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of <h1>High Court clarifies: No need for prior sanction to prosecute under Companies Act</h1> <h3>Hindustan Biologicals Ltd. Versus Jagat Narain Rohatgi</h3> Hindustan Biologicals Ltd. Versus Jagat Narain Rohatgi - [1953] 23 COMP. CAS. 58 (ALL.) Issues:Jurisdiction of the court under section 3 of the Indian Companies Act for entertaining complaints under section 282-A of the Act.Analysis:The judgment pertains to a reference by the Additional Sessions Judge, Lucknow, recommending setting aside the City Magistrate's order refusing to entertain a complaint under section 282-A of the Indian Companies Act. The complaint alleged that the accused wrongfully obtained possession of company properties and refused to return them. The accused objected to the maintainability of the complaint based on section 3 of the Companies Act, contending that prior sanction of the High Court was necessary for the Magistrate to entertain the case. However, the High Court found no explicit requirement for such sanction in the Act for prosecuting offenses under section 282-A. The court highlighted that the Companies Act specifies conditions for prosecution in other sections but not under section 282-A, indicating that the objection lacked merit.The judgment delves into the interpretation of section 3 of the Indian Companies Act, emphasizing that the High Court's jurisdiction under this section pertains to specific provisions of the Act and not as a court of first instance for criminal offenses. It distinguishes between the preliminary provisions in Part I of the Act and the legal proceedings and offenses sections in Part XI. The court also references section 278, indicating the intended trial of offenses under the Companies Act by a Presidency Magistrate or a Magistrate of the first class, aligning with the legislative intent. Moreover, it clarifies that offenses under the Companies Act are to be tried under the Criminal Procedure Code unless specifically modified by the Act.The judgment addresses arguments raised by the opposite party, including the lack of offense ingredients in the complaint and the applicability of section 282-A once the property is in custodia legis. The court refrains from opining on these objections at that stage, directing the opposite party to raise them during further proceedings. Ultimately, the High Court deems the Magistrate's refusal to entertain the complaint as erroneous, setting aside the order and directing the case to proceed in the court concerned for lawful disposal.
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