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Quinn Logistics India (P.) Ltd. Versus R.N. Marwah & Co.

2015 (11) TMI 497 - ANDHRA PRADESH HIGH COURT

Complaint against Sri Samson Arthur and Sri N. Chandrasekhar Rao under sections 191, 192, 193 and 209 of the Indian Penal Code, 1860 - false information - winding up petition - whether a prima facie case is made out which, if rebutted, may have a reasonable likelihood to establish the specified offence and whether it is also expedient in the interest of justice to take such action? - Held that:- Affidavit filed by Sri N. Chandrasekhar Rao, prima facie, goes to show that he has given false statem .....

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rthur in the counter affidavit dated February 16, 2012 filed for appointment of provisional 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 .....

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he 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 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 .....

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Nos. 1 and 2 herein before a Magistrate of competent jurisdiction at Hyderabad. Such officer is directed to file such complaint and take all steps necessary for prosecuting the complaint. The concerned Magistrate is directed to deal with the same as per law without being influenced by any of the observations made herein since they are made only for the purpose of preliminary enquiry under section 340(1) of the Cr.P.C. - CO. APPLICATION NO. 1163 OF 2013, CO. PETITION NO. 30 OF 2012 - Dated:- 25-3 .....

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the applicant-company on the basis of the amounts allegedly due for services purportedly rendered to the applicant and a winding up order was passed against the applicant-company on July 6, 2012, on account of collusion between the petitioner in C. P. No. 30 of 2012 (hereinafter known as the petitioner) and Sri Samson Arthur and Sri N. Chandrasekhar Rao, who admitted the liability of the applicant towards the petitioner. It is stated that Quinn Logistics Sweden AB (in bankruptcy) (QLS) which is .....

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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, .....

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uppressed by Sri N. Chandrasekhar Rao regarding dilution of shareholding constitutes suggestion of falsehood in terms of the maxim suppressio veri suggestio falsi. It is further stated that on June 15, 2012, in another affidavit filed in the company petition seeking extension of time for providing the books of account of the applicant to the official liquidator, Sri N. Chandrasekhar Rao stated that the records of the company are in bad shape and the applicant-company is in the process of compili .....

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ther stated that after falsely admitting the liability towards the petitioner and collusively obtaining a winding up order against the applicant, Sri N. Chandrasekhar Rao by filing the application under section 446 of the Companies Act sought to utilise the order dated July 6, 2012, to prevent the bankruptcy receiver for QLS from further proceeding in its attempts from controlling the affairs of Mack Soft and thereby perpetrated the abuse of process of the court. 3. The applicant-company further .....

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continued financial crunch that the respondent-company as is presently facing and requested the petitioner to bear with the company in view of ongoing financial crunch and has been trying to clear the outstanding dues of the petitioner by trying to arrange funds 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 ave .....

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learly 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 relevant information and suppressing material .....

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the present application is defective in the absence of properly authorised and executed documents. It is stated that the dispute in the present application relates to non-payment of contractual dues by the applicant-company under the agreement dated May 4, 2011 and the validity of the agreement dated May 4, 2011, has not been disputed even by the applicant-company and the only allegation levelled against them is that they have not disclosed the correct financial condition of the applicant-compa .....

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ing through the bankruptcy receiver issued to the applicant-company a letter of requisition for calling an extraordinary general meeting of the applicant seeking removal of the existing directors of the applicant-company and for appointment of new directors in their place, pursuant to which a notice of the extraordinary general meeting dated January 23, 2012, was issued on behalf of the applicant-company and the extraordinary general meeting was held on February 18, 2013 and therefore, it is cle .....

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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 doc .....

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eet its admitted liabilities and mere fact that it owed monies by Mack Soft is completely immaterial since the same would be a claim by the applicant against Mack Soft and cannot be a ground to deny payment of its admitted liabilities. It is further stated that on the date of agreement executed, there was no order appointing the bankruptcy receiver as receiver in bankruptcy of Quinn Logistics Sweden, AB, and it is in conceivable as to on what basis the applicant has alleged that attempts are bei .....

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77; 45,00,000 was to be paid to the petitioner by the applicant on provision of satisfactory services by the petitioner and the same was admitted by respondents Nos. 1 and 2/non-applicants Nos. 1 and 2 that although the amount was due to the petitioner by the applicant-company, the applicant-company was unable to pay dues on account of the present financial condition of the applicant-company and that the question of action being initiated against the respondents for having committed the offence .....

