TMI Blog2022 (2) TMI 600X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oard of India, a statutory body established under the I.B. Code. 4. Presently, only ground, on which impugned order has been challenged is that, the learned Additional Sessions Judge does not have jurisdiction to entertain the complaint filed by the respondents. As such other grounds of challenge are expressly kept open. 5. Mr. Amir Arsiwala, learned Counsel for the Petitioner submitted that in terms of Section 236 of I.B. Code, the Special Court, established under the Companies Act, 2013 is empowered to try the offences under the I.B. Code. He submitted, Section 435 of the Companies Act empowers, the Central Government to establish Special Courts for speedy trial of the offences under the Companies Act. Mr. Arsiwala submitted that under Section 236 of I.B. Code, the Special Court shall be deemed to be a Court of Session and person conducting the prosecution shall be, deemed to be a Public Prosecutor. Mr. Arsiwala submitted Section 236 of the I.B. Code came into effect on 1st December, 2016, whereafter Section 435 of Companies Act was amended by way of Companies Amendment Act 2017 with effect from 7th May, 2018, and in that sense amendment of 2017 was consequential. Mr. Ars ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to expression, under this Issue Process , under Section Act in clause (a) of subsection (2) of Section 435 would , under Section mean, that the Special Courts consist of metropolitan Magistrate or Judicial Magistrate First Class are invested with the jurisdiction to try offences under the other Acts and the offences under the Companies Act, punishable with imprisonment not more than two years. Submission is that before I.B. Code came into effect, Special Courts comprising of Sessions or Additional Sessions Judge were established to try offences under the Companies Act, which were punishable with imprisonment with two years or more. As such only one class of Special Court was established i.e. Court comprising of Judge holding office of Sessions or Additional Sessions Judge. However, after I.B. Code came into effect, legislature in its wisdom, to avoid burden of cases on Special Court consisting of Sessions Judge or Additional Sessions Judge but for the speedy trial of offences under the I.B. Code, created another class of Courts i.e. Court consist of Metropolitan Magistrate or Judicial Magistrate First Class as a Special Court , which by fiction Issue Process , under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tituted by the Insolvency and Bankruptcy Board of India for the offences punishable under the I.B. Code could not have been entertained by the Sessions Judge 58th Court and therefore the order issuing process under Section 73(a) and Section 235A of the I.B. Code was without jurisdiction. 6. Mr. Pankaj Vijayan, learned Counsel appearing for the Respondents, would contend that plain reading of Section 435 of the Companies Act, as amended by Act of 2017, does not admit the interpretation, as sought to be placed by the Petitioners. Mr. Pankaj Vijayan submitted that harmonious construction of provision of Section 236 of the I.B. Code and amended Section 435 of Companies Act, leads to conclude that the Additional Sessions Judge, alone has a jurisdiction to entertain the complaint, since offence referred therein, is punishable with imprisonment for more than three years. 7. So as to appreciate the contentions of respective Counsels, it would be appropriate to read and understand, purport of Section 236 and 237 of I.B. Code and amended provision of Section 435 of the Companies Act, 2013. 8. Section 236 of the I.B. Code empowers the Central Government or Board to file complaint a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng cases within the local limits of the jurisdiction of the High Court. It is significant to note that in view of Section 237 of I.B. Code, Special Court trying the offences under the I.B. Code shall, deem to be a Session Court and proceedings and orders of the Special Court shall be amenable to Appellate and Revisional jurisdiction of the High Court. Therefore, Court other than Court of Session (i.e. a Court of Judicial Magistrate, First Class and Court of Metropolitan Magistrate) if established as a Special Court for trying the offences under the I.B. Code, it shall be deem Session Court and judgments and orders of such Special Court would be amenable to jurisdiction of the High Court under Chapter-XXIX and XXX of the Cr.P.C. 9. It is petitioner s case that, the learned Additional Sessions Judge, 58th Court in which respondents filed a complaint, was not a Special Court, for trying the offences Issue Process , under Section , under Section under the I.B. Code, in terms of Section 236 thereof. To butress the arguments petitioners would rely on provisions of Section 435 of the Companies Act, 2013; (i) originally enacted; (ii) amended in 2015; (iii) amended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Class, in the case of other offences. 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. 10. Thus, it is noticeable, that the Companies Act (17th amendment) which came into effect from 7th May, 2018, for the first time, seeks to establish two different classes of a Special Court; (a) a Single Judge holding office as Session Judge or Additional Sessions Judge and (b) Metropolitan Magistrate or Judicial Magistrate First Class; who shall be appointed by the Central Government with concurrence of the Chief Justice of the High Court within whose jurisdiction, the Judge to be appointed is working. Original Section 435 of Companies Act, empowered Central Government to establish and designate Special Court for speedy trial of offences exclusively under the Companies Act and the Special Court would consist of Single Judge holding office of Sessions Judge or an Additional Sessions Judge. Section 435 amended by Companies (amendment) Act, 2015 came into effect on 29th May, 2015. This amendment empowered Central Government to establish and designate Special Court f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tional 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. This underlined object is visible from clause (a) and (b) of subsection (2) of Section 435 of Companies Act as amended, for quick reference let me reproduce the relevant provisions of Section 435. 435. Establishment of Special Courts (1) The Central Government may, for the purpose of providing speedy trial of 1[offences under this Act, except under section 452 by notification], establish or designate as many Special Courts as may be necessary. (2) A Special Court shall consist of - (a) a single judge holding office as Session Judge or Additional Session Judge, in case of offences punishable under the Act with imprisonment of two years or more; and (b) a Metropolitan Magistrate or a Judicial Magistrate of the First Class, in the case of other offences, who shall be appointed by the Central Government with the concurrence of the Chief Justice of the High Court w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of Bihar (1998) 2 SCC 493 it was held as below : Issue Process , under Section Even if the clause is capable of two interpretations we are inclined to choose the narrower interpretation for obvious reasons. Section 190 of the Code empowers any magistrate of the first class to take cognizance of any offence upon receiving a complaint, or police report or information or upon his own knowledge. Section 195 restricts such general powers of the magistrate, and the general right of a person to move the court with a complaint is to that extent curtailed. It is a well-recognised canon of interpretation that provision curbing the general jurisdiction of the Court must normally receive strict interpretation unless the statute or the context requires otherwise ( Abdul Waheed Khan Vs. Bhawani [AIR 1966 SC 1718 : (1966) 3 SCR 617]. , 14. It may also be noted that Section 236 (3) of the I.B. Code creates a deeming fiction that the Special Court trying offences under I.B. Code shall be deemed to be Court of Issue Process , under Section Sessions . If the intention of the legislature was that , under Section offences under I.B. Code are to be tried by the Sessions Court, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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