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IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 11120   OF 2016 (Arising out of S.L.P.(C) No. 13749 of 2016)

AMARSANG NATHAJI AS HIMSELF AND AS KARTA AND MANAGER          ...  APPELLANT (S)

VERSUS

HARDIK HARSHADBHAI PATEL AND OTHERS           ... RESPONDENT(S)

J  U  D  G  M  E  N  T

KURIAN, J.:

Leave granted.  

2. The scope of this appeal is limited to the challenge on

legality of the proceedings under Section 340 of the Code of

Criminal  Procedure,  1973  (hereinafter  referred  to  as  “the

Code”)  initiated  by  the  High  Court  as  part  of  the  impugned

judgment dated 12th/13th April, 2016 in Appeal from Order No.

489 of 2013 on the file of the High Court of Gujarat. The appeal

before the High Court arose from an order passed by the Senior

Civil Judge, Ahmedabad declining to grant an interim injunction,

in Civil Suit No. 28 of 2012. Having extensively referred to the

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materials  on  record,  the  High  Court  after  elaborately

considering the arguments, by a detailed judgment, dismissed

the appeal, confirming the order passed by the trial court. The

plaintiff/respondent had also approached this Court by way of a

Special  Leave  Petition  (Civil)  No.  14478  of  2016.   The  said

Special Leave Petition has been dismissed on 15.11.2016 as not

pressed on the submission that the parties have reached an

amicable settlement on the issue.

3. The High Court, on account of the contradictory stand

taken  by  the  appellant  herein  who was  the  first  respondent

before the High Court (Defendant no.1 in the Suit),  took the

view  that  the  conduct  of  the  appellant  has  affected  the

administration of justice, and therefore, it was expedient in the

interests  of  justice  to  file  a  complaint  against  the  appellant

under Section 340 of the Code.

4. It is necessary to refer to the relevant paragraphs in the

judgment where the High Court has dealt with the issue:

“19. Before  concluding,  the  Court  deems  it necessary to take serious view on the conduct of the respondent No.1 – defendant No.1, who either for  an  extraneous  consideration,  or  to  save  his skin, has taken contradictory stands in the judicial proceedings  by  filing  one  written  statement  at Exh.  20  supporting  the  case  of  the  present

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appellant – plaintiff and subsequently by filing the application at Exh. 43, and other documents in the nature  of  affidavits  supporting  the  case  of  the respondents  No.3  to  5.  It  appears  that  the respondent No.1 has tried to change his version after the impugned order was passed by the trial Court,  just  to  suit  his  purpose,  misusing  and abusing  the  process  of  law.  The  Court  is constrained to observe that due to sky-rocketing escalation in the prices of the lands in and around the  urban  areas,  the  execution  of  such  illegal agreements  at  the  instance  of  the owners/power-of-attorney  holders/banakhat holders has become rampant, and that more often than  not,  the  proceedings  of  Courts  are  being misused  and  abused  to  a  large  extent  by  such unscrupulous elements.  In  many cases,  innocent persons are being cheated and defrauded by such elements,  in  the  quest  of  earning  easy  money, dragging  such  innocent  persons  to  litigations which go on for years together. 20. In the instant case also, the respondent No.1 – defendant No.1 after requesting the trial Court to reopen his right to file written statement, and after filing written statement at Exh.20 along with the affidavit  and  declaration  supporting  the  case  of the appellant – plaintiff, had filed an application at Exh. 43, requesting the trial Court to de-exhibit the earlier  written  statement  at  Exh.  20  by  stating, inter alia, that the said written statement was filed by  the  Advocate  Ms.  Trupti  Patel  on  his  behalf without  his  knowledge.  The  said  Application  at Exh.  43  was  rejected  by  the  trial  Court,  which order  has  remained  unchallenged.  All  these documents namely the written statement at Exh. 20  with  affidavit  and  declaration  and  the  other written statement and the affidavit filed before the trial Court have also been produced by the learned Counsels for the parties in the present proceedings and have been relied upon by them,  to  support their  respective  contentions.  From  the  said documents on record, it clearly transpires that the

