Full Text
HIGH COURT OF DELHI
CM(M) 160/2022 & CM APPL. 26958/2022
M/S G.S BERAR AND CO. PVT. LTD. & ANR...... Petitioners
Through: Mr. Saurabh Prakash and Mr. Anant Aditya Patro, Advs.
LTD ..... Respondent
Through: Mr. Lakshay Dhamija and Mr. Sahil Dutta, Advs.
01.06.2022
JUDGMENT
1. By this application, preferred in CM(M) 160/2022, the petitioners seek initiation of proceedings, against the respondent, under Section 340 of the Code of Criminal Procedure, 1973 (Cr PC).
2. Section 340 Cr PC reads thus: “340. Procedure in cases mentioned in section 195. (1) When, upon an application made to it in this 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, 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,- 2022:DHC:2202 (a) record a finding to that effect; (b) make a complaint thereof in writing;
(c) send it to a Magistrate of the first class having jurisdiction;
(d) take sufficient security for the appearance of the accused before such
Magistrate, or if the alleged offence is nonbailable and the Court thinks it necessary so to do, send the accused in custody to such Magistrate; and (e) bind over any person to appear and give evidence before such Magistrate. (2) The power conferred on a Court by sub- section (1) in respect of an offence may, in any case where that Court has neither made a complaint under sub- section (1) in respect of that offence nor rejected an application for the making of such complaint, be exercised by the Court to which such former Court is subordinate within the meaning of sub- section (4) of section 195. (3) A complaint made under this section shall be signed,- (a) where the Court making the complaint is a High Court, by such officer of the Court as the Court may appoint; (b) in any other case, by the presiding officer of the Court. (4) In this section," Court" has the same meaning as in section 195.”
3. Clearly, Section 340 Cr PC relates back to Section 195 (1)(b) of the Cr PC.
4. On a query from the Court as to the provision of the IPC, amongst the several provisions envisaged by Section 195 (1) (b) of Cr.PC, that the petitioners seek to invoke against the respondent, learned Counsel for the petitioners submits that he is invoking Section 209 of the IPC, which reads as under: “209. Dishonestly making false claim in Court.— Whoever fraudulently or dishonestly, or with intent to injure or annoy any person, makes in a Court of Justice any claim which he knows to be false, shall be punished with imprisonment of either descrip-tion for a term which may extend to two years, and shall also be liable to fine.
5. Plainly read, Section 209 IPC applies only where a person fraudulently or dishonestly makes a claim, in a Court, which he knows to be false, with intent to injure or annoy any person. There are, therefore, three ingredients in Section 209, viz.
(i) the making, by the accused, of a claim which he knows to be false, (ii) fraud or dishonesty in making of the said claim and (iii) intent, while making the said claim, to injure or annoy any person.
6. These three ingredients, plainly, have to be read cumulatively and, in the absence of any one of the ingredients, even a prima facie case for initiating proceedings under Section 340 Cr PC read with Section 209 of the IPC cannot be said to be made out.
7. Learned Counsel for the petitioners attributes the commission of offence, under Section 209 of the IPC, to the respondent, on the basis of para 20 and 50 in the reply filed by the respondent on 14th March, 2022, in response to CM(M) 160/2022.
