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Thursday, November 24, 2016

The mere fact that a person has made a contradictory statement in a judicial proceeding is not by itself always sufficient to justify a prosecution under Sections 199 and 200 of the Indian Penal Code (45 of 1860) (hereinafter referred to as “the IPC”- AMARSANG NATHAJI AS HIMSELF AND AS KARTA AND MANAGER Vs. HARDIK HARSHADBHAI PATEL AND ORS

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                      CIVIL APPEAL NO. 11120   OF 2016
                (Arising out of S.L.P.(C) No. 13749 of 2016)

AND AS KARTA AND MANAGER                        ...  APPELLANT (S)


OTHERS                                            ... RESPONDENT(S)

                           J  U  D  G  M  E  N  T


Leave granted.

The scope of this appeal is limited to the  challenge  on  legality  of  the
proceedings under Section 340  of  the  Code  of  Criminal  Procedure,  1973
(hereinafter referred to as “the Code”) initiated by the High Court as  part
of the impugned judgment dated 12th/13th April, 2016 in  Appeal  from  Order
No. 489 of 2013 on the file of the High Court of Gujarat. The appeal  before
the High Court arose from  an  order  passed  by  the  Senior  Civil  Judge,
Ahmedabad declining to grant an interim injunction, in Civil Suit No. 28  of
2012. Having extensively referred to  the  materials  on  record,  the  High
Court after elaborately considering the arguments, by a  detailed  judgment,
dismissed the appeal, confirming the order passed by the  trial  court.  The
plaintiff/respondent had also approached this Court  by  way  of  a  Special
Leave Petition (Civil) No. 14478 of 2016.  The said Special  Leave  Petition
has been dismissed on 15.11.2016 as not pressed on the submission  that  the
parties have reached an amicable settlement on the issue.
The High  Court,  on  account  of  the  contradictory  stand  taken  by  the
appellant herein  who  was  the  first  respondent  before  the  High  Court
(Defendant no.1 in the  Suit),  took  the  view  that  the  conduct  of  the
appellant has affected the administration of justice, and therefore, it  was
expedient in the interests of  justice  to  file  a  complaint  against  the
appellant under Section 340 of the Code.
It is necessary to refer to the relevant paragraphs in  the  judgment  where
the High Court has dealt with the issue:

“19.  Before concluding, the Court deems it necessary to take  serious  view
on the conduct of the respondent No.1 – defendant No.1, who  either  for  an
extraneous consideration, or to  save  his  skin,  has  taken  contradictory
stands in the judicial proceedings by filing one written statement  at  Exh.
20  supporting  the  case  of  the  present  appellant   –   plaintiff   and
subsequently by filing the application at Exh. 43, and  other  documents  in
the nature of affidavits supporting the case of the respondents No.3  to  5.
It appears that the respondent No.1 has tried to change  his  version  after
the impugned order was passed by the trial Court, just to suit his  purpose,
misusing and abusing the  process  of  law.  The  Court  is  constrained  to
observe that due to sky-rocketing escalation in the prices of the  lands  in
and around the urban areas, the execution of such illegal agreements at  the
instance  of  the  owners/power-of-attorney  holders/banakhat  holders   has
become rampant, and that more often than not, the proceedings of Courts  are
being misused and abused to a large extent by  such  unscrupulous  elements.
In many cases, innocent persons are being  cheated  and  defrauded  by  such
elements, in the  quest  of  earning  easy  money,  dragging  such  innocent
persons to litigations which go on for years together.
20.   In the instant case also, the respondent No.1 – defendant  No.1  after
requesting the trial Court to reopen his right to  file  written  statement,
and after filing written statement at Exh.20 along with  the  affidavit  and
declaration supporting the case of the appellant – plaintiff, had  filed  an
application at Exh.  43,  requesting  the  trial  Court  to  de-exhibit  the
earlier written statement at Exh. 20 by stating, inter alia, that  the  said
written statement was filed by the Advocate Ms. Trupti Patel on  his  behalf
without his knowledge. The said Application at Exh. 43 was rejected  by  the
trial Court, which order has  remained  unchallenged.  All  these  documents
namely the written statement at Exh. 20 with affidavit and  declaration  and
the other written statement and the affidavit filed before the  trial  Court
have also been produced by the learned  Counsels  for  the  parties  in  the
present proceedings and have been relied upon  by  them,  to  support  their
respective contentions. From  the  said  documents  on  record,  it  clearly
transpires that the respondent No.1 – defendant No.1 had sought  to  produce
two sets of documents contradictory  to  each  other,  in  relation  to  the
proceedings in this Court, and had  made  the  declarations  and  statements
which he knew were false,  for  being  used  as  evidence  in  the  judicial
proceedings. The respondent No.1 has neither denied his  signatures  on  the
written statement Exh. 20 and the affidavit filed along therewith,  nor  has
taken any action against the advocate Ms. Trupti Patel,  who  had  allegedly
filed  the  said  written  statement  on  his  behalf.  The  second  written
statement was sought to be filed along with the application  Exh.  43  after
the impugned order was passed by the  trial  Court,  and  when  the  present
Appeal from Order was pending before this Court. The Court,  therefore,  has
reason to believe that the respondent No.1 has deliberately and  consciously
tried to take Courts for a ride and filed  the  documents  and  declarations
making false statements which could be read  as  evidence  in  the  judicial
proceedings, and thereby has prima facie acted in  the  manner  which  would
affect the administration of  justice,  tantamounting  to  the  offences  as
contemplated in Section 199 and Section 200  of  IPC,  and  as  referred  in
Section 195(1)(b)(i) of  Cr.P.C.  As  stated  herein  above,  nowadays  such
illegal transactions and agreements are rampant, and the process of  law  is
being misused and abused by  the  unscrupulous  elements,  which  ultimately
hampers the administration of justice.  The  Court,  therefore,  is  of  the
opinion that it is expedient in the interest of justice  to  file  complaint
against the respondent No.1  in  exercise  of  the  powers  conferred  under
Section 340 of Cr.P.C.
21.   In view of  the  above,  the  Appeal  from  Order  is  dismissed.  The
Registrar (Judicial), Gujarat High Court,  Ahmedabad  is  directed  to  make
complaint against  the  respondent  No.1  in  view  of  the  above  findings
recorded by the Court for the offence under Section 199 and Section  200  of
IPC before the competent  Court  of  Magistrate,  having  jurisdiction,  who
shall, after following the procedure  as  contemplated  in  Section  343  of
Cr.P.C., deal with the case in accordance with law.”

