Corporate mismanagement allegations belong to company-law remedies, and the criminal complaint was quashed.

Allegations of mismanagement, forgery, misappropriation and cheating arising out of company affairs were found to require examination of corporate accounts, assets, transactions and management, rather than ordinary police investigation. The court noted that the Companies Act, 2013 provides specific remedies and investigative mechanisms for oppression and mismanagement, inquiry by the Registrar, Central Government investigation, SFIO investigation, and prosecution before the Special Court. Because the controversy involved intricate corporate and forensic issues, the criminal complaint and FIR were quashed, and the complainant was directed to pursue the statutory remedies before the competent company-law authorities.

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Issues: Whether the criminal complaint based on allegations of mismanagement, forgery, misappropriation and cheating in the affairs of a company should be quashed and the parties relegated to the remedies under the Companies Act, 2013.

Analysis: The complaint disclosed a dispute arising from the management of the company and its sister concerns, involving allegations that required a comprehensive examination of company affairs, accounts, assets and transactions. The legal framework under the Companies Act, 2013 provided remedies for oppression and mismanagement before the Tribunal, inquiry by the Registrar under Section 206, investigation by the Central Government under Section 210, special investigation by SFIO under Section 212, and prosecution before the Special Court under Sections 435 and 436. The allegations were not suitable for effective investigation by the ordinary police machinery because the controversy involved intricate questions of corporate management, accountancy and forensic audit.

Conclusion: The criminal complaint and FIR were quashed, and the complainant was directed to pursue the appropriate remedies under the Companies Act, 2013 before the Registrar of Companies and the competent statutory authorities.

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