YERRAM VIJAY KUMARversusTHE STATE OF TELANGANA & ANR.

                  [2026] 1 S.C.R. 439 : 2026 INSC 42

                        Yerram Vijay Kumar
                                  v.
                    The State of Telangana & Anr.
                     (Criminal Appeal No. 147 of 2026)
                              09 January 2026
           [J.K. Maheshwari* and K. Vinod Chandran, JJ.]


                           Issue for Consideration
       Whether cognizance of the alleged offences u/ss.448 and 451,
       Companies Act, 2013 could have been taken on a private complaint
       in view of the statutory scheme of the Companies Act and if not,
       whether the criminal proceedings must be quashed in respect of
       those sections; if the proceedings for the offences u/ss.448 and
       451, Companies Act ought to be quashed, would the criminal
       proceedings also have to be quashed in respect of the offences
       under the IPC in light of the provisions as contained in s.436(2),
       Companies Act; whether continuation of the criminal proceedings
       would amount to abuse of process of law, warranting interference
       u/s.482, CrPC.

                                 Headnotes†
       Companies Act, 2013 – ss.447, 448, 451, second proviso to
       s.212(6) – Disputes arose between the parties w.r.t management
       and control of the Company incorporated by the Complainant
       and his wife, who at that time were the promoters, first Directors
       and majority shareholders, and the Appellants who were later
       inducted as Directors however, were subsequently removed –
       Complainant filed private complaint before the Special Court
       alleging that one of the Appellants illegally convened an
       Extra-Ordinary General Meeting without authority, appointed
       third parties as Directors in the Company, fabricated the
       Board and shareholders’ resolutions, and uploaded statutory
       filings along with other forged and false documents on the
       website of the MCA – Special Court took cognizance of the
       alleged offences and issued summons to the Appellants –
       Quashing petition filed by the Appellants, dismissed by High
       Court inter alia holding that the allegations disclosed a prima


* Author
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       facie commission of serious offences involving forgery and
       fraud – Whether cognizance of the alleged offences u/ss.448
       and 451 could have been taken on a private complaint in
       view of the statutory scheme of the Companies Act and if
       not, whether the criminal proceedings must be quashed in
       respect of those sections:
       Held: s.447 lays down the punishment for ‘fraud’ in various forms –
       Thus, punishment section for s.448 (Punishment for false statement)
       is s.447 and both sections cannot be read in isolation, since they
       are inextricably linked – In case an allegation of fraud u/s.447 is
       to be made out, the complaint has to be made by the Director,
       Serious Fraud Investigation Office or any officer of the Central
       Government authorized by a written order of the Government –
       The offence u/s.448 is an ‘offence covered u/s.447’ as mentioned
       in s.212(6) and therefore, the bar against taking cognizance under
       the second proviso of s.212(6), unless specific conditions are met,
       is attracted in the present case – Cognizance, therefore, in such
       a case, cannot be taken merely by filing of a private complaint by
       the Complainant – Since, cognizance cannot be taken for s.448
       without following the requirements under the second proviso to s.
       212(6), cognizance of ‘repeated default’ u/s.451, Companies Act
       is not made out – Complaint case, the order of the Special Court
       taking cognizance and all consequential proceedings to the extent
       of ss.448 and 451 quashed – Impugned judgment set aside – Penal
       Code, 1860 – ss.420, 406, 426, 468, 470, 471 & 120B – Code
       of Criminal Procedure, 1973 – s.482 – Companies (Amendment)
       Act, 2015. [Paras 33, 35, 42, 45-47, 60]

       Companies Act, 2013 – ss.213, 447, 448, 451, second proviso
       to s.212(6):
       Held: Punishment section for s.448 (Punishment for false
       statement) is s.447 and both sections cannot be read in isolation,
       since they are inextricably linked – In case an allegation of fraud
       u/s.447 is to be made out, the complaint has to be made by the
       Director, Serious Fraud Investigation Office or an officer authorized
       by a written order of the Government – The offence u/s.448 is an
       ‘offence covered u/s.447’ as mentioned in s.212(6) and therefore,
       the bar against taking cognizance under the second proviso of
       s.212(6), unless specific conditions are met, is attracted in the
       present case – Cognizance, therefore, in such a case, cannot be
       taken merely by filing of a private complaint by the Complainant –
[2026] 1 S.C.R.                                                             441

          Yerram Vijay Kumar v. The State of Telangana & Anr.


     However, the Complainant is not absolutely remediless – The right
     recourse for a person, who makes an allegation of fraud in the
     affairs of a company is to file an application u/s.213 before the
     NCLT upon satisfying the eligibility u/s.213(a) and 213(b). [Para 45]

     Companies Act, 2013 – s.447 – Invocation of:
     Held: Where the Special Court under the Companies Act is taking
     cognizance of an offence under a section in the Companies
     Act which, if proved, would make the person(s) ‘liable u/s.447’
     or ‘liable for action u/s.447’, it must also invoke s.447 with the
     corresponding section and in such a case, it must comply with
     the bar against taking cognizance as specified in the second
     proviso to s.212(6) – Anything that cannot be done directly, also
     cannot be done indirectly – Merely because there is a bar under
     the second proviso to s.212(6) against taking cognizance of the
     offence u/s.447 unless specific conditions mentioned therein are
     met, does not mean that cognizance may be taken by the Special
     Court u/s.448 of the Act without including the punishment section,
     i.e. s.447 on filing of a private complaint – Non-inclusion of the
     punishment section u/s.447 since the very inception will also lead
     to procedural absurdity since ultimately the said s.447 must be
     invoked in order to impose any punishment after trial is conducted.
     [Paras 59, 43, 44]
     Companies Act, 2013 – ss.447, 448, second proviso to
     212(6) – Interpretation – Bar under the second proviso to
     s.212(6) against taking cognizance by the Special Court
     in cases involving s.447, a safeguard – Object of, stated –
     ‘offence covered under Section 447’ introduced by means
     of a substitution in s.212(6) in the 2015 Amendment Act
     w.e.f 29.05.2015 vis-à-vis Pre-Amendment – Scheme of the
     Companies Act, discussed – Companies (Amendment) Act,
     2015. [Paras 27-35]

     Companies Act, 2013 – ss.447, 448, second proviso to
     s.212(6) – s.448 not to be read in isolation and must be read
     along with s.447:
     Held: s.447 lays down the punishment for ‘fraud’ in various
     forms – In the present case, cognizance has been taken by the
     Special Court u/ss.448 and 451 – s.448 itself does not lay down
     any punishment for its contravention, it simply lays down the
     ingredients of the offence of making a false statement and provides
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       that in case such a false statement is made, the ‘person(s)’ shall
       be liable u/s.447 – That is to say, even if, after trial, an offence
       u/s.448 is proved to have been committed by a ‘person’, it is only
       with the aid of s.447 that the punishment for the said offence may
       be imposed – Therefore, s.448 cannot be read in isolation and
       must be read along with s.447 – The offence u/s.448 is an offence
       ‘covered under Section 447’ of the Companies Act mentioned in
       s.212(6), since the offence u/s.448 is inextricably linked to the
       punishment for ‘fraud’ as mentioned in s.447 and as such, the
       second proviso to s.212(6) is attracted – Companies (Amendment)
       Act, 2015. [Paras 33, 34]