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of fresh equity by Mack Soft in June, 2011 to Mecon FZC and the transfer of the applicant's shareholding in August, 2011 to UCA Logvis AG., as on date the applicant is not a shareholder of Mack Soft and the dispute relating to the above transactions are pending before the District Court, Ranga Reddy in O. S. Nos. 21 of 2012 and 1303 of 2013. It is further stated that as per the audit report, a balance loan of INR 62,91,40,790 is pending on the books of Mack Soft as payable to the applicant .....

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ted 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 narra .....

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p order would go to show that non-applicants Nos. 1 and 2 played fraud and are responsible for winding up the applicant-company. He also contends that the court, while appointing provisional liquidator, observed that the counter filed was vague and non-applicants have not given the details of assets of the applicant company and that non-applicants Nos. 1 and 2 are duty bound to place correct facts in the applications filed in C. P. No. 30 of 2012 and suppressed the information relating to the ap .....

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bmits that non-applicants Nos. 1 and 2 are legally bound to state truth in their affidavits but they failed to do so, as such, they are liable to be punished. He further contends that in an enquiry to be held by the court under section 340(1) of the Code of Criminal Procedure, 1973, irrespective of the result of the main case, the only question is whether prima facie case is made out, which, if unrebutted, may have a reasonable likelihood to establish the specified offence and whether it is also .....

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Cr.P.C., only the Court of Session and the Magistrate of 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 offenc .....

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nds 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 Robert Dix is filed along with the counter affidavit in Company Petition No. 30 of 2012 shows that Robert Dix was director and singly or jointly authorised to file applications, representations, plaints on behalf of the applicant-company. As suc .....

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2012, in C. A. No. 127 of 2012, the court has not recorded any finding regarding collusion or playing fraud by non-applicants Nos. 1 and 2 in this company application. He submits that unless the court records any, prima facie, finding about involvement of non-applicants in the recall application in C. A. No. 127 of 2012, the court cannot render a finding under section 340(1) of the Cr.P.C. He also submits that at the time of final disposal of the case itself, specific finding has to be recorded .....

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to perjury and Sri Robert Dix, who filed the present application, is not a director and no resolution is passed authorising him to prosecute the present application. In support of his contentions, he relied on Shabir Hussain Bholu v. State of Maharashtra AIR 1963 SC 816 and Chandrapal Singh v. Maharaj Singh [1982] 1 SCC 466. 8. Before going into the merits of the case, it may be relevant to refer relevant provisions of the Indian Penal Code as well as the Code of Criminal Procedure, which are e .....

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se 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 fraudulent .....

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fence 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 .....

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n application for the making of such complaint, be exercised by the court to which such former court is subordinate within the meaning of sub-section (4) of section 195. (3) A complaint made under this section shall be signed,- (a) where the court making the complaint is a High Court, by such officer of the court as the court may appoint ; . . . 195. Prosecution for contempt of lawful authority of public servants, for offences against public justice and for offences relating to documents given i .....

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judicial proceeding, a Court of Session or Magistrate of the first class expresses an opinion to the effect that any witness appearing in such proceeding had knowingly or wilfully given false evidence or had 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 evidenc .....

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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, the words "Court of Session or Magistrate of First Class" are used in section 344(1) of t .....

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vidence or had fabricated false evidence with the intention that such evidence should be used in such proceeding and after giving a reasonable opportunity to the offender 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. Sub-section (3) of section 344 of the Cr.P.C., says that nothing in section 344 shall affect .....

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P.C., 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. So, expression of opinion regarding giving false evidence at the time of final disposal of the main case under section 344 of the Cr.P.C., is not a condition precedent for invoking section 340 of the Cr.P.C., and hence, the power under section 340 of the Cr.P.C., can be invoked upon an application .....

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ears 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 sectio .....

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o as representative of Mack Soft before the Ranga Reddy Court shows that INR 62,91,40,790 (INR 62.91 crores) is due to the applicant from Mack Soft and the amounts due from Mack Soft to applicant are also admitted in the counter to the present application. (2) I submit that the respondent-company does not have any assets at all-But the audit report filed by Sri N. Chandrasekhar Rao as representative of Mack Soft before the Ranga Reddy Court shows that INR 62,91,40,790 (INR 62.91 crores) is due t .....

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that the affidavit filed by Sri N. Chandrasekhar Rao, prima facie, goes to show that he has given false statement that the applicant-company does not have assets at all and non-payment of outstanding amount due by the applicant-company was due to prevailing financial conditions of the applicant-company. Even in the counter affidavit, it is not the case of Sri N. Chandrasekhar Rao that they are unable to get the amount from Mack Soft and Mack Soft is not paying the amounts by which the applicant .....

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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 .....

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sumption 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 .....

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