Compliance Management, Audit and Due Diligence · Non-Compliances, Penalties and Adjudications

Special Courts and Tribunal Procedure under the Companies Act, 2013

Updated 11 October 2026 · Fact-checked

Offences under the Companies Act, 2013 (except Section 452) are tried by Special Courts set up under Section 435. They are non-cognizable, and courts take cognizance only on a written complaint under Section 439. The NCLT and NCLAT are not bound by the Code of Civil Procedure but follow natural justice under Section 424.

Understand Special Courts and Offences Tribunal Procedure

The Companies Act, 2013 has offences, and it needs a forum to try them. That forum is the Special Court. The Central Government may establish or designate as many Special Courts as necessary for speedy trial of offences under the Act, except offences under Section 452.

The type of judge depends on the punishment. Where the offence is punishable with imprisonment of two years or more, the Special Court is a single judge who is a Sessions Judge or Additional Sessions Judge. For other offences, it is a Metropolitan Magistrate or a Judicial Magistrate of the First Class, appointed by the Central Government with the concurrence of the Chief Justice of the High Court.

Trial rules are in Section 436. The offences are triable only by the Special Court for the area of the company's registered office. A Special Court can take cognizance on a police report or a complaint without the accused being committed to it for trial. It may also try a non-Act offence charged at the same trial. It may try in a summary way any offence punishable with imprisonment up to three years, but then it cannot pass a sentence above one year.

Section 439 controls how a case starts. Every offence under the Act is deemed non-cognizable, except offences referred to in Section 212(6). No court takes cognizance of an offence by a company or its officer except on the written complaint of the Registrar, a shareholder or member, or a person authorised by the Central Government. Until a Special Court is established, Section 440 sends such offences to the Court of Session, Metropolitan Magistrate or Judicial Magistrate of the First Class.

The NCLT and NCLAT handle civil and compliance matters. Under Section 424 they are not bound by the Code of Civil Procedure, 1908. They follow natural justice and regulate their own procedure, subject to the Act, the IBC and the rules.

Key rules to remember

Section 435(1): Establishment: Central Government may establish or designate Special Courts for offences under the Act, except under Section 452; The purpose is speedy trial.
Section 435(2): Composition: Imprisonment of 2 years or more → Sessions Judge or Additional Sessions Judge; other offences → Metropolitan Magistrate or Judicial Magistrate of the First Class; Magistrate is appointed by the Central Government with the concurrence of the Chief Justice of the High Court.
Section 436(1)(a): Territorial jurisdiction: Triable by the Special Court for the area of the company's registered office; If there are several, the High Court specifies one.
Section 436(1)(b): Detention by Magistrate: Judicial Magistrate: up to 15 days in the whole; Executive Magistrate: up to 7 days in the whole; Then the accused is forwarded to the Special Court.
Section 436(3): Summary trial: Offence punishable with imprisonment up to 3 years → may be tried summarily; sentence cannot exceed 1 year; If a longer sentence may be needed, the court records an order, recalls witnesses and holds a regular trial.
Section 439(1): Nature of offences: Every offence is non-cognizable, except those in Section 212(6); Applies notwithstanding the Code of Criminal Procedure, 1973.
Section 439(2): Cognizance: Only on written complaint of the Registrar, a shareholder or member, or a person authorised by the Central Government; SEBI-authorised person may complain for offences on issue and transfer of securities and non-payment of dividend. Not applicable to a prosecution by a company of its officers.
Section 440: Transitional: Until a Special Court exists → Court of Session, Metropolitan Magistrate or Judicial Magistrate of the First Class; High Court may transfer cases under section 407 of the Code.
Section 424: Tribunal procedure: Not bound by CPC, 1908; guided by natural justice; powers of a civil court on listed matters; Orders are enforced as a decree; proceedings are judicial proceedings.

How to solve Special Courts and Offences Tribunal Procedure questions

Use this order for any case-based question on offences and tribunals. It keeps your answer in the provision, analysis, conclusion format.

1Identify the forum question: is it a criminal offence (Special Court) or a civil or compliance matter (NCLT or NCLAT)?
2State the provision: name the section and quote its key condition in plain words.
3Check the court: decide the Special Court's composition from the punishment (2 years or more, or less).
4Check jurisdiction: the Special Court for the registered office area, or the court under Section 440 if none exists.
5Check how the case starts: is there a written complaint from a person allowed by Section 439(2)? Apply the provisos.
6Check the mode of trial: can it be summary under Section 436(3)? Apply the one-year cap.
7For tribunals, apply Section 424: natural justice, own procedure, civil court powers, execution of orders.
8Conclude clearly: valid or invalid, which court, which procedure, and what the company or officer should do.

Quickest way: Four-question check

When to use it: Use when time is short and the facts are long.

Who complains? Registrar, member, shareholder or an authorised person. Anyone else fails Section 439(2).
Which court? Special Court for the registered office, or the Section 440 court.
Which judge? Two years or more of imprisonment means a Sessions Judge; otherwise a Magistrate.
Which trial? Up to three years of imprisonment may be summary, with a one-year sentence cap.

