The Bombay High Court has ruled that Additional Sessions Judge has no jurisdiction to try offences under the Insolvency and Bankruptcy Code
The single-judge Bench of Justice Sandeep K Shinde clarified that Additional Sessions Judge is not 'Special Court' in terms of Section 236 of the IB Code and the power lies with the Court of Metropolitan Magistrate or Judicial Magistrate First Class established as a Special Court under Section 435 of the Companies Act, 2013 (as amended in 2017) and not with the Court of Additional Sessions Judge established under the same provision.
The Court's clarification came in while dealing with a petition under Article 227 of the Constitution of India read with Section 482 of the Criminal Procedure Code, 1973 assailing the order, Issue Process , under Section “Issue Process”, under Section ”, under Section 73(a) and Section 235A of the Insolvency and Bankruptcy Code, 2016 passed “Issue Process”, under Section ”, under Section by the Additional Sessions Judge in Special Case on a Complaint filed by the Insolvency and Bankruptcy Board of India, a statutory body established under the I.B. Code.
The Court in the analysis went onto read and understand, purport of Section 236 and 237 of I.B. Code and amended provision of Section 435 of the Companies Act, 2013.
The Court noted that Section 435 of the Companies Act came into existence only after the enactment of the IB Code in December 2016 which empowers the Central Government to establish Special Courts for speedy trial of offences. The same was amended in 2017 to empower the Central Government to establish a Court of Metropolitan Magistrate or Judicial Magistrate First Class as a Special Court to try offences not under the Companies Act. Before this amendment, such Courts were only empowered to try offences under the Companies Act that were punishable with imprisonment for less than two years and were not Special Courts.
"After I.B. Code came into effect, legislature in its wisdom, to avoid burden of cases on Special Court consisting of Sessions Judge or Additional Sessions Judge but for the speedy trial of offences under the I.B. Code, created another class of Courts i.e. Court consist of Metropolitan Magistrate or Judicial Magistrate First Class as a Special Court , which by fiction “Issue Process”, under Section ”, under Section of law shall be ‘deem to be’ Court of Session."
Why this another class of Special Court was created?
In rejection to Respondent's contention, the Court reaffirmed that the object to create another class of Special Court was to speed up the trial of offences under the I.B. Code.
"If that was not a object as contended by the Respondent, the question is, why for Central Government has been empowered to designate Court of Metropolitan Magistrate or Judicial Magistrate First Class as Special Court under Section 435 of the Companies Act?"
The Court pointed out that legislative objective was not to burden a Special Court comprising of Sessions Judge or Additional Sessions Judge with the trials, with cases also under I.B. Code.
"If trials in offences under I.B. Code were also to be tried by the Special Court comprising of Sessions Judge or Additional Sessions Judge, it would frustate to object of the speedy trial for which, the Special Courts have been established This underlined object is visible from clause (a) and (b) of subsection (2) of Section 435 of Companies Act as amended, for quick reference let me reproduce the relevant provisions of Section 435."
The Court after examining the chronology of amendments, stated that it was a clear mandate of the legislature that the Special Court comprising of a Sessions Judge or Additional Sessions Judge [i.e. 435 (2) (a)] is only to try offences under the Companies Act, 2013 which carry a punishment of imprisonment of two years or more and that Special Court comprising of a Metropolitan Magistrate or Judicial Magistrate First Class is to try "other offences".
The Court drew the following inferences:
The Court stressed that the omission of the phrase under this “Issue Process”, under Section Act in section 435 (2) (b) and its inclusion in section 435 (2) ”, under Section (a) of CA 2013 must be treated to be a deliberate one. It would follow that the clear mandate of the legislature is that the Special Court comprising of a Sessions Judge or “Issue Process”, under Section ”, under Section Additional Sessions Judge [i.e. 435 (2) (a)] is only to try offences under the CA 2013 itself which carry a punishment of imprisonment of two years or more.
Conclusion
It is clear that Special Court comprising of a Metropolitan Magistrate “Issue Process”, under Section ”, under Section or Judicial Magistrate First Class is to try “Issue Process”, under Sectionother offences”, under Section. The phrase other offences contained in section 435 (2) (b), “Issue Process”, under Section ”, under Section in contradistinction to section 435 (2) (a) of CA 2013, would include (1) offences under the I.B. Code, and (2) offences under the CA 2013 but carrying punishment of imprisonment of less than two years.
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