Special Court presided by a Sessions Judge or an Additional Sessions Judge will have jurisdiction to try the complaint under the IBC: Supreme Court

While hearing the Insolvency and Bankruptcy Board of India vs. Satyanarayan Bankatlal Malu & Ors. case on April 19, 2024, the Supreme Court (SC) of India held that the special judge with sessions judge or additional sessions judge has jurisdiction to try complaints or offences under the Insolvency and Bankruptcy Code (IBC). the bench ordered, “It is held that the Special Court presided by a Sessions Judge or an Additional Sessions Judge will have jurisdiction to try the complaint under the Code. However, since the learned single judge of the High Court has not considered the merits of the matter, the matter is remitted to the learned single judge of the High Court for considering the petition of the respondents afresh on merits.” The matter was heard by a two-judge bench of the SC constituting Justice BR Gavai and Justice Sandeep Mehta.

The bench was hearing an appeal against the Bombay High Court decision stating that only special courts consisting of judicial or metropolitan magistrates have the power to try offences under the IBC. During the proceedings on April 19, the top court observed that “the reasoning of the learned single judge of the High Court that in view of the 2018 Amendment only the offences under the Companies Act would be tried by a Special Court of Sessions Judge or Additional Sessions Judge and all other offences including under the Code shall be tried by a Metropolitan Magistrate or a Judicial Magistrate of the First Class is untenable.” It further said that the learned single Judge of the HC has grossly erred in quashing the complaint only on the ground that it was filed before a Special Court presided by a Sessions Judges. 

Moreover, the SC bench said, “At the most, the learned single judge of the High Court could have directed the complaint to be withdrawn and presented before the appropriate court having jurisdiction.” The bench quashed and set aside the order of the learned single judge of the Bombay HC. After noting that the HC bench did not consider the merits of the matter, the SC bench remitted the matter to the learned single judge of the Bombay HC for considering the petition of the respondents afresh on merits.