AMARSANG NATHAJI AS HIMSELF AND AS KARTA AND MANAGERversusHARDIK HARSHADBHAI PATEL AND OTHERS

                             [2016] 12 S.C.R. 80



A     AMARSANG NATHAJI AS HIMSELF AND AS KARTA AND
                       MANAGER
                                      v.
            HARDIK HARSHADBHAI PATEL AND OTHERS

B                      (Civil Appeal No. 11120 of2016)
                           NOVEMBER 23, 2016
             [KURIAN JOSEPH AND R.F. NARIMAN, JJ.]
          Code of Criminal Procedure, 1973 - ss.340, 195(1)(i){b) and
C ss.238-243 & 343 - Legality of proceedings initiated by the High
   Court u/s.340 Cr.P.C. - Contradictory stand taken by the appellant
   in judicial proceedings - High Court took the view that the conduct
   of appellant has affected the administration of justice - Registrar
   of High Court was directed to file a complaint against the appellant
    uls.340 - Appellant pleaded that High Court has not followed the
D _procedure uls.340(1) - Held: In the instant case, High Court has
   not followed all the requirements u/s.340 Cr.P.C. as settled by
   Supreme Court, regarding the formation of opinion on expediency
   to initiate an inquiry into any offence ulss. 193 to I96,199, 200 etc.
   of lP.C - After forming opinion, the court has to take decision as
E to whether it is required, in the facts and circumstances of the case,
   to file the complaint - Only if the decision is in affirmative, the
   court needs to make a complaint in writing and the complaint thus
   made in writing is then to be sent to a Magistrate of competent
   iurisdiction -:- In the present situation, High Court has not followed
   the procedure in making the opinion that it was expedient in the
F interest of justice to file a complaint against the appellant uls.340
   CnP. C. - Impugned order to the extent of initiation of the proceedings
   u/s.340 Cr.P.C. set aside - Penal Code, 1860 - ss. 193-I96, 199,
   200, 205-211, 228 - Perjury.
          Allowing the appeal, the Court
G          HELD: 1. There are two pre conditions for initiating
    proceedings under Section 340 CrPC - (i) mater;ials produced
    before the court must make out a prinwfacie 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
H expedient in the interests of justice that an inquiry should be
  .                                  80                 '
  AMARSANG NATHAJI AS HIMSELF AND AS KARTA AND                           81
     MANAGER v. HARDIK HARSHADBHAI PATEL

made into the alleged offence. [Para 6] (86-B-C]                         A
      2.1 On a reading of the impugned order, it is clear that the
High Court has not followed all the requirements under Section
340 of the CrPC as settled by this Court regarding the formation
of the opinion on the expediency to initiate an inquiry into any
offence punishable under Sections 193 to 196 (both inclusive),           B
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 com plaint
should be made or not. [Para 10] [88-A-C]                                c
        2.2 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 ifthe decision    0
is in the affirmative, the court needs to make a complaint in writing
and the complaint thus made in writing is then to be sent to a
Magistrate of competent jurisdiction. [Para 11] (88-D]
       3. Under Section 343 CrPC, the Magistrate has to deal with
the complaint referred to in Section 340 CrPC as ifit was instituted     E
on a police report. Therefore, on the offences refen·ed to under
Section 195(l)(b)(i) 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           F
matter, Section 340 CrPC bas provided for a meticulous procedure
regarding initiation of the inquiry. (Para12] [88-E-F]
      4. The High Court in the impugned order bas not followed
the procedure in making the opinion that it was expedient in the
interests of justice to file a complaint against appellant in exercise   G
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. I 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
                                                                         II
82            SUPREME COURT REPORTS                         f2016l 12 S.C.R.



