TaxTMI 
TaxTMI 
2026 (7) TMI 594
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....e BNSS'), seeking setting aside of order dated 11.02.2026, passed by learned Additional Sessions Judge, Gurugram, Haryana in complaint case bearing COMA No.24 of 2025 dated 26.08.2025 titled 'Serious Fraud Investigation Office v. VIVO Mobile Communication Company Ltd. and 70 others', as well as all consequent proceedings arising subsequent to passing of impugned order dated 11.02.2026 (Annexure P-1). 2. It is pleaded in the petition that the petitioner, through publicly available information on the Court websites, came to know that a complaint purportedly under Sections 447, 7(5), 7(6) and 449 of the Companies Act, 2013 (for short 'Act, 2013') had been filed before Special Court, District Gurugram wherein the petitioner has been proposed as accused no.3. That on 11.02.2026, the case was listed before learned Special Court and when the arguments on point of cognizance were being addressed by the Special Public Prosecutor and Panel counsel of the complainant, the petitioner then appeared through its duly appointed counsel and filed an application (Annexure P-10) under the first proviso to Section 223 of the BNSS asserting that the complaint is a criminal complaint case governed by....
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....ily govern the proceedings in question. 6. It was further contended that the order dated 26.08.2025 passed by learned Additional Sessions Judge unequivocally records the filing by the respondent-SFIO as a "complaint". Learned senior counsel argued that such characterisation is neither incidental nor a matter of mere nomenclature or administrative convenience; rather, it constitutes a conscious judicial determination regarding the nature of the proceedings. Learned senior counsel contended that the matter was registered under the "COMA" category, thereby clearly attracting the procedure applicable to complaint cases under Chapter XVI of the BNSS, including the first proviso to Section 223 thereof. 7. Learned senior counsel further argued that learned Additional Sessions Judge, while passing the impugned order, adopted a contradictory approach by subsequently treating the very same filing as a "police report" for the purpose of denying the petitioner a pre-cognizance hearing. Such inconsistency, according to the petitioner, denied the petitioner the benefit of the statutory safeguard contained in the first proviso to Section 223 of the BNSS. According to learned senior counsel,....
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....f the Act, 2013, which contemplates two distinct modes whereby the Special Court may take cognizance of offences under the Act, 2013, namely, upon a police report, or upon a complaint. Learned senior counsel submitted that the legislature, by consciously maintaining this distinction, recognized that complaint proceedings and police-report proceedings are separate and mutually exclusive categories. 10. Learned senior counsel argued that on a cumulative reading of Sections 212(6), 436(1)(d), 438 and 439(2) of the Act, 2013 the legislative intent is unambiguous: proceedings initiated by the SFIO are necessarily complaint proceedings. Consequently, once the filing is held to be a complaint, the procedure governing complaint cases under Chapter XVI of the BNSS, including the mandatory requirement of a pre-cognizance hearing under the first proviso to Section 223 of the BNSS, becomes fully applicable to the present case. 11. Learned senior counsel for the petitioner further placed reliance upon the decisions of the Hon'ble Supreme Court in Yash Tuteja & Anr. v. Union of India & Ors., (2024) 8 SCC 465; Tarsem Lal v. Directorate of Enforcement, Jalandhar, (2024) 7 SCC 61; and Kushal ....
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.... learned senior counsel for the petitioner argued that the ratio of the said judgment i.e. Sanjabij Tari (supra), which is specifically in context of summary proceedings under the NI Act, cannot be mechanically extended to the present case, as Section 436(3) of the Act, 2013 permits summary trial only in respect of offences punishable with imprisonment for a term not exceeding three years. However, in the present complaint, the petitioner has been accused, inter alia, of offences under Section 447 of the Act, 2013, which prescribes punishment extending up to ten years' imprisonment. Consequently, the offences alleged are triable as warrant cases and fall outside the ambit of the summary trial mechanism contemplated under Section 436(3) of the Act, 2013. Learned senior counsel therefore submitted that learned Additional Sessions Judge committed a manifest error in relying upon the aforesaid decision, despite the fact that the said judgment has no application to prosecutions under Section 447 of the Act, 2013. 13. Learned senior counsel for the petitioner further assailed the impugned order dated 11.02.2026 by contending that learned Additional Sessions Judge has erroneously place....
