Case Note & Summary
The petitioner, Sanjay Sreesha, a Chartered Accountant, filed a petition under Section 482 of the Code of Criminal Procedure, 1973 (Cr.P.C.) seeking to quash the criminal proceedings in C.C. No. 34/2012 pending before the Special Court for Economic Offences, Bangalore. The proceedings were initiated based on a complaint filed by the Serious Fraud Investigation Office (SFIO), Ministry of Corporate Affairs, Government of India, under Section 200 Cr.P.C. for alleged violation of Section 240(3) and Section 209A of the Companies Act, 1956. The SFIO alleged that the petitioner failed to comply with summons issued on 16.06.2011, 20.06.2011, and 01.07.2011, requiring him to appear and produce documents. The petitioner responded stating he was not employed as an auditor of the company. The trial court took cognizance of the offence, leading to the present petition. The High Court examined the maintainability of the complaint. It noted that Section 240(3) of the Companies Act, 1956 empowers an Inspector to require any person to produce documents and appear, and Section 240(4) provides that if any person fails to comply, the Inspector shall report to the Central Government, which may then file a complaint before a Magistrate. The court held that the complaint filed directly by SFIO under Section 200 Cr.P.C. is not maintainable as the Act provides a specific procedure. The court also observed that the petitioner was not the auditor of the company at the relevant time. Consequently, the court allowed the petition, quashed the proceedings, and set aside the trial court's order dated 23.02.2012.
Headnote
A) Criminal Procedure Code - Quashing of Complaint - Section 482 Cr.P.C. - Maintainability - Complaint filed by SFIO under Section 200 Cr.P.C. for violation of Section 240(3) and Section 209A of Companies Act, 1956 - Held that the complaint is not maintainable as the Companies Act provides a specific procedure under Section 240(4) for filing complaints for non-compliance of summons, and the complaint must be filed by the Central Government or its authorized officer, not by SFIO directly under Cr.P.C. (Paras 1-10) B) Companies Act, 1956 - Investigation - Section 240(3) and 240(4) - Non-compliance of Summons - Procedure - Section 240(3) requires compliance with summons issued by Inspector, and Section 240(4) provides that if any person fails to comply, the Inspector shall report to the Central Government, which may then file a complaint before a Magistrate - Held that the complaint must be filed by the Central Government or its authorized officer, and not directly by SFIO under Section 200 Cr.P.C. (Paras 5-10) C) Companies Act, 1956 - Auditor - Section 209A - Maintenance of Books of Account - Alleged violation by Chartered Accountant - Held that the complaint under Section 209A is also not maintainable as the procedure under Section 240(4) must be followed for non-compliance of summons, and the petitioner was not the auditor of the company at the relevant time (Paras 2-10)
Issue of Consideration
Whether the complaint filed by SFIO under Section 200 Cr.P.C. for violation of Section 240(3) and Section 209A of the Companies Act, 1956 is maintainable when the Act provides a specific procedure under Section 240(4) for filing complaints for non-compliance of summons.
Final Decision
The High Court allowed the petition, quashed the criminal proceedings in C.C. No. 34/2012, and set aside the order dated 23.02.2012 of the Special Court for Economic Offences, Bangalore.
Law Points
- Section 482 Cr.P.C. inherent powers
- Section 240(3) and 240(4) Companies Act
- 1956
- Section 209A Companies Act
- maintainability of complaint
- SFIO investigation procedure
- non-compliance of summons
- quashing of criminal proceedings
