Special Courts Under the Companies Act, 2013

Published on 11 Jun 2016 by Team

To give quick transfer of offences culpable under the Companies Act, 2013, which are culpable with detainment of 2 years or more, the Ministry of Corporate Affairs has advised the procurements managing 'Special Courts' with impact from 18 May 2016. 

Special Courts in India

Existing courts in the State of Maharashtra, Jammu and Kashmir, Goa, Gujarat, Madhya Pradesh, West Bengal, and Union domain of Andaman and Nicobar Islands, and Dadra and Nagar Haveli and Daman and Diu have been assigned as Special Courts for purposed of trying offences under the Companies Act, 2013. According to the notification, these courts have been assigned for the purposes of the trial of offences culpable under the Companies Act, 2013 with detainment of 2 years or more.

Offences Trialable by Special Courts

According to the provisions of the Companies Act, 2013, after offences are triable by Special Courts:

  1. Offences for which the Companies Act, 2013, accommodates detainment of 2 years or more;
  2. Cases sent by a Magistrate (where he supposes confinement is superfluous) for any offence conferred under the Companies Act, 2013. This provision will become possibly the most important factor when a person is captured and kept in care, and it creates the impression that the examination can't be finished inside the time of 24 hours as required under the Code of Criminal Procedure, 1973 (CrPC) and there are justifications for trusting that the allegation or data is all around established, and detainment is approved by Magistrate for a period not surpassing 15 days (if requested by Judicial Magistrate) or 7 days (if requested by Executive Magistrate), all things considered. In such cases, the Special Court has the same force as the Magistrate having its ward to attempt such case;
  3. Take awareness of an offence under the Companies Act, 2013, without the charged being focused on it for trial upon Scrutiny of the police report of the actualities constituting such offence or If an objection has been documented for that benefit.
  4. An attempt at the same trial an offence for which a denounced might be charged under CrPC notwithstanding an offence under the Companies Act, 2013.
  5. If the Special Court thinks fit, it might attempt summarily, any offence under the Companies Act, 2013, which is culpable with detainment for a term not surpassing 3 years, given that on account of any conviction in such trial, the individual can't be sentenced for detainment for a term surpassing 1 year.

Offer/Revisions from Special Courts to High Courts

Eminently, for the reasons for enlivening request and modification, the High Court has been allowed ward, as though the Special Court inside the neighbourhood furthest reaches of the purview of the High Court were a Court of Session attempting cases inside the nearby furthest reaches of the locale of the High Court.

Offences Under the Companies Act, 2013, for Which Minimum Punishment is 2 Years or More

Sr. No.

Offence

Who is punishable?

Section

1.

False declaration of solvency by a Director during the voluntary winding up

Director

305(4)

2.

Intentionally and fraudulently concealing material information about the company, relating to properties, debts, creditors, from the Company Liquidator during winding up

Off during winding any  person in accordance with whose directions or instructions the directors    of the company have been accustomed to act)

Section 336(1)

Fraudulently misrepresenting material information about the company to the Company Liquidator during winding up

3.

Taking in pawn or pledge or otherwise receipt of the property,knowing it to be pawned, pledged, or disposed of wherein such property was pawned, pledged or disposed off (in 12 months preceding the commencement of the winding up) on credit and not been paid for and was not in the ordinary course of business

 Any person who does such act knowingly

Section 336(2)

4.

The commitment of fraud provided fraud in question involves public interest

 Any person found guilty of such fraud

Section 447

5.

Intentionally giving false evidence upon any examination on oath or solemn affirmation, authorized under the Companies Act, 2013

 Any person giving such false evidence

449

Intentionally giving false evidence in any affidavit, deposition or solemn affirmation, in or about the winding up of any company under the Companies Act, 2013, or in or about any matter arising under the Companies Act, 2013

Special courts have been notified by the Companies Act 2013, as to provide speedy trials and judgments which took normally years. These 8 special courts will help to reduce the burden. The goal of setting up these courts is to let justice courts attempt minor infringement, and that graver offence ought to be managed by Special Courts.

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