MIS. SCIEMED OVERSEAS INC.versusBOC INDIA LIMITED & ORS.

                        [2016] l S.C.R. 151



                MIS. SCIEMED OVERSEAS INC.                              A
                                 v.
                  BOC INDIA LIMITED & ORS.
    (Petition For Special Leave To Appeal (C) No. 29125 of 2008)
                        JANUARY 11, 2016
                                                                        B
       [MADAN B. LOKUR AND R, K, AGRAWAL, JJ.]
       Cost - Imposition of - For filing a false or misleading affidavit
- Writ Petition challenging award of works contract - Dismissed
on the ground of its maintainability - In appeal to Supreme Court,
contractor filing affidavit that work was nearing completion -
Supreme Court directed the High Court to decide the case on merits C
- Single Judge of High Court , in view of the affidavit, did not set
aside the award of contract and giving liberty to the party who
challenged the award of contract, to file a suit for damages - In
intra-court appeal by the contractor, the Division Bench on
verification found that statement given on affidavit was wrong - D
The contractor initially justified its affidavit and then filed
unconditional apology - Division Bench rejecting the apology held
that the contractor had filed false affidavit before Supreme Court
and imposed costs of Rs. I 0 lakhs on the Contractor - On appeal,
held: In the facts of the case, it cannot be said that the affidavit was
bonafide and not a deliberate attempt to mislead the court - The E
very fact that a false or misleading statement was made, by itself is
enough to invite adverse reaction - The imposition of the cost, though
somewhat sweep, was fully justified - Affidavit.
      Affidavit - Filing of false affidavits before Courts - Held:
There is alarming increase in filing of false affidavits and the same   F
needs to be strongly discouraged.
      Dismissing the petition, the Court
      HELD: 1. It cannot be said that the statement made in the
affidavit filed in this Court was not a false statement but was
                                                                        G
bonafide and not a deliberate attempt to mislead this Court. The
correctness of the statement made by the contractor was
examined threadbare not only by the Single Judge but also by
the Division Bench and it was found that a considerable amount
of work had still to be completed by it and it was not as if the
work was nearing completion as represented to this Court.               H
                                151
152              SUPREME COURT REPORTS                   [2016] l S.C.R.


A Additionally, the Report independently given by the advocate
  appointed to make an assessment, also clearly indicated that a
  considerable amount of work had still to be performed by the
  contractor. After the Report was filed in the High Court, the
  contractor also realized that it had in fact misled this Court.
  Nevertheless, the contractor tried to justify the false or misleading
B
  affidavit. After giving the justification, it tendered an unconditional
  and unqualified apology. There was no need for an unconditional
  and unqualified apology unless there was an admission that the
  statement made before this Court was false or misleading. [paras
  23, 25 and 27] [157-F-G, H; 158-A; 159-B]]
c            2. It also cannot be said that the allegedly false or
      misleading statement had no impact on the decision taken by
      this Court and should, therefore, be ignored. The work order
      was issued to the contractor during pendency of the writ petition
      (filed by the respondent-Company challenging invitation to the
D     contractor for opening the price bid) without informing the High
      Court. Furthermore, to ensure that work order goes through, a
      false or misleading statement was made before this Court on
      affidavit. The fact of the matter is that a false or misleading
      statement was made before this Court, and that by itself is enough
      to invite an adverse reaction. [paras 23 and 29] [157-G; 159-E,
E
      F··G]
            Suo Moto Proceedings Against R. Karuppan, Advocate
            2001 (3) SCR 750 = 2001 (5) sec 289; Muthu
            Karuppan v. Parithi Ilamvazhuthi 2011 (5) SCR 329 =
            2011 (5) sec 496 - relied on.
F
         3. A global search of cases pertaining to the filing of a false
  affidavit indicates that the number of such cases that are reported
  has shown an alarming increase in the last fifteen years as
  compared to the number of such cases prior to that. This 'trend'
  is certainly an unhealthy one that should be strongly discouraged,
G well before the filing of false affidavits gets to be treated as a
  routine and normal affair. [para 2] [153-F-G]
            4. On the basis of material before this Court and the
      material considered by the High Court, the imposition of costs
      by the High Court was justified. The imposition of costs, although
H     somewhat steep, was fully justified given that the High Court
   MIS. SCIEMED OVERSEAS INC. v. BOC INDIA LIMITED                               153



