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Witness -Managing Director of defendant No. 1 Company has produced copy of annual returns. These will be indexed and filed in the Registry within two days. Copy of the same be supplied to the learned counsel for the plaintiff within one week.

List this matter on 21st January, 2009 when all pending applications will be considered.

Court on the next date will also examine whether or not to initiate proceedings against Mr. Harish Kumar Dua, Managing Director of defendant No. 1 Company under Section 340 Code of Criminal Procedure, 1973 and 195 of the Indian Penal Code."

Re : Question No.(iii)

20. The Division Bench has affirmed the order of the learned Single Judge that he will next hear whether he should proceed to initiate proceedings under Section 340 Cr.P.C. read with Section 195 of Indian Penal Code (`IPC' for short). Section 195 of Cr.P.C. provides that whoever gives or fabricates false evidence intending thereby to cause, or knowing it to be likely that he will thereby cause, any person to be convicted of an offence punishable with imprisonment for life, or imprisonment for a term of seven years or upwards, shall be punished as a person convicted of that offence would be liable to be punished. Section 195 (1)(b) of the Cr.P.C. provides that no court shall take cognizance of any offence punishable under section 195 of IPC when such offence is alleged to have been committed in, or in relation to, any proceeding in any Court, except on the complaint in writing of that Court. Section 340 of the Cr.P.C. provides that when upon an application made to it in that 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 (1) of section 195 of Cr.P.C. which appears to have been committed in or in relation to a proceeding in that Court 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, record a finding to that effect, make a complaint thereof in writing, sent it to a Magistrate of the first class having jurisdiction etc. Thus the power under section 340 CrPC read with section 195 IPC can be exercised only where someone fabricates false evidence or gives false evidence. By no stretch of imagination, a party giving an answer to a question put under Order 10 Rule 2 of the Code when not under oath and when not being examined as a witness, can attract section 195 of IPC and consequently cannot attract section 195(1)(b) and section 340 of Cr.P.C.

21. The respondents relied upon the decision of a Division Bench of the High Court in Satish Kumar v Union of India [2009 (108) DRJ 317] to contend that there can be a prosecution under Section 340 Cr.P.C. in regard to a statement under Order 10 Rule 2 of the Code. The conclusion in Satish Kumar that a party can be prosecuted under Section 340 Cr.P.C. for his answers in an examination under Order 10 Rule 2 is erroneous and unsound. As noticed above, the answers to an examination under Order 10 Rule 2 are not on oath and therefore the party is not deposing as a witness on oath when giving his answers under Order 10 Rule 2 of the Code. In Satish Kumar, the Delhi High Court purported to rely upon the decision of this Court in B.K. Gupta v. Damodar H. Bajaj [2001 (9) SCC 742], to hold that prosecution under section 340 CrPC is permissible in regard to answer given under Order 10 Rule 2 of the Code. What this Court observed in B.K. Gupta was that a complaint can be filed against a person who has given false affidavit or evidence in a proceeding before the court. But a party giving an answer in an examination under Order 10 Rule 2 is neither giving evidence nor giving a affidavit. Section 340 of the Code will not be attracted with reference to any statement under Order 10 Rule 2 of the Code assuming that the Delhi High Court had laid down the law rightly in Satish Kumar, the said observation will not help the respondent in this case. In Satish Kumar, it was held that a false statement given in the examination under Order 10 Rule 2 of the Code can give rise to criminal prosecution under Section 340 of Cr.P.C. But in this case the High Court has proceeded on the basis that the second appellant spoke the `truth' in response to the question in the examination under Order 10 Rule 2 of the Code. There is no finding that second appellant made a `false statement' in his examination under Order 10 Rule 2 CPC. Therefore, the said decision will be inapplicable, even if it had been rightly decided.

22. Consequently, the decision of the court to consider initiation of proceedings under section 340 Cr.P.C. read with section 195 IPC in regard to an answer to a question put under Order 10 Rule 2 of the Code is ill- conceived and wholly without jurisdiction.

Conclusion

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