8. These two paragraphs may be reproduced thus: “20. That the Respondent company during the year 2016-17 had submitted export bills to the tune of Rs. 40 crores approx on collection for payment through Jammu & Kashmir Bank & others which are pending with the Jammu & Kashmir Bank for remittance/settlement. The Export bills are admittedly not been paid by the overseas buyers, despite receipt of the goods and acceptance of documents by the overseas buyers and the confirmation of acceptance of documents by the overseas payee bank. It would not be out of place to mention here that, the Government of India, because of the difficulty in realisation/payment defaults of the export bills by foreign buyers has established the body called Export Credit Guarantee Corporation (ECGC) specially to protect the interest of small and medium exporters like the Respondent Company herein. ECGC provides insurance cover to the Bank in case of payment defaults by the foreign buyers on preshipment and post-shipment facilities granted by the banks to SME's and are fully insured with ECGC. It is mandatory "for every Bank to take necessary insurance cover from ECGC at banks costs, as per the RBI Circulars No. RBI/2014-l5/69 DBOD No. DIR.BC.19/04/02/002/2014-15, so as to ensure the Banks and exporter payments are fully protected. The ECGC insurance cover in terms of the aforesaid circular is taken by the respective bank being a beneficiary due to the loans advanced by the respective banks to the exporters. Further, as per the aforesaid circular the RBI has categorically instructed the banks to observe the premium payments for such risk at their end only and accordingly any claim with the ECGC can be preferred by the respective Bank only, without borrower/exporter having any role to play. The Jammu & Kashmir Bank, has admittedly delayed the process of ECGC claim under the pretext of this being the last resort for recovery for the bank, which is against the core principles of the above said RBI circular, which added to the financial challenges and difficulties of the Respondent Company.” “50. That the Respondent Company is trying its level best to get back up on their feet and secure their business and properties by negotiating with Jammu & Kashmir Bank which has attached all its properties and due to them all there other bank accounts are on hold as stated above and currently the Respondent Company is at the advance stage of settlement with Jammu & Kashmir Bank where the Respondent Company representation for One Time Settlement (OTS) is been considered by the bank on its merits, RBI guidelines & pursuant to order dated 30.12.2021 passed in W.P. (C) NO. 2763/2021 titled "M/s Trans Asian Industries Exposition Pvt. Ltd. Vs. The Jammu and Kashmir Bank and Ors." by Hon'ble High court of Jammu & Kashmir and Ladakh at Srinagar. copy of order dated 30.12.2021 passed in W.P. (C) NO. 2763/2021 titled “M/s Trans Asian Industries Exposition Pvt Ltd. Vs. The Jammu and Kashmir Bank and ors." by Hon'ble High court of Jammu & Kashmir and Lodakh at Srinagar is annexed herewith and marked as Annexure R-41.”
9. Apropos the allegedly offending para 20 of the reply dated 14th March, 2022, filed by the respondent, Mr. Saurabh Prakash, learned Counsel for the applicants/petitioners, drew my attention to two assertions contained in the said para, viz. that (i) the respondent had, in 2016-17, submitted Export Bills to the tune of ₹ 40 crores on collection for payment through the Jammu & Kashmir Bank (“the Bank”), which was pending with the Bank for remittance/settlement, as the overseas buyers, despite having taken receipt of the goods sent by the respondent, and accepted the documents relating to the goods, had not yet made payments and (ii) as per RBI Circular no. RBI/2014l5/69 DBOD No. DIR.BC.19/04/02/002/2014-15, the Bank was insured against the non-receipt of payment from overseas buyers under the cover provided by the Export Credit Guarantee Corporation (ECGC) and was, therefore, required to process the ECGC claim and secure the monies due to the petitioner, in which respect the Bank was guilty of undue delay.
10. Mr. Saurabh Prakash submits that these contentions are ex-facie false and incorrect and, for that purpose, refers me to a brief note filed by the Bank in WP(C) 7634/2022 (G.S Berar and Co. Pvt. Ltd v. RBI), in which the Bank contended thus:
11. Thus, as the Bank has refuted its liability to obtain remittance from the foreign buyer, allegedly payable to the respondent, under the ECGC insurance cover, Mr. Saurabh Prakash submits that the statement of the respondent was false, and exposes him to the rigour of Section 340 Cr. PC.
12. Regarding the second passage, from the reply dated 14th March, 2022, filed by the respondent in response to CM(M) 160/2022 extracted in para 8 supra, Mr. Saurabh Prakash submits that the contention, by the respondent, that the negotiations of the respondent with the Bank were at an advanced stage of settlement and that the Bank was considering the respondent’s representation for a one-time settlement (OTS) on merits, is palpably false, for which purpose he has referred me to the Bank’s reply to the respondent’s application seeking a One-Time Settlement (“OTS”), in which the Bank has stated thus:
13. The statement, in the afore-extracted passage from the reply of the Bank, to the effect that the policy did not apply to loan accounts whose outstanding balance was more than ₹ 5 crores on 30th September, 2021, submits Mr. Saurabh Prakash, belies the respondent’s contention that the respondent’s application for OTS was pending consideration with the Bank.
