2015 (4) TMI 414 - SC - Companies Law

Appeal against order of high court to quashed the proceedings - Power of Special Courts - Cognizance of the offences under Sections 120B and 420 of the IPC or Section 621 of the Companies Act - Multiplicity of proceedings - Held that - AS can be seen from the complaint the allegations are that the accused conspired with each other to cheat the complainant and a series of transactions gave rise to offence under Section 120B read with Section 420 of the Indian Penal Code as also Section 628 of the Companies Act. It is therefore clear that if the Special Court has jurisdiction to try offences under both the aforesaid Acts then the trial can certainly continue in respect of the offences which do not require the complainant to belong to the categories specified under Section 621 of the Companies Act. Thus the trial could certainly continue against those accused under the IPC. The High Court completely overlooked the fact that the complaint made allegations against the accused A4 A5 A6 A9 and A10 only in respect of Section 120B and 420 of Indian Penal Code and there was no reason in law to quash a complaint against them on the ground that they were immune from prosecution under Section 628 of the Companies Act by virtue of Section 621 of that Act. At this stage it may be noted that the Special Court is empowered to try the offences under the Companies Act along with other Acts by virtue of a notification issued by the erstwhile Government of Andhra Pradesh dated 13.3.1981 which empowers such special Courts to try offences under specified enactments such as The Companies Act 1956 The Income-tax Act 1961 The Wealth-tax Act 1957 etc.The said notification reproduced in the case of Kannur Abdul Kader Mohammed Habbefa 2015 (1) TMI 978 - ANDHRA PRADESH HIGH COURT . Thus even if a number of persons are accused of offences under a special enactment such as the Companies Act and as also the IPC in respect of the same transaction or facts and even if some could not be tried under the special enactment it is the special court alone which would have jurisdiction to try all the offences based on the same transaction to avoid multiplicity of proceedings. We make this observation because at some stage in the hearing learned counsels addressed us on this point. We make it clear that in the present case all the accused are liable to be tried by the special court in respect of the offences under the IPC as well as the Companies Act as alleged in the complaint. - Decided in favour of appellant.

Summary

Issues:
1. Quashing of proceedings under Section 482 of Cr.P.C.
2. Jurisdiction of Special Judge for Economic Offences.
3. Accusations under Companies Act and IPC.
4. Immunity from prosecution under Section 621 of Companies Act.
5. Authority of the Special Court to try offences under multiple enactments.

Analysis:

1. The Supreme Court addressed the appeal against the High Court's judgment quashing proceedings under Section 482 of the Cr.P.C. The complainant challenged the High Court's decision to quash proceedings in CC No. 37 of 2008 against certain accused individuals.

2. The complainant, a Promoter Director of a power project company, filed a complaint alleging offences under the Companies Act and IPC. The accused included company directors, a financing agency manager, and a private individual. The accused were accused of criminal conspiracy, false declarations, and inducing investments through fraudulent means.

3. The High Court held that the Special Judge lacked jurisdiction to take cognizance of offences under the IPC without the ability to try the accused under the Companies Act. It found that the complainant did not meet the criteria to file a complaint under Section 621 of the Companies Act against certain accused individuals.

4. The High Court quashed proceedings against some accused individuals based on legal defects, despite the absence of specific allegations against them. The Court noted that the complainant did not accuse certain individuals of offences under Section 628 of the Companies Act, which was only alleged against one accused.

5. The Supreme Court set aside the High Court's findings, emphasizing that the trial could continue against accused individuals for offences under the IPC, even if they were immune from prosecution under the Companies Act. It highlighted the Special Court's authority to try offences under multiple enactments arising from the same transaction to avoid multiple proceedings. The appeals were allowed, affirming that all accused individuals should be tried by the Special Court for alleged offences under the IPC and Companies Act as per the complaint.