Delhi District Court
State vs . B.K. Malhotra Etc. on 14 December, 2022
IN THE COURT OF DEVANSHU SAJLAN
METROPOLITAN MAGISTRATE - 07 (WEST)
TIS HAZARI COURTS, DELHI
CC No. 66026/2016
State Vs. B.K. Malhotra Etc.
FIR No. 190/1998
PS Paschim Vihar East
14.12.2022
Present: Sh. Gyan Chandra Soni, Ld. Special APP for the State
Sh. Madhukar Pandey and Sh. Umesh Kumar Singh, Ld. Counsels for accused
no.2
Sh. Chandra Shekhar and Sh. Prabhat Kumar, Ld. Counsels for accused no.1
Sh. Sundaram Ojha, Sh. Shikhar Srivastava and Ms. Neha Tripathi, Ld. Counsels
for the complainant.
TABLE OF CONTENTS
Contentions raised by accused persons and consequent discussion
I. The court cannot rely on any document which is not part of the chargesheet
II. No case is made out since the police itself had filed a closure report and cognizance was
taken based on extraneous material which is not part of the chargesheet
III. The accused persons cannot be charged with the offence of cheating and criminal breach
of trust simultaneously
IV. Criminal Breach of Trust not made out in the present case since there was no dishonest
use of the property in violation of law
IV.1 Sub-Contention 1: Proceedings recorded in the bound minute book are
evidence of the proceedings which happened in the meeting and no oral evidence
can be relied upon in this regard.
IV.2 Sub-Contention 2: There is bar on relying upon oral statements in relation to
the contents of the written document (minute book)
V. No case of forgery made out since the original minute book was not seized
VI. No case of forgery made out against accused no. 1 since he is not the maker of the
minutes
VII. Conclusion
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The present matter is one of the oldest matters in the undersigned court (FIR was
registered way back in 1998) and is pending at the stage of framing of charge/ discharge of
accused persons. In order to fast track the proceedings in the present matter, day-to-day hearings
were conducted in November 2022 to hear arguments on the point of charge and the order was
reserved on the point of charge. Vide this order, I shall pronounce the order on the point of
charge.
1. The case of the prosecution rests upon fabrication/ forgery of the minutes of board
meetings of Cross-Country Hotels Limited ("CCHL") by Sh. BK Malhotra ("accused no. 1")
and accused Ms. Suman Gambhir ("accused no. 2"). It is the case of the prosecution that
accused no. 1 was working as Director, Finance, and accused no. 2 was functioning as Company
Secretary in CCHL. It has been further alleged that a meeting of the board of directors of CCHL
was held on 26.09.1997 wherein accused no. 1 had given a suggestion to the effect that in order
to raise funds for CCHL, either a foreign loan can be taken or lands belonging to CCHL can be
sold. The board minutes of 26.09.1997 reflect that Sh. VK Juneja (chairman of CCHL) and
accused no. 1 were authorized by the board of directors to sell the land of CCHL situated in
Goa1. It has been further alleged that thereafter in the meeting of board of directors held on
28.11.1997, notes of the minutes of the previous meeting were circulated by accused no. 2 in
which it was written that authority to sell land situated in Goa of CCHL was granted to accused
no. 1 and Sh. VK Juneja. It is the case of the prosecution that said resolution was objected to by
the entire board of directors, including Sh. Anil Advani, who was appointed as nominee director
in CCHL by the lender Tourism Finance Corporation of India ("TFCI"), who submitted that no
land of CCHL can be sold without taking permission/ NOC from TFCI.2 It has been further
alleged that pursuant to the objections raised by the board of directors, it was unanimously
resolved that the said land situated in Goa will not be sold and the authority purportedly granted
to accused no. 1 to sell the Goa land was withdrawn in the board meeting of 28.11.1997.3
1
However, as per the statements recorded under section 161 CrPC of witnesses Sh. Sunil Kumar
Juneja and Sh. Vimal Kumar, who were present in the said meeting, no such resolution was passed.
2
See statement recorded under section 161 CrPC of Sh. Anil Advani.
3
See statements recorded under section 161 CrPC of Sh. Bhupendra Singh, Sh. Sunil Kumar
Juneja, Sh. Vimal Kumar, Sh. Pradeep Dutta and Sh. Anil Adwani).