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....ncerned, it functions as a Court of first instance dealing with complaint cases, thereby attracting the procedure prescribed under Chapter XVI of the BNSS, including Section 223 thereof. It was further submitted that a similar procedural architecture exists under the PMLA where Special Courts, though designated as Courts of Sessions, entertain complaints filed directly by the Directorate of Enforcement without committal proceedings, and such complaints are nonetheless governed by the general procedural framework applicable to complaint cases under the Cr.P.C./BNSS. Accordingly, learned senior counsel argued that learned Additional Sessions Judge has wrongly held that Section 213 of the BNSS applies to the present case, and not Section 223 of the BNSS, thereby resulting in the impugned order dated 11.02.2026. Hence, learned senior counsel prayed that the present petition ought to be allowed and the impugned order be set aside. SUBMISSIONS ON BEHALF OF RESPONDENT/ S.F.I.O. 15. Per contra, learned senior counsel appearing on behalf of the SFIO opposed the present petition and contended that the same is devoid of merits. It was submitted that the impugned order dated 11.02.2026 p....
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....he said submissions, reliance was placed upon Deloitte Haskins & Sells LLP v. Union Of India, 2025 SCC Online NCLAT 463. 18. Learned senior counsel for the SFIO further contended that the proviso to Section 223 of the BNSS applies only to private complaints and not to complaints filed by public authorities or statutory investigating agencies. It was submitted that a Magistrate takes cognizance of an offence either on a police report or on a private complaint. In the case of a private complaint, the Magistrate has only the allegations contained in the complaint before him, and since no prior investigation material is available, he examines the complainant on oath and may also record statements of witnesses before deciding whether cognizance is to be taken. On the other hand, where cognizance is taken on a police report, the Magistrate has before him the entire investigation record, including statements of witnesses and other material collected during investigation, and he takes cognizance after being satisfied that there is sufficient ground to proceed against the accused. On the basis of aforesaid contention, learned senior counsel submitted that the safeguard contained in th....
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....f Sessions, Metropolitan Magistrate, or Judicial Magistrate First Class, as the case may be. It was submitted that in the facts of the present case, having regard to the nature and punishment prescribed for the alleged offences, the Special Court necessarily operates as a Court of Sessions within the meaning of Sections 435 and 438 of the Act, 2013. Consequently, according to the respondents, the procedure governing cognizance by a Court of Sessions under Section 213 of the BNSS would apply, and not the procedure prescribed for Magistrates taking cognizance of complaint cases under Section 223 of the BNSS. 20. Learned senior counsel for the SFIO further submitted that the decision of the Hon'ble Supreme Court in Sanjabij Tari (supra), though rendered in the context of proceedings under Section 138 of the NI Act, is nevertheless applicable to proceedings under all special statutes, including the Act, 2013. It was contended that the rationale underlying the said judgment is not confined merely to proceedings under the NI Act, but extends to all special enactments which provide a distinct statutory mechanism for investigation, cognizance, and trial. Learned senior counsel further c....
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....NSS, learned senior counsel for the petitioner contended that the said argument proceeds on a fundamental mis-statement of law. Learned senior counsel submitted that the principle of 'generalia specialibus non derogant' applies only in cases where an irreconcilable inconsistency exists between the provisions of a special statute and those of a general enactment. According to the petitioner, no such conflict arises in the present case, inasmuch as Section 438 of the Act, 2013 itself expressly provides that the provisions of the Cr.P.C., now replaced by the BNSS, shall apply to proceedings before the Special Court. It was argued that the Act, 2013 does not exclude the application of the general criminal procedure law, rather, it specifically incorporates it. In support of this submission, reliance was placed on the decision of the Hon'ble Bombay High Court in N. Sampath Ganesh v. Union of India, 2020 SCC Online Bom 782, wherein it has been held that Section 438 of the Companies Act, 2013 makes the provisions of the Cr.P.C. (now the BNSS) applicable to proceedings before the Special Court under the Act, 2013. It was further contended that any interpretation to the contrary would rende....
