Authorization for company fraud prosecution upheld where government-directed complaint followed inspection and alleged conduct continued into the 2013 regime.

Inspection and report proceedings under the Companies Act, 2013, followed by a Central Government direction to prosecute, were treated as satisfying the authorization requirement under Section 212(6), so the complaint was not invalid for want of sanction. The alleged diversion of funds was also viewed as a continuing fraudulent course of conduct extending into the 2013 regime, so prosecution under Section 447 was not barred as an ex post facto application of penal law. The materials disclosed a prima facie case fit for trial, and the narrow threshold for quashing under Section 482 CrPC was not met, so the criminal proceedings were allowed to continue.

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Issues: (i) Whether the complaint and prosecution were vitiated for want of authorization under Section 212(6) of the Companies Act, 2013. (ii) Whether the complaint under Section 447 of the Companies Act, 2013 was barred as an impermissible ex post facto application of penal law, or otherwise liable to be quashed in exercise of inherent jurisdiction under Section 482 of the Code of Criminal Procedure, 1973.

Issue (i): Whether the complaint and prosecution were vitiated for want of authorization under Section 212(6) of the Companies Act, 2013.

Analysis: The complaint followed an inspection and report process undertaken by the Central Government through the inspecting officer under Sections 206 and 208 of the Companies Act, 2013. The Central Government thereafter directed the Registrar of Companies to file prosecution. On that basis, the authorization contemplated by Section 212(6) was treated as having been validly granted, and the prosecution was not regarded as unauthorized.

Conclusion: The challenge based on absence of authorization failed and was decided against the petitioner.

Issue (ii): Whether the complaint under Section 447 of the Companies Act, 2013 was barred as an impermissible ex post facto application of penal law, or otherwise liable to be quashed in exercise of inherent jurisdiction under Section 482 of the Code of Criminal Procedure, 1973.

Analysis: The alleged diversion of funds was viewed as a continuing and recurring course of conduct extending into the period when the Companies Act, 2013 was in force. The Court found that the alleged fraud was not confined to an earlier statutory regime and that the material disclosed a prima facie case requiring trial. The Court also held that the narrow parameters for quashing were not satisfied on the facts.

Conclusion: The plea of ex post facto application failed, and the petition for quashing was rejected.

Final Conclusion: The criminal proceedings were permitted to continue, and the trial court was left free to decide the case on its own merits without being influenced by the observations in this order.

Ratio Decidendi: Where inspection and report proceedings under the Companies Act, 2013 culminate in a Central Government direction to prosecute, authorization under Section 212(6) is satisfied, and a continuing fraudulent course of conduct extending into the 2013 regime may be prosecuted under Section 447 without attracting the bar against ex post facto penal application.

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