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Jurisdictional Limits of Magistrates in Restoring Dismissed Complaints: Vakamulla Chandrashekhar & Ors. V. ROC”

Case Title: VAKAMULLA CHANDRASHEKHAR & ORS. Versus REGISTRAR OF COMPANIES -THROGH ITS DEPUTY REGISTRAR NCT OF DELHI AND HARYANA

Case No: CRL.M.C. 2372/2022 & CRL.M.A. 10023/2022

Decided on: 15th May , 2024

Quorum: HON’BLE MR. JUSTICE NAVIN CHAWLA

Facts of the case

Under Sections 447/448 of the Companies Act, 2013, the respondent lodged a complaint, claiming that the accused firm had misappropriated IPO proceeds to several entities rather than using them for the intended uses specified in the prospectus. The Special Judge first rejected the complaint because the respondent did not show up. Following this, the Special Judge granted the complaint’s restoration, acknowledged the offenses, and sent summonses to the petitioners.

Issues

1. Did the Special Judge have the authority to reinstate the dismissed complaint?

 2. Was it lawful for the order to call the petitioners for violations of the Companies Act?

 3. Whether the 1973 Code of Criminal Procedure’s provisions were appropriately construed and utilized in this instance?

Legal Provisions

The Companies Act of 2013’s Sections 447 and 448 deal with offenses including the diversion of IPO profits. The High Court’s inherent authority to halt proceedings is outlined in Section 482 of the 1973 Code of Criminal Procedure. Section 362 of the 1973 Code of Criminal Procedure grants a judge the authority to rectify mathematical or clerical errors.

 Appellant Contentions

The Code of Criminal Procedure contains no clause allowing a magistrate to review or recall an order, hence the Special Judge lacked jurisdiction to reinstate the dismissed complaint. The complaint was dismissed, rendering the Special Judge functus officio, which prevented the restoration or summons from being issued. The Supreme Court was relied upon ruling in Maj. Gen. A.S. Gauraya v. S.N. Thakur, which highlighted that, in accordance with Section 482 of the Cr.P.C., only the High Court possesses inherent authority.

Respondent Contentions

Since the judgment of dismissal lacked merit, the Special Judge’s reinstatement of the complaint was appropriate. The respondent said that the Special Judge was empowered to recall the dismissing judgment since Section 362 of the Cr.P.C. permits corrections of errors in orders.

 Court Analysis and Judgement

The High Court ruled that because the Cr.P.C. does not allow magistrates to review or recall their orders, the Special Judge lacked power to reinstate the rejected case. The decree directing the petitioners to be summoned was set aside, highlighting the restrictions on the Special Judge’s authority following the complaint’s rejection. The respondent may pursue appropriate legal remedies to get the complaint restored in compliance with the law, the Court further stated. This case emphasizes how crucial it is to comprehend the extent of judicial authority and how laws should be correctly applied in criminal cases.

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Judgement Analysis Written by – K.Immey Grace

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