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2. As per the case of the prosecution, instead of recording the proceedings of the board
meeting of 28.11.1997 correctly, accused no. 2, in connivance with accused no. 1, prepared
forged minutes of the board meeting conducted on 28.11.1997 in which they reflected that the
board minutes of 26.09.1997 were duly confirmed in the meeting of 28.11.1997 (thereby
implying that accused no. 1 continued to have authority to sell the land situated in Goa) whereas
as per the prosecution, the minutes of 26.09.1997 were not confirmed on 28.11.1997 and the
authority of accused no. 1 to sell the Goa land was specifically withdrawn.
3. It has been further alleged that the accused no. 1, in connivance with the accused no. 2,
misrepresenting himself to be duly authorized to sell the land of CCHL situated in Goa based on
forged board minutes, executed two sale deeds with respect to land of CCHL situated in Goa for
an undervalued sale consideration of Rs. 1,08,63,000 (Rupees One Crore Eight Lakhs Sixty-
Three Thousand only). Accordingly, it has been argued that accused no. 1 and accused no. 2,
jointly and severally, misused their purported office and fiduciary relationship with CCHL and
acted in a manner so as to deceive the company they were working for with malafide intent and
to make wrongful gains at the behest of CCHL, whose public shareholders have suffered
irreparable wrongful loss at their hands.
4. Before considering the factual aspects, it is imperative to discuss the scope of duty of the
Court at the stage of framing of charge. The scope of scrutiny at the stage of framing of charge
has been laid down by the Hon'ble Supreme Court in Asim Shariff v. National Investigation
Agency, (2019) 7 SCC 148, wherein it was held that the trial court is required to see whether a
prima-facie case is made out at the stage of framing of charge:
18. Taking note of the exposition of law on the subject laid down by this Court, it is
settled that the Judge while considering the question of framing charge under Section 227
CrPC in sessions cases(which is akin to Section 239 CrPC pertaining to warrant
cases) has the undoubted power to sift and weigh the evidence for the limited
purpose of finding out whether or not a prima facie case against the accused has
been made out; where the material placed before the Court discloses grave suspicion
against the accused which has not been properly explained, the Court will be fully
justified in framing the charge; by and large if two views are possible and one of them
giving rise to suspicion only, as distinguished from grave suspicion against the accused, 3
(2018) 13 SCC 455 4 (2019) 14 SCC 207 : (2019) 6 Scale 794 the trial Judge will be
justified in discharging him. It is thus clear that while examining the discharge
application filed under Section 227 CrPC, it is expected from the trial Judge to exercise
its judicial mind to determine as to whether a case for trial has been made out or not. It is
true that in such proceedings, the Court is not supposed to hold a mini trial by
marshalling the evidence on record.
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5. Further, it is a settled position of law that the Court is not supposed to work as a post
office and has a duty to apply its mind at the stage of framing of charge. In this regard, the
following extract from Ghulam Hassan Beigh v. Mohd. Maqbool Magrey, 2022 SCC OnLine
SC 913, is relevant:
29. Thus from the aforesaid, it is evident that the trial court is enjoined with the duty
to apply its mind at the time of framing of charge and should not act as a mere post
office. The endorsement on the charge sheet presented by the police as it is without
applying its mind and without recording brief reasons in support of its opinion is
not countenanced by law. However, the material which is required to be evaluated by
the Court at the time of framing charge should be the material which is produced and
relied upon by the prosecution. The sifting of such material is not to be so meticulous as
would render the exercise a mini trial to find out the guilt or otherwise of the accused. All
that is required at this stage is that the Court must be satisfied that the evidence
collected by the prosecution is sufficient to presume that the accused has committed
an offence. Even a strong suspicion would suffice. Undoubtedly, apart from the
material that is placed before the Court by the prosecution in the shape of final report in
terms of Section 173 of CrPC, the Court may also rely upon any other evidence or
material which is of sterling quality and has direct bearing on the charge laid before
it by the prosecution. (See Bhawna Bai v. Ghanshyam, (2020) 2 SCC 217).
6. Considering the aforesaid legal principles in mind, I shall now proceed to consider the
following case. Arguments have been heard in detail and file has been perused. The contentions
raised by the accused persons have been discussed hereinafter.
I. Contention - The court cannot rely on any document which is not part of the
chargesheet
7. The first contention of the accused persons is that the entire case rests upon forgery of
minute book by the accused persons. However, the minute book, on which the entire case of the
prosecution rests, has not been seized by the IO and the original minute book does not form part
of the chargesheet. In absence of the same, it has been argued that no case lies against the
accused persons since the court cannot peruse any material outside the chargesheet at the stage of
framing of charge. It has been argued that since the original minute book for the relevant period
(04.02.1997 to 28.11.1997) was not seized by the IO, the prosecution has no legs to stand upon.