       Companies Act, 2013 – s. 436(2) – Penal Code, 1860 – ss.420,
       406, 426, 468, 470, 471 & 120B – If the proceedings for the
       offences u/ss.448 and 451 ought to be quashed, would the
       criminal proceedings also have to be quashed in respect of the
       offences under the IPC in light of the provisions as contained
       in s.436(2) – Plea of the Appellants that in view of s.436(2),
       if the offences under the Companies Act are quashed, the
       Special Court may not try the offences under the sections of
       the IPC under which cognizance was taken:
       Held: s.436(2) lays down the pre-requisite that the Special Court
       should be trying offences under the Companies Act, for it to also try
       offences under the IPC – Once the offences under the Companies
       Act are quashed, it is the Court of appropriate territorial jurisdiction
       which would have jurisdiction to try the private complaint filed by
       the Respondent No. 2 against the Appellants – The judge of the
       Special Court where the complaint case is pending shall take steps,
       in consultation with the Principal District Judge of the district to
       transfer the complaint case to the appropriate court having territorial
       jurisdiction to try the complaint case – Further directions issued.
       [Paras 54, 60]

       Code of Criminal Procedure, 1973 – s.482 – Criminal
       proceedings when ought not to be quashed – Appellants
       submitted that the complaint case insofar as it relates to
       offences under the IPC, is abuse of process of law since
       there are two civil suits and one company petition (filed
       by the Appellants) pending between the parties – Whether
       continuation of the criminal proceedings would amount to
       abuse of process of law, warranting interference u/s.482 of
       CrPC:
[2026] 1 S.C.R.                                                           443

          Yerram Vijay Kumar v. The State of Telangana & Anr.


     Held: Mere institution or pendency of civil proceedings between
     the parties cannot be a ground to quash the criminal proceedings
     instituted by the Respondent No. 2 by filing a complaint case or
     to conclude that the dispute is purely civil in nature – Respondent
     No. 2 and the Appellants were in a commercial relationship and
     the inception of the dispute can be traced to a tussle for control
     over the Company – The civil suits filed by the Appellants are
     for seeking a permanent injunction against the Company and
     the Complainant from violating the terms and conditions of MoU
     and, a declaration that the agreements to sell executed by the
     Complainant with respect to the properties of the Company be
     declared void, respectively, while the Company Petition has been
     filed before the NCLT challenging the removal of the Appellants
     from directorship in the Company – Pendency of these proceedings
     would not absolve the criminality as alleged in the complaint, in
     the facts and circumstances of this case – No ground to quash
     the offences under the IPC of which cognizance was taken by the
     Special Court. [Paras 55-57]

                             Case Law Cited
     S. Satyanarayana v. Energo Masch Power Engg. & Consulting (P)
     Ltd. [2015] 3 SCR 1094 : (2015) 13 SCC 1 – referred to.
     Sumana Paruchuri v. Jakka Vinod Kumar Reddy, 2022 : TSHC :
     30033; Sivananda Rajaram v. M/s New Shipping Kaisha Ship
     Management Pvt. Ltd., Criminal Petition (OP) No. 19154/2021;
     M. Gopal v. Ganga Reddy, 2022 : KHC : 35824; Yogesh Chander
     Goyal and Ors. v. State and Anr., 2024 SCC OnLine Del 3197;
     Sunil Mandwani v. State of M.P., 2019 SCC OnLine MP 1248 –
     referred to.

                                List of Acts
     Companies Act, 2013; Code of Criminal Procedure, 1973; Penal
     Code, 1860; Companies (Amendment) Act, 2015.

                             List of Keywords
     Section 447, Companies Act, 2013; Section 447, Companies
     Act, 2013; Section 451, Companies Act, 2013; Section 212(6),
     Companies Act, 2013; Section 436(2), Companies Act, 2013;
     Special Court under the Companies Act; ‘liable under Section 447’
     or ‘liable for action under Section 447’; Fraud under the Companies
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       Act, 2013; Punishment for false statement; Punishment for repeated
       default; Punishment for fraud; Private complaint; Serious Fraud
       Investigation Office (SFIO); Bar on taking cognizance by the
       Special Court in cases involving Section 447, Companies Act, 2013;
       Notification for designation of Special Courts under the Companies
       Act, 2013; Extra-Ordinary General Meeting; Amendments to the
       AoA; Quashing; Fraud.

                             Case Arising From
       CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No.
       147 of 2026
       From the Judgment and Order dated 20.06.2024 of the High Court
       for the State of Telangana at Hyderabad in CRLP No. 720 of 2023
       With
       Criminal Appeal No. 148 of 2026

                          Appearances for Parties
       Advs. for the Appellant(s):
       Shailesh Madhiyal, Sr. Adv., Awanish Kumar, Anchit Singa, Ms.
       Garima, M/s Dharmaprabhas Law Associates.
       Advs. for the Respondent(s):
       Jayanth Muth Raj, Sr. Adv., Kumar Vaibhaw, Ms. Devina Sehgal,
       Dhananjay Yadav, Sadineni Ravi Kumar.

                  Judgment / Order of the Supreme Court

                                  Judgment

       J.K. Maheshwari, J.

1.     Leave granted.
2.     The present appeals have been filed against the impugned judgment
       dated 20.06.2024 passed by the Single Bench of High Court for the
       State of Telangana at Hyderabad (hereinafter referred to as “High
       Court”) whereby the petition under Section 482 of the Code of
       Criminal Procedure, 1973 (hereinafter referred to as “CrPC”) of the
       Appellants – accused was dismissed. The prayer in the said petition
       was to quash the criminal proceedings in complaint case bearing C.C.
[2026] 1 S.C.R.                                                        445

          Yerram Vijay Kumar v. The State of Telangana & Anr.


     No. 58 of 2022 filed by Respondent No. 2 – Complainant against
     the Appellants where the Special Court for Economic Offences at
     Hyderabad (hereinafter referred to as “Special Court”) has taken
     cognizance of offences under Sections 448 & 451 of the Companies
     Act, 2013 (hereinafter referred to as “Companies Act”) and Sections
     420, 406, 426, 468, 470, 471 & 120B of the Indian Penal Code, 1860
     (hereinafter referred to as “IPC”).