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....Learned senior counsel for the petitioner contended that the ratio laid down in Kushal Kumar Aggarwal (supra) is founded upon the interpretation of Section 46 of the PMLA, which makes the provisions of the Cr.P.C./BNSS applicable to proceedings before the Special Court. Learned senior counsel submitted that Section 46 of the PMLA is materially identical in its effect to Section 438 of the Act, 2013, inasmuch as both provisions mandate the applicability of the Cr.P.C./BNSS to proceedings before the Special Court constituted under the respective enactments. On this basis, it was argued that the legal principle laid down in Kushal Kumar Aggarwal (supra) is fully applicable to proceedings under the Act, 2013 as well. Learned senior counsel further argued that Section 212(15) of the Act, 2013 merely governs the manner in which the SFIO investigation report is to be dealt with at the stage of framing of charge and cannot be construed as diluting, overriding, or excluding the mandatory procedural safeguards prescribed under the BNSS at the stage of taking cognizance. 26. On the basis of the aforesaid submissions and rebuttals, learned senior counsel for the petitioner prayed that the i....
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....ious Fraud Investigation Office shall cause the affairs of the company to be investigated by an Investigating Officer who shall have the power of the inspector under section 217. (5) The company and its officers and employees, who are or have been in employment of the company shall 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), offence 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 r....
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....eing in force, a copy of the investigation report may be obtained by any person concerned by making an application in this regard to the court. (14) On receipt of the investigation report, the Central Government may, after examination of the report and after 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. (14A) Where the report under sub-section (11) or sub-section (12) states that fraud has taken place in a company and due to such fraud any director, key managerial personnel, other officer of the company or any other person or entity, has taken undue advantage or benefit, whether in the form of any asset, property or cash or in any other manner, the Central Government may file an application before the Tribunal for appropriate orders with regard to disgorgement of such asset, property or cash and also for holding such director, key managerial personnel, other officer or any other person liable personally without....
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....n, 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 company at any place. (6) (i) If any director or officer of the company disobeys the direction issue....
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....ch is also under investigation,- (a) destroys, mutilates or falsifies, or conceals or tampers or unauthorised removes, or is a party to the destruction, mutilation or falsification or concealment or tampering or unauthorised removal of, documents relating to the property, assets or affairs of the company or the body corporate; (b) makes, or is a party to the making of, a false entry in any document concerning the company or body corporate; or (c) provides an explanation which is false or which he knows to be false, he shall be punishable for fraud in the manner as provided in section 447. 435. Establishment of Special Courts.- (1) The Central Government may, for the purpose of providing speedy trial of offences under this Act, except under section 452, by notification establish or designate as many Special Courts as may be necessary. (2) A Special Court shall consist of- (a) a single judge holding office as Session Judge or Additional Session Judge, in case of offences punishable under this Act with imprisonment of two years or more; and (b) a Metropolitan Magistrate or a Judicial Magistrate of the First Class,....
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....al 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. 438. Application of Code to proceedings before Special Court.-Save as otherwise provided in this Act, the provisions of the Code of Criminal Procedure, 1973 (2 of 1974) shall apply to the proceedings before a Special Court and for the purposes of the said provisions, the Speci....
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....er the BNSS which govern the ordinary and general procedure of criminal case. The salient features of these aspects are, broadly, as under: (a) Investigation A perusal of the provisions contained in the Act, 2013 relating to the investigation of the offences clearly shows that the investigation conducted under the Act is different than an investigation conducted as per procedure provided under the Cr.P.C./BNSS in its nature, scope, depth, powers of investigating officer, association of the company/individuals with the investigation and qua the evidentiary value attached to the investigation report, which broadly are as under: (i) The investigation cannot be started by any official of the SFIO on his own. The investigation can be done only on the order of the Central Government or on the order of the Director, by a designated official. (ii) The investigation has to relate to the specified company against whom the complaint has been received by the Central Government or the Director, or it can be related to the company affiliated to the main company under investigation. The investigation cannot be wide open to involve any sundry and unconcerned Com....
