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CHAPTER XXVIII

SPECIAL COURTS

 
435.Establishment of Special Courts.

(1) The Central Government may, for the purpose of providing speedy trial of
offences under this Act, by notification, establish or designate as many Special Courts
as may be necessary.
(2) A Special Court shall consist of a single judge who shall be appointed by the
Central Government with the concurrence of the Chief Justice of the High Court within
whose jurisdiction the judge to be appointed is working.
(3) A person shall not be qualified for appointment as a judge of a Special Court unless
he is, immediately before such appointment, holding office of a Sessions Judge or an Additional
Sessions Judge.
 
 
 
436.Offences triable by Special Courts.

(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973,—
(a) all offences under this Act shall be triable only by the Special Court established
for the area in which the registered office of the company in relation to which the
offence is committed or where there are more Special Courts than one for such area, by
such one of them as may be specified in this behalf by the High Court concerned;
(b) where a person accused of, or suspected of the commission of, an offence
under this Act is forwarded to a Magistrate under sub-section (2) or sub-section (2A)
of section 167 of the Code of Criminal Procedure, 1973, such Magistrate may authorise
the detention of such person in such custody as he thinks fit for a period not exceeding
fifteen days in the whole where such Magistrate is a Judicial Magistrate and seven
days in the whole where such Magistrate is an Executive Magistrate:
Provided that where such Magistrate considers that the detention of such person
upon or before the expiry of the period of detention is unnecessary, he shall order such
person to be forwarded to the Special Court having jurisdiction;
(c) the Special Court may exercise, in relation to the person forwarded to it under
clause (b), the same power which a Magistrate having jurisdiction to try a case may
exercise under section 167 of the Code of Criminal Procedure, 1973 in relation to an
accused person who has been forwarded to him under that section; and
(d) a Special Court may, upon perusal of the police report of the facts constituting
an offence under this Act or upon a complaint in that behalf, take cognizance of that
offence without the accused being committed to it for trial.
(2) When trying an offence under this Act, a Special Court may also try an offence
other than an offence under this Act with which the accused may, under the Code of Criminal
Procedure, 1973 be charged at the same trial.
(3) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, 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.
 
 
 
437.Appeal and revision.

The High Court may exercise, so far as may be applicable, all the powers conferred
by Chapters XXIX and XXX of the Code of Criminal Procedure, 1973 on a High Court, as if a
Special Court within the local limits of the jurisdiction of the High Court were a Court of
Session trying cases within the local limits of the jurisdiction of the High Court.
 
 
 
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 shall apply to the proceedings before a Special Court and for the purposes
of the said provisions, the Special Court shall be deemed to be a Court of Session and the
person conducting a prosecution before a Special Court shall be deemed to be a Public
Prosecutor.
 
 
 
439.Offences to be noncognizable.

(1) Notwithstanding anything in the Code of Criminal Procedure, 1973, every
offence under this Act except the offences referred to in sub-section (6) of section 212 shall
be deemed to be non-cognizable within the meaning of the said Code.
(2) No court shall take cognizance of any offence under this Act which is alleged to
have been committed by any company or any officer thereof, except on the complaint in
writing of the Registrar, a shareholder of the company, or of a person authorised by the
Central Government in that behalf:
Provided that the court may take cognizance of offences relating to issue and transfer
of securities and non-payment of dividend, on a complaint in writing, by a person authorised
by the Securities and Exchange Board of India:
Provided further that nothing in this sub-section shall apply to a prosecution by a
company of any of its officers.
(3) Notwithstanding anything contained in the Code of Criminal Procedure, 1973,
where the complainant under sub-section (2) is the Registrar or a person authorised by the
Central Government, the presence of such officer before the Court trying the offences shall
not be necessary unless the court requires his personal attendance at the trial.
(4) The provisions of sub-section (2) shall not apply to any action taken by the
liquidator of a company in respect of any offence alleged to have been committed in respect
of any of the matters in Chapter XX or in any other provision of this Act relating to winding
up of companies.
Explanation.—The liquidator of a company shall not be deemed to be an officer of the
company within the meaning of sub-section (2).
 
 
 
440. Transitional provisions.

Any offence committed under this Act, which is triable by a Special Court shall,
until a Special Court is established, be tried by a Court of Session exercising jurisdiction over
the area, notwithstanding anything contained in the Code of Criminal Procedure, 1973:
Provided that nothing contained in this section shall affect the powers of the High
Court under section 407 of the Code to transfer any case or class of cases taken cognizance
by a Court of Session under this section.
 
 
 
