High Court Of Delhi
OFFICIAL LIQUIDATOR OF R.C.ABROL AND COMPANY PRIVATE LIMITED (IN LIQUIDATION) - Appellant
Versus
R.C.ABROL - Respondent
CRIMINAL APPEAL 77 of 1972
Decided On : 04/28/1976
COMPANIES ACT - JURISDICTION - HIGH COURT - ORIGINAL CRIMINAL JURISDICTION - OFFENCES UNDER THE COMPANIES ACT - WHETHER HIGH COURT HAS ORIGINAL JURISDICTION TO TRY - CRIMINAL PROCEDURE CODE, 1898, SECTIONS 28, 29, 190, 193, 194 - COMPANIES ACT, 1956, SECTIONS 446(2), 454(5A), 622, 624 - CRIMINAL PROCEDURE CODE, 1973, SECTIONS 26, 190, 193, 407.
Fact of the Case:
A criminal complaint was filed in the High Court under Sections 538 and 541 of the Companies Act, 1956, for failure to hand over books of account and records of the company and for failure to keep proper books of account. The accused challenged the jurisdiction of the High Court to try the complaint.
Finding of the Court:
The High Court held that it did not have original criminal jurisdiction to try the complaint under Sections 538 and 541 of the Companies Act, 1956. The Court observed that under the Criminal Procedure Code, 1898, the High Court could only take cognizance of offences on an information lodged by the Advocate General of the State, and that there was no provision for the High Court to take cognizance of offences directly. The Court further held that the provisions of Section 446(2) of the Companies Act, 1956, which gave the High Court jurisdiction to entertain proceedings by or against the company, did not confer original criminal jurisdiction on the High Court to try offences under the Act.
Issues: Whether the High Court had original criminal jurisdiction to try the complaint under Sections 538 and 541 of the Companies Act, 1956.
Ratio Decidendi: The High Court held that it did not have original criminal jurisdiction to try the complaint under Sections 538 and 541 of the Companies Act, 1956, because: * Under the Criminal Procedure Code, 1898, the High Court could only take cognizance of offences on an information lodged by the Advocate General of the State. * There was no provision for the High Court to take cognizance of offences directly. * The provisions of Section 446(2) of the Companies Act, 1956, which gave the High Court jurisdiction to entertain proceedings by or against the company, did not confer original criminal jurisdiction on the High Court to try offences under the Act.
Final Decision: The High Court returned the complaint to the complainant, who was advised to file it before the proper Court.
( 1 ) THE Official Liquidator acting as Liquidator of M/s. R. C. Abrol and Co. (P) Ltd. , in liquidation, has instituted a criminal complaint under Sections 538 and 541 of the Companies Act, 1956, on account of the failure of the accused persons to hand over the books of account and records of the company and also, on account of their failure to keep proper books of account duripg the two years immediately preceding the winding up of the company. There are eight accused in the case of whom, Shri R. C. Abrol, accused No. 1 is stated to be the ex-Managing Director, accused Nos. 2 to 4 are stated to be directors and accused Nos. 5 to 8 are stated to be Accounts Officer, Sales Officer and Administrative Officers of the company. This Court had ordered summons to issue on this complaint on 19th September, 1972, and after that the complaint has taken a long time, because it was difficult to get the accused served.
( 2 ) ON 22nd September, 1975, I expressed some doubt as to whether this Court had Original Criminal jurisdiction to entertain the criminal complaint as it was not a Court of Original Criminal jurisdiction. Arguments have been addressed on this question and I now proceed to deliver judgment.
( 3 ) I first take up the position under the Code of Criminal Procedure, 1898, which was in force when this complaint was instituted. In Section 28, it was provided that offences under the Indian Penalode could be tried by the High Court, the Court of Session or any other Court specified in the eighth column of the second schedule. In Section 29, it was stated that any offence under any other law could be tried in a Court mentioned in this behalf by that law. However, when no such Court was mentioned, the trial would be in the High Court or any other Court mentioned in the eighth column of the second schedule as being the appropriate Court. An examination of the entries in the second schedule relating to offences against other laws shows that such offences can be tried either in the Court of Session or before Special Magistrates dependent on the degree of punishment that can be awarded. There is no entry enabling the High Court to try any such offence as a Court of Original Criminal Jurisdiction.
( 4 ) TURNING now to Section 622 of the Companies Act, 1956, it is stated that no Court inferior to that of a Presidency Magistrate or a Magistrate of the First Class shall try any offence against this Act. In Section 624 of the Act, it is stated that every offence shall be deemed to be a non-cognizable offence within the meaning of the Code of Criminal Procedure, 1898.
( 5 ) THEREFORE, there is nothing in the Criminal Procedure Code, or in the Companies Act, 1956, to indicate that the High Court has Original Jurisdiction to try offence complained of in the present case.
( 6 ) RELIANCE has been placed on Section 446 (2) of the Companies Act, 1956, to say that this Court has Original Jurisdiction to try the complaint now before me. In fact, both the complaint as well as the accused say that this Court has jurisdiction under this Section to try the complaint. The relevant portion of Secion 446 reads :
"the Court which is winding up the company shall, notwith- standing anything contained in anyother law for the time being in force have jurisdiction to entertain, dispose of
(A) any suit or proceeding by or against the company. . -. . . " Thus, it is claimed that the present is a proceeding by the company which can be tried by this Court under the power given by Section 446 (2) of the Companies Act, 1956. The point for consideration is whether this power is wide enough to cover the present case and, whether it was the intention of the Legislature that complaints of the type now before this Court, should be tried by the Company Judge on the Original Side.
( 7 ) I do admit that the wording of the Section appears to give a jurisdiction to the High Court or to the District Judge, (if he has jurisdiction, to entertain proceedings by or against t
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