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Special Court's Jurisdiction Affirmed in Companies Act Case

Background

In a significant ruling, the High Court addressed the jurisdiction of the Special Court concerning offences under Section 452 of the Companies Act, 2013. The case involved Kanan Devan Hills Plantations Company Private Limited , which filed multiple complaints against former employees for wrongfully obtaining possession of company property. The Additional Sessions Court—VII, Ernakulam, had previously ruled that it lacked jurisdiction to hear the case, prompting the company to file revision petitions.

Arguments

The revision petitioner, represented by its counsel, argued that the Special Court had jurisdiction to try offences under Section 452 prior to the amendments made by Act 29 of 2020. They contended that the substantive sentence for the offence included imprisonment, thus falling within the Special Court's purview. Conversely, the accused's counsel maintained that the offence was not punishable by imprisonment of two years or more, asserting that the complaints should have been filed before a Judicial Magistrate of First Class.

Court's Analysis and Reasoning

The court meticulously analyzed the provisions of the Companies Act, particularly focusing on the amendments made to Section 435. It concluded that prior to the amendment, the Special Court had the authority to try offences under Section 452, which included a substantive sentence of imprisonment for disobedience of court orders. The court emphasized that the distinction between the two parts of Section 452 was crucial, noting that while the first part dealt with fines, the second part allowed for imprisonment upon non-compliance with court orders.

Decision

The High Court ultimately set aside the Special Court's earlier ruling, affirming that it indeed had jurisdiction to hear the complaints filed by Kanan Devan Hills Plantations Company . The court directed the Special Court to proceed with the trial of the cases, thereby reinforcing the legal framework surrounding corporate offences and the jurisdictional authority of Special Courts under the Companies Act.