2021 (10) TMI 597 - HC - Companies Law

Court allows Criminal Original Petition, quashes proceedings in Chennai, emphasizing jurisdictional considerations

Ravi Sam Versus The Deputy Registrar of Companies Tamil Nadu, Shastri Bhavan, Chennai

The Criminal Original Petition was allowed, resulting in the quashing of proceedings in EOCC.No.104/2016 in Chennai. The court emphasized the need for ... Territorial Jurisdiction - Validity of continuation of EOCC.No.104/2016 now pending on the file of the learned Additional Chief Metropolitan Magistrate, Economic Offences Wing-1 at Egmore, Chennai - HELD THAT:- The privilege provided to the respondent/complainant of explaining why it was originally lodged in Chennai and if later lodged in Coimbatore, reasons for the same to be addressed to the said competent Court and the learned Magistrate may take a call on accepting or rejecting those reasons. It would be inappropriate for this Court to indicate to the respondent herein to prefer a complaint at Coimbatore. An obligation is placed on the respondent to explain the circumstances necessitating filing the complaint originally in Chennai and thereafter, shifting the said complaint to Coimbatore. Let those reasons be forwarded to the competent Court at Coimbatore, if the respondent has instructions to proceed further. The Criminal Original Petition is allowed and the proceedings in EOCC.No.104/2016 now pending on the file of the learned Additional Chief Metropolitan Magistrate / Economic Offences Wing-1, Egmore, Chennai, stands quashed. Issues:1. Challenge to continuation of criminal proceedings under Section 482 of CrPC2. Interpretation of Section 165 of the Companies Act, 20133. Jurisdiction of the Court over the Companies involved4. Consideration of Companies struck off by Registrar of Companies5. Venue of lodging the complaint and reasons for the sameAnalysis:1. The petitioner challenged the continuation of criminal proceedings under Section 482 of the CrPC, questioning EOCC.No.104/2016 pending before the Additional Chief Metropolitan Magistrate, Economic Offences Wing-1 at Egmore, Chennai.2. The EOCC.No.104/2016 was initiated based on a complaint under Section 165 of the Companies Act, 2013, which restricts a person from holding directorship in more than twenty companies simultaneously. The petitioner was alleged to be a director in 16 companies, leading to the legal issue of compliance with Section 165 provisions.3. The jurisdictional aspect arose as it was revealed that only two out of the 16 companies were within the Chennai court's jurisdiction, while the rest fell under the Coimbatore court's jurisdiction. This raised questions regarding the appropriate venue for the legal proceedings.4. The petitioner's counsel argued that considering the companies struck off by the Registrar of Companies and those from which the petitioner had resigned directorship, the alleged offense under Section 165 might not apply. The distinction between public and private limited companies was also highlighted for legal consideration.5. The court emphasized the importance of explaining why the complaint was initially lodged in Chennai and the potential reasons for shifting it to Coimbatore. The respondent was directed to provide justifications to the competent court in Coimbatore for the venue change, allowing for a fair assessment of the circumstances.6. It was clarified that any reasons presented could be challenged by the petitioner in accordance with legal procedures. Ultimately, the Criminal Original Petition was allowed, leading to the quashing of proceedings in EOCC.No.104/2016 in Chennai, signaling the conclusion of the legal dispute in that jurisdiction.