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respondent No.1 – defendant No.1 had sought to produce two sets  of  documents  contradictory  to each other, in relation to the proceedings in this Court,  and  had  made  the  declarations  and statements which he knew were false,  for  being used as evidence in the judicial proceedings. The respondent No.1 has neither denied his signatures on the written statement Exh. 20 and the affidavit filed  along  therewith,  nor  has  taken  any  action against  the  advocate  Ms.  Trupti  Patel,  who  had allegedly filed the said written statement  on his behalf. The second written statement was sought to be filed along with the application Exh. 43 after the impugned order was passed by the trial Court, and  when  the  present  Appeal  from  Order  was pending  before  this  Court.  The  Court,  therefore, has  reason  to  believe  that  the  respondent  No.1 has  deliberately  and  consciously  tried  to  take Courts  for  a  ride  and  filed  the  documents  and declarations making false statements which could be read as  evidence in  the judicial  proceedings, and thereby has  prima facie acted in the manner which  would  affect  the  administration  of  justice, tantamounting to the offences as contemplated in Section  199  and  Section  200  of  IPC,  and  as referred in Section 195(1)(b)(i) of Cr.P.C. As stated herein above, nowadays such illegal transactions and agreements are rampant, and the process of law  is  being  misused  and  abused  by  the unscrupulous elements, which ultimately hampers the administration of justice. The Court, therefore, is of the opinion that it is expedient in the interest of justice to file complaint against the respondent No.1  in  exercise  of  the  powers  conferred  under Section 340 of Cr.P.C.  21. In view of the above, the Appeal from Order is dismissed. The Registrar (Judicial), Gujarat High Court, Ahmedabad is directed to make complaint against the respondent No.1 in view of the above findings  recorded  by  the  Court  for  the  offence under Section 199 and Section 200 of IPC before the  competent  Court  of  Magistrate,  having

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jurisdiction,  who  shall,  after  following  the procedure  as  contemplated  in  Section  343  of Cr.P.C., deal with the case in accordance with law.”

5. It is the main contention of the learned counsel for the

appellant that while passing the order, as extracted above, the

High Court has not followed the procedure contemplated under

Section 340(1) of the CrPC. Section 340(1) of the CrPC reads as

follows:

“340. Procedure in cases mentioned in section 195.-(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 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 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 to appear and give evidence before such Magistrate.”

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6. There are two pre conditions for initiating proceedings

under  Section  340  CrPC  –  (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  (1)  of  Section  195  of  the  CrPC  and  (ii)  it  is

expedient in the interests of justice that an inquiry should be

made into the alleged offence.

7. The mere fact that a person has made a contradictory

statement  in  a  judicial  proceeding  is  not  by  itself  always

sufficient to justify a prosecution under Sections 199 and 200 of

the Indian Penal Code (45 of 1860) (hereinafter referred to as

“the  IPC”);  but  it  must  be  shown  that  the  defendant  has

intentionally given a false statement at any stage of the judicial

proceedings  or  fabricated  false  evidence  for  the  purpose  of

using the same at any stage of the judicial proceedings. Even

after the above position has emerged also, still the court has to

form an opinion that it is expedient in the interests of justice to

initiate  an  inquiry  into  the  offences  of  false  evidence  and

offences against public justice and more specifically referred in

Section 340(1) of the CrPC, having regard to the overall factual

matrix  as  well  as  the  probable  consequences  of  such  a

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prosecution. (See K.T.M.S. Mohd. and Another v.  Union of

India1). The court  must  be  satisfied that  such  an  inquiry  is

required in the interests of justice and appropriate in the facts

of the case.

8. In the process of formation of opinion by the court that

it is expedient in the interests of justice that an inquiry should

be made into, the requirement should only be to have a prima

facie satisfaction of the offence which appears to have been

committed. It is open to the court to hold a preliminary inquiry

though it is not mandatory. In case, the court is otherwise in a

position to form such an opinion, that it appears to the court

that an offence as referred to under Section 340 of the CrPC

has  been  committed,  the  court  may  dispense  with  the

preliminary  inquiry.  Even  after  forming  an  opinion  as  to  the

offence which appears to have been committed also, it is not

mandatory  that  a  complaint  should  be  filed  as  a  matter  of

course. (See Pritish v. State of Maharashtra and Others2).

