Criminal Prosecution under Companies Act cannot be Sought Directly through Writ Jurisdiction: Delhi HC [Read Order]

TheDelhi High Court has ruled that criminal prosecution for alleged violations of the Companies Act, 2013 cannot be directly sought by filing a writ petition under Article 226 of the Constitution. The Court clarified that such relief is not maintainable in writ jurisdiction and that complainants must follow the procedure prescribed under law.

In a petition filed by Shiv Kumar Bhardwaj, seeking directions to the Registrar of Companies (ROC) to initiate criminal prosecution against certain companies and their directors for alleged contraventions of the Companies Act.

The petitioner argued that despite filing a detailed complaint with the ROC in January 2024 and sending reminders, no prosecution had been initiated against the alleged offenders.

The petitioner had relied on Article 226 of the Constitution read with Section 482of the Code of Criminal Procedure, contending that the inaction of the ROC justified judicial intervention. He sought a direct order from the Court compelling the authorities to launch criminal proceedings against the companies and their directors.

However, the High Court noted that the sole relief sought in the petition was initiation of criminal prosecution based on the petitioner’s complaint. The Court held that such a request cannot be entertained under writ jurisdiction.

It observed that the law provides a specific statutory mechanism for examination of complaints and initiation of prosecution under the Companies Act, and that bypassing this process through a writ petition is not permissible.

Justice Neena Bansal Krishna, therefore declined to issue any directions to the ROC and disposed of the petition. However, it granted liberty to the petitioner to pursue appropriate remedies available under law in accordance with the procedure prescribed under the Companies Act.

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