also held that the contract in favour of the petitioner was awarded              A
improperly and was of a commercial nature, the last two findings
not being under challenge. [paras 1 and 32] [153-E; 160-H]
                          Case Law Reference
       2001 (3) SCR 750                      relied on            para30
                                                                                 B
       2011 (5) SCR 329                      relied on            para 31
       CIVIL APPELLATE JURISDICTION : Special Leave Petition
(C) No. 29125 of 2008
      From the Judgment and Order dated 22.09.2008 of the High Court
of Jharkhand at Ranchi in L. P.A. No. 212 of 2008.                               c
       A. K. Ganguly, Devashish Bharuka, Ravi Bharuka for the
Petitioner.
       Gopal Prasad, K. L. Mehta & Co. for the Respondents.
       The Judgment of the Court was delivered by
                                                                                 D
        MADAN B. LOKUR, J. l.               The only question for our
consideration is whether the High Court was correct in imposing costs
of Rs. 10 lakhs on the petitioner for filing a false or misleading affidavit
in this Court. In our opinion, the imposition of costs, although somewhat
steep, was fully justified given that the High Court also held that the
contract in favour of the petitioner was awarded improperly and was of           E
a commercial nature, the last two findings not being under challenge.
        2. A global search of cases pertaining to the filing of a false
affidavit indicates that the number of such cases that are reported has
shown an alarming increase in the last fifteen years as compared to the
number of such cases prior to that. This ' is illustrative of the malaise        F
that is slowly but surely creeping in. This 'trend' is certainly an unhealthy
one that should be strongly discouraged, well before the filing of false
affidavits gets to be treated as a routine and normal affair.
       3. The petitioner is aggrieved by a judgment and order dated
22"' September, 2008 passed by the Division Bench:of the High Court              G
of Jharkhand in L.P.A. No. 212 of 2008 only to the extent of imposition
of costs. 1 In our opinion, there is no merit in this petition and it deserves
to be dismissed.

I BOC India Limited v. State of Jharkhand, MANU/JH/0938/2008                     H
154               SUPREME COURT REPORTS                         [2016] 1 S.C.R.



A            4 .. The Rajendra Institute of Medical Sciences, Ranchi, (for short
      "the RIMS") issued a notice inviting tender on 1O'" February, 2007. The
      tender was for installation and supply of a complete system of Centralized
      Liquid Medical Oxygen with medical gas pipe line for Oxygen, Carbon
      Dioxide, Nitrous Oxide and compressed air, etc. The work was to be
      executed on a turnkey basis within 150 days in the 1000 bedded
B
      departments and wards of the RIMS.
             5. Responses to the notice inviting tender were submitted by the
      petitioner (Sciemed Overseas) and respondent No. I (BOC India). Their
      tenders were processed by the RIMS and a memorandum dated 25th
      June, 2007 was issued by its Director informing Sciemed and BOC
c     regarding opening of the price bid of commercially and technically
      successful bidders.
             6. According to BOC, the conditions of the technical bid were
      not fulfilled by Sciemed and, therefore, there was no reason to invite it
      for opening the price bid. A representation was made in this regard by
D     BOC to the RIMS but that was not considered and, therefore, BOC
      filed W.P.(C) No. 4203 of 2007 in the High Court of Jharkhand in respect
      of its grievance against Sciemed and the RIMS.
             7. The High Court considered the writ petition filed by BOC and
      by an order dated 31" July, 2007 the writ petition was disposed of giving
E     liberty to BOC to file another representation in continuation of its earlier
      representation to the RIMS. It was directed that both the representations
      should be considered by the Director of the RIMS and an appropriate
      reasoned order be passed thereon.
              8. It is important to note that when the aforesaid writ petition
F     was disposed of on 31" July, 2007 no intimation was given to the High
      Court by the RIMS or by Sciemed to the effect that about a week earlier,
      that is, on 25th July, 2007 a work order had already been issued to Sciemed
      in respect of the notice inviting tender.
            9. This fact was first brought to the notice of BOC when the
G     Director of the RIMS in his letter dated 8th September, 2007 informed
      BOC, in response to the representations, that the work order had already
      been issued to Sciemed on 25th July, 2007.
             10. Under these circumstances, BOC preferred yet another
      petition being W.P. (C) No. 4830 of2007 challenging the issuance of the
H     work order in favour of Sciemed.
  WS. SCIEMED OVERSEAS INC. v. BOC INDIA LIMITED                                155
               [MADAN B. LOKUR, J.]

