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NCLT Mumbai Dismisses Perjury Plea Against Omkara Assets Reconstruction Over Account Differences
The , has firmly rejected an attempt to initiate against , holding that mere inaccuracies or in financial documents do not amount to warranting criminal inquiry. In a reasoned order delivered on , a bench comprising Technical Member Prabhat Kumar and Judicial Member Sushil Mahadeorao Kochey dismissed two applications filed by Aditya Raheja under , in the context of ongoing insolvency proceedings against and
The decision underscores the high threshold set by the for initiating and clarifies the limited scope of such actions in commercial disputes involving contested financial records. The NCLT observed that discrepancies in statements of account, recall notices, and default declarations—often arising from TDS reconciliation, penal interest, or differing legal interpretations—do not by themselves constitute the kind of that the law seeks to punish.
The Allegations and the Response
Aditya Raheja had approached the NCLT alleging that Omkara Assets Reconstruction had placed before the Tribunal documents containing . Specifically, he pointed to differences between a statement of account dated and another dated , a recall notice dated , a default declaration dated , and a Chartered Accountant’s report dated . Raheja also flagged inconsistencies concerning repayment history, exposure under the , and Omkara’s status in records maintained by the .
Omkara Assets Reconstruction, represented by Advocate , opposed the applications vigorously. It argued that all these allegations had already been considered and rejected during the Section 7 insolvency proceedings under the . The company contended that the differences in figures were the result of routine reconciliation adjustments, including those related to TDS and penal interest, and that no document had been fabricated or knowingly falsified.
The NCLT noted that the documents in question were placed before it specifically to determine the occurrence and quantum of default—a matter that was already hotly contested by the corporate debtors. The Tribunal further observed that Raheja had not alleged that any of the documents were false or fabricated; his grievance was limited to inaccuracies or incomplete information.
The Legal Standard for
In its judgment, the NCLT relied heavily on binding precedents from the to delineate the narrow circumstances under which under Section 340 CrPC can be initiated. The bench quoted a key observation:
“It is evident from aforesaid binding precedents that not only the should be initiated in , but also there should be deliberation falsehood on a matter of substance and not merely because of inaccuracy in the statements.”
The Tribunal further elaborated that the applicant had not alleged that the documents were false or fabricated, even though they may have contained inaccurate or incomplete information. It stated:
“It is not case of the applicant that either of these documents was false or fabricated, though such documents may had inaccurate/incomplete information. It is trite that the financial transaction between two parties before the Court are always subject to confirmation/reconciliation of other party, and legal competence in relation to claim is always subject to determination before the court of competent jurisdiction.”
This reasoning effectively draws a bright line: are not a tool to resolve accounting disagreements or to penalize parties for failing to produce perfectly consistent records in the course of adversarial litigation. Instead, they are reserved for cases where there is clear evidence of a deliberate attempt to mislead the court on a matter of substance.
Implications for Insolvency Practitioners
The NCLT’s order carries significant implications for insolvency professionals and litigants. In the high-stakes environment of insolvency resolution, financial data is often voluminous, complex, and subject to multiple interpretations. Discrepancies in statements of account, interest calculations, and default declarations are common, especially when transactions involve TDS, penal interest, or retrospective adjustments.
By dismissing the perjury plea, the NCLT has sent a clear signal that the forum will not entertain aimed at criminalizing legitimate financial disputes. This approach aligns with the object of the , which prioritizes timely resolution and discourages frivolous applications that delay proceedings.
At the same time, the judgment does not leave parties without remedy. If a litigant believes that a document has been deliberately falsified, they may still approach the court with specific evidence of fabrication. But mere discrepancies—especially those that can be explained through routine reconciliation—will not meet the threshold for perjury.
Analysis of the Decision
The bench’s reliance on precedents reinforces the principle that Section 340 CrPC is not a weapon to be used casually. The power to initiate an inquiry into an offence of perjury is extraordinary and must be exercised sparingly, only when the court is satisfied that there is a case of that has the potential to obstruct the course of justice.
In this case, the NCLT observed that the documents were placed before it as part of the , where both sides had the opportunity to challenge their accuracy. The fact that the corporate debtors disputed the amount of default did not transform a civil disagreement into a criminal act. The Tribunal also noted that the financial transaction between the parties was always subject to confirmation and reconciliation by the other side, and that legal competence in relation to a claim is ultimately determined by a court of competent jurisdiction.
This nuanced approach ensures that are not misused to pressure counterparties or to derail insolvency resolutions. It also protects the integrity of the NCLT’s own processes, which rely on the submission of voluminous documentary evidence that may evolve as parties reconcile their accounts.
Conclusion
The NCLT Mumbai’s dismissal of the perjury plea against Omkara Assets Reconstruction is a measured and legally sound decision that reaffirms the high bar for initiating criminal proceedings in the context of commercial litigation. By declining to treat accounting discrepancies as , the Tribunal has preserved the distinction between —a distinction that is fundamental to the .
For legal professionals, the judgment serves as a useful reminder of the limits of Section 340 CrPC and the importance of focusing on substance over procedural minutiae. As insolvency cases continue to generate complex financial records, this decision will likely be cited as authority for resisting attempts to criminalize routine .
The order was delivered with the assistance of advocates for the applicant, for Omkara, for the SRA, and for the Resolution Professional.