8. In relation to this contention, it is imperative to note that in the present case, an
application under section 91 CrPC was moved by the accused themselves to summon the IO to
produce those documents which were handed over to the IO by accused no. 1 during
investigation but were not made part of the chargesheet. The said set of documents included the
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certified copy of the original minute book of CCHL for the relevant period (04.02.1997 to
28.11.1997).4 The said application was withdrawn by the accused and the accused themselves
placed on record the certified copy of the original minute book obtained from Hon'ble High
Court. Vide order dated 28.08.20015 and 21.11.2015, the certified copy of the minute book was
taken on record by the Court and became a part of court record. Hence, it is evident that the
court, in exercise of its power under section 91 CrPC, allowed the accused to place the certified
copy of the minute book on record. Having placed the certified copy of the minute book on
record themselves, the accused persons cannot contend that the said certified minute book cannot
be relied upon.
9. In any case, it is a settled position of law that based on an application under section 91
CrPC moved by the accused, the court can summon a document at the stage of framing of charge
even if the same is not part of the chargesheet if the following conditions are satisfied: (1)
material is withheld by police/prosecution; (2) said material is of sterling quality, and (3) said
material will have crucial bearing on framing of charge. The said position of law was laid down
by Hon'ble Supreme Court in the judgment of Nitya Dharmananda v. Gopal Sheelum Reddy,
(2018) 2 SCC 93:
While ordinarily the Court has to proceed on the basis of material produced with the
charge-sheet for dealing with the issue of charge, but if the Court is satisfied that there
is material of sterling quality, which has been withheld by the Investigator, the
Court is not debarred from summoning or relying upon the same even if such
document is not part of the charge-sheet.
It does not mean that the defence has a right to invoke Section 91 of the Cr.P.C. dehors
the satisfaction of the Court, at the stage of charge.
10. Thus, settled law is, at the stage of framing of charge, the Court is empowered to
summon production of such documents, which are not part of the charge-sheet but of sterling
quality, which have been withheld by the investigator to ensure fair and impartial trial.
Therefore, it is evident that the court clearly has power to summon material even if the said
material is not part of the chargesheet. In the present case, the Court was satisfied with the fact
that the minute book will have crucial bearing on the issue of framing of charge and hence,
4
At the stage of investigation, notice had been issued to accused no. 1 under section 91 CrPC by
the IO to produce original minute book which contained the minutes of 26.09.1997 and 28.11.1997. The
said notice was duly replied by accused no. 1 and it was submitted that the original minute book for the
relevant period was deposited with Hon'ble High Court in a civil suit and the certified copy of the
documents submitted to Hon'ble High Court were handed over to the IO.
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allowed the accused to place the same on record. Therefore, this contention of the accused
stands rejected.
II. Contention - No case is made out since the police itself had filed a closure report and
cognizance was taken based on extraneous material which is not part of the
chargesheet
11. It has been submitted that the police itself had filed a closure report in the present matter.
Strong reliance has been placed on the noting of the SHO on the final report filed by the police,
especially on the part that "जिन धाराओं में अजियोग जिया गया है िुमम नह ं बनता| कंपनी का आपस
मामला प्रतीत होता है ". Therefore, it has been submitted that the police itself was of the opinion
that it is an internal matter of the company and there is no offense made out against the accused
persons. It has been submitted that the cognizance was subsequently taken by Ld. ACJM,
Nawalgarh based on extraneous considerations which were not part of the chargesheet.
12. In this regard, it is pertinent to note that the closure report specifically states that
"अनुसंधान से ये तो साबित है बक बनदे शक, बित्त, िी.के. मल्होत्रा ने कंपनी को धोखा दे ने और आबथिक हानी
जि जनयत से िंपन सजिव सुश्र सुमन गंि र िे साथ जमलिर अपराध शायंत्र िरिे िंपन िे द्वारा संपजि
िो बेिे िे अजधिार िो समाप्त जिए िाने िे बाद ि िंपन जि िरोडो रुपये ि गोवा स्थथर संपजि िो
जवक्रेय िर जदया". Therefore, it is evident that the IO had formed a definite opinion that a case was
made out against both the accused persons. The complete reading of the closure report would
show that the IO was of the opinion that though a case is made out, the concerned police station
situated in Nawalgarh, Rajasthan does not have jurisdiction5 and hence, the closure report was
submitted by the IO. Therefore, the noting made by the SHO cannot be read in isolation of the
contents of the closure report. The IO had recorded the statements of the directors who were
present in the board meeting on 28.11.1997 and based on their statements that the board had
decided to withdraw the authority to sell the Goa land on 28.11.1997, the IO had formed an
opinion that a case is made out against the accused persons.
