$-8 to 39 * IN THE HIGH COURT OF DELHI AT NEW DELHI + CM(M) No. 1257/2010 & CM No.17956/2010, CM (M) No.1421/2010 & CM No. 20287/2010, CM(M) No. 1422/2010 & CM No. 20289/2010, CM(M) No. 1423/2010 & CM No. 20291/2010, CM(M) No. 1424/2010 & CM No. 20293/2010, CM(M) No. 1425/2010 & CM No. 20295/2010, CM(M) No. 1426/2010 & CM No. 20297/2010, CM(M) No. 1427/2010 & CM No. 20299/2010, CM(M) No. 1428/2010 & CM No. 20301/2010, CM(M) No. 1429/2010 & CM No. 20309/2010, CM(M) No. 1430/2010 & CM No. 20318/2010, CM(M) No. 1439/2010 & CM No. 20415/2010, CM(M) No. 1440/2010 & CM No. 20417/2010, CM(M) No. 1441/2010 & CM No. 20419/2010, CM(M^ No. 1442/2010 & CM No. 20421/2010, CM (M) No. 1443/2010 & CM No. 20423/2010, CM (M) No. 1444/2010 & CM No. 20428/2010, CM (M) No. 1445/2010 & CM No. 20430/2010, CM (M) No. 1446/2010 & CM No. 20434/2010, CM (M) No. 1447/2010 & CM No. 20438/2010, CM (M) No. 1448/2010 & CM No. 20440/2010, CM (M) No. 1456/2010 & CM No. 20602/2010, CM rM) No. 1457/2010 & CM No. 20604/2010, CM (M) No. 1458/2010 & CM No. 20617/2010, CM (M) No. 1459/2010 & CM No. 20619/2010, CM (M) No. 1460/2010 & CM No. 20622/2010, CM (M) No 1461/2010 & CM No. 20624/2010, CM (M) No. 1462/2010 & CM No. 20626/2010, CM (M) No. 1463/2010 & CM No. 20628/2010, CM (M) No. 1464/2010 & CM No. 20638/2010, CM (M) No. 1465/2010 & CM No. 20697/2010 and CM (M) No. 1466/2010 & CM No. 20699/2010. PNB HOUSING FINANCE LTD Petitioner Through Mr. R.K. Dhawan, Adv. versus RAM MANI PANDEY&ANR Respondents Through Mr. K.K. Jha, Adv. CORAM; HON'BLE MS. JUSTICE INDERMEET KAUR ORDER % 29.11.2011 I Order impugned is the order dated 20.08.2010 whereby on an application filed under Section 340 of the Code of Criminal r Digitally Signed By:AMULYA Certify that the digital file and physical file have been compared and the digital data is as per the physical file and no page is missing. Signature Not Verified Procedure (hereinafter referred to as the 'Cr.PC') preferred by respondent No. 1 (namely Ram Mani Pandey) the plaintiff bank had been directed to file reply to the said application. This order has been impugned; contention being that there was no occasion to initiate any proceeding under Section 340 of the Cr.PC. 2 A suit had been filed by the petitioner i.e. PNB Housing Finance Limited against the defendants; Ram Mani Pandey was impleaded as a defendant; contention of the plaintiff was that the defendants had approached the plaintiff bank for grant of housing loan for which Ram Mani Pandey had stood a guarantor; loan had been sanctioned and granted; recovery suit had been filed for recovery of the unpaid amounts by the defendant. This suit had been filed in the year 2002. 3 In the course of proceedings, an apphcation under Section 340 of the Cr.PC dated 03.02.2003 had been filed. Contents of this application show that contention of Ram Mani Pandey was that the documents filed along with the plaint i.e. loan documents, application, agreement to sell, finishing agreement, sale letter, letter of hypothecation, undertaking, letters are all forged, fabricated and bogus documents; these documents have been filed intentionally by the plaintiff knowing them to be forged; accordingly action had been sought under Section 340 of the Cr.PC against the plaintiff. 4 This application had been dismissed on 28.02.2008 vide a speaking order. Several applications pending inter-se between the parties had been taken up and present application under Section 340 of the Cr.PC has been dealt with on the internal page 17 of the said order. This order dated 28.02.2008 has since attained a finality as it has not been the subject matter of challenge before any Court. 5 A second application under Section 340 of the Cr.PC read with Order 1 Rule 10 of the Code of Civil Procedure (hereinafter referred to as the 'Code') had been filed thereafter on 12.11.2009. Contents of this second application have also been perused. In this application, the contention of the applicant Ram Mani Pandey is that M/s Bright Buildwell Private Limited is a necessary party and besides the prayer under Order 1 Rule 10 of the Code seeking impleadment of M/s Bright Buildwell Private Limited action had also been sought against the plaintiff under Section 340 of the Cr.PC. Contention was that fictitious loans have been given by the plaintiff bank to the fictitious persons; borrowers as also the guarantors are non-existent; loan documents i.e. loan applications, contract forms, security and mortgage documents, guarantee forms and contract forms are all fraudulent; in the prayer clause action has been sought for initiation of proceedings under Section 340 of the Cr.PC against the plaintiff bank. 6 It is not in dispute that the prayer made under Order 1 Rule 10 of the Code of the said application had been rejected on 19.03.2010; M/s Bright Buildwell Private Limited was held neither to be a necessary and nor a proper party. Admittedly the prayer under Section 340 of the Cr.PC (dated 12.11.2009) was in the common application which had also prayed for relief under Order 1 Rule 10 of the Code which prayer had been rejected on 19.03.2010. It is also not in dispute that on an application filed by the defendant under Order 7 Rule 11 of the Code, the plaint has been rejected on 13.05.2010. Impugned order has been passed on 20.08.2010 wherein the Court had noted that although the prayer made in the combined application (under Order 1 Rule 10 of the Code + under Section 340 of the Cr.PC) had rejected the prayer of Order 1 Rule 10 of the Code yet the contents of Section 340 of the Cr.PC in the applicationare independent and reply had been directed to be filed which is the subject matter of present petition. 