Prior sanction under the Companies Act was not required before a Magistrate could take cognizance of the complaint.

Section 3 of the Indian Companies Act was treated as a general jurisdiction provision and not a bar to a Magistrate taking cognizance of a complaint for an offence under section 282-A. The Court noted that where the legislature intended prior sanction, it used express language, as in section 237; section 282-A was only declaratory of the offence's ingredients, and prosecution was otherwise governed by the Criminal Procedure Code subject to specific statutory modifications. Prior sanction of the High Court was therefore not a condition precedent, and the refusal to entertain the complaint was liable to be set aside.

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Issues: Whether section 3 of the Indian Companies Act required prior sanction of the High Court before a Magistrate could entertain a complaint under section 282-A of the Indian Companies Act.

Analysis: Section 3 of the Indian Companies Act was held to be a general jurisdiction provision and not a restriction on the institution of complaints for offences created by the Act. The presence of an express requirement of previous sanction in section 237 showed that where the legislature intended such a condition, it said so in clear terms. Section 282-A was treated as a declaratory provision stating the ingredients of the offence, while the prosecution of such offences was to proceed according to the Criminal Procedure Code, subject only to specific modifications in the Companies Act. The provisions dealing with cognizance and trial of offences under the Act, read with section 5 of the Criminal Procedure Code, 1898, supported the view that the Magistrate was not barred from entertaining the complaint.

Conclusion: Prior sanction of the High Court was not a condition precedent to the Magistrate's cognizance of the complaint, and the order refusing to entertain it was and liable to be set aside.

Ratio Decidendi: Unless the statute expressly imposes a requirement of prior sanction, a complaint for an offence created by the Companies Act may be instituted and entertained in accordance with the Criminal Procedure Code, and section 3 of the Indian Companies Act does not by itself bar cognizance by the Magistrate.

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