5
The question of jurisdiction is not relevant at this stage anymore since the Hon'ble Supreme
Court of India has transferred the case from the court of Ld. ACJM, Nawalgarh to Delhi vide order dated
09.08.2004.
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13. In any case, it is a settled position of law that when a closure report is placed before a
Court, it may disagree with the report and take the view that there is sufficient ground for further
proceeding, take cognizance of the offence and issue process (Gangadhar Janardan Mhatre v.
State of Maharashtra, (2004) 7 SCC 768).
14. Secondly, with respect to the contention that cognizance was taken based on extraneous
considerations not part of chargesheet, it is pertinent to note that if the summoning order is based
on erroneous considerations, then the option available to the accused persons was to file a
revision against the summoning order. The said remedy has already been availed. In any case,
this Court cannot sit in review of the summoning order. Therefore, this contention of the learned
counsel for the accused does not merit any consideration. Therefore, the contention of the
accused stands rejected.
III. Contention - The accused persons cannot be charged with the offence of cheating and
criminal breach of trust simultaneously
15. It has been forcefully argued that though cognizance was taken under section 408 IPC
(Criminal breach of trust by clerk or servant) and 420 IPC (Cheating and dishonestly inducing
delivery of property) vide the summoning order dated 25.05.1999, a person cannot be charged
with the offence of cheating and criminal breach of trust simultaneously for the same transaction.
It has been argued that for the offence of cheating, it is a prerequisite that dishonest intention
must exist at the inception of any transaction whereas in case of criminal breach of trust, there
must exist a relationship between the parties whereby one party entrusts another with property as
per law, therefore, for commission of criminal breach of trust, the dishonest intention comes
later, i.e., after obtaining dominion over the property by the accused person whereas for
commission of cheating, dishonest intention of the accused has to be present at the inception of
the transaction.
16. The prosecution has argued that the ingredients of criminal breach of trust by clerk or
servant are made out in the present case since (1) the accused persons, being employed as
Director, Finance and Company Secretary in CCHL fall in the category of servant of CCHL; (2)
accused persons were entrusted with a property (i.e., minute book and other records of CCHL)
by CCHL or had dominion over the same; (3) they dishonestly used that property; (4) the
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dishonest use has been done in violation of direction of law prescribing the mode in which such
trust is to be discharged.
17. To elaborate, it is the case of the prosecution that the accused persons were drawing
salary from CCHL and hence, both the accused persons were working as employees of CCHL
and there was a master-servant relationship between the company and accused persons. In this
regard, it is pertinent to note that it is a settled position of law that though usually directors are
agents of the company, there is nothing in law to prevent a director from accepting employment
under a contract with the company (K.R. Kothandaraman v. Commissioner of Income-Tax,
1965 SCC OnLine Mad 271). Therefore, since there was a remuneration contract between the
accused persons and CCHL, and they were drawing salary from CCHL, prima-facie, there was a
master servant relationship between the accused persons and CCHL and the accused persons can
be categorized as servants/ employees as mentioned in section 408 IPC. Secondly, prima-facie,
the accused persons were entrusted with the company's minute records and had sufficient
dominion over them. It has been further alleged that the said minute book was "dishonestly used"
since fabricated resolutions were inserted in the minute book with the intention of causing
wrongful gain to the accused persons and to cause wrongful loss to CCHL by using the
fabricated resolutions to sell off the Goa land of CCHL. It has been further alleged that the said
"dishonest use" of the minute book was in "violation of direction of law" which prescribes that
the minutes of each meeting shall contain a fair and correct summary of the proceedings thereat
(see section 118 (2), Companies Act, 2013). It is pertinent to note that the minute book was being
kept at the office of accused no. 1 and the accused no. 1 has himself admitted to being in
possession of the minute book since he has submitted the original minute book in the Hon'ble
High Court. Therefore, based on the same, the role of both accused no. 1 and accused no. 2 is
prima-facie made out as far as the offence of section 408 IPC is concerned.