       11. By an order dated 10th September, 2007 the High Court                A
dismissed the second writ petition filed by BOC holding that the question
whether the work order had or had not been issued to Sciemed was a
question of fact. That apart, BOC had also raised several other questions
of fact. The High Court was of the opinion that since the factual
controversies could not be adjudicated upon in its writ jurisdiction, there
                                                                                B
was no reason to entertain the writ petition and it was, accordingly,
dismissed.
       12. Feeling aggrieved, BOC preferred L.P.A. No. 319 of 2007
which was heard and dismissed by a Division Bench of the High Court
on IO"' October, 2007 thereby upholding the view taken by the learned
Single Judge that the second writ petition filed by BOC raised disputed
                                                                                c
questions of fact.
        13. Feeling dissatisfied with the order passed by the Division
Bench, BOC preferred a petition for Special Leave to Appeal to this
Court in which leave was granted on 14"' March, 2008. This Court
disposed of the appeal being Civil Appeal No.2028 of 2008 on that day           D
itself holding that there is hardly any disputed question of fact. On the
contrary, the facts of the case were evident from the documents already
on record and oral evidence was required to be led. Accordingly, this
Court was of the view that the matter ought to be heard on merits by the
High Court and an appropriate direction was given in this regard.               E
       14. During the pendency of the Civil Appeal, an affidavit was
filed on 20"' February, 2008 by Sciemed through its proprietor Shailendra
Prasad Singh in which it was stated as follows:-
       "lt is submitted that the NIT, after having been relaxed and technical
       and financial bids having been opened, the respondent No.5 was           F
       declared as the lowest bidder by a margin of Rs.1.12 crores as
       compared to the petitioner and the work order has already been
       acted upon and the project is almost near completion and 85% of
       the amount has already been released to the answering respondent,
       rendering the present SLP, in any case, infructuous and liable to        G
       be rejected."
      15. It is this passage in the affidavit that has given rise to the
controversy before us.
       16. Pursuant to the order passed by this Court, the writ petition
filed by BOC was taken up for consideration by a learned Single Judge           H
156               SUPREME COURT REPORTS                          [2016] 1 S.C.R.


A     of the High Court. By an order dated J41h May, 2008, the learned Single
      Judge dismissed the writ petition. While disposing of the writ petition, it
      was held that though the decision making process by which Sciemed
      was declared to be qualified was improper, it could not be held that the
      RIMS had acted in an arbitrary, ma/a fide or discriminatory manner.
      The learned Single Judge noted that Sciemed had stated before this
B
      Court that the work was almost complete. The High Court observed
      that since the work awarded to Sciemed had progressed to a considerable
      extent and a major portion of money had been advanced or paid to
      Sciemed, therefore if the work order were to be set aside it would involve
      dismantling and uprooting the system that had so far been fixed which
c     would not be in the interest of the patients or the exchequer. Accordingly,
      the learned Single Judge declined to interfere with the award of the
      contract to Sciemed but left it open to BOC to file a suit for damages
      against Sciemed.
             17. Feeling aggrieved, Sciemed preferred a Letters Patent Appeal
D     before the Division Bench of the High Court which came to be dismissed
      by the impugned judgment and order dated 22"' September, 2008. While
      doing so, the Division Bench of the High Court noted that the reason
      why the learned Single Judge did not interfere with the award of the
      contract to Sciemed was because of its statement made before this
      Court on affidavit that the work was almost near completion. It was
E     also noted that cancellation of the award of contract at his stage would
      entail a heavy administrative and financial burden on the Government
      and lead to increase and double expenditure to the tune of crores of
      rupees.
             18. However, the High Court, on the submission oflearned counsel
 F    for BOC decided to verify whether the installation and supply of the
      complete system as per the notice of tender was near completion as
      stated by Sciemed in its affidavit filed in this Court. For this purpose, the
      High Court appointed a respected advocate of that Court as a one-man
      committee to visit the work site and submit a report with regard to the
G     extent of work completed or at the stage of completion.
              19. The learned advocate so appointed by the High Court submitted
      his Report on 3" July, 2008. It was stated in the Report, which was
      accepted by the High Court, that the originating point/inlet of the main
      Liquid Oxygen Gas Tank of the required specification had not yet been
      installed. It was also found that a separate 3-Phase Electric Supply
H
  MIS. SCIEMED OVERSEAS INC. v. BOC INDIA LIMITED                            157
                      [MADAN B. LOKUR, J.]

