14

Special Courts
Question 1
What are provisions related to constitution and working of the Mediation and Conciliation
Panel as per Section 442 of the Companies Act, 2013?
Answer
Mediation and Conciliation Panel: In common parlance, Mediation means intervention of
some third party in a dispute with the intention to resolve the dispute.
Conciliation means the process of adjusting or settling disputes in a friendly manner through
extra judicial means. This new provision introduced by the Companies Act, 2013 has come
into force with effect from 1 st April, 2014 vide notification dated 26 th of March, 2014. Section
442 of the Companies Act, 2013 deals with the constitution and functioning of the mediation
and conciliation panel in order to dispose the matter.
Section 442 lays the following law with respect to the constitution and working of the Mediation
and Conciliation Panel:
(1) Central Government to maintain the Panel of Mediators: The Central Government
shall maintain a panel of experts to be known as Mediation and conciliation panel for
mediation between the parties during the pendency of any proceedings before the
Central Government or the Tribunal or the Appellate Tribunal under this Act.
Hence, it is important that the case should be pending before the Central Government or
the Tribunal or the Appellate Tribunal under this Act.
(2) Panel consisting of experts: The panel shall consist of such number of experts having
such qualification as may be prescribed.
(3) Filing of application: Application for mediation and conciliation can be made by:
(i) any parties to the proceedings. (It shall be accompanied with such fees and in such
form as may be prescribed.)
(ii) The Central Government or the Tribunal or the Appellate Tribunal before which any
proceeding is pending may, suo motu refer any matter pertaining to such
proceeding to such number of experts as it may deem fit.
(4) Appointment of expert/s from panel: The Central Government or the Tribunal or the
Appellate Tribunal before which any proceeding is pending may appoint one or more
experts from the Panel as may be deemed fit.

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(5) Fees, terms and conditions of the experts: The fee and other terms and conditions of
experts of the Mediation and Conciliation Panel shall be such as may be prescribed.
(6) Procedure for the disposal of matter: In order to dispose the matter, the Mediation and
Conciliation Panel shall follow such procedure as may be prescribed.
(7) Period for the disposal of matter: The Mediation and Conciliation Panel shall dispose
of the matter referred to it within a period of three months from the date of such reference
and forward its recommendations to the Central Government or the Tribunal or the
Appellate Tribunal, as the case may be.
(8) Filing of objection on the recommendation of the panel: Any party aggreived by the
recommendation of the Mediation and Conciliation Panel may file objections to the
Central Government or the Tribunal or the Appellate Tribunal, as the case may be .
Question 2
What are the powers of the Central Government under the Companies Act, 2013 regarding:
(i) To appoint company prosecutors
(ii) To Appeal against acquittal
Answer
(i) Power of Central Government to appoint company prosecutors: This section 443 of
the Companies Act, 2013 has come into force with effect from 12th September, 2013.
This section lays down the provisions seeking to provide that the Central Government
may appoint company prosecutors with the same powers as given under the Cr. PC on
Public Prosecutors.
(a) Appointment of company prosecutors: The Central Government may appoint
(generally, or for any case, or in any case, or for any specified class of cases in any
local area) one or more persons, as company prosecutors for the conduct of
prosecutions arising out of this Act; and
(b) Powers and Privileges: The persons so appointed as company prosecutors shall
have all the powers and privileges conferred on Public Prosecutors appointed under
section 24 of the Cr. PC.
(ii) Appeal against acquittal: According to section 444 of the Companies Act, 2013, the
Central Government may, in any case arising under this Act, direct –
(a) any company prosecutor, or
(b) authorise any other person either by name or by virtue of his office, to present an
appeal from an order of acquittal passed by any court, other than a High Court.
Appeal presented by such prosecutor or other person shall be deemed to have been validly
presented to the appellate court.

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Question 3
What is the object of Constituting Panel for Mediation and Conciliation under the
Companies Act, 2013? Who can file application for mediation and conciliation?
Answer
Under section 442 of the Companies Act, 2013, it is provided that the Central
Government shall maintain a panel of experts for mediation between the parties during
pendency of any proceedings before the Central Government or the Tribunal or the
Appellate Tribunal under the Act. In common parlance, mediation means intervention of
some third party in a dispute with the intention to resolve the dispute. Similarly,
conciliation means the powers of adjusting or settling disputes in a friendly manner
through extra judicial means. The object behind the panel is to dispose the matter
pending before the Government / Tribunal as mentioned above.
Filing of application: Application for mediation and conciliation can be made by:
(A) any parties to the proceedings (It shall be accompanied with such fees and in such
form as may be prescribed)
(B) The Central Government or the Tribunal or the Appellate Tribunal before which any
proceeding is pending may, suo moto refer any matter pertaining to such proceeding to
such number of experts as it may deem fit.
Question 4
Mr. Joseph, a member of Armaments Ltd., is aggrieved due to failure of the company to
make payment of dividend declared in the AGM held in August, 2015. He makes a
complaint, in writing, before the court of competent jurisdiction within the prescribed
period of limitation, but the court refused to take cognizance of the alleged offence.
Explain the legal position in this regard under the Companies Act, 2013.
Also state the offences under the Companies Act, 2013 which are cognizable and which
are non-cognizable.
Answer
Cognizance of offence: A court shall take cognizance of any offence under this Act
which is alleged to have been committed by any company or any officer thereof only on
the written complaint of -
(a) The Registrar,
(b) A shareholder of the company, or
(c) Of a person authorised by the Central Government in that behalf.
Provided that the court may take cognizance of offences relating to issue and transfer
of securities and non-payment of dividend, on a complaint in writing, by a person
authorised by the Securities and Exchange Board of India.

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In the present case, Mr. Joseph, a member of Armaments Ltd. is aggrieved due to failure
of the company to make payment of dividend declared in the AGM held in August 2015.
He makes a complaint, in writing, before the court of competent jurisdiction within the
prescribed period of limitation, but the court refused to take cogniz ance of the alleged
offence.
Here, the Court shall take cognizance of the offence relating to non payment of dividend
as the shareholders have made a complaint in writing before the competent jurisdiction.
Cognizable and non-cognizable offences: Overriding the provisions given under the
Code of Criminal Procedure, 1973, every offence under the Companies Act, 2013 except
the offences referred to in section 212(6) of the Companies Act, 2013, which deals with
the investigation into affairs of company by serious fraud investigation office, shall be
deemed to be non-cognizable within the meaning of the said Code.
Therefore, the offences as covered under section 212(6) shall now be deemed to be
cognizable where police officer may arrest person without warrant and are non-
bailable. The Companies Act, 2013 establishes the offence covered under section 212(6)
as a public wrong which has to be prevented and controlled. This non - bailable nature
of the offences deter the offender and the others from committing further and similar
offences.

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