18. However, once the prosecution has argued that criminal breach of trust is made out in the
present case, it cannot also urge framing of charge of cheating for the same transaction. In this
regard, reliance is placed upon the judgment of Hon'ble Delhi High Court in Wolfgang Reim v.
State, 2012 SCC OnLine Del 3341, in which it was held that a person cannot be charged with the
offence of cheating and criminal breach of trust simultaneously for the same transaction:
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34. Further, a person cannot be charged with the offence of cheating and criminal
breach of trust simultaneously for the same transaction because for the offence of
cheating, it is a prerequisite that dishonest intention must exist at the inception of any
transaction whereas in case of criminal breach of trust, there must exist a relationship
between the parties whereby one party entrusts another with property as per law,
therefore, for commission of criminal breach of trust, the dishonest intention comes later,
i.e, after obtaining dominion over the property by the accused person whereas for
commission of cheating, dishonest intention of the accused has to be present at the
inception of the transaction.
19. The said position of law was also laid down in Mahindra and Mahindra Financial
Services Ltd. v. Delta Classic (P.) Ltd., 2009 SCC OnLine Gau 105 (see para 14, 15 and 16).
20. Therefore, based on the aforesaid case laws, it is evident that the accused persons cannot
be charged simultaneously of the offense of criminal breach of trust and cheating simultaneously.
Accordingly, the accused persons are hereby discharged of the offense under section 420
IPC.
IV. Contention - Criminal Breach of Trust not made out in the present case since there
was no dishonest use of the property in violation of law
IV.1 Sub-Contention 1: Proceedings recorded in the bound minute book are evidence of the
proceedings which happened in the meeting and no oral evidence can be relied upon in this
regard.
21. Learned counsel for the accused have argued that there was no dishonest use of the
minute book, and it was maintained in accordance with law. It has been submitted that once the
complete bound minute book is produced in court, there is a presumption that the same reflects
the true proceedings conducted at the board meeting and the same shall be considered as
evidence of the proceedings recorded therein. In this regard, the law in relation to maintenance of
the minutes book is discussed hereinafter.
22. Section 118(7) and 118(8), Companies Act, 2013 states that (these sections correspond to
section 194 and 195 of the Companies Act, 1956):
(7) The minutes kept in accordance with the provisions of this section shall be evidence
of the proceedings recorded therein.
(8) Where the minutes have been kept in accordance with sub-section (1) then, until
the contrary is proved, the meeting shall be deemed to have been duly called and
held, and all proceedings thereat to have duly taken place, and the resolutions passed by
postal ballot to have been duly passed and in particular, all appointments of directors, key
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managerial personnel, auditors or company secretary in practice, shall be deemed to be
valid. (Emphasis added).
23. Section 118(1), Companies Act, 2013 states that:
(1) Every company shall cause minutes of the proceedings of every general meeting of
any class of shareholders or creditors, and every resolution passed by postal ballot and
every meeting of its Board of Directors or of every committee of the Board, to be
prepared and signed in such manner as may be prescribed and kept within thirty days
of the conclusion of every such meeting concerned, or passing of resolution by postal
ballot in books kept for that purpose with their pages consecutively numbered.
24. The detailed manner of maintenance of the minutes is prescribed in the Secretarial
Standards ("SS-1") prepared by Institute of Company Secretaries of India ("ICSI").6 Some of the
pertinent provisions of SS-1 are mentioned below:
(i) As per clause 7.2.1.2, minutes shall record the names of the Directors present and the
Company Secretary who is in attendance at the Meeting. The names of the Directors are required
to be listed in alphabetical order or in any other logical manner.
(ii) As per clause 7.3.1, Minutes are required to contain a fair and correct summary of the
proceedings of the Meeting. The Company Secretary is required to record the proceedings of the
Meetings.
(iii) As per clause 7.6.1, Minutes of the Meeting of the Board are required to be signed and dated
by the Chairman of the Meeting. As per clause 7.6.2, the Chairman is required to initial each
page of the Minutes, sign the last page and append to such signature the date on which and the
place where he has signed the Minutes.
25. Strong reliance has been placed upon the judgment of the Hon'ble Supreme Court in
M.S. Madhusoodhanan v. Kerala Kaumudi (P) Ltd., (2004) 9 SCC 204, in which it was held
that the minutes of meetings kept in accordance with the provisions of Section 193 Companies
Act, 1956 shall be evidence of the proceedings recorded therein, and, unless the contrary is
proved, it shall be presumed that the meeting of the Board of Directors was duly called and held
and all proceedings thereat to have duly taken place.
