MP HC | In absence of any offence punishable under Companies Act, Special Court doesn’t have jurisdiction to try the case which is punishable under IPC

Madhya Pradesh High Court: S.K. Awasthi, J.  dismissed the petition on the ground that trial court and not Special Court are competent to take cognizance when offences were made under the Penal Code, 1860.

A petition was made under Section 397 read with Section 401 of Code of Criminal Procedure, 1973 against the order passed by Additional Sessions Judge.

Facts of the case were that Mukesh and Radheyshyam Mandwani and applicant Sunil were the directors of the company, having an immovable property at Indore. The applicant tried to grab the property without calling any meeting of the company and had also forged the resignation of the complainant and indicted his real brother as director of the company. An FIR was lodged against the applicant for offences under Sections 420, 467, 468, 471 and 120-B of the Penal Code, 1860 and charge sheet was filed. A discharge application on the ground that the trial court was not competent to take the cognizance and Special Court should take the cognizance was rejected by the trial court. Hence, the revision petition was made.

Vijay Asudani, counsel for the applicant argued that a special court can try offence other than offence under the provisions of Companies Act with which the accused may under the CrPC be charged. It was further submitted that the trial court failed to appreciate that the Complainant was the ex-director and shareholder of the company and the fact that the non calling of the meeting, preparation of forged resignation are offences under the Companies Act, 2013 and thus only special court were competent to take cognizance of the offence and thus impugned order should be set aside and applicant should be discharged from the charges made under the Penal Code.

Counsel for the complainant submitted that in order to gain the control over assets of the company and to deceive, betray and cheat the complainant made the complaint under the Penal Code. It was further submitted that the jurisdiction of the Special Court is limited to the offences punishable under the Companies Act, 2013 and not under the Penal Code or any offences committed under any other law. Thus, prayed for the dismissal of the revision petition.

The Court opined that provision of Section 436 (2) of the Companies Act, 2013 also provide that while trying an offence under the Companies Act, a Special Court may also try an offence other than an offence under this Act with which the accused may, under the Code of Criminal Procedure, 1973 be charged at the same trial. In this case, the police registered the offence punishable under the Penal Code and not under Companies Act, 2013. It was held that no criminal trial has been initiated against the applicants for any of the offence which is punishable under the provision of Companies Act, therefore, in absence of any offence punishable under the Companies Act, Special Court is not having jurisdiction to try the case which is punishable under the Penal Code and court of Indore has territorial jurisdiction to try the case for the commission of offence punishable under Sections 420, 467, 468, 471 and 120-B of IPC. Thus, the revision petition was dismissed. [Sunil Mandwani v. State of M.P., 2019 SCC OnLine MP 1248, decided on 27-06-2019]

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