Karnataka High Court
Ennen Castings Pvt. Ltd. (In ... vs M.M. Sundaresh And Ors. on 20 February, 2003
Equivalent citations: AIR2003KANT293, III(2003)BC286, [2003]114COMPCAS541(KAR), (2003)3COMPLJ133(KARN), ILR2003KAR3490, 2003(4)KARLJ122, [2003]47SCL752(KAR), AIR 2003 KARNATAKA 293, 2003 AIR - KANT. H. C. R. 1328, (2003) 3 CIVILCOURTC 526, (2003) 4 KANT LJ 122, (2003) 3 BANKCAS 286, (2003) 114 COMCAS 541, (2003) 3 COMLJ 133, (2003) 2 KCCR 1413, (2004) 1 BANKJ 948
Author: N. Kumar
Bench: N. Kumar
JUDGMENT N. Kumar, J.
1. C. A. No. 423 of 1998 is filed under Section 543(1) of the Companies Act, 1956, for a direction to the respondents who are all the directors of the company under liquidation to pay the company a sum of Rs. 6,88,311.80 along with interest.
2. The respondents have filed their statement of objections denying the liability. Thereafter the matter was referred to the commissioner to record the evidence. Accordingly, the commissioner recorded the evidence of the official liquidator and thereafter the case was set down for the evidence of the respodents. Sri M.M. Sundaresh, the first respondent in C. A. No. 423 of 1998 was examined on January 21, 2003. Respondents Nos. 7 and 6 requested the commissioner to permit them to cross-examine the said M.M. Sundaresh and also requested for cross-examination of respondents Nos. 4 and 5 in the event of they being examined. The said request of the respondents Nos. 7 and 6 was opposed by respondents Nos. 1, 4 and 5 contending that a co-respondent has no right to cross-examine the other respondent. Under those circumstances, the commissioner called upon respondents Nos. 7 and 6 to approach this court and get the necessary permission to cross-examine. Accordingly, respondents Nos. 7 and 6 have filed an application in C. A. No. 110 of 2003 seeking permission to cross-examine RW-1 and other respondents if they are examined in C. A. No. 423 of 1998.
3. In the application it is contended by the applicants that soon after their retirement as directors of the company, the company was taken over by respondents Nos. 1, 4 and 5 who are all the members of the same family and after taking over the company, they have manipulated the accounts of the company to the detriment of respondents Nos. 7 and 6. Therefore, it was contended that the interest of respondents Nos. 7 and 6 is in direct conflict with respondents Nos. 1, 4 and 5 in these proceedings, as they have made false allegations which would affect the interest of respondents Nos. 7 and 6. In the enquiry they should have the liberty to cross-examine respondents Nos. 1, 4 and 5 to expose the falsity of the statement and to place the truth before the court.
4. The application is opposed by respondents Nos. 1, 4 and 5. The sum and substance of their objection is that one co-respondent cannot be permitted to cross-examine the other respondent and of course they have denied all the allegations made by respondents Nos. 7 and 6 in the application.
5. Learned counsel appearing for respondents Nos. 6 and 7 submits that when respondent No. 1 has given the evidence accusing respondents Nos. 7 and 6 and that evidence is against the interest of respondents Nos. 7 and 6, they have a right to cross-examine them notwithstanding the fact that they have been arrayed as respondents in the proceedings.
6. Per contra, learned counsel appearing for respondents Nos. 1, 4 and 5 contends that in law a co-respondent has no such right.
7. Therefore the short question that arises for my consideration is whether a co-respondent can cross-examine the other respondent, who has given evidence against him.
