Special statutory remedy for share certificate disputes bars criminal complaint and liquidation proceedings without company court leave.

The complaint over non-return of share certificates could not be pursued in the criminal court because the Delhi court had territorial jurisdiction on the facts disclosed, and the Bangalore court could not assume it. The statutory remedy under section 113(3) of the Companies Act, 1956, vested such default disputes in the CLB, so a direct complaint before a Magistrate was not maintainable. Where the company was under liquidation and a provisional liquidator had been appointed, proceedings could not continue without leave of the company court under section 446(1), and the absence of such leave barred the complaint.

---

---

Issues: (i) Whether the criminal court had territorial jurisdiction to entertain the complaint concerning non-return of share certificates; (ii) Whether the complaint was maintainable in view of section 113(3) of the Companies Act, 1956, which provides the statutory mechanism before the CLB; (iii) Whether the complaint could proceed against a company under liquidation without leave of the company court under section 446(1) of the Companies Act, 1956.

Issue (i): Whether the criminal court had territorial jurisdiction to entertain the complaint concerning non-return of share certificates.

Analysis: The complaint itself disclosed that the company's head office was at Delhi and the accused was shown as residing at New Delhi. The offence was alleged to have been committed in relation to acts connected with the company at its place of business. On that footing, the Presidency Magistrate at Delhi was the proper forum, and the Bangalore court could not assume jurisdiction.

Conclusion: The criminal court below had no territorial jurisdiction to entertain the complaint.

Issue (ii): Whether the complaint was maintainable in view of section 113(3) of the Companies Act, 1956, which provides the statutory mechanism before the CLB.

Analysis: After the amendment to section 113, the statutory power to address default in returning share certificates was vested in the CLB, and the word "court" stood substituted. The scheme required the shareholder to invoke that special remedy, and regular Magistrate courts were divested of jurisdiction to entertain such complaints. A complaint filed directly before the criminal court was therefore contrary to the statutory procedure.

Conclusion: The complaint was not maintainable before the criminal court and lay within the special jurisdiction of the CLB.

Issue (iii): Whether the complaint could proceed against a company under liquidation without leave of the company court under section 446(1) of the Companies Act, 1956.

Analysis: Once the company had entered liquidation and a provisional liquidator had been appointed, no legal proceedings could continue against the company or its officers without leave of the company court. As no such leave had been obtained, the proceedings were barred at the threshold.

Conclusion: The complaint could not proceed without leave of the company court.

Final Conclusion: The proceedings suffered from want of jurisdiction and from statutory bars to maintainability, so interference under section 482 was warranted and the prosecution could not be sustained.

Ratio Decidendi: Where a special statutory remedy is provided for a corporate default, regular criminal process cannot be used in derogation of that scheme, and proceedings against a company under liquidation cannot continue without leave of the company court.

---