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2014 Supreme(Del) 2571

High Court of Delhi
SANJEEV SACHDEVA, J.
Arun Dhawan & Another
Versus
Lokesh Dhawan
CO. A(SB). No. 50 of 2013
Decided on: 05-12-2014

Advocate Appeared:
For the Appellants:Suhail Dutt, Senior Advocate with Vikas Tiwari, Neeraj Gupta, Advocates.
For the Respondent:Ankit Sibal, Advocate.

Headnote:

Criminal Procedure Code, 1973 - Section 195(1)(b)(ii), 340 - Perjury - Forged and fabricated documents - Power of court - Initiation of criminal proceedings - An application under Section 340 Cr.P.C. has been filed for initiating perjury action against the Respondent for filing of forged and fabricated documents knowing the same to be forged - Embargo as laid down by Sections 195(1)(b)(i) & (ii) CrPC applies on the Second Court and not on the First Court - It applies only where a forgery has taken place after the document has been filed - Even if a document was tampered/forged prior to institution of the legal proceedings, the Court will have jurisdiction to entertain an application under section 340 of the Code if the document has been produced in Court proceedings - Making of false averment in the pleading pollutes the stream of justice - Where a verification is specific and deliberately false, there is nothing in law to prevent a person from being proceeded for contempt - Company Law Board was not barred from entertaining the application under section 340 CrPC - It has erred in refusing to entertain the application filed by the Appellant - Impugned order is set aside - Company Application is restored - Company Law Board is directed to consider the said Application on merits in accordance with the procedure laid down in Section 340 CrPC.

Judgment

Sanjeev Sachdeva, J.

1. This appeal arises out of order dated 18.9.2013 of the Company Law Board whereby the Company Law Board while holding that the document, i.e., Resolution of Board of Directors dated 16.8.2010 filed by the Respondent (Petitioner in the Company Petition) was a forgery, refused to proceed further with the application filed by the Appellant (Respondent in the Company Petition) to initiate action and prosecute the Respondent for perjury and contempt. The Company Law Board dismissed the application relying on the judgment of the Supreme Court in IQBAL SINGH MARWAH V. MEENAKSHI MARWAH, 2005 (4) SCC 370 and held that Section 195(1)(b)(ii) CrPC was attracted only when the offences, enumerated in the said provision have been committed with respect to a document after it has been produced or given in evidence in any court during the time the same was in custodial legis. The Company Law Board further relied on the judgment of the Supreme Court in case of SACHIDA NAND SINGH & ANR. VS. STATE OF BIHAR & ANR., 1998 (2) SCC 493 and held that it would be strained thinking that any offence involving forgery of a document if committed far outside the precincts of the Court and long before its production in the Court, could also be treated as one affecting administration of justice merely because that document later reaches the court.

2. The application filed by the Appellant for prosecuting the Respondent (Petitioner before the CLB) for perjury was premised not only on the facts that the document was forged and fabricated but that the Respondent by filing and relying on the said forged and fabricated document induced the Court to believe that the Respondent was having a higher shareholding.

3. It is an admitted position of the parties that the said document is forged and fabricated. The Respondent contends that the document was handed over to the Respondent by the Appellant himself and believing the document to be correct, the document was relied upon and filed by the Respondent in Court. On the other hand, the contention of the Appellant is that the Respondent forged and fabricated the document and filed pleadings duly verified and affirmed based on the said forged and fabricated document knowing that the document was forged and fabricated and thereby inducing the Court in entertaining the petition.

4. The question that arises for consideration is: Whether the court would be barred from entertaining an application under Section 340 CrPC even in cases where a party files pleadings being aware that the document on which such pleading is based is forged and fabricated?

5. Since the Company Law Board has held that there is a jurisdictional bar, the merits of the allegation of the Appellant or the defence of the Respondent are not being considered in the present judgment.

6. The Appellant No. 1 and Respondent are real brothers and sons of late Sh. K.C. Dhawan. The dispute relates to the succession to the shares of Late Sh. K.C. Dhawan in the Appellant No. 2 Company.

7. The Respondent filed before the Company Law Board Minutes of Meeting of the Board of Directors allegedly held on 16.08.2010 wherein the Resolution is allegedly passed for distribution of the shares of late Sh. K.C. Dhawan between his four sons, one daughter and the wife.

8. It is an admitted case of the parties that the Minutes of Meeting produced by the Respondent are forged and fabricated.

9. The contention of the Appellant is that the Respondent who held only 1% share forged and fabricated the Minutes of the Board and filed the petition under Section 397/398/402 and 403 of the Companies Act, 1956 contending that he had 15% shares based on the said Board Minutes. As per the Appellant, the Respondent, knowing fully well that the Resolution was forged and fabricated, filed the petition contending as under:

“8. That a Board Resolution was also passed in the Board Meeting held on 16.8.2010 and the said shares were also transmitted in the name of the above mentioned l









































































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