Companies Act remedies do not bar IPC prosecution where separate penal offences are disclosed; quashing requires exceptional grounds.

A statutory remedy under the Companies Act, 2013 does not bar criminal prosecution where the allegations disclose distinct IPC offences such as criminal breach of trust, cheating, forgery, conspiracy and misappropriation. Section 430 excludes civil court jurisdiction in matters assignable to the Tribunal, but it does not oust prosecution for penal offences; double jeopardy applies only to the same offence, not to different offences arising from the same facts. The settled test for quashing under Section 482 CrPC permits interference only in exceptional cases, and prima facie cognizable offences were disclosed on the material collected. The charge sheets, cognizance orders and summoning orders were therefore not liable to be quashed.

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Issues: (i) Whether the existence of remedies under the Companies Act, 2013 barred criminal prosecution for alleged IPC offences arising out of company-management disputes. (ii) Whether the charge sheets, cognizance orders and summoning orders were liable to be quashed under Section 482 of the Code of Criminal Procedure, 1973.

Issue (i): Whether the existence of remedies under the Companies Act, 2013 barred criminal prosecution for alleged IPC offences arising out of company-management disputes.

Analysis: The allegations were not confined to internal mismanagement of the company alone. They also disclosed allegations of criminal breach of trust, cheating, forgery, conspiracy and misappropriation of funds. Section 430 of the Companies Act, 2013 bars civil court jurisdiction in matters assignable to the Tribunal, but it does not exclude criminal prosecution for distinct penal offences. The principle against double jeopardy, as reflected in Article 20(2) of the Constitution of India, Section 26 of the General Clauses Act, 1897 and Section 300 of the Code of Criminal Procedure, 1973, applies only to the same offence, not to different offences arising from the same facts under different enactments.

Conclusion: Criminal prosecution was not barred, and the contention based on the Companies Act failed.

Issue (ii): Whether the charge sheets, cognizance orders and summoning orders were liable to be quashed under Section 482 of the Code of Criminal Procedure, 1973.

Analysis: The settled law permits quashing only in exceptional cases, including where no offence is disclosed, where the proceedings are manifestly mala fide, or where the case falls within the recognised categories for exercise of inherent jurisdiction. On the allegations and the material collected in investigation, prima facie cognizable offences were disclosed. At the stage of cognizance on a police report, the Magistrate is not required to record detailed reasons or conduct a meticulous evaluation of evidence. The challenge to the proceedings was therefore not made out at the threshold.

Conclusion: The proceedings, charge sheets and summoning orders were not liable to be quashed.

Final Conclusion: The criminal proceedings were allowed to continue, and the petitions for quashing were rejected. The applicants were left free to seek appropriate protection or remedies before the competent forum in accordance with law.

Ratio Decidendi: A statutory civil remedy under the Companies Act does not bar prosecution for distinct IPC offences, and inherent powers to quash criminal proceedings can be exercised only where the complaint or police report fails to disclose an offence or falls within the settled exceptional categories justifying interference.

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