TMI Blog2015 (11) TMI 497X X X X Extracts X X X X X X X X Extracts X X X X ..... nal liquidator, the only reason for non-payment of the outstanding dues by the respondent-company was the prevailing financial condition of the respondent-company, which is contrary to the audit report filed by Sri M. Chandrasekhar Rao as representative of Mack Soft before Ranga Reddy Court in which it is shown that INR 62,91,40,970 (INR 62.91 crores) is due to the applicant from Mack Soft and that the amount due from Mack Soft to the applicant-company is also admitted in the counter to the present application. The company court, while appointing provisional liquidator in C. P. No. 30 of 2012 filed by the petitioner held that the court passed the order for appointing of provisional liquidator since the counter affidavit filed by Sri Samson Arthur is vague and has not chosen to give details of its assets nor has it assured the court that the assets would not be taken away beyond the jurisdiction of the court. Admittedly, caveat petition is filed by the applicant-company on February 10, 2012 and winding up petition is filed on February 14, 2012, by the petitioner and winding up order is passed on July 6, 2012. The sequence of events leading to winding up order in the company petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that Sri Samson Arthur and Sri N. Chandrasekhar Rao have wrongfully admitted liability of the applicant towards the petitioner and the applicant contends that no dues are payable by it to the petitioner who colluded with Sri Samson Arthur and Sri N. Chandrasekhar Rao and initiated proceedings against the applicant on the basis of false claims. The applicant, among other things, stated that on June 13, 2012, an affidavit has been purportedly filed in the company petition on behalf of the applicant by Sri N. Chandrasekhar Rao wherein he stated that the applicant-company does not have any assets at all and is not operating for the last one and half years since January 2010, but the audit report, which has been accepted by Sri N. Chandrasekhar Rao, states that the applicant-company has sufficient assets in terms of monies, i.e., INR 62,91,40,790 owned to it by Mack Soft and acknowledged in the audit report. It is also stated that no mention has been made by Sri N. Chandrasekhar Rao before the court of the dilution of shareholding of the applicant in Mack Soft, which is subject matter of challenge in O. S. No. 21 of 2012 and on the contrary, in the affidavit before the court sworn on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from some other source. The applicant-company further stated that Sri Samson Arthur stated the above facts falsely to his knowledge in contrast to the actual financial position of the applicant-company. It is further stated that the averments made by Sri Samson Arthur in the counter affidavit are in contrast to the averments made by him in the caveat filed by him on February 10, 2012, wherein he claimed that the dues of the petitioner has been paid and the contradictory statements made by him in the affidavit is an abuse of process of the court. Even as per the audit report, the applicant-company has lent monies to a tune of INR 62,91,40,970 to its subsidiary, Mack Soft. 4. The petitioner further submits that the above facts clearly demonstrate that the proceedings in the company petition are collusive one and Sri Samson Arthur and Sri N. Chandrasekhar Rao have deliberately filed false affidavits before the court and deliberately withheld material information from the court and have concealed several relevant facts that were known to them and that the actions and conduct of Sri Samson Arthur and Sri N. Chandrasekhar Rao in making false statements, deliberately withholding releva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cy receiver. It is also stated that there is no averment in the application that the said agreement is sham or has been backdated and that no payment was made by the applicant-company to the petitioner. The counter affidavit filed by Samson Arthur honestly mentioned the financial difficulties faced by the applicant and that the veracity of Samson Arthur regarding the financial difficulties faced by the applicant-company and the consequent inability to pay the dues to the petitioner have been duly established by the bank statements annexed along with the affidavit filed by Sri N. Chandrasekhar Rao filed on June 13, 2012. As per the documents annexed, the applicant has two bank accounts, viz., account No. 00210350003538 with the HDFC Bank and account No. 081-108896-001 with the HSBC Bank and while there was an amount of ₹ 9,99,150 in the HDFC Bank, an amount of ₹ 2,772 was lying in HSBC account and that the veracity of the bank statements has not been disputed by the applicant-company till date and that it is clearly evident that as on that date, i.e., June 7, 2012, the applicant-company was financially unable to meet its admitted liabilities and mere fact that it owed mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Mack Soft as payable to the applicant and this liability towards the applicant-company is also reflected in the balance-sheet of Mack Soft dated March 31, 2012. The respondents have denied that in accordance with the audit report, the applicant has sufficient assets in terms of monies owed to it by Mack Soft and acknowledged in the audit report. The respondents denied that they have falsely admitted liability towards the petitioner and collusively obtained a winding up order against the applicant-company. The respondents further stated that the applicant is now under the management of Sri Robert Dix, Sri Paul Mc.Gowan. Sri Paul Mc. Gowan and Sri Bryan O'Neil, who were unanimously appointed as directors at the extraordinary general meeting held on February 18, 2012, subsequently confirmed at extraordinary general meeting of the applicant convened on July 29, 2013, wherein the shareholders have also conferred authorities on them to institute legal proceedings on behalf of the applicant-company. In view of the facts narrated above, it clearly shows that the affidavits dated February 16, 2012 and June 13, 2012, have truthfully and honestly mentioned the correct financial