TMI Blog2020 (12) TMI 759X X X X Extracts X X X X X X X X Extracts X X X X ..... ed when without asking the Adjudicating Authority to pick and send the admitted and disputed signatures for report of Handwriting Expert, on its own it sent documents which were in its possession and then brandished the said Report filing I.A. No. 62 of 2020 asking the Adjudicating Authority to take it on record. What the conclusion of that Report can be seen from Paragraph 8 of I.A. No. 62 of 2020 (Annexure P8 Page 141 at 144). The Corporate Debtor claimed that the Report dated 2nd March, 2020 conclusively found that the signature of Mr. Praful Prakash Bafna in I.A. Nos. 41 and 42 of 2020 were not naturally executed but they must have traced/transplanted/copy-pasted . When the admitted and disputed signatures were not sent through the Adjudicating Authority, and Corporate Debtor sent copies of documents it had, such report could naturally be expected. Copy of the Report has not been placed before us. Even without going into the merit whether or not, the signatures are matching, the Appellant has not shown that the Financial Creditor or Mr. Praful Prakash Bafna the authorized Signatory had anything to gain by authorized signatory not signing. The contents of the I.As were false ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 and 62 of 2020 in C.P. (I.B) No. 204/7/AMR/2019 (CP/204/2019 in short). 2. The Corporate Debtor had filed I.A. No. 51 and 52 of 2020 mentioned above seeking to initiate Criminal Proceedings against Mr. Praful Prakash Bafna, the authorized signatory of Financial Creditor under Section 340 read with Section 195 (1) (b) (i) of Cr. P.C. read with Section 193 of Indian Penal Code, 1860 (Penal Code in short), after conducting preliminary inquiry and to call Mr. Praful Prakash Bafna for cross-examination. The Corporate Debtor claimed that the signatures on I.A. Nos. 41 and 42 of 2020 by which Applications Financial Creditor sought restoration of Company Petition and restoration of Interim Orders passed earlier in the Company Petition C.P. (I.B) No. 204/7/AMR/2019 (CP/204/2019 in short) were forged. The Adjudicating Authority accepted Memo filed by Financial Creditor and I.A. Nos. 41 and 42 of 2020 were dismissed as not pressed; disposed I.A. Nos. 51 and 52 of 2020 with observations that the Corporate Debtor may approach appropriate forum for redressal; I.A. No. 62 of 2020 (which was filed by Corporate Debtor to bring on record the report of Forensic Expert) was dismissed as infruc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of India (Insolvency Resolution Process for Corporate Persons) Regulations 2016 for further action in the matter and disposed of the present Company Petition. The Operational Creditor M/s. Eshwar Enterprises and the Corporate Debtor reached an out of court settlement and filed I.A. No. 37 of 2020 (in the other Company Petition) for withdrawal of the said Company Petition. This Authority by an order dated 21.02.2020 allowed the IA No. 37 of 2020 and permitted withdrawal of the other Company Petition. 3. The basis of the order dated 13.02.2020 in the present Company Petition thus having set at naught, the Financial Creditor accordingly filed IA No. 41 of 2020 seeking restoration of the present Company Petition and IA No. 42 of 2020 seeking restoration of the interim order dated 02.12.2019 of this Authority. The Respondent (CD) filed his counter to both the IAs. At the same time it also filed two applications namely, IA Nos. 51 of 2020 and 52 of 2020 alleging forgery of the signature of the Applicant(FC) in IA Nos. 41 and 42 of 2020. Counters were sought and the matter was listed for hearing. On 13.03.2020 the CD filed another application vide IA No. 62 of 2020 praying to recei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2020. Since the present IAs were pending this Authority by order dated 02.06.2020 directed not to number the IA. 5. We have seen the Appeal Memo also and above developments are reflected in the Appeal Memo also. The Adjudicating Authority in the chronology missed making reference that the Financial Creditor filed I.A. No. 69 of 2020 on 05th May, 2020 with identical prayers as in I.A. Nos. 41 and 42 of 2020; and that, when Memo dated 29th May, 2020 was filed the Financial Creditor had also filed Affidavit reverifying the contents of the Affidavit in I.A. No. 41 of 2020. 6. It appears that the Financial Creditor claimed before the Adjudicating Authority that by raising disputes with regard to I.A Nos. 41 and 42 of 2020 the Corporate Debtor was creating obstruction in the restoration of CP/204/2019 with other motives with regard to the property of the Corporate Debtor so as to defeat the claims of the Financial Creditor. Thus, the I.A. Nos. 41 and 42 of 2020 were being withdrawn with liberty to file fresh I.A. The Adjudicating Authority recorded following reasons to suo motu restore CP/204/2019: 6 The Financial Creditor made the Applications IA Nos. 41 and 42 of 2020 soo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or other technicalities. Therefore I am not inclined to grant the Applicant (FC) liberty to file another Application for the self-same prayer. Accordingly, I have no reason before me to allow withdrawal of the Application and at the same time grant liberty to file another. The withdrawal simpliciter can however be permitted. The reverifying affidavit has no bearing on the issues raised in the IA Nos. 51 and 52 of 2020. Therefore, it needs no consideration. 