The plea noted that as per Section 236 of the IBC, special courts under the Companies Act were empowered to try offences under the IBC as a court of sessions.
The petitioners argued that the objective behind Section 236 was a speedy trial of offences and to achieve the same, there were two classes of special courts introduced:
They contended that by amending Section 435 of the Companies Act, after Section 236 of the IBC, the legislature intended that for speedy trial of offences under IBC, the courts with metropolitan magistrates or judicial magistrates are courts deemed to be special courts. Only these courts could try cases under the IBC, the petitioners argued.
The High Court accepted this contention.
The High Court noted that courts consisting of sessions judges were to try offences under the Companies Act, whereas courts consisting of magistrates were to try offences under Acts other than the Companies Act (including IBC).
With these observations, the High Court concluded that the proceedings initiated by the IBBI in the sessions court were not sustainable. The order issuing process against the petitioners was held as being without jurisdiction, unsustainable, and hence quashed.
Source: Barandbench
