False evidence and vicarious liability in arbitral proceedings: prima facie case survived against the company, not the chairman.

A complaint alleging fabrication of a commissioning report disclosed a prima facie case under sections 192 and 199 IPC against the company because the pleaded facts suggested a false record was made or tendered in arbitral proceedings and could have affected the tribunal's view on a material point. However, no prima facie liability was shown against the chairman: the complaint lacked specific averments of personal participation, supervision, or causation of the document's tendering, and vicarious liability could not be presumed from office alone. Section 34 also failed because no prior concert or active participation was pleaded. Proceedings continued against the company but were quashed against the chairman.

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Issues: (i) whether the complaint disclosed a prima facie case under sections 192 and 199 of the Indian Penal Code, 1860 against the company; (ii) whether the complaint disclosed any prima facie liability of the chairman under sections 192 and 199 of the Indian Penal Code, 1860, either directly or by invoking section 34 of the Indian Penal Code, 1860.

Issue (i): Whether the complaint disclosed a prima facie case under sections 192 and 199 of the Indian Penal Code, 1860 against the company.

Analysis: The complaint alleged that a commissioning report was fabricated and tendered in arbitral proceedings to support the company's defence. For an offence under section 192, the making or causing of a false record with the intention that it appear in evidence before a judicial proceeding or an arbitrator, and that it may lead to an erroneous opinion on a material point, is sufficient. For section 199, the making of a false statement in a declaration receivable in evidence on a material point is relevant. On the pleaded facts and the arbitral tribunal's observations, the document relied upon could have influenced the arbitral decision.

Conclusion: A prima facie case was made out against the company and quashing was not warranted.

Issue (ii): Whether the complaint disclosed any prima facie liability of the chairman under sections 192 and 199 of the Indian Penal Code, 1860, either directly or by invoking section 34 of the Indian Penal Code, 1860.

Analysis: The complaint contained no specific averment that the chairman personally participated in the fabrication, supervised the alleged interpolation, or caused the document to be tendered in arbitral proceedings. Sections 192 and 199 do not create vicarious liability by themselves, and liability cannot be presumed merely from the office held. Section 34 requires a pre-arranged plan and some participation in the act constituting the offence, but the complaint did not plead any prior concert or active participation by the chairman.

Conclusion: No prima facie case was made out against the chairman, and the complaint was liable to be quashed against him.

Final Conclusion: The prosecution was allowed to continue against the company but was set aside against the chairman, reflecting a partial interference with the criminal complaint.

Ratio Decidendi: Criminal liability for fabricating false evidence cannot be fastened on company in the absence of specific pleadings showing their direct role or, where section 34 is invoked, their participation in a common intention formed by prior concert.

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