A    matter of the complaint and subsequent developments, the matter
     needs to be laid to rest in the interests of justice. [Para 13) [88-
     G-H]
           K. T.MS. Mohd. and Another v. Union of India (1992)
           3 SCC 178 : 1992 (2) SCR 879; Pritish v. State of
B          Maharashtra and Others (2002) 1 SCC 253 : 2001 (5)
            Suppl. SCR 302; Iqbal Singh Marwah and Another
           v. Meenakshi Marwah and another (2005) 4 SCC
           370 : 2005 (2) SCR 708 - relied on.
                             Case Law Reference
c          1992 (2) SCR 879                    relied on        Para 7
           2001 (5) Suppl. SCR 302             relied on        Para8
           2005 (2) SCR 708                    relied on        Para9
          CIVIL APPELLATE JURISDICTION: Civil Appeal No. 11120
D    of2016.
            From the Judgment and Order dated 12.04.2016 and 13.04.2016
     of the High Court of Gujarat at Ahmedabad in Appeal from Order No.
     489of2013.
          Purvish Jitendra Malkan, Jitendra Malkan, Ms. Yashasvi Virendra;
E
     Ms. Dharita Malkan, Advs. for the Appellant.
          Ms. Meenakshi Arora, Sr. Adv., Rahul Narayan, Shaswat Goel,
     Pradhuman Gohil, Tatram Patel, Vikash Singh, Ms. Tarun Singh Gohil,
     Ms. Jaikriti S. Jadeja, Himanshu Chaubey, Shiv Mangal Sharma,
     Ms. Shikha Sandhu, Arjun Singh, Advs. for the Respondents.
F
           The Judgment of the Cout1 was delivered by
           KURIAN, J. I. 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,
G    1973 (hereinafter referred to as "the Code") initiated by the High Court
     as part of the impugned judgment dated 121h/l 3 1hApril, 2016 in Appeal
     from Order No. 489 of2013 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. 28of2012. Having extensively referred to the materials
H
  AMARSANG NATHAJI AS HIMSELF AND AS KARIA AND                                   83
 MANAGER v. HARDIK HARSHADBHAI PATEL[KUR!AN, J.]

on record, the High Court after elaborately considering the arguments,           A
by adetailedjudgment, 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. 144 78of2016. The said
Special Leave Petition has been dismissed on 15.11.2016 as not pressed
on the submission that the partie~ have reached an amicable settlement
                                                                                 B
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. I in the Suit), took the view that the conduct of the
appellant has affected the administration ofjustice, and therefore, it was
expedient in the interests ofjustice to file a complaint against the appellant
                                                                                 c
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 Cou11 deems it necessary to                   D
       take serious view on the conduct of the respondent No. I -
       defendant No. I, 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 appellant- plaintiff
       and subsequently by filing the application at Exh. 43, and                E
       other documents in the nature of affidavits-supporting the
       case of the respondents No.3 to 5. It appears that the
       respondent No. I 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                 F
       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                 G
       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.                                                      H
84       SUPREME COURT REPORTS                           [2016] 12 S.C.R.



A      20. In the instant case also, the respondent No. I -defendant
       No. l 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
B
       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
c      namely the written statement at Exh. 20 with affidavit and
       declaration and the other written statement and the affidavit
       filed before the trial Coutt 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,
D
       it clearly transpires that the respondent No. I - defendant
       No. I 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
E      the judicial proceedings. The respondent No. I 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
F
       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. I has deliberately
       and consciously tried to take Courts for a ride and filed the
G      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 !PC, and as referred in Section I95(1)(b)(i) ofCr.P.C.
H
  AMARSANG NATHAJ[ AS HIMSELF AND AS KARTA AND                                85
 MANAGER v. HARDIK HARSHADBHAI PATEL[KURIAN, J.]

      As stated herein above, nowadays such illegal transactions              A
      and agreements are rampant, and the process of law is
      being misused and abused by the unscrupulous elements,
      which ultimately hampers the administration ofjustice. The
      Court, therefore, is of the opinion that it is expedient in the
      interest of justice to file complaint against the respondent
                                                                              B
      No. I 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. I
      in view of the above findings recorded by the Court for the             c
      offence under Section 199 and Section 200 of IPC before
      the competent Cou11 of Magistrate, havingjurisdiction, who
      shall, after following the procedure as contemplated in
      Section 343 of Cr.P.C., deal with the case in accordance
      with law."                                                              D
      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.-                    E
      (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 (I) of section
      195, which appears to have been committed in or in relation·            F
      to a proceeding in that Cou11 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;
                                                                              G
             (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
                                                                              H
86             SUPREME COURT REPORTS                           [2016] 12 S.C.R.



