Companies Act, 2013. Except the Registrar, Shareholder and Official Liquidator, no other person can initiate any criminal proceedings against a company for the offences under the Act.

Azim Hasham Premji and others vs India Awake For Transparency. Writ Petition 10140/2020 decided on 18 January 2021.

Judgment Link: http://judgmenthck.kar.nic.in/judgmentsdsp/bitstream/123456789/359290/1/WP10140-20-18-01-2021.pdf

Question: Whether any person can file a proceeding against the directors of a company and/or the company under Section 439(2) of the Act of 2013 ?

14.5 The requirement of prior sanction under the Prevention of Corruption Act is to protect an officer against unnecessary prosecution during the time that he was discharging his function as an officer of the State, in such situation it is mandated that prior sanction from the concerned authority has to be obtained which authority would apply its mind to the facts and come to a conclusion as to whether the proceedings are to be initiated or not.

14.6 The same in my opinion cannot be equated to authorised person under Section 439. There is a specific prohibition to the Court to take cognizance except upon a complaint in writing by the registrar, a shareholder of the company or a person authorised by the Central Government in that behalf.

14.7 Admittedly, the respondent is neither the Registrar nor a shareholder nor has he obtained any authorisation from the Central Government. Therefore, the respondent would not in my considered opinion have any locus to initiate penal proceedings under Section 439 of the Act of 2013 or even if he initiates any action, the court dealing with such a matter cannot take cognizance of such a complaint.

14.8 I Answer Point No.2 by holding that Act of 2013 being a Special enactment containing a specific embargo, the embargo is required to be given complete effect to by this Court. This Court cannot travel beyond the intention of the legislature and water down the requirements of Section 439. In view thereof, I am of the considered opinion that the finding of the Special Economic Court in its order dated 3.7.2017 was proper and correct. Section 19 of the Prevention of Corruption Act and Section 439 of Act of 2013 are not pari materia with each other.

15.1 In view of the above finding in respect of point No.2, it is but required that to initiate proceeding under Section 439(2) and/or if before the Court taking cognizance such matter arises than the court can take cognisance only on a complaint in writing by the Registrar or shareholder of the company or a person authorised by the Central Government in that behalf.

15.2 I answer Point No. 3 by holding that apart from the named persons a complaint can also be filed by a person authorised by Securities and Exchange Board of India in terms of the proviso (1) of Section 439(2) or the Official Liquidator in terms of Section 439(4), no other person can initiate any criminal proceeding against a

Compiled by S. Basavaraj, Advocate, High Court.