Allowed

Sri. Arun Ballakur v. Sri.M.Krishna Reddy

Karnataka HC1 Mar 2024WP/11821/2018

Case brief

AI extract

What is this about?

Petitioners challenged cognizance taken by the Special Court (Economic Offences) on a private complaint under Section 447 of the Companies Act, 2013. Following the Division Bench ruling that such Special Courts can take cognizance only on complaints by the Special Fraud Investigation Officer under Section 212(6), the court quashed the entire proceedings as without jurisdiction.

What did the court decide?

Proceedings in C.C.No.235/2017 before Special Court (Economic Offences), Bengaluru quashed insofar as petitioners/accused Nos.2 and 3 are concerned.

Sri. Arun Ballakur Vs Sri.M.Krishna Reddy — Quashing and FIR | Karnataka HC (2024)

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1 - NC: 2024:KHC:8831 WP No. 11821 of 2018

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 1^ST DAY OF MARCH, 2024

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BEFORE

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THE HON'BLE MR JUSTICE HEMANT CHANDANGOUDAR WRIT PETITION NO. 11821 OF 2018 (GM-RES)

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BETWEEN:

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SRI. ARUN BALLAKUR, S/O LATE B.L.N RAO, AGED ABOUT 60 YEARS, R/AT NO.295, 19^TH MAIN, 6^TH BLOCK, KORAMANGALA, BENGALURU - 560 095.

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SMT. MADHAVI BALLAKUR, W/O SRI. ARUN BALLAKUR, AGED ABOUT 54 YEARS, R/AT NO 295, 19^TH MAIN, 6^TH BLOCK, KORAMANGALA, BENGALURU -560 095.

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…PETITIONERS

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(BY SRI. VIVEK HOLLA, ADVOCATE FOR SMT. MAYA HOLLA, ADVOCATE)

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AND:

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Digitally signed by R HEMALATHA Location: HIGH COURT OF KARNATAKA

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SRI. M. KRISHNA REDDY, S/O M. VENKATA REDDY, AGED ABOUT 55 YEARS, R/O NO.306, 24^TH CROSS, 27^TH MAIN, HSR SECTOR - II, BENGALURU - 560 102

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…RESPONDENT

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(BY SRI. K.V. SATISH, ADVOCATE)

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THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO CALL FOR THE RECORDS IN CRIMINAL CASE NO.235/2017 ON THE FILE OF SPECIAL COURT [ECONOMIC OFFENCES] AT BANGALORE AND ETC.

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NC: 2024:KHC:8831 WP No. 11821 of 2018

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THIS PETITION, COMING ON FOR ORDERS, THIS DAY, THE COURT MADE THE FOLLOWING:

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ORDER

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The petitioners/accused Nos.2 and 3 are challenging the proceedings in C.C.No.235/2017 on the file of Court of the Special Court (Economic Offences) at Bengaluru for the offences punishable under Section 447 and 448 of the Companies Act, 2013.

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The respondent filed a private complaint under Section 200 of Cr.P.C., alleging that though the petitioners, who are required to call upon the requisition meeting within three months, however, convened the meeting after expiry of three months, and also filed false returns before the ROC which constitutes an offence under Section 447 of the Companies Act, 2013.

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Learned Magistrate took cognizance of the aforesaid offence, and the application filed under Section 245(2) Cr.P.C, for discharge was dismissed. Whether the Special Court constituted under Section 435 of the Companies Act, 2013 can take cognizance of an offence punishable under Section 447 of the Companies Act, 2013 on a private complaint by a shareholder or a member of a Company was examined by the Division Bench of this Court upon reference by the learned Single Judge and the Division Bench has held that upon reading Section 212(6) along with 439(1), the Special Court constituted under Section 435 of the Act cannot take cognizance of an offence punishable under Section

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NC: 2024:KHC:8831 WP No. 11821 of 2018

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447 of the Act upon a private complaint by a shareholder or a member of a Company, but can take cognizance only upon complaint by the Special Fraud Investigation Officer in terms of Second Proviso of Section 212(6) of the Act. Therefore, the cognizance taken on a private complaint filed by the shareholder is one without jurisdiction, and the continuation of the proceedings will be an abuse of the process of law.

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Accordingly, I pass the following:

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ORDER

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i. Writ petition is allowed.

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ii. The entire proceedings in C.C.No.235/2017 on the file of the Special Court (Economic Offences) at Bengaluru, insofar as it relates to petitioners/accused No.2 and 3, is hereby quashed.

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CP List No.: 1 Sl No.: 30 CT:SNN

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Sd/JUDGE

Sri. Arun Ballakur v. Sri.M.Krishna Reddy

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Sri. Arun Ballakur v. Sri.M.Krishna Reddy

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