     FACTS
3.   The genesis of the dispute lies in the affairs of a private limited
     company, namely M/s Shreemukh Namitha Homes Private Limited
     (hereinafter referred to as “Company”), which was incorporated
     on 19.08.2015 under the provisions of the Companies Act by the
     Complainant and his wife, Namitha. At the time of incorporation,
     they were the promoters, first Directors and majority shareholders of
     the Company. Accused No. 1, i.e., Appellant in the Criminal Appeal
     arising out of SLP (Crl.) No. 11530/2024 was inducted as a Director
     in the Company on 03.09.2016. Accused No. 2, i.e., Appellant in
     the Criminal Appeal arising out of SLP (Crl.) No. 14783/2024 was
     inducted as a Director in the Company on 27.08.2015. The initial
     disputes between the parties arose with regard to management and
     control of the Company.
4.   The original Articles of Association (hereinafter referred to as “AoA”)
     of the Company did not provide any fixed tenure for Directors,
     nor did it contemplate their retirement by rotation. On 17.08.2016,
     Accused No. 1 entered into a Memorandum of Understanding with
     the Complainant and certain other stakeholders, pursuant to which
     he agreed to make substantial financial investment, approximately
     to the tune of Rs. 30 crores, in a real estate project of the Company.
     The arrangement contemplated sharing of profits in mutually agreed
     proportions.
5.   An Extra-Ordinary General Meeting (hereinafter referred to as
     “EOGM”) is stated to have been held on 22.08.2016, preceded
     by a Board Meeting on 21.07.2016, in which amendments to the
     AoA were approved and uploaded on the website of the Ministry of
     Corporate Affairs (hereinafter referred to as “MCA”) on 12.09.2016.
     As alleged by Accused No. 1, no notice of either meeting was
     served upon him despite being a Director of the Company at
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       the relevant time. The relevant portion of the amended AoA is
       reproduced as thus: -
            “64. (i) Subject to the provisions of Section 149, the board
            shall have the power at any time, and from time to tim,
            to appoint a person as an additional director, provided
            the number of directors and additional directors together
            shall not at any time exceed the maximum strength fixed
            by the Board for the articles.
            (ii) Such person shall hold office only up to the date of the
            next annual general meeting of the company but shall be
            eligible for appointment by the company as a director at
            that meeting subject to provisions of the Act.”
6.     As a result of the amendment in the AoA, the tenure of a Director was
       fixed until the date of next annual general meeting of the company.
7.     On 02.11.2021, the complainant and his wife convened another
       EOGM wherein the AoA were further amended, in terms of which,
       all Directors other than the Complainant and his wife were required
       to retire annually and seek re-appointment. Pursuant thereto, an
       Annual General Meeting was held on 30.11.2021 wherein resolutions
       for re-appointment of the Accused were placed. The said resolutions
       failed as the Complainant and his wife, holding majority shareholding,
       voted against them. As such, the accused ceased to be Directors of
       the Company with effect from 30.11.2021.
8.     Such removal was challenged by Accused No. 1 before the National
       Company Law Tribunal at Hyderabad (hereinafter referred to as
       “NCLT”) by filing Company Petition No. 10 of 2022, which is pending
       adjudication.
9.     Subsequent to such challenge, on 19.05.2022, the Complainant filed
       a private complaint before the Special Court alleging that Accused
       No. 1 illegally convened an EOGM on 01.12.2021 without authority,
       appointed third parties as Directors in the Company, fabricated
       the Board and shareholders’ resolutions, and uploaded statutory
       filings along with other forged and false documents on the website
       of the Ministry of Corporate Affairs. In parallel, two civil suits were
       also instituted by the Appellants before the competent civil courts
       seeking a permanent injunction against the Company and the
       Complainant from violating the terms and conditions of MoU dated
[2026] 1 S.C.R.                                                      447

          Yerram Vijay Kumar v. The State of Telangana & Anr.


     17.08.2016 and a declaration that the agreements to sell executed
     by the Complainant with respect to the properties of the Company
     be declared void, respectively.
10. The Special Court recorded the sworn statement of the Complainant
    and, by order dated 10.10.2022, took cognizance of the alleged
    offences and issued summons to the Appellants, leading to registration
    of C.C. No. 58 of 2022. Aggrieved by the summoning order and further
    proceedings, the Appellants invoked inherent jurisdiction of the High
    Court under Section 482 of CrPC and filed the quashing petition. The
    Appellants inter alia contended that the dispute was essentially civil
    and corporate in nature; the criminal complaint was a counterblast
    to the proceedings pending before NCLT; cognizance of offences
    involving alleged fraud under the Act, particularly Section 447 was
    barred by Section 212(6) of the Act in the absence of a complaint
    by the Serious Fraud Investigation Office (hereinafter referred to as
    “SFIO”) or other authorised agency; and that the mandatory statutory
    procedure as per the Companies Act preceding investigation were
    not followed.
11. The High Court vide the impugned judgment dismissed the quashing
    petition, holding that the allegations disclosed a prima facie
    commission of serious offences involving forgery and fraud, and that
    disputed questions of fact could not be examined in a petition under
    Section 482 of CrPC. The Appellants have, therefore, approached
    this Court by way of the present appeals.

     ARGUMENTS ADVANCED
12. Mr. Shailesh Madhiyal, learned Senior Advocate appearing on behalf
    of the Appellants, vociferously urged that the High Court failed to
    appreciate that the learned Special Court had taken cognizance of
    various offences including Section 448 of the Companies Act. It is his
    submission that Section 448 of the Companies Act clearly specifies
    that whoever fails to act as per mandate of the said provision shall
    be liable to be punished under Section 447 of the Companies Act.
    Therefore, the Special Court should not have taken cognizance
    under said provisions against the Appellants despite there being an
    express legal bar contained in the second proviso to Section 212(6)
    of the Companies Act, which prohibits the taking of cognizance of
    offences covered under Section 447 of the Companies Act except on
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       a complaint made by the categories of persons prescribed thereunder,
       namely, the Director of SFIO or any officer of the Central Government
       authorised by an order in writing in that behalf.
13. It is further submitted that a bare reading of Section 448 makes it
    clear that any person who makes a false statement as specified
    therein “shall be liable under Section 447”. In other words, the liability
    for an offence under Section 448 is directly linked to Section 447,
    which prescribes the punishment for fraud. Therefore, the legal bar
    imposed by the second proviso to Section 212(6) of the Companies
    Act, as applicable to Section 447, is squarely applicable to offences
    alleged under Section 448 of the Act, hence, the Special Court is
    precluded from taking cognizance of such offences on filing of a
    private complaint by the Complainant.
14. It is also submitted that the cognizance by the Special Court was
    without jurisdiction as the procedure mandated under Section 206
    of the Companies Act was not followed. Section 206 provides that
    the Registrar of Companies, on receiving information, shall seek
    explanation and conduct enquiry. On being satisfied about violation
    of the Companies Act in running the affairs of the company, the
    Registrar may conduct enquiry and can then report to the Central
    Government for conducting further investigation, which, if satisfied,
    may entrust the case to SFIO for further investigation. In the instant
    case, the said procedure has been completely bypassed.
15. Learned Senior Counsel further submitted that the Complainant has
    given a criminal cloak to a civil dispute inasmuch as there are several
    civil cases pending between the parties in respect of the present
    dispute. The Appellants have filed O.S. No. 55 of 2022 before the
    III Junior Civil Judge, Kukatpally, O.S. No. 99 of 2022 before the
    XV Additional District Judge, Kukatpally, and C.P. No. 10 of 2022
    before the National Company Law Tribunal, which are all pending for
    adjudication. Therefore, the impugned proceeding was maliciously
    instituted and liable to be quashed.
16. Per contra, Mr. Kumar Vaibhaw, learned Advocate appearing for
    Respondent No. 1 - State of Telangana, submitted that the Special
    Court has taken cognizance of the offences based on the material
    placed on record and had issued summons to the Appellants. It
    is submitted that there is no bar on the Special Court in taking
    cognizance of the offence under Section 448 of the Companies Act,
[2026] 1 S.C.R.                                                         449

