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of <h1>MP HC rejects discharge application under Section 227 in fraud case involving forged resignation letters</h1> <h3>Sunil Mandwani Versus State of M.P.</h3> Sunil Mandwani Versus State of M.P. - TMI Issues:Jurisdiction of Special Court under Companies Act vs. Jurisdiction of Regular Court under IPCAnalysis:1. Jurisdiction of Special Court under Companies Act:The applicants sought discharge under Section 227 of Cr.P.C., arguing that the alleged offenses fall under the purview of the Companies Act, 2013 and should be tried by a Special Court designated under the Act. They contended that the offenses related to non-calling of meetings, forged resignations, and appointment of directors, all covered under the Companies Act. However, the trial court rejected this argument, stating that only complaints by the Registrar of Companies or shareholders trigger the Companies Act provisions. The court highlighted that the FIR registered against the applicants pertained to offenses under the IPC, not the Companies Act.2. Interpretation of Companies Act Provisions:The defense argued that the trial court failed to consider the provisions of the Companies Act, specifically Section 436(2), which allows a Special Court to try offenses under the IPC along with Companies Act offenses. They emphasized that the complainant, being an ex-director and shareholder, had the right to file a complaint under the Companies Act. The defense contended that the actions of the applicants, such as fabrication of documents and forgery, constituted offenses under the Companies Act, punishable by up to 10 years of imprisonment.3. Prosecution's Allegations under IPC:On the other hand, the prosecution alleged that the applicants engaged in fraudulent activities to gain control of the company's assets. They accused the applicants of manipulating records, filing false returns, and fabricating resignations to deceive and cheat the complainants. The prosecution argued that the offenses committed by the applicants, including fraud and cheating, fell under sections 406, 420, 465, 467, 468, 471, and 201 of the IPC. They asserted that the FIR was justified based on detailed investigations and hand-writing analysis.4. Court's Decision and Rationale:After examining the arguments and provisions, the court emphasized the notification designating Special Courts under the Companies Act. It clarified that the Special Court's jurisdiction is limited to offenses punishable under the Companies Act, not IPC offenses. The court noted that the FIR registered against the applicants concerned IPC offenses, not violations of the Companies Act. Therefore, the trial court's decision to reject the discharge application under Section 227 of Cr.P.C. was upheld, as the Special Court lacked jurisdiction over the IPC offenses alleged in the case.5. Final Verdict:In conclusion, the petition seeking discharge was dismissed by the court, affirming that the trial court's decision was appropriate in light of the jurisdictional issues between the Special Court under the Companies Act and the regular court under the IPC. The judgment clarified the scope of jurisdiction for each court based on the nature of offenses alleged, ultimately upholding the trial court's ruling.
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