System for commissioning the project had not yet been installed. In          A
view of these two major deficiencies, the commissioning of the complete
system was being delayed. Additionally, it was noted that the Oxygen
Gas Tank was in transit from Bangalore at that time.
       20. On a consideration of the Report, the High Court took the
view that Sciemed had given a false affidavit in this Court to the effect    B
that the work was near completion. In this view of the matter, the High
Court dismissed the appeal filed by Sciemed and imposed costs of Rs.
10 lakhs to be deposited with the Jharkhand State Legal Services
Authority.
       21. At this stage, it is important to mention that Sciemed through    c
its proprietor Shailendra Prasad Singh son of Rameshwar Prasad Singh,
had filed an affidavit on or about JOth July, 2008 in the High Court in
which it was explained that the statement made in this Court on affidavit
was because the deponent was of the view that the installation of the
complete system of gas pipeline is one part of the award and installation
of liquid oxygen tank is a separate work. It was stated that the affidavit   D
filed in this Court was due to some misconception and was not with a
view to mislead this Court. In other words, the deponent sought to justify
his affidavit in this Court notwithstanding the Report of the learned
advocate. The deponent after giving the above explanation, tendered an
unconditional and unqualified apology to the High Court for the statement    E
regarding the near completion of the project.
      22. The High Court did not accept the apology given by the
proprietor of Sciemed and, therefore, imposed costs of Rs.I 0 lakhs on
Sciemed.
      23. While impugning the order passed by the High Court, it was         F
submitted by the learned counsel for Sciemed that in fact the statement
made in the affidavit filed in this Court was not a false statement but
was bona fide and not a deliberate attempt to mislead this Court. It
was also submitted that the allegedly false or misleading statement had
no impact on the decision taken by this Court and should, therefore, be      G
ignored.
      24. We are unable to accept either contention raised by learned
counsel.
     25. The correctness of the statement made by Sciemed was
examined threadbare not only by the learned Single Judge but also by         H
158               SUPREME COURT REPORTS                         [2016] l S.C.R.



A     the Division Bench and it was found that a considerable amount of work
      had still to be completed by Sciemed and it was not as if the work was
      nearing completion as represented to this Court. Additionally, the Report
      independently given by the learned advocate appointed to make an
      assessment, also clearly indicated that a considerable amount of work
      had still to be performed by Sciemed. The Report was not ex parte but
B
      was carefully prepared after an inspection of the site and discussing the
      matter with Shailendra Prasad Singh the proprietor of Sciemed and an
      engineer of Sciemed as well as officers from the RIMS.
            26. The conclusion drawn by the learned advocate after a thorough
      inspection and discussion of the issues is as follows:-
c
            "From a detailed inspection of the entire Liquid Oxygen Gas
            System as required to be installed under the tender conditions
            land the work Order, I was able to gather that at the originating
            point/inlet the main Liquid Oxygen Gas Tank of the required
            specification has not yet been installed. I also found that a separate
D           3-Phase Electric Supply System for commissioning of the project
            has not yet been installed and is reportedly in the process. I was
            informed by the hospital authorities that the 3-Phase electricity
            connection is to be supplied by the hospital authorities and are not
            required under the tender conditions or work order to be done on
E           the part of the Contractor i.e. Mis Sciemed Overseas Inc. On
            the part of the Contractor i.e. respondent no.5 I was repeatedly
            informed that the delay in the execution of the work has occasioned
            primarily due to repeated thefts of the costly Copper pipes,
            whitewashing and distemper work underway in the RIMS and
            also the operational and practical difficulties in installation in the
F           ICU's, OT's, Labour Rooms in the Gynae Department which had
            to be vacated by the hospital authorities completely after much
            persuasion, before any installation could be carried out.
            It appears that on account of delay in installation of the Main
            Liquid Oxygen Tank and the 3 Phase electrical connection, the
G           commissioning of the complete system of Liquid Medical Oxygen
            Gas together with other gases. Vacuum and Air are being delayed.
            The entire outlet system upto the individual outlets have been put
            in place as already stated above. I also noticed that at the point of
            the final outlets at the end of the Branch pipeline at the Bed heads
H           wherever they are specified by the Work Order, the double lockout
    MIS. SCIEMED OVERSEAS INC. v. BOC INDIA LIMITED                              159
                  [MADAN B. LOKUR, J.]