condit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the First Class are mentioned unlike section 340 of the Cr.P.C. as such, the application under section 340 of the Code of Criminal Procedure is maintainable. He further submits that even as per sub-section (3) of section 344 of the Cr.P.C., the power of court to make a complaint under section 340 of the Cr.P.C. is not affected. Section 344 of the Cr.P.C. empowers the Court of Session and the Magistrate of First Class for trial of an offence for giving any false evidence in summary procedure. In the present case, since false evidence was placed before the court, section 340 of the Cr.P.C. can be invoked for registering a complaint against non-applicants Nos. 1 and 2. He further submits that section 340 of the Cr.P.C. is an independent section and that it is always not necessary that the court should render the finding at the time of final judgment, but later also, the court can invoke section 340(1) of the Cr.P.C. He further contends that the counter filed by the respondents in C. P. No. 30 of 2012 along with petition for recalling winding up order shows that Sri Robert Dix is authorised to defend with the company and that the authorisation dated May 22, 2013, issued in favour of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or being bound by law to make a declaration upon any subject, makes any statement which is false, and which he either knows or believes to be false or does not believe to be true, is said to give false evidence. 193. Punishment for false evidence. - Whoever intentionally gives false evidence in any stage of a judicial proceeding, or fabricates false evidence for the purpose of being used in any stage of a judicial proceeding, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine ; and whoever intentionally gives or fabricates false evidence in any other case, shall be punished with imprisonment of either description for a term which may extend to three years, and shall also be liable to fine. 209. Dishonestly making false claim in court. - Whoever fraudulently or dishonestly, or with intent to injure or annoy any person, makes in a court of justice any claim which he knows to be false, shall be punished with imprisonment of either description for a term which may extend to two years, and shall also be liable to fine. 340. Procedure in cases mentioned in section 195. - (1) When upon an appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad fabricated false evidence with the intention that such evidence should be used in such proceeding, it or he may, if satisfied that it is necessary and expedient in the interest of justice that the witness should be tried summarily for giving or fabricating, as the case may be, false evidence, take cognizance of the offence and may, after giving the offender a reasonable opportunity of showing cause why he should not be punished for such offence, try such offender summarily and sentence him to imprisonment for a term which may extend to three months, or to fine which may extend to five hundred rupees, or with both. (2) In every such case the court shall follow, as nearly as may be practicable, the procedure prescribed for summary trials. (3) Nothing in this section shall affect the power of the court to make a complaint under section 340 for the offence, where it does not choose to proceed under this section. 9. The reliance placed by the respondents in Shabir Hussain Bholu (supra) and Chandrapal Singh (supra) has no application to the facts of the present case since it is rendered while interpreting the provisions of the old Code of Criminal Procedure, 1898, more so, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lish the specified offence and whether it is also expedient in the interest of justice to take such action (see K. Karunakaran (supra). The purpose of enacting section 340(1) of the Cr.P.C., appears to be further arm the court with a weapon to deal with more flagrant cases and not to take away the weapon already in its possession. The object of the Legislature underlying enactment of section 340(1) of the Cr.P.C., is that the evil of perjury and fabrication of evidence has to be eradicated and can be better achieved now as it is open to courts to take recourse to section 340(1) (corresponding to section 476 of the Old Code) in cases in which they have failed to take action under section 344 of the Cr.P.C. (see Mahila Vinod Kumari (supra). Hence, the present application is maintainable under section 340(1) of the Cr.P.C. 12. In the present case, non-applicant No. 1 Sri N. Chandrasekhar Rao stated in his affidavit dated June 13, 2012, in C. P. No. 30 of 2012 as follows : (1) The only reason for non-payment of the outstanding dues by the respondent-company was the prevailing financial condition of the respondent-company-But the audit report filed by Sri N. Chandrasekhar Rao as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of provisional liquidator since the counter affidavit filed by Sri Samson Arthur is vague and has not chosen to give details of its assets nor has it assured the court that the assets would not be taken away beyond the jurisdiction of the court. Admittedly, caveat petition is filed by the applicant-company on February 10, 2012 and winding up petition in C. P. No. 30 of 2012 is filed on February 14, 2012, by the petitioner and winding up order is passed on July 6, 2012. The sequence of events leading to winding up order in the company petition in quick succession would also give rise to a presumption that non-applicants Nos. 1 and 2 have not placed correct facts before the court before winding up order is passed. The respondents being legally bound by on oath to state the truth in their affidavits in C. P. No. 30 of 2012 is prima facie held to have made a false statement which constitutes an offence of giving false evidence as defined under section 191 punishable under sections 193 and 209 of the IPC. 15. In Suo Motu Proceedings Against R. Karuppan, Advocate (supra), the apex court held as follows (page 293) : Courts are entrusted with the powers of dispensation and adjud ..... X X X X Extracts X X X X X X X X Extracts X X X X
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