Special Courts Established Under Companies Act, 2013 Can't Retrospectively Try Offences Committed Under 1956 Act: Karnataka High Court

The Karnataka High Court has quashed a criminal prosecution initiated in 2015 by the Serious Fraud Investigation Office against the accused involved in the merger initiated by Kingfisher Airlines Limited to acquire Deccan Aviation Limited by providing fraudulent documents to its shareholders, stakeholders thereby violating various provisions of the Companies Act and the Income Tax Act. Petitioner submissions The petitioners primarily argued that the Special Court constituted under Section 435 of Act, 2013 lacked jurisdiction to take cognizance of the offence alleged to have been committed and made penal under the provisions of Act, 1956, since the Special Court constituted can try an offender, who is said to have committed an offence, which is made penal under the provisions of Act, 2013. The SFIO, after investigation, filed a complaint before the Special Court established under Section 435 of the Act, 2013, presided by a Single Judge holding office as Sessions Judge appointed by the Central Government in concurrence with the Chief Justice of the High Court, the Court said. For the other offences with imprisonment less than two years or offences punishable under previous company law i.e., Act, 1956, the proviso states that, they shall be tried by the Judicial Magistrate of the First Class.” Rejecting the contention of SFIO the court held that the Special Court established is made available only to try the offences under the Act, 2013, and therefore, the jurisdiction of the Special Court cannot be extended retrospectively to try the offences under the Act, 1956, and the jurisdiction of the Special Court is restricted to the Companies Act, 2013.