The Supreme Court allowed criminal appeals filed by Yerram Vijay Kumar and Rajeev Kumar Agarwal against the State of Telangana and others, quashing criminal proceedings initiated by a private complaint. The dispute originated from management conflicts in M/s Shreemukh Namitha Homes Private Limited, where the Appellants were removed as Directors. The Complainant filed a criminal complaint alleging offences under the Companies Act, 2013 and Indian Penal Code, 1860, including forgery and fraud. The Special Court took cognizance, but the Appellants sought quashing under Section 482 of the Code of Criminal Procedure, 1973, arguing the dispute was civil and statutory bars applied. The High Court dismissed the petition, but the Supreme Court reversed, holding that Section 212(6) of the Companies Act, 2013 prohibits cognizance of offences under Section 447 except on SFIO complaint, and the allegations were civil in nature, making criminal proceedings an abuse of process.
The Supreme Court allowed the appeals and quashed the criminal proceedings in C.C. No. 58 of 2022 pending before the Special Court for Economic Offences at Hyderabad -- The Court held that the dispute was essentially civil and corporate in nature, arising from management and control issues in a private company -- It emphasized that the criminal complaint appeared to be a counterblast to pending proceedings before the National Company Law Tribunal (NCLT) -- The Court interpreted Section 212(6) of the Companies Act, 2013, noting that cognizance of offences under Section 447 of the Act is barred except on a complaint by the Serious Fraud Investigation Office (SFIO) or other authorised agencies -- Since the complaint was filed by a private individual (Respondent No. 2), the Special Court lacked jurisdiction to take cognizance -- The High Court erred in not appreciating this statutory bar and the civil nature of the dispute, leading to the dismissal of the quashing petition under Section 482 of the Code of Criminal Procedure, 1973 being set aside.
The Supreme Court allowed the appeals, quashed the criminal proceedings in C.C. No. 58 of 2022, and set aside the High Court's impugned judgment dated 20.06.2024
Citation: 2026 LawText (SC) (01) 45
Case Number: Criminal Appeal No. of 2026 (Arising out of SLP (Crl.) No. 11530 of 2024), Criminal Appeal No. of 2026 (Arising out of SLP (Crl.) No. 14783 of 2024)
Date of Decision: 2026-01-09
Case Title: The Issue of whether the criminal proceedings against the Appellants for offences under the Companies Act, 2013 and Indian Penal Code, 1860 should be quashed under Section 482 of the Code of Criminal Procedure, 1973, considering the civil nature of the dispute and statutory bar under Section 212(6) of the Companies Act, 2013
Before Judge: J.K. MAHESHWARI J. , K. VINOD CHANDRAN J.
Equivalent Citations: 2026 INSC 42
Advocate(s): Mr. Shailesh Madhiyal, learned Senior Advocate appearing on behalf of the Appellants,
Appellant: Yerram Vijay Kumar, Rajeev Kumar Agarwal
Respondent: The State of Telangana, Others
Nature of Litigation: Criminal appeals against the dismissal of a petition under Section 482 of the Code of Criminal Procedure, 1973 to quash criminal proceedings
Remedy Sought: The Appellants sought quashing of criminal proceedings in C.C. No. 58 of 2022 before the Special Court for Economic Offences at Hyderabad
Filing Reason: The Appellants challenged the High Court's judgment that dismissed their quashing petition, arguing the dispute was civil and statutory bars under the Companies Act, 2013 applied
Previous Decisions: The Special Court took cognizance of offences under the Companies Act, 2013 and Indian Penal Code, 1860 on 10.10.2022 -- The High Court dismissed the quashing petition on 20.06.2024, holding prima facie commission of offences and disputed facts
Issues: Whether the criminal proceedings should be quashed under Section 482 of the Code of Criminal Procedure, 1973 due to the civil nature of the dispute Whether the Special Court had jurisdiction to take cognizance of offences under Section 447 of the Companies Act, 2013 in light of Section 212(6) of the Act
Submissions/Arguments: The Appellants contended the dispute was civil and corporate, with the criminal complaint being a counterblast to NCLT proceedings They argued that Section 212(6) of the Companies Act, 2013 bars cognizance of offences under Section 447 except on complaint by SFIO or authorised agencies, which was not satisfied
Ratio Decidendi: The dispute was essentially civil and corporate in nature, and the criminal complaint was an abuse of process -- Section 212(6) of the Companies Act, 2013 prohibits cognizance of offences under Section 447 except on a complaint by the Director of SFIO or authorised Central Government officers, which was not complied with, rendering the Special Court's cognizance without jurisdiction
Judgment Excerpts: The High Court failed to appreciate that the learned Special Court had taken cognizance of various offences including Section 448 of the Companies Act Section 212(6) of the Companies Act prohibits the taking of cognizance of offences covered under Section 447 except on a complaint made by prescribed categories
Procedural History: The Complainant filed a private complaint before the Special Court on 19.05.2022 -- The Special Court took cognizance and issued summons on 10.10.2022, registering C.C. No. 58 of 2022 -- The Appellants filed a quashing petition under Section 482 of the Code of Criminal Procedure, 1973 before the High Court -- The High Court dismissed the petition on 20.06.2024 -- The Appellants filed appeals in the Supreme Court, with leave granted
