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2024 (3) TMI 1318 - HC - Companies LawCognizance of an offence punishable under Section 447 of the Companies Act, 2013 on a private complaint by a shareholder or a member of a Company by the Special Court constituted under Section 435 of the Companies Act, 2013 - HELD THAT - The Division Bench of this Court upon reference by the learned Single Judge and the Division Bench has held that upon reading Section 212(6) along with 439(1), the Special Court constituted under Section 435 of the Act cannot take cognizance of an offence punishable under Section 447 of the Act upon a private complaint by a shareholder or a member of a Company, but can take cognizance only upon complaint by the Special Fraud Investigation Officer in terms of Second Proviso of Section 212(6) of the Act. Therefore, the cognizance taken on a private complaint filed by the shareholder is one without jurisdiction, and the continuation of the proceedings will be an abuse of the process of law. The entire proceedings on the file of the Special Court (Economic Offences) at Bengaluru, insofar as it relates to petitioners/accused No.2 and 3, is hereby quashed - Petition is allowed.
Issues involved: Challenge to proceedings under Sections 447 and 448 of the Companies Act, 2013 for delay in convening a meeting and filing false returns.
The respondent filed a private complaint under Section 200 of Cr.P.C., alleging that the accused, required to call a meeting within three months, convened it late and filed false returns before the ROC, constituting an offence under Section 447 of the Companies Act, 2013. The learned Magistrate took cognizance of the offence, and the application for discharge under Section 245(2) Cr.P.C. was dismissed. The issue of whether the Special Court under Section 435 of the Companies Act, 2013 can take cognizance of an offence under Section 447 on a private complaint was examined by the Division Bench. It was held that the Special Court cannot take cognizance based on a private complaint by a shareholder, but only upon a complaint by the Special Fraud Investigation Officer as per Section 212(6) read with 439(1) of the Act. Thus, the cognizance taken on a private complaint by a shareholder was deemed to be without jurisdiction, and continuing the proceedings would be an abuse of the legal process. Judgment: The writ petition was allowed, and the proceedings in C.C.No.235/2017 related to the accused were quashed by the High Court.
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