It is the main contention of the learned  counsel  for  the  appellant  that
while passing the  order,  as  extracted  above,  the  High  Court  has  not
followed the procedure  contemplated  under  Section  340(1)  of  the  CrPC.
Section 340(1) of the CrPC reads as follows:
“340. Procedure in  cases  mentioned  in  section  195.-(1)  When,  upon  an
application made to it in this behalf or otherwise, any Court is of  opinion
that it is expedient in the interests of justice that an inquiry  should  be
made into any offence referred to  in  clause  (b)  of  sub-section  (1)  of
section 195, which appears to have been committed in or  in  relation  to  a
proceeding in that Court or, as the case may be, in respect  of  a  document
produced or given in evidence in a proceeding  in  that  Court,  such  Court
may, after such preliminary inquiry, if any, as it thinks necessary,-

(a) record a finding to that effect;

(b) make a complaint thereof in writing;

(c) send it to a Magistrate of the first class having jurisdiction;

(d) take sufficient security for the appearance of the accused  before  such
Magistrate, or if the alleged offence is non-bailable and the  Court  thinks
it necessary so to do, send the accused in custody to such Magistrate; and

(e)  bind  over  any  person  to  appear  and  give  evidence  before   such

There are two pre conditions for initiating proceedings  under  Section  340
CrPC – (i) materials produced before the court must make out a  prima  facie
case for a complaint for the purpose of inquiry into an offence referred  to
in clause (b)(i) of sub-Section (1) of Section 195 of the CrPC and  (ii)  it
is expedient in the interests of justice that  an  inquiry  should  be  made
into the alleged offence.
The mere fact that  a  person  has  made  a  contradictory  statement  in  a
judicial proceeding  is  not  by  itself  always  sufficient  to  justify  a
prosecution under Sections 199 and 200 of  the  Indian  Penal  Code  (45  of
1860) (hereinafter referred to as “the IPC”); but it must be shown that  the
defendant has intentionally given a false statement  at  any  stage  of  the
judicial proceedings or fabricated false evidence for the purpose  of  using
the same at any stage of the judicial  proceedings.  Even  after  the  above
position has emerged also, still the court has to form an  opinion  that  it
is expedient in the interests of justice to initiate  an  inquiry  into  the
offences of false evidence and offences  against  public  justice  and  more
specifically referred in Section 340(1) of the CrPC, having  regard  to  the
overall factual matrix as well  as  the  probable  consequences  of  such  a
prosecution. (See K.T.M.S. Mohd. and Another  v.  Union  of  India[1]).  The
court must be satisfied that such an inquiry is required  in  the  interests
of justice and appropriate in the facts of the case.
In the process of formation of opinion by the court that it is expedient  in
the  interests  of  justice  that  an  inquiry  should  be  made  into,  the
requirement should only be  to  have  a  prima  facie  satisfaction  of  the
offence which appears to have been committed. It is open  to  the  court  to
hold a preliminary inquiry though it is not mandatory. In  case,  the  court
is otherwise in a position to form such an opinion, that it appears  to  the
court that an offence as referred to under Section 340 of the CrPC has  been
committed, the court may dispense with the preliminary inquiry.  Even  after
forming an opinion as to the offence which appears to  have  been  committed
also, it is not mandatory that a complaint should be filed as  a  matter  of
course. (See Pritish v. State of Maharashtra and Others[2]).
In Iqbal Singh Marwah and Another v.  Meenakshi  Marwah  and  another[3],  a
Constitution Bench of this Court has gone into the scope of Section  340  of
the CrPC. Paragraph-23 deals with the relevant consideration:

