Supreme Court rejects Centre’s review on Companies Act private complaint bar

The Supreme Court on Monday dismissed the Central government's review petition against its January 9 judgment that a special court cannot take cognisance of certain Companies Act fraud offences based on a private complaint. The bench of Chief Justice Surya Kant and Justices K Vinod Chandran and Joymalya Bagchi clarified that the Union government can authorise any officer by a general or special order in writing to institute such a complaint under the second proviso to Section 212(6), in addition to the SFIO Director.

The review arose from a Hyderabad case where a private complaint alleged former directors fabricated resolutions and made false ROC filings. The court had held that an offence under Section 448 (false statements) was covered under Section 447 (fraud) for the purposes of the cognisance bar, quashing proceedings under the Companies Act while allowing IPC offences to continue. The Centre argued that the ruling affected non-SFIO investigations including those by the Registrar of Companies. The court said the government could address this by exercising its statutory power to authorise an officer to file the complaint.

The Union government is now free to issue a notification authorising officers such as the Registrar of Companies to file complaints, which would cover non-SFIO investigations under the statutory framework.