7 Apart from the fact that an application cannot be dismissed piecemeal (the combined apphcation under Order 1 Rule 10 of the Code read with Section 340 of the Cr.PC ha^/ing been dismissed on 19.03.2010), the contents of the averments under Section 340 of the Cr.PC could not have been adverted to; discretion exercised by the Court in directing the plaintiff bank to file reply to this apphcation was an arbitrary exercise of its power. To invoke the provisions of Section 340 of the Cr.PC, the Court must form an opinion that it is expedient in the interest of justice that an inquiry should be made for the offence purported to have been committed under Section 195 (l)(b) of the Cr.PC in respect of a document produced or given in evidence in a proceeding in that Court and pursuant to which a preliminary inquiry may be ordered. Before this preliminary inquiry is initiated, the Court in its discretion must be of the opinion that the interest of justice demands that an inquiry for the purported offence under Section 195 (l)(b) of the Cr.PC has been committed. This discretion has to be exercised fairly and judicially. Section 195 (l)(b) of the Cr.PC specificallypostulates that no Court shall take cognizance of any offence mentioned in Sub-clause(i), (ii) and (iii) of Section195 (b) of the Cr.PC except on the complaint in writing of that Court or by such officer of the Court as that Court may authorize or of some other Court to which the Court is subordinate. Section 340 of the Cr.PC in fact prescribes the procedure as to how a complaintmay be preferred under Section 195 of the Cr.PC; provisions under Section 195 of the Cr.PC are mandatory and no Court can take cognizance ofthe offence referred to therein except as per the procedure lo prescribed therein. 8 In the present case admittedly the first application under Section 340 of the Cr.PC had been dismissed by a speaking order dated 28.02.2008 which order has since attained a finality. The contents of the said application and the averments made in the second application under Section 340 of the Cr.PC are both identical; thus this issue already having been decided and not challenged by the parties, such an issue could not have been raised again in the subsequent application; it is barred by constructive res-judicata. 9 That apart it is an admitted case that the original documents of which forgery has been alleged have not been filed by the plaintiff and only photocopies had been filed along with the plaint as a case under the provisions of the Prevention of Corruption Act has been registered against Ram Mani Pandey and the original documents have been seized by the CBI who is now conducting the investigation in the said case. In these circumstances when the original documents alleged to have been forged were not produced in the Court, the provisions of Section 195 (l)(b) would have no application. This has been held in the case of Suhil Kumar Vs. State of Harvana AIR 1988 SC 419. In this case the original documents had not been filed in the civil Court and an order had been obtained on the strength of its copy. In this context, the Apex Court has noted herein as under:- " Sub-section (l)(b)(ii) of Section 195 fo the Code lays down that no court shall take cognizance ofany offence described in the sections mentioned therein when such offence is alleged to have been committed in respect of 'a document produced or given in evidence in a proceeding in any court'. Interpreting the similar language of the corresponding provision in the earlier Criminal Procedure Code of 1898, the Privy Council in Sanmukhsingh VKing, observed that by production of a copy of the allegedly forged document it cannot be said that the document itself was given in evidence. This view, as pointed out, accords with the plain grammatical meaning of the words and is also supported by the practical common sense. The judgment of the Judicial Committee was followed in Budhu Ram V. State ofRajasthan. Accordingly we hold that since the document alleged to have been forged was not in the present case produced in the court, the provisions of Section 195 (l)(b)(ii) of the Code have no application." 10 In AIR 1988 SC 1121 Sachida Nand Sinoh and Another Vs. State of Bihar and Another while dealing with the provisions of Section 340 of the Cr.PC and the bar contained in Section 195 (l)(b) of the Cr.PC, the Court had noted that this provision is not applicable to a case where forgery of a document was purported to have been committed before the document was produced in the Court; the scope of the prehminary enquiry envisaged under Section 340 of the Cr.PC (1) of the Code is to ascertain whether any offence affecting administration of justice has been committed in respect of a document produced in Court or given in evidence in a proceeding in that Court In other words, the offence should have been committed during the time when the document was in custodia legis. This is clearly not so in the instant case. Original documents have not been filed along with the plaint. It is also an admitted fact that pursuant to an application under Section 156 (3) of the Cr.PC filed by Ram Mani Pandey an FIR under Sections 406, 420 & 468 of the IPC has been registered and which investigation is under progress. The purport of the provisions of Section 340 of the Cr.PC are not to vent out personal grievance or personal vendetta. 11 The impugned order taking cognizance and directing the plaintiff to file reply to the apphcation under Section .340 of the Cr.PC thus suffers from an illegality. The trial Court has clearly made an arbitrary exercise of the discretion vested in it; when the first application under Section 340 of the Cr. PC already stood dismissed, contents and averments being reiterated in the second apphcation of which cognizance has been taken is thus an illegality which has to be cured. Such an order could not have been passed. Proceedings before the trial Court are quashed. 12 Petitions disposed of. INDERMEET KAURJ NOVEMBER 29, 2011 A /