Supreme Court rejects Centre's plea on private complaints in Companies Act fraud cases
The Supreme Court rejected the Centre's plea regarding private complaints in fraud cases. Special courts cannot take cognisance of such complaints filed under the Companies Act. The court allowed the Centre to authorize officers to file complaints in these matters. This ruling ensures further scrutiny before fraud allegations are considered. The decision stemmed from a case involving former…
The Supreme Court has dismissed the Centre's plea for a review of its January ruling on private complaints in Companies Act fraud cases. In its decision, the apex court reaffirmed that only the director of the Serious Fraud Investigation Office or an authorised government officer can file the complaint in such cases. This additional layer of scrutiny and investigation aims to prevent special courts from taking cognizance based solely on a private complaint.
The court emphasized that Section 448, which deals with false statements, cannot be considered independently from Section 447, as the punishment for the offence is directly linked to the former. The matter pertains to a private complaint against former directors of Shreemukh Namitha Homes, who were accused of various fraudulent activities, including conducting an unauthorized extraordinary general meeting, appointing unauthorised directors, and fabricating board and shareholder resolutions.
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