In the Annual General Meeting (AGM) of Jollydays Limited, the matter of re-appointment of Mr. Jolly, the Executive Director (ED) came up for voting. During such discussion, allegations of fraud and financial irregulariti
CS Professional · Resolution of Corporate Disputes, Non-Compliances & Remedies · PYQS · December 2019
In the Annual General Meeting (AGM) of Jollydays Limited, the matter of re-appointment of Mr. Jolly, the Executive Director (ED) came up for voting. During such discussion, allegations of fraud and financial irregularities were levelled against him by some members, which resulted in chaos in the meeting. The situation was normal only after the Chairman promised to initiate an inquiry against Mr. Jolly. The resolution at AGM to reappoint Mr. Jolly as ED, was not passed. The matter was published in the newspapers next day. Under the Companies Act, 2013, can a Court take cognizance of the matter and suo moto initiate action against Mr. Jolly based on the media reports?
Answer & Explanation:
Section 439 of the Companies Act, 2013 provides that: 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. 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 or a member of the company, or of a person authorised by the Central Government in that behalf. Further, 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. Thus, in the given situation, a Court shall not initiate any suo moto action against Mr. Jolly without receiving any complaint in 'writing of the Registrar of Companies, a shareholder of the company or a members or of a person authorized by the Central Government in this behalf.
Topics: Corporate Offences
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