Jurisdiction Clarified: Company Law Board, Not Local Court, for Share Certificate Complaints

The court held that the Jaipur court lacked jurisdiction to entertain a complaint under sections 113 and 116 of the Companies Act, 1956, regarding the issuance of share certificates. It clarified that complaints under section 113 should be filed before the Company Law Board, not in a local court. Additionally, the court emphasized the prohibition on taking cognizance of offences against a Government company under section 621 of the Act, leading to the quashing of complaints and proceedings in the criminal cases filed in Jaipur.

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Issues involved:
Jurisdiction of court to entertain complaint under sections 113 and 116 of the Companies Act, 1956; Maintainability of complaints in the Jaipur court; Authority to issue directions for delivery of share certificates under section 113; Cognizance of offence against a Government company; Prohibition on court to take cognizance under section 621 of the Companies Act.

Jurisdiction of Court:
The petitioner argued that the complaint under section 113 could only be filed before the Company Law Board and not in the Jaipur court due to the location of the petitioner-company's registered office in Vadodara, Gujarat. The court analyzed section 113(1) of the Act, emphasizing the requirement for companies to deliver share certificates within a specified time. It clarified that the Board could extend the delivery period, but the court had authority to impose penalties for non-compliance. The court differentiated between filing a complaint for penalty under sub-section (2) and seeking a direction for delivery under sub-section (3) of section 113.

Authority to Issue Directions:
The court examined the summary remedy provided under section 113(3) for applying to the Board to order the issuance of share certificates. It highlighted that this remedy was separate from the penalty provision under sub-section (2) and affirmed that the person entitled to certificates could approach the Board for non-compliance with the delivery requirements.

Cognizance of Offence against Government Company:
The judgment referenced the definition of a Government company under section 617 of the Act, emphasizing that the petitioner-company fell under this category. It delved into section 621, which mandates that complaints against a Government company can only be made by a person authorized by the Central Government. The court concluded that the court was prohibited from taking cognizance of offences against a Government company, as in this case, the complaint was made by a shareholder and not in relation to winding-up proceedings.

Prohibition on Court to Take Cognizance:
The court invoked section 621 of the Act to highlight that the court was prohibited from taking cognizance of offences under sections 113(2) and 116 when the complaint was against a Government company. It clarified that the complaint in this case was not maintainable under the clear provisions of the Act.

In conclusion, the court found that the court below erred in taking cognizance of the offence under sections 113(2) and 116 based on a complaint made in Jaipur. The order of the Special Court of Judicial Magistrate was set aside, and the complaints and proceedings in the criminal cases were quashed.

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