8. The essence of cross-examination is that it is the interrogation by the advocate of one party of a witness called by his adversary with the object either to obtain from such witness admissions favourable to his cause or to discredit him. Cross-examination is the most effective of all means for extracting truth and exposing falsehood. The object is to impeach the accuracy, credibility and general value of the evidence given in chief to sift the facts already stated by the witness to detect and expose discrepancies or to elicit suppressed facts which will support the case of the cross-examination party. The exercise of his right is justly regarded as one of the most efficacious tests, which the law has devised for the discovery of truth. It is beyond any doubt the greatest legal engine ever invented for the discovery of truth. The right of cross-examination belongs to an adverse party and parties who do not hold that position should not be allowed to take part in the cross-examination.
9. As a general rule, evidence is not legally admissible against a party, who at the time it was given had no opportunity to cross-examine the witness or of rebutting their testimony by other evidence. When two or more persons are tried on the same indictment and are separately defended any witness called by one of them may be cross-examined on behalf of the others, if he gives any testimony to incriminate them. A defendant may cross-examine his co-defendant who gives evidence or any of his co-defendant's witnesses, if his co-defendant's interest is hostile to his own.
10. Though there is no specific provision in the Indian Evidence Act providing for such an opportunity for a defendant-respondent to cross-examine a co-defendant/co-respondent, however, having regard to the object and scope of cross examination, it is settled law that when allegations are made against the party to the proceedings, before that evidence could be acted upon, that party should have an ample opportunity to cross-examine the person who had given the evidence against him. It is only after such an opportunity is given, and the witness is cross examined that evidence becomes admissible. In this regard it is useful to refer to passages in the law of evidence, by the learned authors on the subject.
Sarkar on Evidence, eighth edition p. 1141 :
"No special provision is made in the Evidence Act for the cross-examination of the co-accused's or co-defendant's witnesses. But the procedure to be adopted may be regulated by the well-known rule that no evidence should be received against one who had no opportunity of testing it by cross-examination ; as it would be unjust and unsafe not to allow a co-accused or co-defendant to cross-examine witness called by one whose case was adverse to his, or who has given evidence against. If there is no clash of interest or if nothing has been said against the other party, there cannot be any right of cross-examination."
Principles and Digest of the Law of Evidence by M. Monir, third edition, p. 1114 :
"A defendant may cross-examine a co-defendant or any other witness who has given evidence against him, and reply on such evidence, though there is no issue joined between them".
Phipson on Evidence, tenth edition, para. 1538 :
"A defendant may cross-examine a co-defendant or any other witness who has given evidence against him, and reply on such evidence though there is no issue joined between them."
11. Therefore, it is very clear from the aforesaid passages that it is the settled law that no evidence should be received against one who had no opportunity of testing it by cross-examination ; as it would be unjust and unsafe not to allow a co-accused or co-defendant to cross-examine a witness called by one whose case was adverse to him, or who has given evidence against. If there is no conflict of interest, such an opportunity need not be given. Therefore, the condition precedent for giving an opportunity to a defendant-respondent to cross-examine a co-respondent or a defendant is either from the pleadings of the parties or in the evidence, there should exist conflict of the interest between them. Once it is demonstrated that their interest is not common and there is a conflict of interest and evidence has been adduced, affecting the interest of the co-defendant/co-respondents, then before the court could act on that evidence, the person against whom the evidence is given should have an opportunity to cross-examine the said witness, so that ultimately truth emerges on the basis of which the court can act. Under these circumstances, there is no substance in the contentions of respondents Nos. 1, 4 and 5 that a co-respondent has 'no right to cross-examine the other respondent.
12. Hence, I direct the commissioner to permit respondent Nos. 7 and 6 to cross-examine RW-1, who has already been cross-examined-in-chief and permit them to cross-examine any other respondents whose evidence is in direct conflict with the interest of respondents Nos. 7 and 6, Similarly, respondents Nos. 1, 4 and 5 will also have an opportunity to cross-examine respondents Nos. 6 and 7 as from the pleadings on record it is demonstrated that their interest is in direct conflict with each other.
13. Time granted for recording of evidence is extended by another three weeks from the date of receipt of this order.
14. C. A. No. 423 of 1998 and 110 of 2003 are allowed accordingly.