MCA circulars dated 18.05.2016 regarding applicability of special courts

ORDERS ISSUED BY MCA DATED 18.05.2016 REGARDING APPLICABILITY OF SPECIAL COURTS

MCA has issued an order on 18.05.2016 clarifying the commencement of section 2(29), sections 435 to 438 and 440 of Companies Act, 2013.

The notice states that:

"S.O......... (E)-In exercise of the powers conferred by sub-section (3) of section 1 of the Companies Act, 2013 (18 of 2013), the Central government hereby appoints 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 said Act shall come into force."

Section 2(29) “court” means—

(i) the High Court having jurisdiction in relation to the place at which theregistered 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, bynotification, empowered any district court to exercise all or any of thejurisdictions conferred upon the High Court, within the scope of its jurisdictionin respect of a company whose registered office is situate in the district;

(iii) the Court of Session having jurisdiction to try any offence under thisAct 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 Classhaving jurisdiction to try any offence under this Act or under any previouscompany law;

435. Establishment of Special Courts

(1) The Central Government may, for the purpose of providing speedy trial ofoffences under this Act, by notification, establish or designate as many Special Courtsas may be necessary.

(2) A Special Court shall consist of a single judge who shall be appointed by theCentral Government with the concurrence of the Chief Justice of the High Court withinwhose jurisdiction the judge to be appointed is working.

(3) A person shall not be qualified for appointment as a judge of a Special Court unlesshe is, immediately before such appointment, holding office of a Sessions Judge or an AdditionalSessions Judge

436. Offences triable by Special Courts

(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973,—

(a) all offences under this Act shall be triable only by the Special Court establishedfor the area in which the registered office of the company in relation to which theoffence is committed or where there are more Special Courts than one for such area, bysuch one of them as may be specified in this behalf by the High Court concerned;

(b) where a person accused of, or suspected of the commission of, an offenceunder this Act is forwarded to a Magistrate under sub-section (2) or sub-section (2A)of section 167 of the Code of Criminal Procedure, 1973, such Magistrate may authorisethe detention of such person in such custody as he thinks fit for a period not exceedingfifteen days in the whole where such Magistrate is a Judicial Magistrate and sevendays in the whole where such Magistrate is an Executive Magistrate:

Provided that where such Magistrate considers that the detention of such personupon or before the expiry of the period of detention is unnecessary, he shall order suchperson to be forwarded to the Special Court having jurisdiction;

(c) the Special Court may exercise, in relation to the person forwarded to it underclause (b), the same power which a Magistrate having jurisdiction to try a case mayexercise under section 167 of the Code of Criminal Procedure, 1973 in relation to anaccused person who has been forwarded to him under that section; and

(d) a Special Court may, upon perusal of the police report of the facts constitutingan offence under this Act or upon a complaint in that behalf, take cognizance of thatoffence without the accused being committed to it for trial.

(2) When trying an offence under this Act, a Special Court may also try an offenceother than an offence under this Act with which the accused may, under the Code of CriminalProcedure, 1973 be charged at the same trial.

(3) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, the Special Court may, if it thinks fit, try in a summary way any offence under this Act which is punishable with imprisonment for a term not exceeding three years:

Provided that in the case of any conviction in a summary trial, no sentence of imprisonment for a term exceeding one year shall be passed:

Provided further that when at the commencement of, or in the course of, a summary trial, it appears to the Special Court that the nature of the case is such that the sentence of imprisonment for a term exceeding one year may have to be passed or that it is, for any other reason, undesirable to try the case summarily, the Special Court shall, after hearing the parties, record an order to that effect and thereafter recall any witnesses who may have been examined and proceed to hear or rehear the case in accordance with the procedure for the regular trial.

437. Appeal and revision

The High Court may exercise, so far as may be applicable, all the powers conferred by Chapters XXIX and XXX of the Code of Criminal Procedure, 1973 on a High Court, as if a Special Court within the local limits of the jurisdiction of the High Court were a Court of Session trying cases within the local limits of the jurisdiction of the High Court.

438. Application of Code to proceedings before Special Court

Save as otherwise provided in this Act, the provisions of the Code of Criminal Procedure, 1973 shall apply to the proceedings before a Special Court and for the purposes of the said provisions, the Special Court shall be deemed to be a Court of Session and the person conducting a prosecution before a Special Court shall be deemed to be a Public Prosecutor.

440. Transitional provisions

Any offence committed under this Act, which is triable by a Special Court shall,until a Special Court is established, be tried by a Court of Session exercising jurisdiction overthe area, notwithstanding anything contained in the Code of Criminal Procedure, 1973:

Provided that nothing contained in this section shall affect the powers of the HighCourt under section 407 of the Code to transfer any case or class of cases taken cognizanceby a Court of Session under this section.

MCA has issued an order on 18.05.2016 in respect of special courts under section 435 of Companies Act, 2013

The notice states that:

“S.O......... (In exercise of the powers conferred by sub-section (1) of section 435 of the Companies Act, 2013 (18 of 2013), the Central government hereby, after obtaining the concurrence of the respective Chief justices of the High Courts, designates the following Courts mentioned in the Table below as Special Courts for the purposes of trial of offences punishable under the Companies Act, 2013 with imprisonment of two years or more in terms of section 435 of the Companies Act, 2013, namely:-

TABLE

2. The aforesaid Courts mentioned in column number (2) shall exercise the jurisdiction as Special Courts in respect of jurisdiction mentioned in column number (3)”