9. In  Iqbal Singh Marwah and Another v.  Meenakshi

Marwah and another3, a Constitution Bench of this Court has

1 (1992) 3 SCC 178 2 (2002) 1 SCC 253 3 (2005) 4 SCC 370

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gone into the scope of Section 340 of the CrPC. Paragraph-23

deals with the relevant consideration:

“23. In view of the language used in Section 340 CrPC the court is not bound to make a complaint regarding commission of an offence referred to in Section 195(1)(b),  as the section is  conditioned by  the  words  “court  is  of  opinion  that  it  is expedient in the interests of justice”. This shows that  such  a  course  will  be  adopted only  if  the interest of justice requires and not in every case. Before filing of the complaint, the court may hold a preliminary enquiry and record a finding to the effect  that  it  is  expedient  in  the  interests  of justice that enquiry should be made into any of the offences referred to in Section 195(1)(b). This expediency will normally be judged by the court by weighing not the magnitude of injury suffered by the person affected by such forgery or forged document,  but  having  regard  to  the  effect  or impact,  such  commission  of  offence  has  upon administration of justice. It is possible that such forged  document  or  forgery  may  cause  a  very serious or substantial  injury to  a person in  the sense that it may deprive him of a very valuable property or status or the like, but such document may  be  just  a  piece  of  evidence  produced  or given  in  evidence  in  court,  where  voluminous evidence may have been adduced and the effect of such piece of evidence on the broad concept of  administration of  justice may be minimal.  In such circumstances, the court may not consider it expedient in the interest of justice to make a complaint. …”

10. Having  heard  the  learned counsel  appearing  on  both

sides and having gone through the impugned order and also

having  regard  to  the  subsequent  development  whereby  the

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parties have decided to amicably settle some of the disputes,

we are of the view that the matter needs fresh consideration.

We are also constrained to form such an opinion since it is fairly

clear on a reading of the order that the court has not followed

all the requirements under Section 340 of the CrPC as settled

by this Court in the decisions referred to above regarding the

formation of the opinion on the expediency to initiate an inquiry

into any offence punishable under Sections 193 to 196 (both

inclusive), 199, 200, 205 to 211 (both inclusive) and 228 of the

IPC, when such an offence is alleged to have been committed in

relation to any proceedings before the court. On forming such

an opinion in respect of such an offence which appears to have

been committed, the court has to take a further decision as to

whether any complaint should be made or not.

11. No doubt, such an opinion can be formed even without

conducting a preliminary inquiry, if the formation of opinion is

otherwise possible. And even after forming the opinion also, the

court has to take a decision as to whether it is required, in the

facts and circumstances of the case, to file the complaint. Only

if the decision is in the affirmative, the court needs to make a

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complaint in writing and the complaint thus made in writing is

then to be sent to a Magistrate of competent jurisdiction.  

12. Under Section 343 of the CrPC, the Magistrate has to

deal with the complaint referred to in Section 340 of the CrPC

as  if  it  was  instituted  on  a  police  report.  Therefore,  on  the

offences referred to under Section 195(1)(b)(i) of the CrPC, all

falling within the purview of warrant case, the Magistrate has to

follow the procedure for trial of warrant cases under Chapter

XIX Part A comprising of Sections 238 to 243 of the CrPC.  It is

only in view of such seriousness of the matter, Section 340 of

the CrPC has provided for  a  meticulous procedure  regarding

initiation of the inquiry.

13. We find that the court in the impugned order has not

followed  the  procedure  in  making  the  opinion  that  it  was

expedient in the interests of justice to file a complaint against

respondent  no.1  in  exercise  of  the  powers  conferred  under

Section 340 of the CrPC and directing the Registrar (Judicial) of

the  High  Court  of  Gujarat,  Ahmedabad  “to  make  complaint

against respondent no.1 in view of the findings recorded by the

court for the offence under Sections 199 and 200 of the IPC….”.

Having  regard  to  the  subject  matter  of  the  complaint  and

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subsequent  developments,  we  are  of  the  view  that  in  the

interests of justice the matter needs to be laid to rest.

14. The appeal is hence allowed. The impugned order to the

extent of initiation of the proceedings under Section 340 of the

CrPC is set aside.

15. There shall be no orders as to costs.

........................................J.        (KURIAN JOSEPH)

......………………………………J. (ROHINTON FALI NARIMAN)

New Delhi; November 23, 2016.   

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