NCLAT Judgment per-incuriam
NCLAT Judgment per-incuriam
The judgment in KVR Industries
Pvt. Ltd. Vs. P.P. Bafna 2020 Scc Online NCLAT 828 is against the law laid
down by the Supreme Court
FOR DETAILS ABOUT LAW ON PERJURY AND SPECIALLY REGARDING PROVISIONS OF SEC 340 OF CR. P.C. READERS CAN DOWNLOAD THE BOOK OF 'LAW ON PERJURY -2021' WRITTEN BY ADV. NILESH OJHA FROM WEBSITE OF INDIAN BAR ASSOCIATION WHICH IS BEING LAUNCHED VERY SOON.
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 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.
However the adjudicating authority of NCLT disposed the I.A. Nos. 51 and
52 of 2020 with observations that the Corporate Debtor may approach appropriate
forum for redressal. Said order was challenged before NCLAT.
The NCLAT Bench of Justice A.I.S Cheema and V.P. Singh had refused to
proceed with the enquiry under Sec. 340 of Cr. P. C. on the following grounds;
i) If it is not shown the exact benefit/advantage taken/being taken by
the accused due to forging the signature then action under Sec. 340 of Cr. P.
C. is not called for.
ii) The appellant/Corporate Debtor has not prima-facie shown any
intention or mens rea on the part of the accused i.e. financial creditor.
iii) The defence of accused is having substance that he will not have any
advantage of benefit of putting false signature.
All the above said reasons given by the NCLAT in its judgment are against the basic principles of criminal jurisprudence and against the binding precedents of Hon’ble Supreme Court and judgments are called anticipatorily- overruled or per-incuriam judgments and they lose their efficacy as binding precedents.
GROSS ILLEGALITIES IN THE JUDGMENT
said judgment is passed by taking the defence of the accused in to
consideration and therefore it is vitiated in view of law laid down in
following binding precedents;
i) A- One Industries Vs. Shri D.P. Garg
1999 SCC OnLine Del 533
ii) Devinder Mohan Zakhmi Vs. The
Amritsar 2002 SCC OnLine P&H 439
iii) Karim Fathima 2009 All MR Journal 21
M. Narayandas Vs. State (2003) 11
v) Pritish Vs. State (2002)
1 SCC 253
above precedents it is ruled that during hearing an application under Sec. 340
of Cr. P. C. the accused will not have any say or right to participate either
before lower Court or before Appellate/Revisional Court. The order/judgment passed by taking the defence of prospective accused
in to consideration is illegal and vitiated.
1.2. The provision for Appeal against order by sub ordinate bench is given in sec 341 of Cr. P.C. and it is a special section where the Appellate Bench can exercise the same power as that of sub ordinate bench and therefore the prospective accused cannot be made respondent nor he is allowed to participate in the Appeal. Even if he appears then also his defence cannot be taken in to consideration.
1.2. The observation of the NCLAT Bench that, since the Appellant failed to show as to what advantage/benefit the accused are going to take from the said act of forging the signature therefore it cannot be treated as an offence against administration of justice are also wrong and against the binding precedents of Hon’ble Supreme Court in following landmark judgments;
Sciemed overseas Inc. Vs. BOC India Ltd. 2016
(3) Punj L J 28
Murray & Co. Vs. Ashok Newatia (2000) 2 SCC
2.1. In Radhey
Shyan Garg Vs. Naresh Kumar Gupta (2009) 13 SCC 201 Hon’ble Supreme Court
had directed the prosecution on the ground of mismatch of signatures. It is
ruled as under;
“22. …. However, keeping in view the
fact that there appears to be an apparent dissimilarity in the signatures of
the deponent appearing at pp. 39 and 61, we are of the opinion that there
exists a necessity for conducting an enquiry in this behalf. We, therefore,
direct the Registrar (Judicial) to conduct an enquiry in terms of Section 340
of the Code of Criminal Procedure and submit a report to this Court. We,
however, make it clear that trial of the matter shall go on before the court
3. Hence it is clear that the judgment of
NCLAT is per-incuriam.
4. RELEVANT PARAS FROM THE BINDING PRECEDENTS
PROVING ILLEGALITY OF THE JUDGMENT BY NCLAT.
“ False affidavit – Whether the respondent has obtained a definite
advantage of this false statement or not, is wholly immaterial in the matter of
commission of offence –
cannot escape the liability of being held guilty of contempt by reason of a
definite and deliberate false statement. The statement on oath is a fabricated
one and contrary to the facts - The fact
that the deponent has in fact affirmed a false affidavit before this Court is
rather serious in nature and thereby rendered himself guilty of contempt of
this Court as noticed hereinbefore. This Court in our view, would be failing in
its duties, if the matter in question is not dealt with in a manner proper and
effective for maintenance of magesty of Courts as otherwise the Law Courts
would lose its efficacy to the litigant public. It is in this perspective that
we do feel it expedient to record that by mere tendering of unconditional
apology to this Court would not exonerate the contemnor in the contextual facts
but having regard to the nature of the act of contempt, we do deem it fit to
impose a fine of Rs. 2,500 each so as to sub-serve the ends of justice against
the respondent-contemnors in default of payment of which they (each of them)
will suffer simple imprisonment for one month.
4.2. In Sciemed
overseas Inc. Vs. BOC India Ltd. 2016 (3) Punj L J 28; it is ruled as
“ The fact of the matter is that a false or
misleading statement was made before this Court and that by itself is
enough to invite an adverse reaction.
Rs. 10 lakh cost imposed.”
5. NO RIGHT OF ACCUSED TO PARTICIAPTE HEARING UNDER SEC 340 AND 341 OF CR. P.C.
5.1. In Madangopal
Banarasilal Jalan & others vs. Partha s/o Sarathy Sarkar 2018 SCC OnLine Bom 3525 it is ruled as under;
“A] The accused does
not have any say in the process of accepting the application u/s 340 of Cr.P.C
or directing the preliminary inquiry.
The legal position is settled by Supreme Court in Pritesh
Vs. State of Maharashtra AIR 2002 SC 236 The said legal position is
5.2. In M. Narayandas Vs. State (2003) 11 SCC
251 it is ruled as under;
“Court cannot draw conclusion about
falsity of complaint on the basis of submission of ACCUSED. (Para No. 6)”
5.3. Hon’ble Bombay High
Court in the case of Tushar
Galani Vs. Jagdeesh 2001 ALL MR (Cri.) 46 it is ruled as under ;
P.C.(1973),Ss.202,204- Issue of process –Magistrate cannot issue notice to
proposed accused as to why process be not issued against him for the alleged
The learned Magistrate could not have evolved new
procedure which is not contemplated by law. The accused has no locus standi in
the matter before issuing process against him and therefore, he is not entitled
to be heard before process is issued against him. The learned Magistrate has to
consider the question of issuing process purely from the point of view of the
complainant without reference to any defence that the accused may have. At the stage
of issuing, the Magistrate cannot enter into a detailed discussion on the
merits or demerits of the case.”
5.3. In Ashok Mootilal Saraogi Vs. State it is ruled as under;
fabricating/preparing bogus documents and using in court –
Court ordering, registration of FIR – Opportunity of hearing to accused
need not be given prior to ordering prosecution (Para No. 4)”