441. Compounding of certain offences.

(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973,
any offence punishable under this Act (whether committed by a company or any officer
thereof) with fine only, may, either before or after the institution of any prosecution, be
compounded by—
(a) the Tribunal; or
(b) where the maximum amount of fine which may be imposed for such offence
does not exceed five lakh rupees, by the Regional Director or any officer authorised by
the Central Government,
on payment or credit, by the company or, as the case may be, the officer, to the Central
Government of such sum as that Tribunal or the Regional Director or any officer authorised
by the Central Government, as the case may be, may specify:
Provided that the sum so specified shall not, in any case, exceed the maximum amount
of the fine which may be imposed for the offence so compounded:
Provided further that in specifying the sum required to be paid or credited for the
compounding of an offence under this sub-section, the sum, if any, paid by way of additional
fee under sub-section (2) of section 403 shall be taken into account:
Provided also that any offence covered under this sub-section by any company or its
officer shall not be compounded if the investigation against such company has been initiated
or is pending under this Act.
(2) Nothing in sub-section (1) shall apply to an offence committed by a company or its
officer within a period of three years from the date on which a similar offence committed by
it or him was compounded under this section.
Explanation.—For the purposes of this section,—
(a) any second or subsequent offence committed after the expiry of a period of
three years from the date on which the offence was previously compounded, shall be
deemed to be a first offence;
(b) “Regional Director” means a person appointed by the Central Government as
a Regional Director for the purposes of this Act.
(3) (a) Every application for the compounding of an offence shall be made to the
Registrar who shall forward the same, together with his comments thereon, to the Tribunal or
the Regional Director or any officer authorised by the Central Government, as the case may
be.
(b) Where any offence is compounded under this section, whether before or after the
institution of any prosecution, an intimation thereof shall be given by the company to the
Registrar within seven days from the date on which the offence is so compounded.
(c) Where any offence is compounded before the institution of any prosecution, no
prosecution shall be instituted in relation to such offence, either by the Registrar or by any
shareholder of the company or by any person authorised by the Central Government against
the offender in relation to whom the offence is so compounded.
(d) Where the compounding of any offence is made after the institution of any
prosecution, such compounding shall be brought by the Registrar in writing, to the notice of
the court in which the prosecution is pending and on such notice of the compounding of the
offence being given, the company or its officer in relation to whom the offence is so
compounded shall be discharged.
(4) The Tribunal or the Regional Director or any officer authorised by the Central
Government, as the case may be, while dealing with a proposal for the compounding of an
offence for a default in compliance with any provision of this Act which requires a company
or its officer to file or register with, or deliver or send to, the Registrar any return, account or
other document, may direct, by an order, if it or he thinks fit to do so, any officer or other
employee of the company to file or register with, or on payment of the fee, and the additional
fee, required to be paid under section 403, such return, account or other document within
such time as may be specified in the order.
(5) Any officer or other employee of the company who fails to comply with any order
made by the Tribunal or the Regional Director or any officer authorised by the Central
Government under sub-section (4) shall be punishable with imprisonment for a term which
may extend to six months, or with fine not exceeding one lakh rupees, or with both.
(6) Notwithstanding anything contained in the Code of Criminal Procedure, 1973,—
(a) any offence which is punishable under this Act, with imprisonment or fine, or
with imprisonment or fine or with both, shall be compoundable with the permission of
the Special Court, in accordance with the procedure laid down in that Act for
compounding of offences;
(b) any offence which is punishable under this Act with imprisonment only or
with imprisonment and also with fine shall not be compoundable.
(7) No offence specified in this section shall be compounded except under and in
accordance with the provisions of this section.
 
 
 
442.Mediation and Conciliation Panel.

(1) The Central Government shall maintain a panel of experts to be called as the
Mediation and Conciliation Panel consisting of such number of experts having such
qualifications as may be prescribed for mediation between the parties during the pendency
of any proceedings before the Central Government or the Tribunal or the Appellate Tribunal
under this Act.
(2) Any of the parties to the proceedings may, at any time during the proceedings
before the Central Government or the Tribunal or the Appellate Tribunal, apply to the Central
Government or the Tribunal or the Appellate Tribunal, as the case may be, in such form along
with such fees as may be prescribed, for referring the matter pertaining to such proceedings
to the Mediation and Conciliation Panel and the Central Government or Tribunal or the
Appellate Tribunal, as the case may be, shall appoint one or more experts from the panel
referred to in sub-section (1).
(3) The Central Government or the Tribunal or the Appellate Tribunal before which any
proceeding is pending may, suo motu, refer any matter pertaining to such proceeding to such
number of experts from the Mediation and Conciliation Panel as the Central Government or
the Tribunal or the Appellate Tribunal, as the case may be, deems fit.
(4) The fee and other terms and conditions of experts of the Mediation and Conciliation
Panel shall be such as may be prescribed.
(5) The Mediation and Conciliation Panel shall follow such procedure as may be
prescribed and dispose of the matter referred to it within a period of three months from the
date of such reference and forward its recommendations to the Central Government or the
Tribunal or the Appellate Tribunal, as the case may be.
(6) Any party aggreived by the recommendation of the Mediation and Conciliation
Panel may file objections to the Central Government or the Tribunal or the Appellate Tribunal,
as the case may be.
 
 
 
443.Power of Central Government to appoint company prosecutors.

Notwithstanding anything contained in the Code of Criminal Procedure, 1973, the
Central Government may appoint generally, or for any case, or in any case, or for any specified
class of cases in any local area, one or more persons, as company prosecutors for the
conduct of prosecutions arising out of this Act and the persons so appointed as company
prosecutors shall have all the powers and privileges conferred by the Code on Public
Prosecutors appointed under section 24 of the Code.
 
 
 
444.Appeal against acquittal.

Notwithstanding anything contained in the Code of Criminal Procedure, 1973, the
Central Government may, in any case arising under this Act, direct any company prosecutor
or authorise any other person either by name or by virtue of his office, to present an appeal
from an order of acquittal passed by any court, other than a High Court, and an appeal
presented by such prosecutor or other person shall be deemed to have been validly presented
to the appellate court.
 
 
 
445. Compensation for accusation without reasonable cause.

The provisions of section 250 of the Code of Criminal Procedure, 1973 shall apply
mutatis mutandis to compensation for accusation without reasonable cause before the
Special Court or the Court of Session.
 
 
 
446. Application of fines.

The court imposing any fine under this Act may direct that the whole or any part
thereof shall be applied in or towards payment of the costs of the proceedings, or in or towards
the payment of a reward to the person on whose information the proceedings were instituted.

 

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