2010 (2) TMI 592 - HC - Companies Law

Whether an utterly dishonest defence has been set up in a court of law with full knowledge that it is dishonest and by relying on palpably false documents, it is unfortunate that there is no screening at any level to filter such untruthful stands for them to be weeded out before they actually reach the court? Held that - The original documents along with the affidavit affirmed by Subhojit Ghose on February 14, 2008, will be sent by the Registrar, original side to the appropriate criminal forum for initiation of proceedings for perjury against the deponent of the affidavit upon it prima facie appearing to this court that false statements have been made on oath to court knowing the same to be false and documents have been manufactured, forged and/or brought into existence for the use in proceedings before the court with intent to substantiate a false and dishonest defence. An affidavit is evidence within the meaning of section 191 of the Indian Penal Code and a person swearing to a false affidavit is guilty of perjury punishable under section 193 of the Indian Penal Code. The deponent of the company s affidavit herein, being legally bound by an oath to state the truth, is prima facie held to have made false statements and relied on fabricated documents which constitute offences of giving false evidence as defined under section 191 of the Indian Penal Code and of fabricating documents as defined under section 192 of the Indian Penal Code, punishable under section 193 thereof. It is also expedient in the interest of justice to make an enquiry against such deponent in relation to the offences committed by him. The Registrar, original side, will file a complaint under section 193 of the Indian Penal Code against Subhojit Ghose, the deponent of the company s affidavit, before a magistrate of competent jurisdiction in Kolkata within eight weeks from date and take all steps necessary for prosecuting the complaint.

Summary

Issues Involved:
1. Dishonest Defense by the Company
2. Petitioner's Claim for Goods Sold and Delivered
3. Admission of Indebtedness by the Company
4. Company's Response to Statutory Notice
5. Alleged Debit Note and Correspondence
6. Dishonored Cheques and Their Validity
7. Legal Consequences for False Affidavits and Fabricated Documents

Issue-wise Detailed Analysis:

1. Dishonest Defense by the Company:
The court found that the company set up an "utterly dishonest defence" by relying on "palpably false documents." The judgment criticized the lack of screening mechanisms to filter out such frivolous claims before they reach the court, highlighting the adverse impact on the judicial process.

2. Petitioner's Claim for Goods Sold and Delivered:
The petitioner claimed Rs. 43,43,933 for gunny bags supplied to the company, supported by seven cheques issued by the company. The court noted the simplicity of the petitioner's claim and the detailed particulars of the cheques provided.

3. Admission of Indebtedness by the Company:
The company had unequivocally admitted its indebtedness to the petitioner in a document dated April 1, 2005, confirming a closing balance of Rs. 43,43,933. This admission was not contested by the company and was a significant factor in the court's decision.

4. Company's Response to Statutory Notice:
The company responded to the statutory notice with an elaborate defense, including references to various letters and a debit note. The court scrutinized these documents and found inconsistencies and fabrications, undermining the company's defense.

5. Alleged Debit Note and Correspondence:
The company's defense included a debit note of Rs. 33,78,597, allegedly issued on March 31, 2006, and various letters questioning the rates charged by the petitioner. The court found these documents to be fabricated and inconsistent with the company's previous admissions and conduct.

6. Dishonored Cheques and Their Validity:
The company issued seven cheques totaling Rs. 43,43,933, which were dishonored upon presentation. The court noted the presumption in law that cheques are issued for consideration received and found the company's explanation for the dishonored cheques to be dubious and unconvincing.

7. Legal Consequences for False Affidavits and Fabricated Documents:
The court highlighted the serious implications of submitting false affidavits and fabricated documents, citing relevant Supreme Court judgments. It directed the Registrar to seal the original documents and the company's affidavit and forward them for criminal proceedings for perjury against the company's deponent, Subhojit Ghose.

Conclusion:
The company petition was admitted for Rs. 43,43,933 with interest at 12% per annum from June 20, 2006. The company was given six weeks to pay the amount, failing which the petitioner was allowed to advertise the petition. The court emphasized the need for strict action against frivolous claims and deceitful defenses to maintain the integrity of the judicial process.