October 12 2010
Questions for determination
Kapil Corepacks filed a suit against Harbans Lal for recovery of money, alleging that while Harbans Lal had executed an agreement to sell it an industrial property and had further received payment towards the agreement, it had refused to convey the property and disclose adequate documentation regarding the property's proof of title.
Harbans Lal had meanwhile filed a criminal complaint against Kapil Corepacks alleging that the purported signatures on the agreement were forged. Harbans Lal had additionally filed its written statement denying the claim and alleging that it had never signed the agreement and that the signatures were, in fact, clever forgeries.
In the course of the suit proceedings a second appellant, the managing director of the first defendant, was examined under Order 10, Rule 2(1) of the Code of Civil Procedure and shown a copy of the agreement where only the rubber stamp and the signature on the document was visible and the rest of the document was covered by blank paper. The High Court judge made an order (confirmed by the Division Bench of the High Court on appeal) that the second appellant had admitted to his signature on the agreement, as well as the company's rubber stamp, and was, as such, liable for prosecution under Section 340(2) of the Code of Criminal Procedure with Section 195(3) of the Penal Code.
Questions for determination
The case related to the scope of Rule 2 of Order 10 of the Code of Civil Procedure and the correctness of invoking Section 340 of the Code of Criminal Procedure in regard to answers given by a party in an examination by the court under the rule. The Supreme Court was specifically concerned with the following questions arising for its consideration:
Scope and ambit of Order 10, Rule 2
Laying down the difference between the scope of Order 10, Rule 1 and Order 10, Rule 2 of the code, the Supreme Court held that while Rule 1 enables parties to a court proceeding to admit or deny any counter allegations that may not have been expressly or implicitly admitted or denied in the pleading itself, Rule 2 is concerned with the broader objective of elucidating any particular matter that may be controversial in the suit.
The court highlighted that the object of oral examination under Rule 2 is not to record evidence, inasmuch as the statement made under the aforesaid provision is not under oath nor intended to be a substitute for a regular examination under oath. The court further clarified that the purpose of Rule 2 was not to elicit any admissions, which are merely contemplated:
The court held that the power under Order 10, Rule 2 cannot be converted into a process of selective cross-examination by the court, calling on any party to admit a document, before the party has an opportunity to put forth its case at the trial.
The court observed that the object of examination under Order 10, Rule 2 was not to prove or disprove the controversial matters, nor to seek admissions, nor to decide the rights or obligations of parties. The court highlighted that, had the lower courts merely asked the second appellant whether he had executed the agreement or not by showing him the document (by marking the document for purposes of identification only and not as an exhibit), it might have been possible to justify it as lawful examination under Order 10, Rule 2 read with Order 12, Rule 3A.(4) The attempt in this regard by the lower courts to cross-examine the party by adopting stratagems of covering portions of a document used by cross-examining counsels was strongly condemned by the court.
The court also termed the judge and the Division Bench of the High Court's decisions as erroneous, having equated the admission by the second appellant of a signature which was claimed to be a clever forgery by him as an admission of execution of the agreement itself. The Supreme Court observed that the admission of a signature is not an admission of execution of a document, and that examination of parties in such a casual manner under Order 10, Rule 2 was nothing but an anxiety on the part of the lower courts to do justice by speeding up the suit and ignoring the mandate of Order 10, Rule 2.
Prosecution under Section 340 of the Code of Criminal Procedure
The court observed that the power under Section 340 of the Code of Criminal Procedure read with Section 195 of the Penal Code can be exercised only where someone fabricates false evidence or gives false evidence. It was held that by no stretch of the imagination can a party, by giving an answer to a question put under Order 10, Rule 2 (when not under oath and when not being examined as a witness), be considered as amenable to Section 195 (1)(b) and Section 340 of the Code of Criminal Procedure. The decision of the lower courts to consider initiation of proceedings under Section 340 of the Code of Criminal Procedure read with Section 195 of the Penal Code in regard to an examination under Order 10, Rule 2 was consequently held to be ill-conceived and without jurisdiction.
The court accordingly set aside the orders of the Division Bench and the High Court judge, directing the matter as listed for consideration of prosecution under Section 340 of the Code of Criminal Procedure. It additionally directed the court conducting the trial to decide the suit in accordance with law on the basis of evidence placed, and to ignore the second appellant's 'answer' under Order 10, Rule 2 of the code.
For further information on this topic please contact Manu Nair or Saanjh Purohit at Amarchand & Mangaldas & Suresh A Shroff & Co by telephone (+91 11 2692 0500) or by fax (+ 91 11 2692 4900) or by email (firstname.lastname@example.org or email@example.com).
"Oral examination of party, or companion of party –
- At the first hearing of the suit, the court (i) shall with a view to elucidating matters in controversy in the suit examine orally such of the parties to the suit appearing in person or present in Court, as it deems fit; and (ii) may orally examine any party appearing in person or present in Court, or any person, able to answer any material question relating to the suit, by whom such party or his pleader is accompanied.
- At any subsequent hearing, the court may orally examine any party appearing in person or present in court, or any person, able to answer any material question relating to the suit, by whom such party or his/her pleader is accompanied.
- The court may, if it thinks fit, put in the course of an examination under this rule questions suggested by either party."
"When upon an application made to it in this behalf or otherwise any court is of opinion that it is expedient in the interest 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,
- record a finding to that effect;
- make a complaint thereof in writing;
- send it to a magistrate of the first class having jurisdiction;
- take sufficient security for the appearance for 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
- bind over any person to appear and give evidence before such magistrate..."
"Whoever gives or fabricates false evidence intending thereby to cause, or knowing it to be likely that he will thereby cause, any person to be convicted of an offence which [by the law for the time being in force in [India] is not capital, but punishable with [imprisonment for life], or imprisonment for a term of seven years or upwards, shall be punished as a person convicted of that offence would be liable to be punished."
Section 195(1)(b) of the Code of Criminal Procedure provides that no court shall take cognisance of any offence punishable under Section 195 of the Penal Code when such offence is alleged to have been committed in, or in relation to, any proceeding in any court, except on the complaint in writing of that court.
"Power of Court to record admission - Notwithstanding that no notice to admit documents has been given under Rule 2, the court may at any stage of the proceeding before it, of its own motion, call on any party to admit any document and shall in such a case, record whether the party admits or refuses or neglects to admit such document."
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