M/S.Kapil Corepacks Pvt.Ltd.& Ors vs Harbans Lal (D) Thr.Lrs

2. Late Harbans Lal (for short the `plaintiff' of whom the respondents are the legal heirs) filed a suit against the appellants on 5.9.2006, for recovery of Rs. 66 lakhs. He alleged that second appellant and his brother late Sohan Lal Dua (father of third appellant) on behalf of the first appellant, had executed an Agreement/Receipt dated 7.9.2003 agreeing to sell him an industrial property for a consideration of Rs. 2,02,41,600/- and had received a sum of Rs. 33 lakhs made up of Rs. 9 lakhs by cheque and Rs. 24 lakhs in cash towards the said agreement. He further alleged that the appellants were unwilling to convey the property and failed to produce the documents necessary to satisfy him about their title to the property; and that therefore in terms of the agreement, he was suing for refund of double the amount advanced by him.

3. The appellants filed a criminal complaint dated 23.2.2007 against Harbans Lal and certain others alleging that the purported signatures of second appellant and late Sohanlal Dua on the said agreement/receipt were forged and that they had not executed any such agreement/receipt. On 5.3.2007, they also filed their written statement in the suit filed by Harbans Lal denying the claim, and making a counter claim seeking a declaration that the agreement/receipt put forth by the plaintiff was forged and void. The 3 appellants alleged that second appellant and his late brother had never signed the agreement/receipt and the signatures found thereon, (purporting to be the signatures of second appellant and his late brother) were clever forgeries; that they did not receive Rs.24 lakhs said to have been paid in cash; that the sum of Rs. 9 lakhs paid by cheque by Harbans Lal, was an advance to their company (first appellant) obtained by late Sohanlal Dua to tide over a short term financial crisis and the said amount was treated as share application money.

6. On 3.10.2008, a learned Single Judge directed the Principal Officer and Managing Director of the first appellant-company to appear in person on 12.11.2008 along with its annual returns filed with the Registrar of Companies, income tax returns and the balance sheets for the financial year 2003-2004 onwards. In pursuance of the said order, the second appellant appeared before the court with the relevant documents on 12.11.2008. The second appellant was examined under Order 10 Rule 2 of the Code and his statement recorded by the learned Single Judge, is extracted below:

The substance of the examination shall be reduced to writing by the Judge, and shall form part of the record."

Re : Question No.(iii)

Conclusion

23. In view of the above, this appeal is allowed. The order dated 20.1.2009 of the Division Bench and the order dated 12.11.2008 of the learned Single Judge, directing the matter to be listed to consider whether the second appellant should be prosecuted under Section 340 Cr.P.C., are set aside. As the process of confrontation of an unexhibited document by covering portions of it by a court, is beyond the scope of examination under 23 Order 10 Rule 2 of the code, the answer to such question shall be excluded from consideration and completely disregarded. The court conducting the trial and hearing arguments shall decide the suit in accordance with law on the basis of evidence placed and ignore the said `answer' under Order 10 Rule 2 of the Code.

24. We make it clear that whatever we have stated or observed during the course of this Judgment, are only in the context of examining the correctness of the procedure adopted under Order 10 Rule 2 of the Code, and not intended to be findings of fact.