TaxTMI 
TaxTMI 
2020 (10) TMI 1181
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.... the company. It is alleged that Ravindra Kumar Maurya without discussion with other Directors prepared forged documents and ousted his wife from the Directorship. Ravindra Kumar Maurya and applicant have opened a separate account of the company in State Bank of India and transferred the profits of the company to the aforesaid account and misappropriated the same. It has further been alleged that the applicant in collusion with other Directors lodged an FIR dated 20.09.2018 against the informant, being Case Crime No. 985 of 2018 and the informant was subsequently exonerated by the Investigating Officer. There are number of cases lodged against the applicant and other accused persons against each other in different police station. 3. Counsel for the applicant has submitted that applicant has been falsely implicated in this case on account of lodging of FIR dated 20.09.2018 against Kripa Shanker Rai, informant in the present case. He has further submitted that the informant managed to get a final report submitted in aforesaid case. The allegation that in the year 2016 Smt. Pratima Verma was ousted from the firm and the applicant was made Director is false. Smt. Pratima Verma resig....
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....s for the procedure of conduct investigation into the affairs of the company where allegations of fraud are made against the office bearers of the company. The allegations regarding the offences committed by the applicant should have been investigated under the provisions of companies act aforesaid. 6. However, before proceeding further, it would be appropriate to have a reference to the relevant provisions of the new Companies Act 2013, which are reproduced hereinbelow:- SECTION 210: Investigation into affairs of company.- (1) Where the Central Government is of the opinion, that it is necessary to investigate into the affairs of a company,-- (a) on the receipt of a report of the Registrar or inspector under section 208; (b) on intimation of a special resolution passed by a company that the affairs of the company ought to be investigated; or (c ) in public interest, it may order an investigation into the affairs of the company. (2) Where an order is passed by a court or the Tribunal in any proceedings before it that the affairs of a company ought to be investigated, the Central Government shall order an investigation into the affairs of that c....
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....all be responsible to provide all information, explanation, documents and assistance to the Investigating Officer as he may require for conduct of the investigation. 6) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, (2 of 1974) (offences covered under section 447) of this Act shall be cognizable and no person accused of any offence under those sections shall be released on bail or on his own bond unless - (i) the Public Prosecutor has been given an opportunity to oppose the application for such release; and (ii) where the Public Prosecutor opposes the application, the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail: Provided that a person, who, is under the age of sixteen years or is a woman or is sick or infirm, may be released on bail, if the Special Court so directs : Provided further that the Special Court shall not take cognizance of any offence referred to this sub-section except upon a complaint in writing made by -- (i) the Director, Serious Fraud Investigation Offic....
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....ter taking such legal advice, as it may think fit), direct the Serious Fraud Investigation Office to initiate prosecution against the company and its officers or employees, who are or have been in employment of the company or any other person directly or indirectly connected with the affairs of the company. (15) Notwithstanding anything contained in this Act or in any other law for the time being in force, the investigation report filed with the Special Court for framing of charges shall be deemed to be a report filed by a police officer under section 173 of the Code of Criminal Procedure, 1973. (16) Notwithstanding anything contained in this Act, any investigation or other action taken or initiated by Serious Fraud Investigation Office under the provisions of the Companies Act, 1956 shall continue to be proceeded with under that Act as if this Act had not been passed. (17). (a) In case Serious Fraud Investigation Office has been investigating any offence under this Act, any other investigating agency, State Government, police authority, income-tax authorities having any information or documents in respect of such offence shall provide all such information or docu....
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....ons referred to in sub-section (1); and (b) with the prior approval of the Central Government, any other person, in relation to the affairs of the company, or other body corporate or person, as the case may be, and for that purpose may require any of those persons to appear before him personally: Provided that in case of an investigation under section 212, the prior approval of Director, Serious Fraud Investigation Office shall be sufficient under clause (b). (5 ) Notwithstanding anything contained in any other law for the time being in force or in any contract to the contrary, the inspector, being an officer of the Central Government, making an investigation under this Chapter shall have all the powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908), while trying a suit in respect of the following matters, namely:-- (a) the discovery and production of books of account and other documents, at such place and time as may be specified by such person; (b) summoning and enforcing the attendance of persons and examining them on oath; and ( c ) inspection of any books, registers and other documents of the comp....