6
In terms of sub-section (10) of Section 118 of the Act, every company is required to observe Secretarial
Standards.
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26. Based on the above provisions of law and case law, it has been urged that only the
contents of the minutes book will be admissible as evidence and no oral evidence can be
admissible in relation to the proceedings of board meeting which was held on 28.11.1997. It has
been submitted that the certified copy of the minute book containing the minutes dated
28.11.1997 specifically record that in the said meeting, minutes of the previous board meeting
were read and confirmed by all attending directors after which the chairman initialed all pages
and signed the minutes of 26.09.1997 board minutes. Therefore, it has been argued that the
minutes have been maintained in accordance with law, and hence, only the said minutes are
evidence of the proceedings of the board minutes and no oral evidence can be taken into
consideration regarding the same. Accordingly, it has been submitted that the statements by Sh.
Bhupendra Singh, Sh. Sunil Kumar Juneja, Sh. Vimal Kumar, Sh. Pradeep Dutta and Sh. Anil
Adwani, to the effect that it was unanimously resolved on 28.11.1997 that the land situated in
Goa will not be sold and the authority purportedly granted to accused no. 1 to sell the Goa land
was withdrawn in the board meeting of 28.11.1997, cannot be considered for any purpose.
27. There is no quarrel with the position of law laid down in M.S. Madhusoodhanan
(supra). However, it is pertinent to note that the minutes of the meeting of 28.11.1997, placed on
record by the accused in terms of section 91 CrPC, have not been initialed by the Chairman and
they also do not contain the signature of the Chairman on the last page. As discussed above, as
per clause 7.6.2 of the SS-1, the Chairman is required to initial each page of the Minutes, sign the
last page and append to such signature the date on which and the place where he has signed the
Minutes. However, a bare perusal of the pages of the minutes of the meeting dated 28.11.1997
will show that none of the pages of the said minutes are initialed by the Chairman and the last
page also does not bear the signature of the Chairman. Therefore, it cannot be contended that the
minutes of the said date were prepared and signed in a manner prescribed under law.
Accordingly, the presumption provided under section 118 Companies Act, 2013 (formerly
section 195, Companies Act, 1956) is not available in the present matter as far as the minutes
dated 28.11.1997 are concerned.
28. It has been contended next that the said minutes bear the signatures of all the directors on
the first page and once the minutes have been signed by the directors, they cannot later dispute
the same. This contention cannot be accepted. It is pertinent to note that as per clause 7.2.1.2 of
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SS-1, minutes are required to record the names of the directors present. Therefore, the first page
merely records the attendance of the directors who were present in the said meeting and their
signatures next to their names is merely to record their attendance. The said signatures on the
first page cannot be contended to mean acceptance of the said minutes. It is pertinent to note that
minutes are written after conclusion of the meeting and acceptance of the draft minutes.
However, the signatures of attendance would have been done by the directors on the date of the
meeting itself (28.11.1997) and at that point of time, the contents of the minute book for
28.11.1997 would have been blank. Therefore, the said signatures of the directors cannot be said
to be acceptance of the board minutes of 28.11.1997 since when the said attendance signatures
would have been done as per procedure, the minutes would not have been written by that time.
29. Therefore, as far as the minutes of board meeting dated 28.11.1997 are concerned, there
cannot be any presumption of validity in terms of section 118 Companies Act 2013 (formerly
section 195 Evidence Act). Hence, the Court can look beyond the contents of the said minute
book to come to a conclusion whether a prima-facie case is made out or not.
IV.2 Sub-Contention 2: There is bar on relying upon oral statements in relation to the contents
of the written document (minute book).
