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TMI BlogSPECIAL COURTS UNDER COMPANIES BILL, 2009X X X X Extracts X X X X X X X X Extracts X X X X ..... SPECIAL COURTS UNDER COMPANIES BILL, 2009 - By: - Mr. M. GOVINDARAJAN - Corporate Laws / IBC / SEBI - Dated:- 30-7-2010 - - INTRODUCTION: The Companies Act, 1956 provides for penalties for non compliance or violation of the provisions of Companies Act. The same is tried in the criminal court coming under the purview of Code of Criminal Procedure, 1973. The Companies Bill, 2009 was introduced in the Lok Sabha, comprehensive in nature. The bill has given a change in dealing with the violation of the provisions. SPECIAL COURT: Chapter XVII of the bill deals with the establishment and functioning of special courts to provide speedy trial of offences under the new Act, by notification. Chapter XVII deals with the following: Establi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shment of special courts - Clause 396; Offences triable by special courts - Clause 397; Appeal and revision - Clause 398; Application of Code to proceedings before a special court - Clause 399; Offences to be non-cognizable - Clause 400; Transitional provisions - Clause 401; Compounding of certain offences - Clause 402; Power of Central Government to appoint company prosecutors - Clause 403; Appeal against acquittal - Clause 404; Compensation for accusation without reasonable cause - Clause 405; Application of fines - Clause - 405. The Central Government may, for the purpose of providing speedy trial offences, by notification, establish as many special courts as may be necessary. Notwithstanding anything contained in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he code of Criminal Procedure, 1973 all offences under the new Act shall be triable only by the special courts established for the area in which the registered office of the company in relation to which the offence is committed or where there are more special courts than one for such area, by such one of them as may be specified in this behalf by the High Court concerned. The provisions of the Code of Criminal Procedure, 1973 shall apply to the proceedings before a special court. For the purposes of the said provisions, the special court shall be deemed to be a Court of Sessions and the person conducting a prosecution before a special court shall be deemed to be a public prosecutor. The Central Government will be given power to appoint ge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nerally, or for any case, or in any case, or for any specified class of cases in any local area, one or more persons, as company prosecutors for the conduct of prosecutions arising out of this new Act. The Company prosecutors shall have all the powers and privileges conferred by the Code on Public Prosecutors under Sec. 24 of the Code. A Special Court shall consist of a single judge who shall be appointed by the Central Government with the concurrence of the Chief Justice of the High Court within whose jurisdiction the Judge to be appointed is working. A person shall not be qualified for appointment as a judge of a special court unless he is, immediately before such appointment, holding office of a Sessions Judge or an Additional Session ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Judge. PROCEDURE OF SPECIAL COURT : Where a person accused of, or suspected of the commission of an offence under the new Act is forwarded to a Magistrate under Sec. 167 (2) or Sec. 167(2A) of Code of Criminal Procedure, 1973, such Magistrate may authorize the detention of such person in such custody as he thinks fit for the period not exceeding fifteen days in the whole where such Magistrate is a Judicial Magistrate and seven days in the whole where such Magistrate is an Executive Magistrate. Where such Magistrates consider that the detention of such person upon or before the expiry of the period of detention is unnecessary, he shall order such person to be forwarded to the Special Court having jurisdiction. The Special Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may exercise, in relation to the person forwarded to it, upon the perusal of the police report of the facts constituting an offence under this Act or upon a complaint in that behalf take cognizance of that offence without the accused being committed to it for trial. The Special Court may, if it thinks fit, try in a summary way any offence under the new Act which is punishable with imprisonment for a term not exceeding three years. In the case of any conviction in a summary trial, no sentence of imprisonment for a term exceeding one year shall be passed. When at the commencement of, or in the course of, a summary trial, it appears to the Special Court that the nature of the case is such that the sentence of imprisonment for a term exceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g one year may have to be passed or that it is, for any other reason, undesirable to try the case summarily, the special court shall, after hearing the parties, record an order to that effect and thereafter recall any witnesses who may have been examined and proceed to hear or rehear the case in accordance with the procedure for the regular trial. NON COGNIZABLE OFFENCES: Every offences under the new Act shall be deemed to be non cognizable within the meaning of Code of Criminal Procedure, 1973. No Court shall take cognizance of any offence under the new Act which is alleged to have been committed by any company or any officer thereof, except on the complaint in writing of the Registrar, a shareholder of the company, or of a person a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthorized by the Central Government in that behalf. Unless the court requires the personal attendance of the Registrar or a person authorized by the Central Government shall not be necessary. The Court may take cognizance of offence relating to issue and transfer of securities and non payment of dividend on a complaint in writing by a person authorized by SEBI. The above said provisions shall not be applicable to any action taken by the liquidator of a company in respect of any offence alleged to have been committed in relating to winding up of companies. A liquidator of a company shall not be deemed to be an officer of the company. Any offence committed under the new Act, which is triable by s a special court shall, until a special ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... court is established, be tried by a Court of Sessions exercising jurisdiction over the area. APPEAL AND REVISION: The High Court may exercise, so far as may be applicable, all the powers conferred by Chapters XXIX and XXX of the Code of Criminal Procedure on a High Court, as if a special court within the local limits of the jurisdiction of the High Court were a Court of Session trying cases within the local limits of the jurisdiction of the High Court. The Central Government may direct any company prosecutor or authorize any other person either by name or by virtue of his office, to present an appeal from an order of acquittal passed by any court, other than a High Court, an appeal presented by such prosecutor or other person shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be deemed to have been validly presented to the appellate court. COMPOUNDING OF OFFENCES: Notwithstanding anything contained in the Code of Criminal Procedure, 1973 any offence punishable under the new Act, not being an offence punishable with imprisonment only or with imprisonment and also with fine, may, either before or after the institution of any prosecution, be compounded by the aggrieved person or persons with the permission of the court having jurisdiction to try the offence. MISC: The provisions of Section 250 of the Code of Criminal Procedure shall apply mutatis mutandis to accusation without reasonable cause before the special court of the Court of Sessions. The Court imposing any fine may direct that the whole or any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part thereof shall be applied in or towards payment of the costs of the proceedings, or in or towards the payment of a reward to a person on whose information the proceedings were instituted. - - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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