Case: M/S.Kapil Corepacks Pvt.Ltd Vs. Harbans Lal (D) Thr.Lrs

that on the basis of the said answer, the second appellant could be proceeded under Section 195 of Indian Penal Code read with Section 340 of Code of Criminal Procedure, are without any basis. Equally unwarranted is the observation of the Division Bench : "The Managing Director of the appellant had denied his signature earlier on the agreement/receipt, but when his statement was recorded under Order 10 CPC before the court, an admission came out that the signature were his.... The truth emerged though belatedly". Admission must obviously be a conscious and deliberate act. Admission can be explained. An admission of a signature is not an admission of execution of a document. The power to identify the matters in controversy by examination of parties at the pre-trial stage under Order 10 Rule 2, is completely different from the power exercised by the court under Section 165 of the Evidence Act to put any question it pleases in any form, to a witness or a party in order to discover or to obtain proper proof of relevant facts, or the power under Order 18 Rule 14 of the Code to recall and examine any witness. The courts anxiety to do justice by speeding up the process of the suit should not itself lead to injustice. Re : Question No.(iii) 20. The Division Bench has affirmed the order of the learned Single Judge that he will next hear whether he should proceed to initiate proceedings under Section 340 Cr.P.C. read with Section 195 of Indian Penal Code (`IPC for short). Section 195 of Cr.P.C. provides that 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 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 Cr.P.C. provides that no court shall take cognizance of any offence punishable under section 195 of IPC 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. Section 340 of the Cr.P.C. provides that when upon an application made to it in that 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 of Cr.P.C. 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, sent it to a Magistrate of the first class having jurisdiction etc. Thus the power under section 340 CrPC read with section 195 IPC can be exercised only where someone fabricates false evidence or gives false evidence. By no stretch of imagination, a party giving an answer to a question put under Order 10 Rule 2 of the Code when not under oath and when not being examined as a witness, can attract section 195 of IPC and consequently cannot attract section 195(1)(b) and section 340 of Cr.P.C. 21. The respondents relied upon the decision of a Division Bench of the High Court in Satish Kumar v Union of India [2009 (108) DRJ 317] to contend that there can be a prosecution under Section 340 Cr.P.C. in regard to a statement under Order 10 Rule 2 of the Code. The conclusion in Satish Kumar that a party can be prosecuted under Section 340 Cr.P.C. for his answers in an examination under Order 10 Rule 2 is erroneous and unsound. As noticed above, the answers to an examination under Order 10 Rule 2 are not on oath and therefore the party is not deposing as a witness on oath when giving his answers under Order 10 Rule 2 of the Code. In Satish Kumar, the Delhi High Court purported to rely upon the decision of this Court in B.K. Gupta v. Damodar H. Bajaj [2001 (9) SCC 742 ], to hold that prosecution under section 340 CrPC is permissible in regard to answer given under Order 10 Rule 2 of the Code. What this Court observed in B.K. Gupta was that a complaint can be filed against a person who has given false affidavit or evidence in a proceeding before the court. But a party giving an answer in an examination under Order 10 Rule 2 is neither giving evidence nor giving a affidavit. Section 340 of the Code will not be attracted with reference to any statement under Order 10 Rule 2 of the Code assuming that the Delhi High Court had laid down the law rightly in Satish Kumar, the said observation will not help the respondent in this case. In Satish Kumar, it was held that a false statement given in the examination under Order 10 Rule 2 of the Code can give rise to criminal prosecution under Section 340 of Cr.P.C. But in this case the High Court has proceeded on the basis that the second appellant spoke the `truth in response to the question in the examination under Order 10 Rule 2 of the Code. There is no finding that second appellant made a `false statement in his examination under Order 10 Rule 2 CPC. Therefore, the said decision will be inapplicable, even if it had been rightly decided. 22. Consequently, the decision of the court to consider initiation of proceedings under section 340 Cr.P.C. read with section 195 IPC in regard to an answer to a question put under Order 10 Rule 2 of the Code is ill- conceived and wholly without jurisdiction.