          Yerram Vijay Kumar v. The State of Telangana & Anr.


     on a private complaint. It is further submitted that all the contentions
     raised by the Appellants have to be examined at the time of framing
     of charges, and the Appellants ought not to be permitted to ask for
     quashing of the private complaint and the order taking cognizance
     under Section 482 CrPC. There are several disputed questions of
     fact which need to be looked into for the purpose of adjudication,
     and such an adjudicatory process cannot be undertaken by the Court
     in proceedings under Section 482 CrPC.
17. Learned Senior Advocate, Mr. Jayant Muth Raj, appearing for
    Respondent No. 2 - Complainant, adopted the submissions made
    on behalf of Respondent No. 1 - State and further submitted that
    the Companies (Amendment) Act, 2015 (hereinafter referred to as
    “2015 Amendment Act”) came into effect on 29.05.2015, and from
    such date, Section 212(6) of the Companies Act was amended to
    delete Section 448 and other provisions from its ambit. Prior to
    the amendment, Section 212(6) covered offences under various
    provisions of the Companies Act, including Section 448, which
    attracted the punishment for fraud provided in Section 447 of the
    Act. However, after the amendment, the bar on taking cognizance
    is applicable only for the offence under Section 447 of the Act. It is
    submitted that the present complaint has been filed for the offence
    under Sections 448 and 451 of the Companies Act, and not under
    Section 447. In view of the amendment made to Section 212(6), there
    is no bar on the Special Court from taking cognizance of offences
    under Section 448 of the Act on the basis of a private complaint.
    The bar is applicable only for offences under Section 447.
18. It is also submitted that the Appellants had surreptitiously conducted
    an EGOM on 01.12.2021 without the requisite quorum and illegally
    appointed two Directors in an attempt to usurp managing control over
    the Company from Respondent No. 2. The Appellants fraudulently
    submitted FORM DIR-12 to the Ministry of Corporate Affairs, declaring
    the aforesaid appointments, despite being well aware of the fact that
    they no longer held the position of Director after 30.11.2021.
19. It is submitted that the Appellants have played fraud on the members
    of the Company and have falsified the records of the Company. The
    Appellants, with an intention to deceive the shareholders and other
    Directors of the Company and with an intent to usurp the management
    of the Company, passed resolutions appointing the wife of Accused
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       No. 1 and another person as Directors of the Company falsifying the
       records of the Company. Therefore, it constitutes serious offences
       under the Companies Act as well as under the IPC. The allegations
       require trial, and cannot be quashed at this stage. The impugned
       judgment does not suffer from any legal infirmity and does not warrant
       interference by this Court. As such, the present appeals deserve to
       be dismissed.

       ISSUES FOR CONSIDERATION
20. After hearing learned counsel for the parties at length and on perusal
    of the facts and material placed on record, the following issues arise
    for consideration:
       (i)    Whether cognizance of the alleged offences under Sections
              448 and 451 of the Companies Act could have been taken
              on a private complaint in view of the statutory scheme of the
              Companies Act and if not, whether the criminal proceedings
              must be quashed in respect of those sections?
       (ii)   If the proceedings for the offences under Sections 448 and 451
              of the Companies Act ought to be quashed, would the criminal
              proceedings also have to be quashed in respect of the offences
              under the IPC in light of the provisions as contained in Section
              436(2) of the Companies Act?
       (iii) Whether continuation of the criminal proceedings would amount
             to abuse of process of law, warranting interference under
             Section 482 of CrPC?

       ANALYSIS OF ISSUE 1:
       Since Issue 1 has a material bearing on the other issues framed,
       we are analysing the contentions in that respect, first.

       Scheme of the Companies Act
21. In the present case, cognizance has been taken by the Special
    Court under Sections 448 and 451 of the Companies Act. Section
    448 of the Companies Act prescribes the punishment for false
    statement by any person in any return, report, certificate, financial
    statement, prospectus, statement or other document required by
    the Companies Act or Rules. Section 448 of the Companies Act
[2026] 1 S.C.R.                                                          451

          Yerram Vijay Kumar v. The State of Telangana & Anr.


     is relevant for the purposes of this case and is therefore quoted
     for reference: -
           “448. Punishment for false statement. – Save as
           otherwise provided in the Act, if in any return, report,
           certificate, financial statement, prospectus, statement or
           other document required by, or for, the purposes of any
           of the provisions of this Act or the rules made thereunder,
           any person makes a statement, -
                (a) which is false in any material particulars, knowing
                it to be false; or
                (b) which omits any material fact, knowing it to be
                material,
           he shall be liable under Section 447.”
22. Section 451 of the Companies Act punishes repeated commission
    of an offence punishable either with fine or with imprisonment within
    three years by a company or an officer of the company. Section 451
    is also relevant, and is therefore quoted: -
           “451. Punishment for repeated default. – If a company
           or an officer of a company commits an offence punishable
           either with fine or with imprisonment and where the
           same offence is committed for the second or subsequent
           occasions within a period of three years, then, that
           company and every officer thereof who is in default
           shall be punishable with twice the amount of fine for
           such offence in addition to any imprisonment provided
           for that offence.”
23. Section 448 of the Companies Act, in turn, makes a reference to
    Section 447 of the Companies Act, which prescribes the punishment
    for fraud. The said Section is integral to Section 448 therefore
    reproduced as under: -
           “447. Punishment for fraud. – Without prejudice to any
           liability including repayment of any debt under this Actor
           any other law for the time being in force, any person who
           is found to be guilty of fraud, involving an amount of at
           least ten lakh rupees or one per cent. of the turnover of
           the company, whichever is lower shall be punishable with
452                                                        [2026] 1 S.C.R.

