No 2) [1982] Ch 204 (CA) at 222H-223A:

I take the exceptions to the general rule from the claimant’s skeleton argument. These are:

The parties’ respective contentions appear clearly from the draft Points of Claim and the claimant’s response to it. It is convenient to take them as pleaded. The defendants make the following four points:

As counsel acknowledge, this is an unusual case. Under the terms of the order of 16 November 2012, “Any application by the Defendants to enforce the cross-undertaking in damages must be brought within 6 months of the date of the Order”. There seems to be some issue between the parties as to the scope of this provision, and whether it applies to third parties such as the Affiliated Companies. I was not addressed on this issue, and say nothing about it.

However, it is not in dispute that the Affiliated Companies remain outside the control of the first defendant. It is not unreasonable to infer, therefore, as he submits, that he is unable to procure that the companies themselves take action to recover the loss which he claims has been incurred.

The exception is RCC, which has never been the subject of an injunction in the Indian proceedings, and which the first defendant regained control of as a result of an EGM on 30 November 2012. That company is one of those included under the defendants’ second head of loss (loss of investments). The defendants claim that they “… have not been able to assess the losses that have been suffered as a result of the poor state in which the company was left by its former directors” (draft Points of Claim paragraph 10.2). This is not, in my view, a convincing explanation at all.

Further, I agree with the claimant that paragraph 10 of the draft Points of Claim which pleads losses equal to lost dividends and the diminished value of the defendants’ shareholdings pleads losses which fall within the reflective loss principle. The real question is whether or not at this preliminary stage the court can or should find that the defendants cannot arguably invoke one or more of the exceptions.

I agree with the claimant that the fact that an independent duty may be owed to the shareholder is not relevant. This is because, “provided the loss claimed by the shareholder is merely reflective of the company’s loss and provided the defendant wrongdoer owed duties both to the company and to the shareholder, it is irrelevant that the duties so owed may be different in content” (Gardner v Parker, ibid, at paragraph 33(5)).

I further agree that there may be impediments to the defendants’ assertion that the companies are unable to pursue their own claims under the cross-undertaking by reason of the wrong done to them (Webster v Sandersons[2009] EWCA Civ 830, Lord Clarke MR at [38]) which for these purposes is the grant of the injunction. Further, as the claimant says, the English court cannot prejudge the issue before the Indian courts, and would be unlikely to countenance parallel proceedings in England which amount to second guessing issues which are for the Indian courts to decide.

However, the defendants also seek to invoke the exception to the reflective loss rule which applies where the company itself has no cause of action. This is point (2) in the summary above from the defendants’ draft Points of Claim. The claimant’s response is that there will clearly be a cause of action against the claimant, for example as a shadow director, which they can pursue in India if there is any merit in the underlying complaint. I see the force of that submission. However, the defendants point out that there is no evidence before the court to that effect, and argue that the court cannot assume that this is the case. It may not be straightforward, they say, for the companies to argue a case based on the actions of their own boards. There could be a lacuna, it was submitted, if the defendants themselves are to be barred at this stage from pursuing their claim.

I have not found this an easy issue to decide. Whilst I am concerned at allowing a claim under the cross-undertaking with the difficulties identified above to go forward (perhaps at considerable expense to the parties), it is the “reflective loss” principle which is potentially the claimant’s knock out blow at this stage. Inevitably however, the application of the principle to these facts requires careful analysis. In his summary of the case law in Gardner v Parker, ibid, at [33], Neuberger LJ refers to the rule that reflective loss is not recoverable by the shareholder, adding that “where there is no reasonable doubt that this is the case, the court can properly act, in advance of trial, to strike out the offending heads of claim”. Essentially, that is the approach I have to apply here. This is a high hurdle, and I have concluded that the claimant cannot surmount it at this stage. It may be that on inquiry, the court will conclude that his arguments are correct—I say nothing as to that—but I do not think that this is a conclusion that can be reached summarily. It follows that I will order an inquiry, and will hear counsel as to appropriate directions.