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]13. The object of Order 10 Rule 2 is not to elicit admissions. Nor does it provide for or contemplate admissions. The admissions are usually contemplated (i) in the pleadings (express or constructive under Order 8 Rule 5 of the Code); (ii) during examination of a party by the court under Order 10 Rule 1 of the Code; (iii) in answers to interrogatories under Order 11 Rule 8 of the Code; (iv) in response to notice to admit facts under Order 12 Rule 4 of the Code; (v) in any evidence or in an affidavit, on oath; and (vi) when any party voluntarily comes forward during the pendency of a suit or proceedings to make an admission.14. The power of court to call upon a party to admit any document and record whether the party admits or refuses or neglects to admit such document is traceable to Order 12 Rule 3A rather than Order 10 Rule 2 of the Code. Nothing however comes in the way of the court combining the power under Order 12 Rule 3A with its power under Order 10 Rule 2 of the Code and calling upon a party to admit any document when a Party is being examined under Order 10 Rule 2. But the court can only call upon a party to admit any document and cannot cross-examine a party with reference to a document.Both the learned Single Judge and the Division Bench committed an obvious error in equating admission of a signature which is claimed to be a clever forgery, as an admission of execution of the agreement/receipt and the contents thereof. The observations of the learned Single Judge in his order that "The Managing Director has admitted his signature on the agreement/receipt as well as stamp of the defendant no.1 company on the said document" and the further observation that on the basis of the said answer, the second appellant could be proceeded under Section 195 of Indian Penal Code read with Section 340 of Code of Criminal Procedure, are without any basis. Equally unwarranted is the observation of the Division Bench : "The Managing Director of the appellant had denied his signature earlier on the agreement/receipt, but when his statement was recorded under Order 10 CPC before the court, an admission came out that the signature were his.... The truth emerged though belatedly". Admission must obviously be a conscious and deliberate act. Admission can be explained. An admission of a signature is not an admission of execution of a document. The power to identify the matters in controversy by examination of parties at the pre-trial stage under Order 10 Rule 2, is completely different from the power exercised by the court under Section 165 of the Evidence Act to put any question it pleases in any form, to a witness or a party in order to discover or to obtain proper proof of relevant facts, or the power under Order 18 Rule 14 of the Code to recall and examine any witness. The courts anxiety to do justice by speeding up the process of the suit should not itself lead toSatish Kumar, the Delhi High Court purported to rely upon the decision of this Court in B.K. Gupta v. Damodar H. Bajaj [2001 (9) SCC 742 ], to hold that prosecution under section 340 CrPC is permissible in regard to answer given under Order 10 Rule 2 of the Code. What this Court observed in B.K. Gupta was that a complaint can be filed against a person who has given false affidavit or evidence in a proceeding before the court. But a party giving an answer in an examination under Order 10 Rule 2 is neither giving evidence nor giving a affidavit. Section 340 of the Code will not be attracted with reference to any statement under Order 10 Rule 2 of the Code assuming that the Delhi High Court had laid down the law rightly in Satish Kumar, the said observation will not help the respondent in this case. In Satish Kumar, it was held that a false statement given in the examination under Order 10 Rule 2 of the Code can give rise to criminal prosecution under Section 340 of Cr.P.C. But in this case the High Court has proceeded on the basis that the second appellant spoke the `truth in response to the question in the examination under Order 10 Rule 2 of the Code. There is no finding that second appellant made a `false statement in his examination under Order 10 Rule 2 CPC. Therefore, the said decision will be inapplicable, even if it had been rightly decided.Consequently, the decision of the court to consider initiation of proceedings under section 340 Cr.P.C. read with section 195 IPC in regard to an answer to a question put under Order 10 Rule 2 of the Code is ill- conceived and wholly without jurisdiction.