                        Supreme Court Reports


          imprisonment for a term which shall not be less than six
          months but which may extend to ten years and shall also
          be liable to fine which shall not be less than the amount
          involved in the fraud, but which may extend to three times
          the amount involved in the fraud:
          Provided that where the fraud in question involves public
          interest, the term of imprisonment shall not be less than
          three years.
          Provided further that where the fraud involves an amount
          less than ten lakh rupees or one per cent of the turnover
          of the company, whichever is lower, and does not involve
          public interest, any person guilty of such fraud shall be
          punishable with imprisonment for a term which may extend
          to five years or with fine which may extend to 3[fifty lakh
          rupees] or with both.
          Explanation – For the purposes of this section –
          (i) “fraud”, in relation to affairs of a company or any body
          corporate, includes any act, omission, concealment of
          any fact or abuse of position committed by any person
          or any other person with the connivance in any manner,
          with intent to deceive, to gain undue advantage from, or
          to injure the interests of, the company or its shareholders
          or its creditors or any other person, whether or not there
          is any wrongful gain or wrongful loss;
          (ii) “wrongful gain” means the gain by unlawful means of
          property to which the person gaining is not legally entitled;
          (iii) “wrongful loss” means the loss by unlawful means of
          property to which the person losing is legally entitled.”
24. The thrust of the argument presented by the Appellants is that there
    is a specific bar contained in the second proviso to Section 212(6)
    of the Companies Act which prevents the Special Court from taking
    cognizance of an ‘offence covered under Section 447’ except upon a
    complaint in writing made by the Director, SFIO or any officer of the
    Central Government authorized, by general or special order in writing
    in this behalf by the Government. Section 212(6) of the Companies
    Act is relevant and is therefore quoted herein:
[2026] 1 S.C.R.                                                           453

          Yerram Vijay Kumar v. The State of Telangana & Anr.


           “212. Investigation into affairs of Company by Serious
           Fraud Investigation Office. –
           (6) Notwithstanding anything contained in the Code of
           Criminal Procedure, 1973 (2 of 1974), offence covered
           under section 447 of this Act shall be cognizable and no
           person accused of any offence under those sections shall
           be released on bail or on his own bond unless—
                (i) the Public Prosecutor has been given an opportunity
                to oppose the application for such release; and
                (ii) where the Public Prosecutor opposes the
                application, the court is satisfied that there are
                reasonable grounds for believing that he is not guilty
                of such offence and that he is not likely to commit
                any offence while on bail:
           Provided that a person, who, is under the age of sixteen
           years or is a woman or is sick or infirm, maybe released
           on bail, if the Special Court so directs:
           Provided further that the Special Court shall not take
           cognizance of any offence referred to this subsection
           except upon a complaint in writing made by —
                (i) the Director, Serious Fraud Investigation Office; or
                (ii) any officer of the Central Government authorised,
                by a general or special order in writing in this behalf
                by that Government.”
25. Making a reference to the second proviso of Section 212(6) of the
    Companies Act, it is argued by the Appellants that in the absence
    of a complaint as specified therein, merely on a private complaint
    by the Respondent No. 2, cognizance could not have been taken
    by the Special Court.
26. Therefore, what falls for our consideration is whether the offence
    under Section 448 of the Companies Act is an ‘offence covered
    under Section 447’ of the Companies Act as mentioned in the
    Section 212(6) of the Companies Act, which would then attract the
    bar against taking cognizance under the second proviso to Section
    212(6) of the Companies Act.
454                                                          [2026] 1 S.C.R.

                          Supreme Court Reports


27. It is pertinent to note that the phrase ‘offence covered under Section
    447’ was introduced by means of a substitution in Section 212(6)
    of the Companies Act in the 2015 Amendment Act with effect from
    29.05.2015. Prior to the amendment, instead of the phrase ‘offence
    covered under Section 447’, Section 212 of the Companies Act
    mentioned “the offences covered under sub-sections (5) and (6) of
    section 7, section 34, section 36, sub-section (1) of section 38, sub-
    section (5) of section 46, sub-section (7) of section 56, sub-section
    (10) of section 66, sub-section (5) of section 140, sub-section (4)
    of section 206, section 213, section 229, sub-section (1) of section
    251, sub-section (3) of section 339 and section 448 which attract
    the punishment for fraud provided in section 447”.
28. After the amendment to Section 212 in 2015, instead of individually
    mentioning different sections which attract the punishment for fraud
    under Section 447 of the Companies Act, ‘offence covered under
    Section 447’ was substituted. However, if we look to the Companies
    (Amendment) Bill, 2014 (Bill No. 185 of 2014) it provides the Statement
    of Objects and Reasons. In Clause (xii) of the same, it is mentioned:
           “(xii) to amend sub-section (6) of section 212 of the said
           Act to provide for bail restrictions to apply only for offence
           relating to fraud u/s 447;”
29. The intent of legislature, as evinced from the ‘Statement of Objects
    and Reasons’ of the said Bill is to limit the applicability of the rigorous
    twin-conditions for grant of bail set out in Section 212(6) to the offence
    under Section 447 of the Companies Act.
30. In the context of the facts of this case, in the matter of taking
    cognizance with respect to ‘offence covered under section 447’, the
    interplay has been brought by the legislature under Section 212(6) of
    the Companies Act. The said section is in two parts – (I) the ‘offence
    covered under section 447’ shall be cognizable and (II) no person
    accused of any offence under those sections shall be released on
    bail, subject to twin conditions as mentioned therein. The first proviso
    to Section 212(6) provides a relaxation to children below 16 years
    of age, women, sick or infirm in the matter of releasing on bail. The
    second proviso relates to taking cognizance and makes a reference
    to first part of Section 212(6) whereby the Special Court has been
    permitted to take cognizance only on a complaint in writing by the
    Director, SFIO or any officer of the Central Government authorised by
[2026] 1 S.C.R.                                                          455

          Yerram Vijay Kumar v. The State of Telangana & Anr.


     general or special order in writing in this behalf by the government.
     The said special provision has been enacted because as per Section
     439 (1) and (2) of the Companies Act the other offences of the
     Companies Act were made non-cognizable.
31. In addition to Section 447 of the Companies Act, the provision under
    Section 448 of the Companies Act also has relevance, it criminalizes
    a statement made by any person in any return, report, certificate,
    financial statement, prospectus, statement or other document required
    by the Companies Act or Rules, which is (a) false in any material
    particulars, knowing it to be false or (b) which omits any material
    fact, knowing it to be material. In such case, the person shall then
    be liable under Section 447 of the Companies Act, which lays down
    the punishment for fraud. As per Section 447 of the Companies Act,
    depending on whether (a) the amount involved is more or less than
    ten lakh rupees or one per cent of turnover of the company, whichever
    is lesser or (b) involves public interest or not, the punishment has
    been prescribed in terms of imprisonment and fine.
32. Particularly, the stipulation that the ‘person (s)’ shall be ‘liable under
    Section 447’ is contained not only in Section 448 of the Companies
    Act, but also for offences as contained in Sections 34, 56(7), 66(10).
    Additionally, it has been mentioned that the ‘person (s)’ shall be ‘liable
    for action under Section 447’ in case of offences as mentioned in
    Sections 7(5), 7(6), 8(11), 34, 36, 38(1)(c), 46(5), 76A, 86(2), 90(12),
    140(5), 229, 251, 339(3) of the Companies Act. As such, some offences
    under the Companies Act have been elevated to the level of ‘fraud’.
    It appears that Section 447 is the catch-all provision laying down the
    punishment for fraud, in various manifestations thereof, in a multitude
    of Sections of the Companies Act. The word ‘fraud’ itself has been
    given a very wide and all-encompassing meaning in Section 447 of
    the Act, where it is defined in explanation (i) to Section 447 as:
            “‘fraud’ in relation to affairs of a company or any body
           corporate, includes any act, omission, concealment of
           any fact or abuse of position committed by any person
           or any other person with the connivance in any manner,
           with intent to deceive, to gain undue advantage from, or
           to injure the interests of, the company or its shareholders
           or its creditors or any other person, whether or not there
           is any wrongful gain or wrongful loss;”
456                                                        [2026] 1 S.C.R.