14. Mr. Saurabh Prakash submits that, by making such false averments, the respondent has, craving leniency persuaded this Court to pass orders in the respondent’s favour. This, he submits, is unconscionable and merits action against the respondent under Section 195 of the Cr.PC read with Section 209 of the IPC.
15. To my mind, the application is completely misconceived.
16. Before adverting to the nature of the application, I may refer to the two paragraphs on the basis of which, according to Mr. Saurabh Prakash, proceedings under Section 340 Cr.PC deserve to be initiated against the respondent.
17. The first paragraph i.e. para 20 in the reply dated 14th March, 2022 filed by the respondent in CM(M) 160/2022, merely states, to the extent Mr. Saurabh Prakash alleges it to be perjurious in nature, that the Bank was delaying processing of the respondent’s claim through the ECGC Insurance Cover route which, according to the petitioner, was available to the Bank.
18. The Bank, in its reply in entirely different proceedings i.e. WP(C) 7634/2022, appears to have contested the applicability of the ECGC Insurance Cover scheme, insofar as the petitioner is concerned. By no stretch of imagination can the fact that the Bank may be contesting the petitioner’s claim in a pending writ petition be treated as a ground to urge that the respondent’s claim was perjurious in nature. To reiterate, what is required, for Section 209 of the IPC, to be applicable, is fraudulent or dishonest making of a false claim with the knowledge that it is false, with intent to injure or annoy any person.
19. None of these ingredients can be said to be satisfied, in respect of the statement contained in para 20 of the reply dated 14th March, 2022, filed by the respondent in CM(M) 160/2022. It is clearly a case of the Bank contesting the claim of the respondent, in entirely different proceedings which appear presently to be pending. This cannot be treated, therefore, as the making of a claim which the respondent knows to be false. Besides, there is not even an iota of material to indicate that the claim was made fraudulently or dishonestly or with intent to injure or annoy any person.
20. Coming, now, to the second paragraph in the reply dated 14th March, 2022 of the respondent in CM(M) 160/2022, which Mr. Sarurabh Prakash castigates as perjurious, the case of the petitioner is an even weaker footing. Mr. Saurabh Prakash has invited my attention to the second part of the sentence contained in para 12 of the said reply, in which the petitioner has stated that the one- time settlement scheme did not apply to loan accounts whose outstanding balance was more than ₹ 5 crores as on 31st September, 2021. In so emphasising the latter part of the sentence, Mr. Saurabh Prakash has ignored the former part of the sentence which clearly acknowledges the fact that the respondent’s application for OTS was under consideration by the Bank, albeit pursuant to the order dated 30th December, 2021 passed by the High Court of Jammu & Kashmir.
21. The statement of the respondent, in para 5 of its reply dated 14th March, 2022, to the effect that the respondent’s application for onetime Settlement was being considered by the Bank on its merits is, therefore, not untrue, at least to the extent that the application is under consideration with the Bank.
22. I have, in earlier orders passed by me, deprecated the practice of filing applications under Section 340 Cr.PC in civil litigations. To my mind, such applications, unless they are justified by clear and cogent evidence, are a transparent attempt of abusing the process of law and pressurising the opposite party, for reasons which, at the very least, may be recondite.
23. The present application, in my view, is a clear example of abuse of the process of Section 340 Cr PC. It deserves, therefore, to be dismissed with costs.
24. Accordingly, the application is dismissed with costs of ₹15,000/- to be paid by the applicant/petitioner by way of a crossed cheque favouring the Delhi High Court Staff Welfare Fund (DHSWF) within a period of two weeks from today.
C. HARI SHANKAR, J.