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....olitan Magistrate or a Judicial Magistrate of the First Class, in the case of other offences. The features of complaint to be filed under the Act, 2013 are as under: (i) Under Section 439 (2) of the Act, 2013, the complaint can be filed by Registrar of Companies, a shareholder or a member of the company, or of a person authorised by the Central Government. So, a complaint can be initiated either by the government functionary or by the private individuals. Such a complaint can be either regarding cognizable offence or non-cognizable offence. (ii) However, as per the provision contained in Section 212 (6) of the Act, 2013, the complaint for offences punishable under Section 447 can only be filed either by the SFIO or by the person authorised by the Central Government. (iii) Such a complaint has to be filed in writing. (iv) Investigation officer cannot himself file the complaint on the basis of his investigation report by submitting the same directly before the Court. He would require separate authorisation from the Director of SFIO or from the Central Government for filing such complaint. (v) Since the complaint for offences punishable und....
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....him to be present. It is the prosecutor appointed by the Central Government who is to take care of the proceedings after filing of the complaint. So as per the Act, 2013 the Special Court does not require the presence of the accused or the complainant, and the statutory scheme neither envisages the production of any evidence or any material other than the complaint and the investigation report, nor contemplates hearing of the accused or of the complainant upto the stage taking cognizance of offences. (d) Framing of the charge The Act, 2013 also makes clear the material on the basis of which the Special Court is to frame charges in a case arising out of an SFIO investigation. Section 212(15) specifically provides that the investigation report submitted by the SFIO shall be treated, by a legal fiction, as a police report filed under the Code and shall be taken into consideration by the Special Court for the purpose of framing charges. The same legislative intent is reflected in Section 436(1)(d) of the Act, 2013. These provisions indicate that proceedings before the Special Court are intended to be founded upon the investigation report and the material accompanying ....
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....er the Act, 2013 is also so designed as to ensure giving a proper hearing to the concerned persons, companies or to the accused who are duly associated with the investigation and may make statement on oath and provide relevant material to the investigation officer. All these things already come before the Special Court as part of the investigation report. Therefore, giving an opportunity of hearing to the concerned person(s) before taking cognizance would only be a repetitive exercise. Accordingly, the accused would get due opportunity of hearing at the time of framing of charge, if he so desires. Therefore, the Legislature has consciously designed this scheme of the Act, 2013 to avoid unnecessary procedural delays and to advance the overarching objective of expeditious trial of offences under the Act, which often involve complex financial transactions and demand swift adjudication in the public interest. 34. As culled out in foregoing paragraphs, the legislative intent from the language incorporated in the provision is clear, that once the complaint and investigation report are presented before the Special Court, cognizance is to be taken on that basis without interposing an ad....
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....t case'. However, as detailed in the foregoing paragraphs, a perusal of the provisions of the Act, 2013 makes it clear that though the proceedings are to be initiated by way of written complaint, yet in the cases where the complaint is based on and is filed along with the investigation report, the case is to be taken as the proceedings Instituted on a 'police report'. Hence, there is no merit in the contention of the learned senior counsel for the petitioner that the deeming fiction is only limited to the purpose of framing of charges. The words used in the statue, when their linguistic meaning is clear has to be assigned their literal meaning, however, it is equally settled law that to give effect to the object of the statute and where the literal meaning of the words create superfluous or absurd results, then to find out true meaning of the words used in the statue, the provisions contained in the statue has to be read as a whole. An overly constrained approach in the interpretation should not be allowed such that it derogates the legislative intent behind enacting the provision. A cumulative reading of the provisions of the Act, 2013 in no unambiguous terms makes it clear that t....
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....lex corporate frauds through specialized mechanisms, including the establishment of Special Courts. The Act, 2013, in addition to providing for establishment or designation of Special Courts, also specifically provides for the procedure to be followed by the Special Court while taking cognizance. 42. As culled out herein hereinabove, Sections 435 and 436 of the Act, 2013 provide for establishment of Special Courts for the purpose of providing speedy trial for offences under the Act, 2013. Further, Section 436 provides for cognizance by the Special Courts either on police report or upon a complaint in that behalf. A bare reading of Section 436(1)(d) reflects that there is no statutory requirement of affording a pre-cognizance hearing to the accused before taking cognizance upon a complaint. The provision is clear in its design and does not contemplate any preliminary opportunity of hearing before cognizance is taken. Therefore, it cannot be said that the Act, 2013 is silent on the aspect of procedure for cognizance; rather, it provides a specific mechanism without any statutory requirement of pre-cognizance notice. The legislative intent is to ensure expeditious trial of corporat....