                         Supreme Court Reports


33. From a bare perusal of the aforementioned provisions of the
    Companies Act, it is clear that Section 447 of the Companies Act
    lays down the punishment for ‘fraud’ in various forms. In the present
    case, cognizance has been taken by the Special Court under Section
    448 and 451 of the Companies Act. Section 448 itself does not lay
    down any punishment for its contravention, it simply lays down the
    ingredients of the offence of making a false statement and provides
    that in case such a false statement is made, the ‘person(s)’ shall
    be liable under Section 447 of the Companies Act. That is to say,
    even if, after trial, an offence under Section 448 is proved to have
    been committed by a ‘person’, it is only with the aid of Section 447
    of the Companies Act that the punishment for the said offence may
    be imposed. Section 448 of the Companies Act, therefore, cannot
    be read in isolation and must be read along with Section 447 of
    the Companies Act. Therefore, the offence under Section 448 is an
    offence ‘covered under Section 447’ of the Companies Act mentioned
    in Section 212(6), since the offence under Section 448 is inextricably
    linked to the punishment for ‘fraud’ as mentioned in Section 447 and
    as such, the second proviso to Section 212(6) of the Companies
    Act is attracted.
34. If the intention of the legislature were to bar the Special Court from
    taking cognizance of only the offence under Section 447 of the
    Companies Act, there would be no need to mention offences ‘covered
    under’ Section 447 in Section 212(6) of the Companies Act. Prior
    to the 2015 Amendment Act, various offences of the Companies
    Act were mentioned in Section 212(6) which, when proved, made
    the accused liable for the punishment prescribed for ‘fraud’ under
    Section 447 of the Companies Act. After the amendment, which was
    intended to ensure that the restrictive twin-condition for grant of bail
    is applied only in cases where Section 447 of the Companies Act
    has been invoked, the words ‘offence covered under Section 447’
    was substituted.
35. That being said, the bar on taking cognizance by the Special Court in
    cases involving Section 447 of the Companies Act was a safeguard
    which was put in place to prevent filing of frivolous complaints by
    disgruntled company members / shareholders or competitors with
    vested interests. As such, in case an allegation of fraud under Section
    447 of the Companies Act is to be made out, the complaint has to
    be made by the Director, SFIO or an officer authorized by a written
[2026] 1 S.C.R.                                                           457

           Yerram Vijay Kumar v. The State of Telangana & Anr.


     order of the Government. This adds a further level of scrutiny and
     investigation prior to taking cognizance in cases where allegations
     of fraud are made and ensures that cognizance is not taken by the
     Special Court simply upon filing of a private complaint.

     View taken by different High Courts
36. During hearing, it has been brought to our notice that the Single
    Bench of the High Court in its earlier judgment dated 06.06.2022,
    Sumana Paruchuri v. Jakka Vinod Kumar Reddy1 had interpreted
    the provisions as contained in Section 212(6) and Section 447/448
    of the Companies Act in a challenge made by the accused therein
    to the criminal proceedings initiated on a private complaint and held
    as thus:-
            “16. As seen from Section 212 (6) of the Companies Act,
            2013, it provides a safeguard against frivolous complaints
            and ensures that a prosecution for fraud can only be
            launched after due investigation. Learned counsel for the
            respondent No. 1 contended that the respondent No. 1 was
            entitled to file complaint as a shareholder of the company
            under Section 439 (2) of the Companies Act, 2013. But,
            an exception is carved out under Section 439 (1) itself that
            every offence under the Act except the offences referred
            to in sub-section (6) of Section 212 of the Act shall be
            deemed to be non-cognizable. As such, Section 439 of
            the Companies Act, 2013 is not applicable to offences
            covered under Section 447 of the said Act. The contention
            of the learned counsel for the respondent No. 1 was that
            under Section 439 of the Companies Act, 2013, the Court
            can take cognizance of any offence including Section 447
            of the Act so long as the SFIO had not been assigned
            investigation by the Central Government under Section 212
            of the Act. But the heading of Section 439 of the Act itself
            would read as “offences to be non cognizable”. Hence,
            cognizance of the offence under Section 447 of the Act
            could not have been taken by the trial Court on a private
            complaint, as it is a cognizable offence.


1   2022 : TSHC : 30033.
458                                                     [2026] 1 S.C.R.

                     Supreme Court Reports


       17. Under Section 206 of the Companies Act, 2013,
       the Registrar of Companies based on the information
       received by him, seek for explanation, call for production
       of document and conduct enquiry. If the Registrar is
       satisfied on the basis of information available with him,
       or furnished to him or on a representation made to him
       by any person that the business of a company is being
       carried out not in compliance with the provisions of the Act,
       he can proceed with enquiry. If the enquiry conducted by
       the Registrar discloses material for further investigation,
       he, under Section 210 of the Companies Act, 2013 can
       report to the Central Government to conduct investigation
       into the affairs of the company. If the Central Government
       considers the allegations as true and considering the gravity
       of the offence that the matter was fit to be investigated
       by the SFIO, directs the matter to be investigated by the
       SFIO under Section 212 of the Companies Act,2013. The
       Investigating Officers who were having better investigation
       skills in forensic auditing, corporate affairs and capital
       market would conduct investigation. If the Complainant is
       aggrieved, he should have resorted to the procedure as
       contemplated under the Act. The Registrar of Companies
       is a competent person to call for the records, conduct
       an enquiry and to arrive at an opinion. If there is any
       material, he would submit a report to the Government for
       investigation by SFIO. If SFIO is able to collect material
       sufficient to prosecute then it would file charge sheet after
       taking necessary sanctions from the Central Government. If
       the contention of the Complainant that any shareholder can
       file a complaint for fraud is accepted, it would open flood
       gates for any person commencing criminal proceedings
       merely by filing a complaint. There were several companies
       with millions of shareholders. The condition prescribed
       under Section 212(6) of the Act is a safeguard against
       frivolous criminal complaints. As such, I do not find any
       merit in the contention of the leamed counsel for the
       respondent No. l that a private complaint for fraud is
       maintainable before the Special Court.
                                 xxxx
[2026] 1 S.C.R.                                                          459

            Yerram Vijay Kumar v. The State of Telangana & Anr.