Common mistakes in Special Courts and Offences Tribunal Procedure

Saying any person can file a complaint for an offence under the Act.
Students assume ordinary criminal law, where anyone can set the law in motion.
Fix: Section 439(2) limits complaints to the Registrar, a shareholder or member, or a person authorised by the Central Government. SEBI-authorised persons fit only the provisos.
Treating offences under Section 452 as triable by Special Courts.
Students remember only that all offences go to Special Courts.
Fix: Section 435(1) excludes offences under Section 452.
Saying a summary trial can lead to any sentence.
Students miss the proviso to Section 436(3).
Fix: Summary trial is for offences up to three years, and the sentence cannot exceed one year. Otherwise the court recalls witnesses and holds a regular trial.
Applying the Code of Civil Procedure strictly to the NCLT.
The Tribunal has civil court powers, so students assume full CPC procedure.
Fix: Section 424(1) says the Tribunal is not bound by the CPC. It follows natural justice and regulates its own procedure, with civil court powers only on the listed matters.
Stating that all offences are non-cognizable without the exception.
Students learn the rule and forget the carve-out.
Fix: Section 439(1) excepts offences referred to in Section 212(6).
Forgetting who may complain when a company prosecutes its officer.
The second proviso is skipped.
Fix: Section 439(2) restrictions do not apply to a prosecution by a company of any of its officers. Also, a liquidator's action on winding-up matters is outside Section 439(2) under Section 439(4).

Worked examples

Example 1

A shareholder of Kaveri Textiles Ltd, registered office at Coimbatore, files a written complaint about an offence under the Companies Act, 2013, punishable with imprisonment of three years. Which court tries it, who sits, and can the trial be summary?

Show the solution

Provision: Section 436(1)(a) makes the offence triable only by the Special Court for the area of the registered office, which is Coimbatore.
Complaint: Section 439(2) allows a shareholder or member to complain in writing, so cognizance can be taken.
Judge: imprisonment of two years or more means a single judge who is a Sessions Judge or Additional Sessions Judge under Section 435(2)(a).
Mode: Section 436(3) allows summary trial for offences punishable up to three years, so the offence qualifies.
Limit: in a summary trial, no sentence above one year can be passed. If a longer sentence seems likely, the court records an order, recalls witnesses and tries the case regularly.

Answer: The Special Court for Coimbatore, presided by a Sessions or Additional Sessions Judge, tries it. A summary trial is possible, but the sentence cannot exceed one year.

Example 2

Mr. Rao, a stranger to Deccan Foods Ltd, files a complaint with a Magistrate alleging an offence by the company's officers under the Companies Act, 2013. Can the court take cognizance?

Show the solution

Provision: Section 439(2) bars cognizance of an offence by a company or its officer except on the written complaint of the Registrar, a shareholder or member, or a person authorised by the Central Government.
Facts: Mr. Rao is none of these and nothing shows an authorisation.
Provisos: the SEBI proviso covers only offences on issue and transfer of securities and non-payment of dividend, by a SEBI-authorised person. Mr. Rao is not such a person.
Second proviso: the exemption for a company prosecuting its own officers does not help him, as he is not the company.
Conclusion: the bar in Section 439(2) applies.

Answer: No. The court cannot take cognizance on Mr. Rao's complaint. The proper route is a complaint by the Registrar, a member or an authorised person, or he may approach one of them.

Exam tips

Quote the section number with the rule. Examiners reward Section 435, 436, 439 and 440 used correctly.
Keep the numbers exact: 2 years, 3 years, 1 year, 15 days and 7 days. These are easy marks.
In case questions, check the complainant first. Many fact patterns hide an invalid complaint.
For tribunal questions, name Section 424 and state that natural justice replaces strict CPC procedure.
End with a clear conclusion and a practical compliance step, such as keeping records ready for a Registrar inquiry.

Practice questions from Non-Compliances, Penalties and Adjudications

Special Courts and Offences Tribunal Procedure in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

CS ExecutiveOffences, Penalties, Special Courts and Dispute Resolution

Special Courts and Offences Tribunal Procedure: frequently asked questions

What does Section 435 of the Companies Act, 2013 provide?

It lets the Central Government establish or designate Special Courts for speedy trial of offences under the Act, except offences under Section 452. It also fixes who sits: a Sessions or Additional Sessions Judge for offences with imprisonment of two years or more, and a Magistrate for others.

Who can file a complaint under Section 439?

The Registrar, a shareholder or member of the company, or a person authorised by the Central Government. A SEBI-authorised person may complain for offences on issue and transfer of securities and non-payment of dividend.

Are offences under the Companies Act cognizable?

No. Section 439(1) deems every offence non-cognizable, except offences referred to in Section 212(6).

Is the NCLT bound by the Code of Civil Procedure?

No. Under Section 424, the NCLT and NCLAT are not bound by the Code of Civil Procedure, 1908. They follow natural justice and regulate their own procedure, subject to the Act, the IBC and the rules, with civil court powers on listed matters.

What happens if no Special Court exists yet?

Under Section 440, the offence is tried by the Court of Session or the Metropolitan Magistrate or Judicial Magistrate of the First Class, as the case may be, with jurisdiction over the area.