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TMI Blog2020 (2) TMI 479X X X X Extracts X X X X X X X X Extracts X X X X ..... mount of Rs. 75,600/- towards arrears of service charges @ Rs. 2100/- per month for the period from November, 2004 to October, 2007. The appellants are legal heirs of Mr. Keshrichand B. Shah deceased Proprietor of M/s. Union Commercial Corporation which came to be dissolved on the demise of its Proprietor on 22nd January, 1980. 3. Respondent No.1 is a partnership firm and was a licencee of the subject premises which is situate on the third floor of Churchgate House 32, Veer Nariman Road, Fort, Mumbai - 400 023. Appellant No.2 is the Director of M/s. Modern Products Private Limited. It is contended that respondent No.1 were liable to pay service charges @ Rs. 2100/- per month to M/s. Union Commercial Corporation for the use of furniture and fixtures in the said licence premises. After the death of Mr. Keshrichand B. Shah, respondent No.1 had paid service charges to the appellants till October, 2004. Thereafter, they were in arrears of charges with effect from November, 2004 to October, 2007 amounting to Rs. 75,600/-. 4. Despite due service upon respondent No.1 in June, 2008 by registered post, none appeared and, therefore, the suit proceeded further before this Court. Subsequently ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and respondent No.3 are not licensee of M/s. Modern Products Private Limited of which appellant No.1 is a Director. It is held that respondents No.2 and 3 have been unlawfully inducted by respondent No.1 in the said premises without permission of M/s. Modern Products Private Limited. 9. In Revision Application No.32 of 2009 in Exhibit 11 in L.E & C Suit No.139/158 of 2007, Division Bench of the Small Causes Court, by an order dated 6th April, 2009 upheld the order of the Judge, Small Causes Court. Thus, it is contended that respondent No.2 is trying to make a backdoor entry by projecting themselves as successor of respondent No.1. 10. Thus, according to the appellants, respondent No.2 had made a totally false statement through respondent No.3 who is the Director of respondent No.2 and is also a full time practicing Chartered Accountant having full and complete knowledge of the provisions of Part IX of the Companies Act, 1956 who on oath stated that respondent No.2-Company is converted into and consequently it is the successor of respondent No.1Firm, under Part IX of the Companies Act 1956 only to dishonestly deceive and manipulate the appellants and the trial Court. 11. It is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondent No.1, it should be given an opportunity to defend the suit. The learned Counsel, therefore, supported the impugned order passed by the trial Court. 15. A short question which needs determination is as to whether respondent No.3-Mr. Himanshu Patwa, director of Nak Engineering Company Private Limited, knowingly and intentionally had sworn false affidavits in Notices of Motion No.1925 of 2017 and 1346 of 2018 so as to say that respondent No.2-Company was the successor of respondent No.1Firm under Part IX of the Companies Act, 1956 which tantamounts to giving or fabricating false evidence at any stage of judicial proceedings? The answer is in the affirmative for the reasons to follow. 16. I have meticulously gone through the entire record vis-a-vis, the impugned order. A detailed procedure is laid down in the Companies Act, 1956 for converting a partnership firm into a Limited Company under Part IX of the Companies Act. 17. Following are the few basic requirements and procedure contemplated in Companies Act, 1956; (a) There should be at least seven or more members to form a Limited Company under Part IX of the Companies Act, 1956; (b) There is a requirement of Form No.1A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve, if juxtaposed with affidavit sworn in by respondent No.3 who is admittedly a full time practicing Chartered Accountant and a Member with the Institute of Chartered Accountants of India and also a Proprietor of Himanshu Y Patwa and Company has had complete knowledge as regards the provisions of Part IX of the Companies Act, 1956. Despite being aware about legal niceties, he appears to have knowingly made a statement on oath that respondent No.2-Company is converted and consequently is the successor of respondent No.1-Firm under Part IX of the Companies Act, 1956 which can only be said to be with a dishonest intention. 21. The learned Counsel for the appellants has, therefore, rightly placed a useful reliance on a decision of the Supreme Court in case of Amarsang Nathaji Vs. Hardik Harshadbhai Patel, AIR 2017 Supreme Court Cases 113. It would be apposite to refer to paragraphs 5 and 6 of the judgment which read thus; "5. There are two preconditions for initiating proceedings under Section 340 Cr. PC: (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 340 CrPC falls under Chapter XXVI of the Code - "Provisions as to Offences Affecting the Administration of Justice". Either on an application or otherwise, if any court forms an opinion that it is expedient in the interest of justice that an inquiry should b made in respect of an offence referred to under Section 195 CrPC which appears to have been committed in relation to a proceeding in that court, the court after such preliminary inquiry, enter a finding and make a complaint before the Magistrate of competent jurisdiction. It is this jurisdiction which has been invoked suo motu by the High Court in the criminal appeal, leading to the impugned order. 11. Section 340 CrPC, prior to amendment in 1973, was Section 479-A in the 1898 Code and it was mandatory under the pre-amended provision to record a finding after the preliminary inquiry regarding the commission of offence; whereas in the 1973 Code, the expression "shall" has been substituted by "may" meaning thereby that under the 1973 Code, it is not mandatory that the court should record a finding. What is now required is only recording the finding of the preliminary inquiry which is meant only to form an opinion of the court, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for finding whether any particular person is guilty or not. Far from that, the purpose of preliminary inquiry, even if the court opts to conduct it, is only to decide whether it is expedient in the interest of justice to inquire into the offence which appears to have been committed." 25. Thus, it is quite clear that after having gone through the entire material on record, prima facie opinion can be formed that an inquiry needs to be initiated into an offence/s referred to in clause (b) of sub section (i) of section 195 Cr. P.C. It must be noted that an inquiry contemplated in sub section (i) is not for finding whether the respondents are guilty or not but it is restricted only to the extent as to whether it is expedient in the interest of justice to inquire into the offence which appears to have been committed. The ratio is, therefore, squarely applicable to the present set of facts. 26. The learned Counsel for the respondents has also placed reliance upon a judgment of the Supreme Court in the case of Chajoo Ram Vs. Radhey Shyam, AIR 1971 Supreme Court 1367. The essence of the judgment can be found in paragraph 7 which reads thus; "7. The prosecution for perjury should be sanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ained to allow the appeal and set aside the order directing complaint to be filed". (emphasis supplied) 27. The ratio laid down by the Hon'ble Supreme Court in this judgment is in consonance with the judgment of the Supreme Court in case of Premsagar (supra). Thus, giving of false evidence in the form of an affidavit or fabricating false evidence in the judicial proceeding needs to be dealt with an iron hand. Nevertheless, for initiating prosecution for perjury too readily and too frequently without due care and caution and on inconclusive and doubtful material defeats its very purpose as has been observed in the case of Chajoo Ram (supra). As already stated that the material on record qua the conduct of the respondents clearly indicates that it is expedient in the interest of justice to initiate an inquiry. There is, prima facie, case of deliberate falsehood on the part of the respondents. The ratio, I am afraid, is not of any assistance to the respondents' case. 28. As such, the learned trial Judge has erred not only in fact but also in law to take into consideration the true scope and ambit of Part IX of the Companies Act, 1956 as well as clause (b) of sub section (i) of Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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