             21. Since the punishment for the offence under Section 448
             of the Companies Act, 2013 was also under Section 447
             of the Act, it was covered by the bar of taking cognizance
             under Section 212(6) of the Act.”
37. This judgment of the High Court pronounced on an earlier date than
    the impugned order has not been noticed by the High Court while
    passing the impugned judgment. We acknowledge the judgment
    dated 06.06.2022 and its pronouncement on the proposition of law
    as contained therein. The issue in the present appeal is the same
    as in the earlier case, the High Court ought to have considered its
    previous judgment which is on an identical question of law in almost
    similar factual situation. Principles of judicial comity and stare decisis
    are applicable to the High Court and the Court while passing the
    impugned order should have noticed its earlier judgment and, if so
    required, referred the matter to a larger bench.
38. The Madras High Court in Sivananda Rajaram v. M/s New Shipping
    Kaisha Ship Management Pvt. Ltd.2 quashed a complaint case
    under Section 447 in light of the bar against taking cognizance under
    Section 212(6) of the Companies Act.
39. The Karnataka High Court has taken a similar view in M. Gopal v.
    Ganga Reddy3 and quashed the order of the Magistrate taking
    cognizance under Section 447 of the Companies Act on a private
    complaint filed by a shareholder. The Court held that the shareholder
    can go through the procedure under Section 213 of the Act in order
    to make a complaint which may eventually result in prosecution
    under Section 447 of the Companies Act.
40. The Delhi High Court in Yogesh Chander Goyal and Ors. Vs. State
    and Anr.4 has referred to the judgments of the Madras High Court
    and Karnataka High Court and held that the order taking cognizance
    under Section 447 of the Companies Act on a private complaint
    cannot be sustained in law.




2   Criminal Petition (OP) No. 19154/2021.
3   2022 : KHC : 35824.
4   2024 SCC OnLine Del 3197.
460                                                        [2026] 1 S.C.R.

                         Supreme Court Reports


       Application of principles to the facts of the present case
41. Coming to the facts of this case, the High Court in the impugned
    judgment has not discussed or addressed the provisions of law
    as contained in Sections 448/451 read with Section 212(6) of the
    Companies Act nor has it referred to its previous judgment on similar
    facts. It has reached a finding that a mini-trial cannot be conducted by
    the High Court when exercising its inherent jurisdiction under Section
    482 of the CrPC. The Court has found that allegations against the
    Appellants are serious in nature and they require trial to elicit the
    true facts of the case.
42. It goes without saying that the Special Court in the present case has,
    in its order dated 10.10.2022 taken cognizance under Section 448,
    451 of the Companies Act and Sections 420, 406, 426, 468, 470,
    471 & 120B of the IPC. We have found above that the punishment
    section for Section 448 of the Companies Act is Section 447 of the
    Companies Act and both sections cannot be read in isolation, since
    they are inextricably linked.
43. It is trite law that anything that cannot be done directly, also cannot
    be done indirectly. Merely because there is a bar under the second
    proviso to Section 212(6) of the Companies Act against taking
    cognizance of the offence under Section 447 of the Companies Act
    unless specific conditions mentioned therein are met, does not mean
    that cognizance may be taken by the Special Court under Section
    448 of the Act without including the punishment section, i.e. Section
    447 on filing of a private complaint.
44. Non-inclusion of the punishment section under Section 447 since the
    very inception will also lead to procedural absurdity since ultimately
    the said Section 447 of the Companies Act must be invoked in order
    to impose any punishment after trial is conducted. In saying so,
    we are aware of the proposition of law that cognizance is taken of
    an offence and not of a section under the law, and at the stage of
    framing charges, the Court may add or remove sections. However,
    in the present case, when there is a specific requirement under
    law which acts as a pre-condition for taking cognizance under
    Section 447 of the Companies Act, the decision of the Special
    Court to take cognizance under Section 448 of the Companies
    Act without invoking the punishment section, Section 447 cannot
    be countenanced.
[2026] 1 S.C.R.                                                        461

          Yerram Vijay Kumar v. The State of Telangana & Anr.


45. As such, the offence under Section 448 of the Companies Act is
    an ‘offence covered under Section 447’ as mentioned in Section
    212(6) of the Companies Act and therefore, the bar against taking
    cognizance under the second proviso of Section 212(6) of the
    Companies Act, unless specific conditions are met, is attracted
    in the present case. Cognizance, therefore, in such a case,
    cannot be taken merely by filing of a private complaint by the
    Complainant. However, it is not to say that the Complainant is
    left absolutely remediless. The right recourse for a person, who
    makes an allegation of fraud in the affairs of a company is to file
    an application under Section 213 of the Companies Act before
    the NCLT upon satisfying the eligibility under Section 213(a) and
    213(b) of the Companies Act.
46. The offence under Section 451 of the Companies Act is for punishment
    in case of repeated default. Since we are finding that cognizance
    cannot be taken for Section 448 of the Companies Act without following
    the requirements under the second proviso to Section 212(6) of the
    Companies Act, cognizance of ‘repeated default’ under Section 451
    of the Companies Act is not made out.
47. As an upshot of the above discussion, the inescapable conclusion
    reached is that the complaint case bearing C.C. No. 58/2022, the
    order dated 10.10.2022 of the Special Court and all consequential
    proceedings to the extent of Section 448 and 451 of the Companies
    Act shall stand quashed.

     ANALYSIS OF ISSUE 2 AND 3
48. It has been contended before us by the Appellants that in view of
    the provisions as contained in Section 436(2) of the Companies Act,
    if the offences under the Companies Act are quashed, the Special
    Court may not try the offences under the sections of the IPC under
    which cognizance has been taken vide order dated 10.10.2022 of
    the Special Court.
49. Section 436(2) of the Companies Act is relevant and is therefore
    reproduced as under:
           “436. Offences triable by Special Courts. –
           (2) When trying an offence under this Act, a Special Court
           may also try an offence other than an offence under
462                                                        [2026] 1 S.C.R.

                          Supreme Court Reports


            this Act with which the accused may, under the Code of
            Criminal Procedure, 1973 (2 of 1974) be charged at the
            same trial.”
50. It is contended by the Appellants, in light of the aforementioned
    provision, that a Special Court under the Companies Act may try
    offences under the IPC only when it is also trying an offence under
    the Companies Act and not when the offences under the Companies
    Act have been quashed.
51. A similar question arose before this Court in S. Satyanarayana v.
    Energo Masch Power Engg. & Consulting (P) Ltd.,5 albeit in slightly
    different factual scenario and in the context of the Companies Act,
    1956, where this Court held that when multiple persons are made
    accused in respect of the same set of facts, even if some of them
    are prosecuted against for the offences under the Companies Act
    and others are being prosecuted against only for the offences under
    the IPC, the Special Court can try all the accused persons together
    in order to avoid multiplicity of proceedings.
            “11. We accordingly set aside the findings of the High
            Court that taking of cognizance against Accused A-4, A-5,
            A-6 and A-9 is without jurisdiction on the ground that the
            complaint does not make out a prima facie case for the
            offences under Section 628 of the Companies Act, 1956
            against the said accused. At this stage, it may be noted
            that the Special Court is empowered to try the offences
            under the Companies Act along with other Acts by virtue
            of a notification issued by the erstwhile Government of
            Andhra Pradesh dated 13-3-1981 which empowers such
            Special Courts to try offences under specified enactments
            such as the Companies Act, 1956the Income Tax Act,
            1961, the Wealth Tax Act, 1957, etc., which reads as
            follows:
                   “… even if such cases include offences
                   punishable under the Penal Code, 1860 and
                   any other enactments, if such offences form
                   part of the same transaction….”


