IBC Section 236: Trial of offences by Special Court

Section 236 of Insolvency and Bankruptcy Code, 2016: Trial of offences by Special Court

Official Bare Act Text

Override / Mandate Mens Rea (Intent) Actus Reus (Conduct) Punishment Limitation Monetary

(1) Notwithstanding anything in the Code of Criminal Procedure, 1973 (2 of 1974), offences under this Code shall be tried by the Special Court established under Chapter XXVIII of the Companies Act, 2013 (18 of 2013).

(2) No Court shall take cognizance of any offence punishable under this Act, save on a complaint made by the Board or the Central Government or any person authorised by the Central Government in this behalf.

(3) The provisions of the Code of Criminal Procedure, 1973 (2 of 1974) shall apply to the proceedings before a Special Court and for the purposes of the said provisions, the Special Court shall be deemed to be a Court of Session and the person conducting a prosecution before a Special Court shall be deemed to be a Public Prosecutor.

(4) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), in case of a complaint under sub-section (2), the presence of the person authorised by the Central Government or the Board before the Court trying the offences shall not be necessary unless the Court requires his personal attendance at the trial.

Legal Commentary & Landmark Judgments: Section 236

Section 236 provides for the Trial of Offences under the Code by designated Special Courts, establishing a dedicated judicial mechanism for insolvency crimes.

Designated Special Courts: Offences under the Code are tried exclusively by Special Courts established under Section 435 of the Companies Act, 2013.
Complaint Prerequisite: No court can take cognizance of any offence punishable under the Code except on a complaint made by the Board or the Central Government (or person authorized by either).
Sessions Judge / Magistrate Jurisdiction: Where an offence is punishable with imprisonment of two years or more, it is tried by a Sessions Court; lesser offences by a Metropolitan Magistrate or Judicial Magistrate First Class.

Key Landmark Precedents:

Swiss Ribbons Pvt. Ltd. v. Union of India (2019) 4 SCC 17: The Supreme Court held that the trial of insolvency offences by Special Courts under Section 236 guarantees specialized economic adjudication and rapid punishment for fraudulent bankrupts.
Innoventive Industries Ltd. v. ICICI Bank (2018) 1 SCC 407: Affirmed that the statutory complaint bar under Section 236(2) prevents vexatious private criminal prosecutions from disrupting insolvency proceedings.

Courtroom Practice & Strategic Litigation Guidance:

Private creditors cannot directly file criminal complaints under the Code; they must submit evidence of fraud or concealment to the IBBI or Central Government to initiate prosecution before the Special Court under Section 236.