A                 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
B                 before such Magistrate."
            6. There are two pre conditions for initiating proceedi1o1gs under
     Section 340 CrPC - (i) materials produced before the court must make
     out a primafacie case for a complaint for the purpose of inquiry into an
     offence referred to in clause (b )(i) of sub-Section (I) of Section 195 of
c    the CrPC and (ii) it is expedient in the interests ofjustice 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 19_9 and 200 of the Indian Penal Code (4 5 of
D    1860) (hereinafter referred to as "the lPC"); 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 ofjustice to initiate an inquiry into the
E    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
     prosecution. (See K.T.M.S. Mohd. and Another v. Union oflndia 1).
     The court must be satisfied that such an inquiry is required in the interests
F    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 primafacie satisfaction of the
   offence which appears to have been committed. It is open to the court
G ·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
     • (1992) 3 sec 178
H
    AMARSANG NATHAJI AS HIMSELF AND AS KARTA AND                            87
    MANAGER v. HARDIK HARSHADBHAI PATEL[KURIAN, J.]

been committed also, it is not mandatory that a complaint should be filed   A
as a matter of course. (See Pritish v. State of Maharashtra anu
Others 2 ).
      9. In lg bal Singh Manvah and Another v. Meenakshi Manvah
and another', a Constitution Bench of this Court has gone into the scope
of Section 340 of the CrPC. Paragraph-23 deals with the relevant            B
consideration:
       "23. In view of the language used in Section 340 CrPC the
       comt is not bound to make a complaint regarding commission
       of an offence referred to in Section I95( I)( b), as the section
       is conditioned by the words "court is of opinion that it is          c
       expedient in the interests ofjustice''.· This shows that such
       a course wi II be adopted only if the interest ofjustice requires
       and not in every case. Before filing of the complaint, the
       comt 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                 D
       referred to in Section 195(L)(b). This expediency will
       normally be judged by the cou1t 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                       E
       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 ofa
       very valuable property or status or the like, but such
       document may be just a piece of evidence produced or given
       in evidence in cou1t, where voluminous evidence may have              F
       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.
          "                                                                 G
      I 0. 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 parties have decided to amicably
2
  (2002) 1 sec 253
'(2005) 4 sec 370                                                           H
88             SUPREME COURT REPORTS                          [2016] 12 S.C.R.
                    "-.;-




A 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 .
B
     punishable under Sections 193 to 196 (both inclusive), 199, 200, 205 to
     211 (both inclusive) and 228 of the !PC, 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
c    whether any complaint should be made or not.
            11. No doubt, such an opinion can be formed even without
     conducting a preliminary inquiry, ifthe 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
D    the case, to file the complaint. Only ifthe decision is in the affirmative,
     the court needs to make a 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
E    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 unqer 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
F    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. I in exercise of the
     powers conferred under Section 340 of the CrPC and directing the
G    Registrar (Judicial) of the High Court of Gujarat, Ahmedabad "to make
     complaint against respondent no. I in view of the findings recorded by
     the court for the offence under Sections 199 and 200 of the !PC .... ".
     Having regard to the subject matter of the complaint and subsequent
     developments, we are of the view that in the interests of justice the
H    matter needs to be laid to rest.
  AMARSANG NATHAJI AS HIMSELF AND AS KARTA AND                               89
 MANAGER v. HARDIK HARSHADBHAI PATEL[KURIAN, J.]

       14. The appeal is hence allowed. The impugned order to the extent     A
of initiation of the proceedings under Section 340 of the Cr PC is set
aside.
       15. There shall be no orders as to costs.

                                                                             B
Ankit Gyan                                                 Appeal allowed.