5   (2015) 13 SCC 1.
[2026] 1 S.C.R.                                                          463

           Yerram Vijay Kumar v. The State of Telangana & Anr.


            (vide Notification reproduced in Supt. of Customs v. Kannur
            Abdul Kader Mohammed Haneefa [2014 SCC OnLine Hyd
            622 : (2014) 310 ELT 49] ), SCC OnLine Hyd para 15.
            Thus, even if a number of persons are accused of offences
            under a special enactment such as “the Companies Act
            and as also the IPC” in respect of the same transaction
            or facts and even if some could not be tried under the
            special enactment, it is the Special Court alone which
            would have jurisdiction to try all the offences based on
            the same transaction to avoid multiplicity of proceedings.
            We make this observation because at some stage in the
            hearing the learned counsel addressed us on this point.
            We make it clear that in the present case all the accused
            are liable to be tried by the Special Court in respect of
            the offences under IPC as well as the Companies Act as
            alleged in the complaint.”
52. The High Court of Madhya Pradesh dealt with a similar question in
    Sunil Mandwani v. State of M.P.,6 where the FIR was registered
    under various sections of the IPC only yet the accused approached
    the Court seeking discharge on the ground that only offences under
    the Companies Act are made out and therefore only a Special Court
    under the Companies Act has jurisdiction to try the case. In that
    context, the Court held that since no trial has been initiated against
    the accused under the Companies Act, in the absence of offences
    under the Companies Act, the relevant Special Court does not have
    jurisdiction to try the IPC offences and only the Court having territorial
    jurisdiction may try such offences.
53. Pertinently, it is to be noticed that in S. Satyanarayana (Supra), this
    Court has relied upon the notification of the erstwhile Government
    of Andhra Pradesh dated 13.03.1981 which had empowered Special
    Courts under the Companies Act, 1956 to try cases under the IPC and
    other enactments if such offences form part of the same transaction.
    Even though no such notification has been brought on record for
    designation of Special Courts under the Companies Act, 2013, on
    research it is found that ‘The Special Court for trial of Economic
    Offences- cum-VIII Additional Metropolitan Sessions Judge Court-


6   2019 SCC OnLine MP 1248.
464                                                           [2026] 1 S.C.R.

                           Supreme Court Reports


       cum-XXII Additional Chief Judge, City Civil Court, Hyderabad’ has
       been designated as the Special Court for the State of Telangana by
       the Central Government vide Notification bearing F. No. 01/12/2009-
       CL-I (Vol. IV) dated 23.03.2017. In this notification issued in exercise
       of powers conferred under Section 435(1) of Companies Act, there is
       no mention of offences under the IPC, it merely mentions ‘…hereby
       designates the following Courts mentioned in the Table below as
       Special Courts for the purposes of providing speedy trial of offences
       punishable with imprisonment of two years or more under the said Act’.
54. That being said, under the Companies Act, Section 436(2) governs
    the jurisdiction of the Special Court. The requirement of ‘same
    transaction’ is not present in Section 436(2) which only lays down
    the pre-requisite that the Special Court should be trying offences
    under the Companies Act, for it to also try offences under the IPC.
    As such, once the offences under the Companies Act are quashed,
    it is the Court of appropriate territorial jurisdiction which would have
    jurisdiction to try the private complaint filed by the Respondent No. 2
    against the Appellants. The learned Judge of the Special Court where
    the C.C. No. 58 of 2022 is pending shall take steps, in consultation
    with the Principal District Judge of the district to transfer the complaint
    case to the appropriate court having territorial jurisdiction to try the
    complaint case.
55. Arguments have also been made by the Appellants about the propriety
    and legality of continuance of the proceedings in respect of offences
    under the IPC and it has been submitted by the Appellants that
    the complaint case insofar as it relates to offences under the IPC,
    is abuse of process of law since there are two civil suits and one
    company petition pending between the parties. However, we are
    not convinced by this argument. It is trite law that mere institution
    or pendency of civil proceedings between the parties cannot be a
    ground to quash the criminal proceedings instituted by the Respondent
    No. 2 by filing a complaint case or to conclude that the dispute is
    purely civil in nature.
56. The Respondent No. 2 and the Appellants were in a commercial
    relationship and the inception of the dispute can be traced to a tussle
    for control over the Company. The civil suits filed by the Appellants
    are for seeking a permanent injunction against the Company and the
    Complainant from violating the terms and conditions of MoU dated
[2026] 1 S.C.R.                                                         465

           Yerram Vijay Kumar v. The State of Telangana & Anr.


     17.08.2016 and, a declaration that the agreements to sell executed
     by the Complainant with respect to the properties of the Company
     be declared void, respectively, while the Company Petition has been
     filed before the NCLT challenging the removal of the Appellants from
     directorship in the Company. Pendency of these proceedings would
     not absolve the criminality as alleged in the complaint, in the facts
     and circumstances of this case.
57. Therefore, without expressing any views on merits of the complaint
    case, we hold that there is no reason or ground to quash the offences
    under the IPC of which cognizance has been taken by the Special
    Court.
58. Issues 2 and 3 are answered as above.

     CONCLUSION
59. In the interest of abundant clarity, as per the discussion hereinabove,
    we have held that where the Special Court under the Companies Act
    is taking cognizance of an offence under a section in the Companies
    Act which, if proved, would make the person(s) ‘liable under Section
    447’ or ‘liable for action under Section 447’, it must also invoke
    Section 447 with the corresponding section and in such a case, it
    must comply with the bar against taking cognizance as specified in
    the second proviso to Section 212(6) of the Companies Act.
60. In view of the discussion, the present appeals are partly allowed, the
    impugned judgment of the High Court is set aside with the following
    directions:
     I.    The complaint case bearing C.C. No. 58/2022, the order
           dated 10.10.2022 of the Special Court and all consequential
           proceedings to the extent of Section 448 and 451 of the
           Companies Act shall stand quashed.
     II.   The learned judge of the Special Court where the C.C. No. 58
           of 2022 is pending shall take steps, in consultation with the
           Principal District Judge of the district to transfer the complaint
           case to the appropriate court having territorial jurisdiction
           to try the complaint case. The said transfer shall be made
           within a period of 4 weeks and then the complaint case shall
           be adjudicated on its own merits, uninfluenced by any of the
           observations made hereinabove, as expeditiously as possible.
466                                                          [2026] 1 S.C.R.

                              Supreme Court Reports


       III.    We make it clear that the observations made hereinabove
               in paragraph 56 are not an expression of any views on the
               merits of the complaint, however, the competent Court, which
               is continuing the offences under the IPC and maintaining the
               private complaint may examine all relevant objections, if any,
               raised at appropriate stage or during trial by way of defence,
               uninfluenced by the above observations.
61. All pending applications shall stand disposed of. There shall be no
    order as to costs.

       Result of the case: Appeals partly allowed.




       †
           Headnotes prepared by: Divya Pandey