        with parking facility has been installed but the electrical switches     A
        for which space is left in the panel has not yet been fixed."
         27. After the Report was filed in the High Court, Sciemed also
 realized that it had in fact misled this Court. Nevertheless, Sciemed
 tried to justify the false or misleading affidavit filed in this Court. After
 giving the justification, Sciemed tendered an unconditional and unqualified     B
 apology through Shailendra Prasad Singh, proprietor of Sciemed. There
 was no need for the proprietor to have tendered an unconditional and
 unqualified apology unless there was an admission that the statement
 made before this Court was false or misleading. It would have been a
 different matter if Sciemed had tendered an unconditional and unqualified
 apology without tendering a justification.
                                                                                 c
        28. As far as the alternative submission of the learned counsel is
 concerned, we are not in a position to accept this submission also
 particularly if the entire matter is looked at in a broad conspectus.
         29. In the first instance, the work order was issued to Sciemed on      D
  25'h July, 2007 but this was not disclosed to the High Court when it
  disposed ofW.P.(C) No.4203 of2007 on 31" July, 2007. Had the factual
  position been disclosed to the High Court, perhaps the outcome of the
  writ petition filed by BOC would have been different and the issue might
  not have even travelled up to this Court. Furthermore, apparently to
  ensure that work order goes through, a false or misleading statement           E
  was made before this Court on affidavit when the matter was taken up
  on 14'h March, 2008 to the effect that the work was nearing completion .
. It is not possible to accept the view canvassed by learned counsel that
  the false or misleading statement had no impact on the decision rendered
  by this Court on 14" March, 2008. We cannot hypothesize on what                F
  transpired in the proceedings before this Court nor can we imagine what
  could or could not have weighed with this Court when it rendered its
  decision on 14"' March, 2008. The fact of the matter is that a false or
  misleading statement was made before this Court and that by itself is
  enough to invite an adverse reaction.
                                                                                 G
        30. In the case of Suo Moto Proceedings Against R. Karuppan,
 Advocate' this Court had observed that the sanctity of affidavits filed
 by parties has to be preserved and protected and at the same time the
 filing of irresponsible statements without any regard to accuracy has to

 2 (200JJ   s sec 2s9                                                            H
160                SUPREME COURT REPORTS                          [2016] I S.C.R.


A     be discouraged. It was observed by this Court as follows:
            "Courts are entrusted with the powers of dispensation and
            adjudication of justice of the rival claims of the parties besides
            determining the criminal liability of the offenders for offences
            committed against the society. The courts are further expected
B           to do justice quickly and impartially not being biased by any
            extraneous considerations. Justice dispensation system would be
            wrecked if statutory restrictions are not imposed upon the litigants,
            who attempt to mislead the court by filing and relying upon false
            evidence particularly in cases, the adjudication of which is
            dependent upon the statement of facts. If the result of the
c           proceedings are to be respected, these issues before the courts
            must be resolved to the extent possible in accordance with the
            truth. The purity of proceedings of the court cannot be permitted
            to be sullied by a party on frivolous, vexatious or insufficient grounds
            or relying upon false evidence inspired by extraneous
D           considerations or revengeful desire to harass or spite his opponent.
            Sanctity of the affidavits has to be preserved and protected
            discouraging the filing of irresponsible statements, without any
            regard to accuracy."
             31. Similarly, in Muthu Karuppan v. Parithi llamvazhuthi 3 this
E     Court expressed the view that the filing of a false affidavit should be
      effectively curbed with a strong hand. It is true that the observation was
      made in the context of contempt of Court proceedings, but the view
      expressed must be generally endorsed to preserve the purity of judicial
      proceedings. This is what was said:

F            "Giving false evidence by filing false affidavit is an evil which
             must be effectively curbed with a strong hand. Prosecution should
             be ordered when it is considered expedient in the interest of justice
             to punish the delinquent, but there must be a prima facie case of
             "deliberate falsehood" on a matter of substance and the court
             should be satisfied that there is a reasonable foundation for the
G            charge."
            32. On the material before us and the material considered by the
      High Court, we are satisfied that the imposition of costs by the High
      Court was justified. We find no reason to interfere with the impugned
      3 (201 l) s sec 496
H
   MIS. SCIEMED OVERSEAS INC. v. BOC INDIA LIMITED                        161
                      [MADAN B. LOKUR, J.]

judgment and order. The petition is dismissed.                            A
      33. However, we grant six weeks to the petitioner to make the
deposit of costs as directed by the High Court with the Jharkhand Legal
Services Authority (JHALSA). On the deposit being made, the JHALSA
should forward the amount to BOC India. The matter should be listed in
the High Court after eight weeks for compliance.                          B
Kalpana K. Tripathy                                      SLP dismissed.