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.... the BNSS, including Section 223, as the Act, 2013 being a special statute, empowers and provides the procedure for Special Courts to take cognizance directly, without any statutory requirement of affording a pre-cognizance hearing to the accused as well as without the accused being committed to it for trial. iii) Distinction Between Private Complaints and Statutory Complaints by Public Servants 47. This Court finds substance in the contention advanced on behalf of the respondent that prosecution complaints filed by the SFIO stand on a materially different footing from private complaints instituted by individuals. There is distinction between a private complaint filed by an individual and a statutory complaint filed by public servants pursuant to a detailed investigation under Section 212 of the Act, 2013. In a private complaint, the Magistrate ordinarily proceeds solely upon allegations made by the complainant and evidence adduced at the pre-summoning stage. However, the criminal complaint in question in the present case arises from a statutory investigation conducted by Inspectors duly appointed by the Director, SFIO, who are public servants within the meaning of law and wh....
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....g fettered by pre-cognizance notice requirements. 50. In view of the foregoing grounds the directions for issuance of pre-cognizance notice as envisaged under Section 223 of the BNSS in a prosecution initiated under the Act, 2013, are alien to the statutory scheme as provided under the Act, 2013 and will frustrate the object of the Act, 2013. The proviso to Section 223 of the BNSS appears to have been enacted primarily to safeguard persons proposed to be arrayed as accused in complaints not founded upon prior statutory investigation. Hence, the rationale underlying such provision cannot be mechanically extended to prosecution complaints instituted after completion of investigation by a specialized statutory agency such as the SFIO, particularly where the statute itself creates a deeming fiction treating the investigation report as a police report. 51. Thus, there is merit in the contention of learned senior counsel for the SFIO that the Act, 2013 envisages a distinct procedure for complaints filed by private persons, and for the complaints filed by agencies authorised by the State. In such legislative scheme, mechanical extension of Section 223 of the BNSS is unwarranted as i....
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....dermines the legislative intent of creating a differentiated framework for trial of corporate offences by both type of Special Courts as provided under Act, 2013 55. The scheme of the Act, 2013 therefore governs the manner in which cognizance is taken by Special Courts, and reliance on Section 223 of the BNSS in this context would be legally untenable. 56. Therefore, a combined reading of Sections 223 and 213 of the BNSS along with Section 436(1)(d) and 438 of the Act, 2013 makes it abundantly clear that the Special Court under the Act, 2013, functioning as a Court of Sessions, is not covered by Section 223 of the BNSS while taking cognizance. Rather, it is governed exclusively by Section 213 of the BNSS read with Section 436(1)(d) of the Act, 2013. As such, the Special Court is not required to afford any opportunity to the accused at the stage of cognizance, and the legislative intent is to streamline the process before a Sessions Court in contrast to the procedure before a Magistrate. Any attempt to import the proviso of Section 223 into the scheme of Section 213 would amount to overriding judicial legislation and its express statutory framework. Authorities relied upon ....
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....on treating the investigation report as a police report, the proviso to Section 223 of the BNSS cannot be invoked to introduce an additional pre-cognizance stage which is not contemplated under the special enactment. 59. Further, contrary to the submission of learned senior counsel for the petitioner, this Court also does not find any illegality in the impugned order merely because the proceedings were administratively registered as a complaint case. Mere nomenclature or categorization in the filing register cannot override the true legal character of proceedings as emerging from the statutory framework. As mentioned above, the nomenclature as 'complaint in writing', has been used and to emphasize the fact that the prosecution can be initiated after due approval of the Central Government to be granted on appreciation of the investigation report and the same cannot be initiated by the investigating officer directly by submitting the report to the Special Court. This is a deliberate deviation from the procedure prescribed under Cr.P.C./BNSS. Otherwise also, the Act, 2013 has made it totally clear that the matter is to be proceeded with as the case instituted on a police report. ....