30. It has been contended that in terms of section 92, Indian Evidence Act, oral testimony in
relation to a written document is barred and hence, the statements of witnesses Sh. Bhupendra
Singh, Sh. Sunil Kumar Juneja, Sh. Vimal Kumar, Sh. Pradeep Dutta and Sh. Anil Adwani,
given under section 161 CrPC are of no use to decide the issue of framing of charge. In this
regard, it is pertinent to note that proviso (1) of Section 92 of the Evidence Act allows oral
statement/proof of such fact which would invalidate any document such as fraud, intimidation,
illegality, want of due execution, want of capacity in any contracting party, want or failure of
consideration, or mistake in fact or law. In this regard, it would be apposite to reproduce the
following extract from Placido Francisco Pinto v. Jose Francisco Pinto, 2021 SCC OnLine SC
842:
28. It is beyond dispute that a sale deed is required to be registered i.e. a document
required by law to be reduced to the form of a document. Therefore, no evidence of any
oral agreement or statement shall be admitted for the purpose of contradicting, varying,
adding or subtracting from its terms. The proviso (1) of Section 92 of
the Evidence Act on which reliance was placed is a proof of such fact which would
invalidate any document such as fraud, intimidation, illegality, want of due
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execution, want of capacity in any contracting party, want or failure of
consideration, or mistake in fact or law. Section 92 of the Evidence Act reads as under:
"92. Exclusion of evidence or oral agreement. - When the terms of any such contract,
grant or other disposition of property, or any matter required by law to be reduced to the
form of a document, have been proved according to the last section, no evidence of any
oral agreement or statement shall be admitted, as between the parties to any such
instrument or their representatives in interest, for the purpose of contradicting, varying,
adding to, or subtracting from, its terms:
Proviso(1).--Any fact may be proved which would invalidate any document, or which
would entitle any person to any decree or order relating thereto; such as fraud,
intimidation, illegality, want of due execution, want of capacity in any contracting party,
want or failure of consideration, or mistake in fact or law."
29. The respondents were free to prove fraud in execution of the sale deed.
31. Therefore, oral evidence in relation to a written document is not completely barred and the present case may fall under the category of proviso 1 to section 92, Indian Evidence Act since it is the case of the prosecution that the contents of minutes book are invalidated on account of fraud, illegality and want of due execution. At this stage, the admissibility of the oral statements cannot be decided and only a prima-facie case is required to be seen.
32. Therefore, based on the aforesaid discussions, there is no bar on considering the statement of witnesses recorded under section 161 CrPC. It is pertinent to note that witnesses Sh. Bhupendra Singh, Sh. Sunil Kumar Juneja, Sh. Vimal Kumar, Sh. Pradeep Dutta and Sh. Anil Adwani have given a statement under section 161 CrPC to the effect that it was unanimously resolved on 28.11.1997 that the land situated in Goa will not be sold and the authority purportedly granted to accused no. 1 to sell the Goa land was withdrawn in the board meeting of 28.11.1997. All these persons were present in the meeting conducted on 28.11.1997 and can depose about the proceedings which were conducted on the said date. Therefore, their statement under section 161 CrPC cannot be ignored at this stage and it is imperative to put the case for trial in order to unearth the truth.
33. Accordingly, based on the statements of the aforesaid persons under section 161 CrPC, a prima-facie case under section 408 IPC is made out against both the accused persons since (1) the accused persons, being employed as Director, Finance and Company Secretary in CCHL fall in the category of servant of CCHL (see paragraph 17 of this order); (2) accused persons were entrusted with a property (i.e., minute book and other records of CCHL) by CCHL or had dominion over the same; (3) they dishonestly used that property since fabricated resolutions were Page 13 of 16 inserted in the minute book with the intention of causing wrongful gain to the accused persons and to cause wrongful loss to CCHL by using the fabricated resolutions to sell off the Goa land of CCHL; (4) the dishonest use of the minute book was in "violation of direction of law" which prescribes that the minutes of each meeting shall contain a fair and correct summary of the proceedings thereat (see paragraph 17 of this order).
V. Contention - No case of forgery made out since the original minute book was not seized
34. Learned counsel for the accused have submitted that without seizing of the original minute book, no case is made out of forgery against the accused persons since the offense of forgery is only applicable in a case where the original minute-book is part of the record. In this regard, reliance can be placed on Srichand P. Hinduja v. State through C.B.I, 2005 SCC OnLine Del 676, in which it has been held that forgery cannot be proved in absence of original documents.
35. While usually original documents are required for framing a charge of forgery, the facts of the present case are slightly different, and the certified copy of the minute book can be relied upon to frame the charge of forgery in light of the reasons discussed hereinafter. It is pertinent to note that it has been mentioned in clause 7.3.1 of the SS-1 that the Company Secretary is required to record the proceedings of the board meetings. Therefore, when the certified copy of the minute book has been produced, there is a legal presumption of law that the same was recorded by the Company Secretary. It is not in dispute that the Company Secretary of CCHL on 28.11.1997 was accused Ms. Suman Gambhir. Therefore, at this stage, in light of the legal presumption, it can be safely concluded on a prima-facie basis that accused Ms. Suman Gambhir is the maker of the minutes dated 28.11.1997 and the comparison of her handwriting with the original minute book is not required.
