Central Government by a notification published in Official Gazette on 18th May 2016 appointed the 18th day of May, 2016 as the date on which the provisions of clause (iv) of sub-section (29) of section 2, sections 435 to 438 (both sections inclusive) and section 440 of the Companies Act, 2016 shall come into force. These provisions deal with Special Courts under Chapter XXVIII of the Companies Act, 2013. Even though, we have already discussed these provisions originally earlier here and with amendment here, it may be beneficial to have these notified sections in this post again.
Clause (29) of Section 2 defines “Court” under the Companies Act, 2013:
(i) the High Court having jurisdiction in relation to the place at which the registered office of the company concerned is situate, except to the extent to which jurisdiction has been conferred on any district court or district courts subordinate to that High Court under sub-clause (ii);
(ii) the district court, in cases where the Central Government has, by notification, empowered any district court to exercise all or any of the jurisdictions conferred upon the High Court, within the scope of its jurisdiction in respect of a company whose registered office is situate in the district;
(iii) the Court of Session having jurisdiction to try any offence under this Act or under any previous company law;
(iv) the Special Court established under section 435;
(v) any Metropolitan Magistrate or a Judicial Magistrate of the First Class having jurisdiction to try any offence under this Act or under any previous company law;
The sub – clause (iv) from above definition came into force on 18th May 2016 and is relevant to other sections notified by same notification.
Special courts are one most commendable constitute introduced by this Act. This is trend recently to constitute special courts for every single legal constitute. The main reason for establishment of such special court is technicalities involved in these technical matters.
ESTABLISH OF SPECIAL COURT
This section has been amended by Section 21 of the Companies Amendment Act, 2015.
The Central Government may for the purpose of providing speedy trial of offences punishable under this Act with imprisonment with two year or more, by notification establish or designate Special Courts. [sub – section (1) of Section 435, as amended]
All other offences shall be tried, as the case may be, by a Metropolitan Magistrate or a Judicial Magistrate of the First Class having jurisdiction to try any offence under this Act or under any previous company law. [Proviso to sub – section (1) of Section 435, as inserted]
A Special Court shall consist of a single judge appointed by the Central Government. The Judge shall be appointed 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 Special Court unless he was holding a Sessions Judge or an Additional Sessions Judge.
OFFENCES TO BE TRIED BY SPECIAL COURTS
This section has been amended by Section 22 of the Companies Amendment Act, 2015.
All offence under sub-section (1) of section 435 of the Companies Act shall be triable only by the Special Court for the area in which the registered office of the company in relation to which the offence is committed. [Clause (a) of sub – section (1) of Section 436, as amended]
Where a person accused of or suspected of the commission of an offence under the Act is forwarded, a Judicial Magistrate may authorise the detention of that person for fifteen days or an Executive Magistrate for seven days. Where the Magistrate considers that the detention of the 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. [Clause (b) of sub – section (1) of Section 436]
The Special Court may exercise the same power which a Magistrate having may exercise under Section 167 of the Code of Criminal Procedure, 1973 in relation to an accused person who has been forwarded to him. [Clause (c) of sub – section (1) of Section 436]
A Special Court may upon perusal of the police report of the facts constituting an offence under this Act or upon a complaint, take cognizance of the offence without the accused being committed to it for trial. [Clause (b) of sub – section (1) of Section 436]
When trying an offence under this Act, a Special Court may also try an offence under the Code of Criminal Procedure, 1973 in a same trial. [Sub – section (2) of Section 436]
The Special Court may try in a summary way any offence under this Act which is punishable with imprisonment for a term not exceeding three years. In case of summary trial, a sentence of imprisonment for a term exceeding one year shall not be passed. Where the Special Court think it is undesirable to try the case summarily, the Special Court shall record an order to that effect and thereafter recall any witness who may have been examined and proceed to hear or rehear in regular trial. [Sub – section (3) of Section 436]
APPEAL AND REVISION
The High Court may exercise all the powers conferred by Chapter XXIX and XXX of the Code Criminal Procedure, 1973 on a High Court as if a Special Court were a Court of Session trying cases. [Section 437]
APPLICATION OF CODE TO PROCEEDING BEFORE SPECIAL COURT
The provisions of the Code of Criminal Procedure, 1973 shall apply to the proceedings before a Special Court. The Special Court shall be deemed to be a Court of Session and the person conducting a prosecution before a Special Court be deemed to be a Public Prosecutor. [Section 438]
Until a Special Court is established, any offence triable by a Special Court shall be tried by a Court of Session. [Section 440]
This transitional provision came into force, when many Special Courts is being established by another notification of same date 18th May 2016. The notification established special courts only in 8 states and Union Territories. In case of all other States and Union Territories, this transition provision under Section 440 shall apply.
1 Courts of Additional Special Judge, Anti-Corruption at Jammu and Srinagar – State of Jammu and Kashmir
2 Presiding Officers of Court No’s. 37 and 58 of the City Civil and Sessions Court, Greater Mumbai – State of Maharashtra
3 Court of Principal District and Sessions Judge, Union territory of Dadra and Nagar Haveli at Silvassa – Union Territories of Dadra and Nagar Haveli and Daman and Diu
4 Court of District Judge -1 and Additional Sessions Judge, Panaji – State of Goa
5 Court of Principal District and Sessions Judge, Ahmedabad (Rural), situated at Mirzapur, Ahmedabad – State of Gujarat
6 9th Additional Sessions Judge, Gwalior Madhya Pradesh – State of Madhya Pradesh
7 Court of Additional District and Session Judge, Port Blair, Andaman and Nicobar Islands – Union territory of Andaman and Nicobar Islands.
8 2nd Special Court, Calcutta – State of West Bengal
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