7. The Adjudicating Authority recorded further reasons that the Financial Creditor could not be left without remedy as there was no negligence on the part of the Financial Creditor, when the Company Petition was disposed because the other Petition of M/s. Eshwar Enterprises was admitted. The Adjudicating Authority recorded that the Financial Creditor had a right to file the Company Petition and was entitled to get the same decided on merits. Relying on the dicta that procedure is the handmaiden of Justice the Adjudicating Authority granted the relief suo motu. 8. The Adjudicating Authority observed that although the Applications (I.A. No. 41 and 42 of 2020) are not pressed the Petitioner can not be left without remedy an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tter of Narendra Kumar Srivastava Vs. State of Bihar ((2019) 3 SCC 318) it has been held that for offence under Section 193 of the Penal Code, procedure under Section 340 read with Section 195 (1)(b)(i) of Cr. P.C. has to be followed. It is argued that submitting forged affidavit means to giving forged evidence under Section 193 of IPC. For offence of perjury, the Judicial Proceeding has to be initiated by the same Court and according to the Learned Counsel complaints should have been filed after holding preliminary inquiry. 11. Against this, the case put up by the Financial Creditor/Respondent is that discrepancies in the signatures of the Interim Applications, if any, were entirely inadvertent, accidental and due to sheer chance or ignorance (see Written-Submissions of Respondent Diary No. 23599). The Respondent has also filed Reply Diary No. 21564. The Argument of Respondent/Financial Creditor is that Mr. Praful Bafna had filed Affidavit dated 09th May, 2020 before the Adjudicating Authority reaffirming the contents of I.A. No. 41 and 42 of 2020. It is argued that the Corporate Debtor maliciously raised contentions that Mr. Praful Bafna s signatures were forged and Criminal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as was held in the matter of Dr. Vimla Vs. Delhi Administration by Hon ble Supreme Court in Criminal Appeal No. 213 of 1960 decided on 29th November, 1962 (MANU/SC/0163/1962) (1963 SCR Supl. (2) 585). The Financial Creditor has submitted that to order prosecution of perjury there must be prima facie case of deliberate falsehood and matter of substance and Court has to be satisfied that there is reasonable foundation for the charge. Mere inaccurate statement can not be basis for charge of perjury. It is argued that I.A. Nos. 41 and 42 of 2020 were filed with bona fide intention to restore CP/204/2019 and to restore earlier order dated 2nd December, 2019. It is further argued that under Section 340 of Cr. P.C. Court is not bound to make a complaint regarding commission of offence referred in Section 195 (1) (b) (i) as the Section is conditioned by the words Court is of opinion that it is expedient in the Interest of Justice to initiate proceedings. Suo Motu Restoring of C.P.(IB) 204/7/AMR/2019 12. Having heard Learned Counsel for parties and having gone through the record as has been placed before us, firstly we look into the Impugned Order suo motu restoring CP/204/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... serted by Act 31 of 2016 with effect from 15th November, 2016) Adjudicating Authority is guided by Principles of Natural Justice. The Adjudicating Authority has ample Inherent powers even under Rule 11 of the National Company Law Tribunals Rules, 2016 to make such Orders as may be necessary for meeting ends of justice or to present abuse of the process of the Tribunal. If the Adjudicating Authority in order to cut short the delay which was being caused due to the controversies raised by the Corporate Debtor and consequential abuse of process suo motu restored CP/204/2019 we do not find that it committed any error. The Interest of Justice and the facts and circumstances of the matter required such suo motu action on the part of the Adjudicating Authority. We thus maintain this part of the order of the Adjudicating Authority. Such action for Criminal Prosecution should have been taken? 13. The Adjudicating Authority in the impugned Order observed that no order of prosecution of the person verifying the affidavit can be ordered by the Authority and it was outside the realm of jurisdiction of the Authority. For such reasoning, the Adjudicating Authority without going into th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate Tribunal to send for execution of its orders to the court within the local limits of whose jurisdiction,- (a) in the case of an order against a company, the registered office of the company is situate; or (b) in the case of an order against any other person, the person concerned voluntarily resides or carries on business or personally works for gain. (4) All proceedings before the Tribunal or the Appellate Tribunal shall be deemed to be judicial proceedings within the meaning of sections 193 and 228, and for the purposes of section 196 of the Indian Penal Code, and the Tribunal and the Appellate Tribunal shall be deemed to be civil court for the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973 (2 of 1974). (Emphasis Supplied) 14. Now Section 195 of IPC requires reference. The same reads as follows: (1) No Court shall take cognizance- (a) (i) of any offence punishable under sections 172 to 188 (both inclusive) of the Indian Penal Code (45 of 1860 ), or (ii) of any abetment of, or attempt to commit, such offence, or (iii) of any criminal conspiracy to commit such offence, except on the comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subordinate to the Civil or Revenue Court according to the nature of the case or proceeding in connection with which the offence is alleged to have been committed. 