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2022 (2) TMI 600 - HC - Insolvency and BankruptcyJurisdiction to entertain the complaint filed by the respondents - which class of Special Courts, created by Companies Act (amendment) 2017, is empowered to try the offences under the I.B. Code? - challenge to issue process - Section 73(a) and Section 235A of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- It can be noticed that under Section 435 of the Companies Act, Special Court, comprising of Sessions Judge or Additional Sessions Judge, was in place since 2013 and it retained its jurisdiction to try the offences under the Companies Act. Amendment of 2017, for the first time brought into existence and empowered Central Government, to establish Court comprising of Metropolitan Magistrate or Judicial Magistrate First Class, as Special Court , after I.B. “Issue Process”, under Section”, under Section Court came into force. Why for this another class of Court was created? The object to create another class of Special Court was to speed up the trial of offences under the I.B. Code. If that was not a object as contended by the Respondent, the question is, why for Central Government has been empowered to designate Court of Metropolitan Magistrate or Judicial Magistrate First Class as Special Court under Section 435 of the Companies Act? Answer is simple. It is after Section 236 of I.B. Code, came into force Section 435 of the Companies Act was amended (17th amendment Act) on 7th May, 2018 and another class of Court (Metropolitan Magistrate and Judicial Magistrate First Class) have been created as Special Courts for speedy trial in offences under the I.B. Code. Keeping in mind, the said object, legislature thought it fit, not to burden a Special Court comprising of Sessions Judge or Additional Sessions Judge with the trials, also under I.B. Code. If trials in offences under I.B. Code were also to be tried by the Special Court comprising of Sessions Judge or Additional Sessions Judge, it would frustate to object of the speedy trial for which, the Special Courts have been established. The plain reading of clause (a) of subsection (2) of Section 435 of the Companies Act in no uncertain terms implies or suggests that the Special Court consists of Judge holding office as a Sessions Judge is empowered to try the offences “Issue Process”, under Section under this Act”, under Section. (emphasized). The phrase ‘under this Act’, only means the offences committed under the Companies Act. Therefore, the offences other than the Companies Act cannot be tried by the Special Court established under clause (a) of subsection 2 of Section 435. While on the contrary, Special Court consists of Metropolitan Magistrate or Judicial Magistrate First Class proposed in clause (b) is invested with jurisdiction to try the “Issue Process”, under Section case of other offences”, under Section - it is clear that Special Court comprising of a Metropolitan Magistrate “Issue Process”, under Section ”, under Section or Judicial Magistrate First Class is to try “Issue Process”, under Section other offences”, under Section. The phrase other offences contained in section 435 (2) (b), “Issue Process”, under Section ”, under Section in contradistinction to section 435 (2) (a) of CA 2013, would include (1) offences under the I.B. Code, and (2) offences under the CA 2013 but carrying punishment of imprisonment of less than two years. Special Court which is to try “Issue Process”, under Section offences under the I.B. Code is the Special Court established under Section 435 (2) (b) of the Companies Act, 2013 which consists of Metropolitan Magistrate or Judicial Magistrate First Class. The Petition is allowed.
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