Session Judge not empowered to hear complaints under IBC- Bombay HC

The Bombay High Court ruled that special courts consisting of Sessions Court judges cannot handle Insolvency and Bankruptcy Code (IBC) complaints; only Metropolitan or Judicial Magistrates are empowered to hear complaints under the IBC.

The HC made the ruling in a plea filed by two individuals against an order of the Sessions Court issuing summons to them in a complaint filed by the statutory body of the IBC, Insolvency and Bankruptcy Board of India (IBBI). 

The petition contended that the Sessions Judge did not have the jurisdiction to consider the complaint filed by the IBBI. As per Section 236 of IBC, the Special Courts under the Companies Act were authorized to try offences under the IBC as a Court of Sessions. The objective behind Section 236 was a speedy trial. To achieve the same, there were two categories of special courts introduced – 

1. one court consisting of Sessions or Additional Sessions Judge; and 

2. another consisting of Metropolitan or JMFC.

Justice SK Shinde accepted this contention and observed that the purpose of the legislature was to not burden a Special Court comprising a Sessions Judge with complaints under the IBC. The Court further noted that Sessions Judges were to try offences under the Companies Act, and courts consisting of Magistrates were to try offences under other Acts. The single bench concluded that the proceedings initiated by the IBBI in the Sessions Court were not sustainable. It was without jurisdiction and hence quashed.