Statutory locus for Companies Act complaints is mandatory; non-shareholders cannot maintain proceedings outside the statutory exception.

Cognizance of offences under the Companies Act, 1956 is confined to complaints by persons having statutory locus under section 621, namely the Registrar, a shareholder, or a person authorised by the Central Government, save for offences falling within the statutory exception. Where no shares or debentures were allotted and the refund of application money had been sent, the complainant and his wife were not shareholders and therefore lacked competence to initiate the complaint. As the alleged offences did not fall within the exception, the criminal proceedings were unsustainable and were quashed.

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Issues: Whether a complaint alleging offences under the Companies Act, 1956 was maintainable at the instance of a person to whom no shares or debentures had been allotted and whose refund had been sent but not encashed, and whether the criminal proceedings were liable to be quashed.

Analysis: The company had not allotted any shares or debentures to the complainant or his wife and had refunded the application money by refund orders, later followed by demand drafts including interest when the earlier refund orders were found unencashed. On these facts, the complainant and his wife were not shareholders. Section 621 of the Companies Act, 1956 restricts cognizance of offences against the Act to complaints by the Registrar, a shareholder, or a person authorised by the Central Government, except for offences covered by section 545. The alleged offences were not within section 545. As the complainant lacked the status required to institute the complaint, the proceedings could not be sustained.

Conclusion: The complaint was not maintainable and the criminal proceedings were quashed in favour of the petitioner.

Ratio Decidendi: Cognizance of offences under the Companies Act, 1956 can be taken only on a complaint by a person who has the statutory locus under section 621, and a person who is not a shareholder has no competence to maintain such a complaint unless the case falls within the statutory exception.

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