1 August 2022


Judgments

High Court of Bombay

Satyanarayan Bankatlal Malu and Ors. Vs. Insolvency and Bankruptcy Board of India and Ors.

MANU/MH/0453/2022

14.02.2022

Insolvency

Special Court trying offences under I.B. Code shall be "deemed to be Court of Sessions"

Present petition under Article 227 of the Constitution of India, 1950 read with Section 482 of the Criminal Procedure Code, 1973 assails the order, "Issue Process", under Section 73(a) and Section 235A of the Insolvency and Bankruptcy Code, 2016 ("the I.B. Code") passed by the Additional Sessions Judge, on a Complaint filed by the Insolvency and Bankruptcy Board of India, a statutory body established under the I.B. Code.

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.

The object to create another class of Special Court was to speed up the trial of offences under the 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 frustrate to object of the speedy trial for which, the Special Courts have been established.

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 Sessions". If the intention of the legislature was that offences under I.B. Code are to be tried by the Sessions Court, then this subsection would have been unnecessary. According to the Petitioners, this is an indication as to the true and proper interpretation of Section 435 of the Companies Act, 2013 and Section 436 of I.B. Code. Thus, the impugned proceedings have been instituted by the Respondents (Complainant) in the Court of Additional Sessions Judge, were not sustainable for want of jurisdiction.

As a consequence order, 'issue process' passed by the learned Additional Sessions Judge against the Petitioners, in a complaint by the Respondents/Board was without jurisdiction and therefore not sustainable equally. It is therefore to be held that Special Court "which is to try offences under the I.B. Code is the Special Court established under Section 435(2) (b) of the Companies Act, 2013 which consists of Metropolitan Magistrate or Judicial Magistrate First Class. Proceedings being Special Case instituted in the Court of Additional Sessions Judge, are quashed and set aside. Petition allowed.

Tags : Proceedings Jurisdiction Legality

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