36. Accordingly, a prima-facie case under section 467 IPC is made out against accused Ms. Suman Gambhir since (1) prima-facie, she is the maker of the minutes of the meeting dated 28.11.1997; (2) the said minutes were made to make people believe that such minutes were made and signed by the authority of CCHL, by whose authority, she knew that the minutes were not made; (3) the minutes dated 28.11.1997 was forged to give authority to accused no. 1 to make or transfer the valuable security (i.e. the land of CCHL situated in Goa).
Page 14 of 16VI. Contention - No case of forgery made out against accused no. 1 since he is not the maker of the minutes
37. It has been argued that the accused no. 1 cannot be charged with forgery since he is not the maker of the minutes dated 28.11.1997. In this regard, it is pertinent to note that it is a settled position of law that making of a document is different than causing it to be made and for constituting an offence under Section 464, IPC, it is imperative that a false document is made, and the accused person is the maker of the same, otherwise the accused person is not liable for the offence of forgery. The said position of law was laid down in the judgment of Sheila Sebastian v. R. Jawaharaj, (2018) 7 SCC 581:
25. Keeping in view the strict interpretation of penal statute i.e. referring to rule of interpretation wherein natural inferences are preferred, we observe that a charge of forgery cannot be imposed on a person who is not the maker of the same. As held in plethora of cases, making of a document is different than causing it to be made. As Explanation 2 to Section 464 further clarifies that, for constituting an offence under Section 464 it is imperative that a false document is made and the accused person is the maker of the same, otherwise the accused person is not liable for the offence of forgery.
38. There is no allegation against the accused no. 1 that he is the maker of the forged minutes. There is no material on record which proves that the minutes were fabricated by the accused no. 1 himself. The allegation against accused no. 1 is that he caused the minutes to be forged in connivance with accused no. 2. Therefore, the accused no. 1 cannot be charged of the offence of forgery. However, the accused no. 1 is prima-facie liable for the offense under section 471 IPC since accused no. 1 used the forged minute book for disposing of land of CCHL situated at Goa with the knowledge or reason to believe that the said minute book is forged.
VII. Conclusion:
39. In conclusion, both accused persons are prima-facie liable to be charged under section 408/34 IPC. Further, accused no. 2 Ms. Suman Gambhir is prima-facie liable to be charged under section 467 IPC and accused no. 1 Sh. BK Malhotra is liable to be charged under section 471 IPC. Both accused persons are hereby discharged of the offense under section 420 IPC.
Since the accused persons have been discharged under section 420 IPC (cheating), they consequently stand discharged for the offense of section 468 IPC (forgery for the purpose of cheating). Further, section 423 IPC is not also made out since it is not the case of the prosecution that the sale deed executed for the sale of Goa land contains any false statement relating to the Page 15 of 16 consideration for such transfer. In any case, the original sale deed of the Goa land is not part of the record and hence, there is no material on record which can be used to frame charge under section 423 IPC. Further, no prima-facie case is made out under section 461 or 462 IPC since there is no eyewitness who has seen either accused no. 1 or 2 break open or unfasten a receptacle and in absence of any eye-witness, the said offense is not made out. Lastly, the charge under section 120-B IPC is also not made out since the said offence cannot be made out based on deemed presumption. The prosecution has not been able to prima-facie prove, based on any material, existence of any agreement to hatch criminal conspiracy and the entire case is sought to be made out on the basis of deemed presumption that since the board minutes were fabricated, there would have been an agreement to commit an illegal act. It is a settled position of law that suspicion cannot take the place of legal proof and existence of a meeting between the accused persons is not by itself sufficient to infer the existence of criminal conspiracy. Therefore, in light of any cogent material, the accused persons are discharged under section 120-B, IPC as well.
40. Based on the abovesaid discussion, let charge be framed upon accused no. 1 under section 408/34 and 471 IPC and under section 408/34 and 467 IPC upon accused no. 2. Put up for framing of formal charge on the NDOH on 02.01.2023. Since both the accused persons are senior citizens, they are at liberty to appear through VC for the purpose of framing of charge.
41. Since the present case is more than 20 years old, it is hereby directed that upon framing of charge, the present matter be listed on Friday of each week of the month for recording of PE from 2:00 pm to 04:00 pm, starting from 13.01.2023.
42. Let a copy of the order be given dasti.
[DEVANSHU SAJLAN] MM-07/(West)/Delhi 14.12.2022 Page 16 of 16