“23. In view of the language used in Section  340  CrPC  the  court  is  not
bound to make a complaint regarding commission of an offence referred to  in
Section 195(1)(b), as the section is conditioned by the words “court  is  of
opinion that it is expedient in the interests of justice”. This  shows  that
such a course will be adopted only if the interest of justice  requires  and
not in every case. Before filing of the complaint,  the  court  may  hold  a
preliminary enquiry and record a finding to the effect that it is  expedient
in the interests of justice that enquiry should be  made  into  any  of  the
offences referred to in Section 195(1)(b). This expediency will normally  be
judged by the court by weighing not the magnitude of injury suffered by  the
person affected by such forgery or forged document,  but  having  regard  to
the effect or impact, such commission of offence has upon administration  of
justice. It is possible that such forged document or  forgery  may  cause  a
very serious or substantial injury to a person in  the  sense  that  it  may
deprive him of a very valuable property or status  or  the  like,  but  such
document may be just a piece of evidence produced or given  in  evidence  in
court, where voluminous evidence may have been adduced  and  the  effect  of
such piece of evidence on the broad concept  of  administration  of  justice
may be minimal. In  such  circumstances,  the  court  may  not  consider  it
expedient in the interest of justice to make a complaint. …”

Having heard the learned counsel appearing on both  sides  and  having  gone
through the  impugned  order  and  also  having  regard  to  the  subsequent
development whereby the parties have decided to amicably settle some of  the
disputes, we are of the view that the matter needs fresh  consideration.  We
are also constrained to form such an opinion since it is fairly clear  on  a
reading of the order that the court has not followed  all  the  requirements
under Section 340 of the CrPC as settled by  this  Court  in  the  decisions
referred to above regarding the formation of the opinion on  the  expediency
to initiate an inquiry into any offence punishable  under  Sections  193  to
196 (both inclusive), 199, 200, 205 to 211 (both inclusive) and 228  of  the
IPC, when such an offence is alleged to have been committed in  relation  to
any proceedings before the court. On forming such an opinion in  respect  of
such an offence which appears to have been committed, the court has to  take
a further decision as to whether any complaint should be made or not.
No  doubt,  such  an  opinion  can  be  formed  even  without  conducting  a
preliminary inquiry, if the formation of opinion is otherwise possible.  And
even after forming the opinion also, the court has to take a decision as  to
whether it is required, in the facts and circumstances of the case, to  file
the complaint. Only if the decision is in the affirmative, the  court  needs
to make a complaint in writing and the complaint thus  made  in  writing  is
then to be sent to a Magistrate of competent jurisdiction.
Under Section 343  of  the  CrPC,  the  Magistrate  has  to  deal  with  the
complaint referred to in Section 340 of the CrPC as if it was instituted  on
a police report. Therefore,  on  the  offences  referred  to  under  Section
195(1)(b)(i) of the CrPC, all falling within the purview  of  warrant  case,
the Magistrate has to follow the procedure for trial of warrant cases  under
Chapter XIX Part A comprising of Sections 238 to 243 of  the  CrPC.   It  is
only in view of such seriousness of the matter, Section 340 of the CrPC  has
provided for a meticulous procedure regarding initiation of the inquiry.
We find that the court in the impugned order has not followed the  procedure
in making the opinion that it was expedient in the interests of  justice  to
file  a  complaint  against  respondent  no.1  in  exercise  of  the  powers
conferred under  Section  340  of  the  CrPC  and  directing  the  Registrar
(Judicial) of the High  Court  of  Gujarat,  Ahmedabad  “to  make  complaint
against respondent no.1 in view of the findings recorded by  the  court  for
the offence under Sections 199 and 200 of the IPC….”. Having regard  to  the
subject matter of the complaint and subsequent developments, we are  of  the
view that in the interests of justice the matter needs to be laid to rest.
The appeal is hence allowed. The impugned order to the extent of  initiation
of the proceedings under Section 340 of the CrPC is set aside.
There shall be no orders as to costs.


New Delhi;
November 23, 2016.
[1]    (1992) 3 SCC 178
[2]    (2002) 1 SCC 253
[3]    (2005) 4 SCC 370



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