15. Section 340 of Cr. P.C. is also relevant and is as follows: 340. (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 subsection (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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pter XXVI contains Section 340 of Cr. P.C. As per Section 5 (1) of IBC the Adjudicating Authority for the purposes of Part-II of IBC, means National Company Law Tribunal constituted under Section 408 of the Companies Act, 2013. Under Section 61 of IBC any person aggrieved by the order of the Adjudicating Authority may prefer an Appeal to National Company Law Appellate Tribunal. These Provisions make it clear that Adjudicating Authority was not right in its observations that it did not have jurisdiction to order Prosecution. In our view in appropriate case, the Adjudicating Authority has powers to act in terms of Section 340 of Cr. P.C. read with Section 195 of Cr. P.C. Under Section 340 of Cr. P.C. the Adjudicating Authority can hold preliminary inquiry if it is of opinion that it is expedient in the Interest of Justice that an inquiry should be made into the any offence referred 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, i.e.-Adjudicating Authority, here. 18. The Learned Counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ous. It emphatically held as under: (SCC p. 779, para 7) 7. The prosecution for perjury should be sanctioned by courts only in those cases where the perjury appears to be deliberate and conscious and the conviction is reasonably probable or likely. No doubt giving of false evidence and filing false affidavits is an evil which must be effectively curbed with a strong hand but to start prosecution for perjury too readily and too frequently without due care and caution and on inconclusive and doubtful material defeats its very purpose. Prosecution should be ordered when it is considered expedient in the interests of justice to punish the delinquent and not merely because there is some inaccuracy in the statement which may be innocent or immaterial. There must be prima facie case of deliberate falsehood on a matter of substance and the court should be satisfied that there is reasonable foundation for the charge. 19. In Santokh Singh V. Izhar Hussain (1973) 2 SCC 406 : 1973 SCC (Cri) 828 , this Court has held that every incorrect or false statement does not make it incumbent on the court to order prosecution. The court has to exercise judicial discretion in the light of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ures below (Annexure P5 Page 88 to 101) I.A. No. 41 of 2020 and I.A. No. 42 of 2020. On various pages of the two I.As the rubber stamps of the Director/Authorized Signatory (as on Authorization, Company Petition and Vakalatnama) are put, and signed. The affidavits filed in support are notorised. 22. The Corporate Debtor is insisting only with regard to the signatures on I.A. Nos. 41 and 42 of 2020. The Financial Creditor filed I.A. No. 69 of 2020 (Annexure P9 Page 148) which shows that the Financial Creditor opposed the I.A. Nos. 51 and 52 of 2020 of the Corporate Debtor as well as the I.A. No. 62 of 2020 (Annexure P8) that the same was filed to create procedural and technical hurdles and to divert attention of the Tribunal making false and baseless allegations against the Financial Creditor. The Application sought to restore the CP/204/2019 and the earlier order dated 2nd December, 2019. Similar averments were made in subsequent Memo (Annexure P10 page 154) and Financial Creditor claimed that with regard to I.A Nos. 41 and 42 of 2020 wrongful contentions issues are raised causing unreasonable delay and deviations and that to expedite hearing of the Petition it wants to with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 42 and has thereafter withdrawn the IA Nos. 41 and 42. It is submitted that a purported difference in a signature does not mean that it is fraud or perjury. Signatures of a person do vary at different points of time. It is also an established rule of law that a defect in regard to the signature on a plaint is a technical irregularity relating to matters of procedure which can be cured at any time irrespective of the limitation or other procedural hurdles. These unwarranted and fictitious accusations are a feeble attempt by the Appellant to mislead the Hon ble Appellate Tribunal and create hurdles to delay the progress of CP (I.B) 204/7/AMR of 2019 pending before the Hon ble Tribunal. It is also not the case of the Appellant that any unfair advantage or a dishonest gain or profit has been made by the Respondent in not deliberately appending his signatures on the aforementioned applications. The Offences complained of by the Appellant necessarily entail mensrea, in the absence of an intent the offence is not made out. Moreover, no unfair advantage or dishonest gain has been made by the Respondent by not reproducing the exact same signatures on the aforementioned applications. Fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to term the act as fabricating false evidence . No prima facie material is shown by Corporate Debtor that by Praful Bafna himself not signing, the Adjudicating Authority would entertain an erroneous opinion touching any point material to the result of the proceeding. (This is not to be taken as any finding whether or not he signed. We are only seeking material for opinion as required under Section 340 of Cr.P.C.) In the facts of the matter it does not appear to us that it is expedient in the Interest of Justice that an inquiry should be made under Section 340 of Cr. P.C. No such case was made out before the Adjudicating Authority and the Appellant has not convinced us that Interest of Justice required an inquiry to be held and so the order of Adjudicating Authority should be interfered with. 27. We have taken note of the relevant circumstances and the reasons for the Financial Creditor to move I.A. Nos. 41 and 42 of 2020 and the controversy raised by the Corporate Debtor and it appears to us that there is an element of frivolity in the disputes being raised by the Corporate Debtor. From the facts of the matter, we are unable to form opinion that it is expedient in the inte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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