TaxTMI 
TaxTMI 
2010 (8) TMI 1152
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....ial property for a consideration of Rs. 2,02,41,600/- and had received a sum of Rs. 33 lakhs made up of Rs. 9 lakhs by cheque and Rs. 24 lakhs in cash towards the said agreement. He further alleged that the appellants were unwilling to convey the property and failed to produce the documents necessary to satisfy him about their title to the property; and that therefore in terms of the agreement, he was suing for refund of double the amount advanced by him. 3. The appellants filed a criminal complaint dated 23.2.2007 against Harbans Lal and certain others alleging that the purported signatures of second appellant and late Sohanlal Dua on the said agreement/receipt were forged and that they had not executed any such agreement/receipt. On 5.3.2007, they also filed their written statement in the suit filed by Harbans Lal denying the claim, and making a counter claim seeking a declaration that the agreement/receipt put forth by the plaintiff was forged and void. The appellants alleged that second appellant and his late brother had never signed the agreement/receipt and the signatures found thereon, (purporting to be the signatures of second appellant and his late brother) were clever ....
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....mine the original receipt/agreement to sell dated 7.9.2003 take photographs etc. and give his opinion with regard to the genuineness of the said document. As and when any application is field by the appellant, the same shall be considered by the learned Single Judge in terms of the observations made herein giving due weightage to the submissions of the learned counsel appearing for the appellant." In pursuance of it, the appellants filed an application on 7.1.2008 under Order 26 Rule 10A of the Code to permit their Handwriting Expert to inspect the original Agreement/Receipt dated 7.9.2003 and take photographs thereof so that he can give a further report as also evidence. They also made another application on 7.1.2008 to modify the order dated 31.7.2007 and defer the examination under Order 10 Rule 2 of the Code till the report of the Handwriting Expert was received. In the meanwhile, the plaintiff Harbans Lal having died on 12.11.2007, his legal representatives came on record on 29.4.2008. 6. On 3.10.2008, a learned Single Judge directed the Principal Officer and Managing Director of the first appellant-company to appear in person on 12.11.2008 along with its annual....
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....ed his signature on the Agreement/receipt as well as stamp of the defendant No. 1 - Company on the said document. The said document was thereafter shown to the witness after removing blank paper. I may note here that the said document was denied at the time of admission/denial and in the written statement. 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." (emphasis supplied) 7. Feeling aggrieved, the appellants filed an intra-court appeal on 16.1.2009. A Division Bench of the High Court dismissed the said appeal, by the following order dated 20.1.2009. "The Managing Director of the appellant had denied his signatures earlier on....
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....all, with a view to elucidating matters in controversy in the suit examine orally such of the parties to the suit appearing in person or present in Court, as it deems fit; and (b) may orally examine any person, able to answer any material question relating to the suit, by whom any party appearing in person or present in Court or his pleader is accompanied. (2) At any subsequent hearing, the Court may orally examine any party appearing in person or present in Court, or any person, able to answer any material question relating to the suit, by whom such party or his pleader is accompanied. (3) The Court may, if it thinks fit, put in the course of an examination under this rule questions suggested by either party. 3. Substance of examination to be written -- The substance of the examination shall be reduced to writing by the Judge, and shall form part of the record." 10. Rule 1 enables the court to ascertain from each of the parties (or his pleader), at the first hearing whether he admits or denies such of those allegations of fact made in the pleadings of the other party, which were not expressly or by necessary implication admitted or d....
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....y to put forth his case at the trial. 12. The above position of law is well settled. We need refer only to two decisions in this behalf. In Manmohan Das v. Mt. Ramdei & Anr. [AIR 1931 PC 175], the Privy Council observed: "No doubt under Order 10, Rule 2, any party present in Court may be examined orally by the Court at any stage of the hearing, and the Court may if it thinks fit put in the course of such examination questions suggested by either party. But this power is intended to be used by the Judge only when he finds it necessary to obtain from such party information on any material questions relating to the suit and ought not to be employed so as to supersede the ordinary procedure at trial as prescribed in Order 18." (emphasis supplied) A Division Bench of the Madras High Court in Arunagiri Goundan v. Vasantharoya Koundan & Ors (AIR 1949 Madras 707), held as follows referring to Order 10 Rule 2 of the Code : "At the outset it must be pointed out that this (Order 10 Rule 2) does not provide for an examination on oath. This provision was intended to be used to elucidate the matters in controversy in suit before the trial began. This is not a provision....
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....ecisions relied upon are : Bhanwarlal Kavad v. Shyamsunder [AIR 1984 Raj. 113], Amrita Devi v. Sripat Rai [AIR 1962 All. 111], Rajiv Srivastava v. Sanjiv Tuli [AIR 2005 Del. 319] and Gautam Adani v. Container Corporation of India [150 (2008) DLT 281]. On a careful consideration of these decisions, we find that they are not of any assistance in this case. 16.1) In Bhanwar Lal Kavad (supra), a learned Single Judge of Rajasthan High Court held: "In my opinion the court should resort to the examination of the parties under Rule 2, particularly on the documents, which are said to be signed by the parties. .... it is better that the original documents are put to the party and admission or denial is obtained after visual observations by the party himself of the original documents. After looking into the documents, the party would be in a position to admit or deny the same, which would not be possible, if the same is got done by his pleader." 16.2) Learned Single Judge of the Allahabad High Court in Amrita Devi (supra) and the Division Bench of Delhi High Court in Rajiv Srivastava (supra) held that an admission made by a party under Order 10 Rule 2 of the Code is conclusive ....
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.... admit any document under Order 12 Rule 3A of the Code. What the High Court has done in this case is to 'cross-examine' the second appellant and not examine him as contemplated under Order 10 Rule 2 of the Code. We therefore hold that the purported examination under Order 10 Rule 2 of the Code, by confronting a party only with a signature on a disputed and unexhibited document by adopting the process of covering the remaining portions thereof is impermissible, being beyond the scope of an examination under Order 10 Rule 2 of the Code. 18. In this case the appellants-defendants denied having signed/executed any agreement/receipt in favour of the respondents. In the examination under Order 10 Rule 2, the court did not ask the second appellant whether he had signed the document or not, by showing the document. What was done was confrontation of a signature alone without disclosing the document. When so confronted, the second appellant admitted the signature shown as his signature. But that is not an admission of execution of agreement/receipt. The specific case of appellants in the written statement was that the Agreement/Receipt dated 7.9.2003 was a clever forgery. If a signature ....
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....f a signature is not an admission of execution of a document. The power to identify the matters in controversy by examination of parties at the pre-trial stage under Order 10 Rule 2, is completely different from the power exercised by the court under Section 165 of the Evidence Act to put any question it pleases in any form, to a witness or a party in order to discover or to obtain proper proof of relevant facts, or the power under Order 18 Rule 14 of the Code to recall and examine any witness. The court's anxiety to do justice by speeding up the process of the suit should not itself lead to injustice. 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....
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....is 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 ....