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Issues: Jurisdiction of the Special Judge under section 482 of the Code of Criminal Procedure, 1973; Interpretation of section 621 of the Companies Act, 1956 regarding initiation of criminal proceedings.
Jurisdiction of the Special Judge under section 482 of the Code of Criminal Procedure, 1973: The petitioners, who are accused in a criminal case, filed a petition under section 482 of the Code of Criminal Procedure, 1973 to quash the proceedings in Calendar Case No. 34 of 2000 before the Special Judge for Economic Offences. The complaint was filed by the 2nd respondent, alleging that the accused submitted a false statement in Form No. 32 before the Registrar of Companies. The Special Judge took cognizance of the complaint and issued process to the accused, leading to the petition for quashing the proceedings. The main argument raised by the petitioners was that the complainant was not a shareholder of the company, which is a requirement under section 621 of the Companies Act, 1956, to initiate criminal proceedings. Interpretation of section 621 of the Companies Act, 1956 regarding initiation of criminal proceedings: Section 621 of the Companies Act, 1956 specifies that offences under the Act, except those under section 545, can only be cognizable on a complaint by the Registrar, a shareholder of the company, or a person authorized by the Central Government. The complainant in this case was not a shareholder of the company as his application for share transfer was pending, and the shares were not yet transferred to his name. The court noted that until the transfer was completed following the procedure laid down in the Act, the complainant could not be considered a shareholder. Therefore, the complaint filed by the complainant, who was not a shareholder at the time, should not have been taken cognizance of by the Special Judge as per the clear prohibition in section 621. Consequently, the criminal petition was allowed, and the proceedings in Calendar Case No. 34 of 2000 were quashed. This judgment highlights the importance of complying with the procedural requirements for initiating criminal proceedings under the Companies Act, emphasizing the specific roles of the Registrar, shareholders, and authorized persons in filing complaints for offences under the Act. The interpretation of section 621 serves as a guide for future cases involving the initiation of criminal proceedings against companies or their officers, ensuring adherence to the statutory provisions outlined in the legislation.
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