Fraud complaint cognizance under Companies Act needs authorised action and statutory finding; vague forgery allegations also fail.

Section 212(6) of the Companies Act, 2013 was treated as a special bar on cognizance of fraud-related offences unless a complaint is made by the statutorily authorised authorities after inquiry, inspection, investigation, or SFIO action has yielded a finding of fraud; a private complaint resting only on inference was therefore unsustainable for Sections 447 and 448. On the forgery allegations, the Court applied Section 464 of the Indian Penal Code and found that general assertions of manipulation of forms and board resolutions did not show how a false document was made, altered, or executed within the statutory definition; accordingly, the connected charge under Section 463 also failed. The prosecution was quashed as an abuse of process.

---

---

Issues: (i) Whether a private complaint alleging fraud and false statements under the Companies Act, 2013 could be taken cognizance of without a prior finding of fraud through inquiry, inspection, investigation, or SFIO action as contemplated by the Act; (ii) Whether the allegations disclosed the ingredients of offences under Sections 463 and 464 of the Indian Penal Code, 1860.

Issue (i): Whether a private complaint alleging fraud and false statements under the Companies Act, 2013 could be taken cognizance of without a prior finding of fraud through inquiry, inspection, investigation, or SFIO action as contemplated by the Act.

Analysis: The statutory scheme under Chapter XIV and Section 212 of the Companies Act, 2013 was treated as a special mechanism for detecting irregularities, fraud, oppression, and mismanagement in the affairs of a company. The Court noted that Section 447 contemplates punishment only where a person is found guilty of fraud, and that the proviso to Section 212(6) restricts cognizance of offences covered by Section 447 to complaints in writing by the Director, SFIO, or an authorised Central Government officer. Section 439(2) was held to govern non-cognizable offences and could not override the specific bar for cognizable offences under Section 212(6). In the absence of any prior finding by the competent authorities, the private complaint was held to be based only on inference and assumption, amounting to a fishing inquiry.

Conclusion: The complaint was not maintainable for the offences under Sections 447 and 448 of the Companies Act, 2013, and cognizance was held to be and unsustainable against the petitioner.

Issue (ii): Whether the allegations disclosed the ingredients of offences under Sections 463 and 464 of the Indian Penal Code, 1860.

Analysis: The complaint contained only general allegations that the PAS-3 form and board resolutions had been manipulated. The Court applied the settled requirements of Section 464, namely that a false document requires making or executing a document as if by another, unauthorized alteration, or obtaining execution through deception from a person unable to understand the document. Mere assertions of manipulation, without particulars showing how the alleged false document was made, altered, or executed within the statutory definition, were found insufficient to constitute forgery. In the absence of the foundational ingredients of Section 464, the connected charge under Section 463 also could not stand.

Conclusion: The offences under Sections 463 and 464 of the Indian Penal Code, 1860 were not made out.

Final Conclusion: The criminal prosecution was held to be an abuse of process of law and was quashed in entirety.

Ratio Decidendi: For offences of fraud under the Companies Act, 2013 covered by Section 212(6), cognizance can be taken only on a complaint by the statutorily authorised authorities after the Act's prescribed inquiry or investigation mechanism yields a finding of fraud, and a forgery charge under Section 464 of the Indian Penal Code, 1860 requires specific facts showing a false document within the statutory definition.

---