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....State and may, by notification, render the application of this Chapter in relation to a foreign State with which reciprocal arrangements have been made subject to such modifications, exceptions, conditions and qualifications as may be deemed expedient for implementing the agreement with that State. (11) Notwithstanding anything contained in this Act or in the Code of Criminal Procedure, 1973 (2 of 1974) if, in the course of an investigation into the affairs of the company, an application is made to the competent court in India by the inspector stating that evidence is, or may be, available in a country or place outside India, such court may issue a letter of request to a court or an authority in such country or place, competent to deal with such request, to examine orally, or otherwise, any person, supposed to be acquainted with the facts and circumstances of the case, to record his statement made in the course of such examination and also to require such person or any other person to produce any document or thing, which may be in his possession pertaining to the case, and to forward all the evidence so taken or collected or the authenticated copies thereof or the things s....
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.... (e) any other body corporate whose Board of Directors comprises nominees of the company or is accustomed to act in accordance with the directions or instructions of the company or any of its directors; or (f) any person who is or has at any relevant time been the company's managing director or manager or employee, he shall, subject to the prior approval of the Central Government, investigate into and report on the affairs of the other body corporate or of the managing director or manager, in so far as he considers that the results of his investigation are relevant to the investigation of the affairs of the company for which he is appointed." Section 229: Penalty for furnishing false statement, mutilation, destruction of documents- Where a person who is required to provide an explanation or make a statement during the course of inspection, inquiry or investigation, or an officer or other employee of a company or other body corporate which is also under investigation, (a) destroys, mutilates or falsifies, or conceals or tampers or unauthorisedly removes, or is a party to the destruction, mutilation or falsification or concealment or tampering ....
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....nder this Act with which the accused may, under the Code of Criminal Procedure, 1973 (2 of 1974) be charged at the same trial. (3) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), the Special Court may, if it thinks fit, try in a summary way any offence under this Act which is punishable with imprisonment for a term not exceeding three years: Provided that in the case of any conviction in a summary trial, no sentence of imprisonment for a term exceeding one year shall be passed: Provided further that when at the commencement of, or in the course of, a summary trial, it appears to the Special Court that the nature of the case is such that the sentence of imprisonment for a term exceeding one year may have to be passed or that it is, for any other reason, undesirable to try the case summarily, the Special Court shall, after hearing the parties, record an order to that effect and thereafter recall any witnesses who may have been examined and proceed to hear or rehear the case in accordance with the procedure for the regular trial." Section 438: Application of Code to proceedings before Special Court.- Save as o....
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.... is not legally entitled; (iii) "wrongful loss " means the loss by unlawful means of property to which the person losing is legally entitled;" 7. After consideration of above special provisions of the Companies Act, 2013, it is clear that it is a code by itself as far as procedure for arrest, investigation and prosecution of the offence under Companies Act is concerned. The procedure provided under the Companies Act does not excludes the application of Cr.P.C completely. Section 212(6) excludes the applicability of Cr.P.C only for the limited purpose for treating the offence under Section 447 cognizable. Section 438 of the Companies Act makes it clear Section 212(14) of the Companies Act provides that the central government has to provide whether prosecution should be launched against " the companies and its officer or employees, who are or have been in employment in the company or any other person directly or indirectly connected with the affairs of the company." Therefore it appears that when the director of company is prosecuted the company should also be arrayed as an accused. Even if the argument of the learned counsel for the informant is accepted that the applica....
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....ng the investigation or trial. 2. The applicant shall cooperate in the trial sincerely without seeking any adjournment. 3. The applicant shall not indulge in any criminal activity or commission of any crime after being released on bail. 4. The applicant shall remain present before the trial court on each date fixed, either personally or through his counsel. In case of her absence, without sufficient cause, the trial court may proceed against her under Section 229-A of the Indian Penal Code; 5. In case, the applicant misuses the liberty of bail and in order to secure her presence proclamation under Section 82 Cr.P.C. is issued and the applicant fails to appear before the Court on the date fixed in such proclamation, then, the trial court shall initiate proceedings against her, in accordance with law, under Section 174-A of the Indian Penal Code. 6. The applicant shall remain present, in person, before the trial court on the dates fixed for (i) opening of the case, (ii) framing of charge and (iii) recording of statement under Section 313 Cr.P.C. If in the opinion of the trial court default of this condition is deliberate or without sufficient cause, then it shall be op....