2022 (11) TMI 1506 - AT - Companies Law

Oppression and mismanagement - Power of NCLT to order for production of documentary evidence and for forensic examination under section 424, Companies Act 2013 read with rule 43 of the NCLT Rules - forgery of his signatures and documents pleaded in main company petition or not. Whether NCLT can order for production of documentary evidence and for forensic examination under section 424, Companies Act 2013 read with rule 43 of the NCLT Rules? - HELD THAT - The Rule 43 (1),(2) (3) of NCLT Rules 2016 clearly states that for the purpose of satisfying itself as to the truth of the allegations made, for ascertaining any information which in the opinion of the Tribunal is necessary for the purpose of enabling it to pass orders and where any party preferring or contesting a petition of oppression and mismanagement raises the issue of forgery or fabrication of any statutory records, then it shall be at liberty to move an appropriate application for forensic examination and the Tribunal hearing the matter can allow the petition if it think so. Therefore, in the present case the Tribunal has relied on the above mentioned sections to order forensic investigation of the signature and other documents. The Appellants agreed that the signature in the financial statements varies and claimed that the respondent had a practise of using multiple signatures at different times. Therefore, it is clear that there existed the issue of forgery/ signature difference, intentionally or unintentionally, and the Tribunal was not out of line while adjudicating on the same as pleaded by the Appellant in its appeal by allowing referring relevant signature and financial statements as elaborated in the Impugned Order for forensic examination by Central Forensic Science Laboratory at the cost of party allegation fabrication on record. The Appellate Tribunal do not find any error in the Impugned Order in this regard and hold that the Tribunal has sufficient power to refer the case for forensic examination and ask for production of documentary evidence as per power delegated under NCLT Rules, 2016 and Companies Act, 2013. Whether the Respondent had pleaded forgery of his signatures and documents in main company petition? - HELD THAT - The appellant agreed that the signature in the financial statements varies and claimed that the respondent had a practise of using multiple signatures at different times - the Tribunal exercising powers under Rule 43 of NCLT Rule 2016 and under Section 424 of companies Act, 2013 requiring production of documents as being necessary has called upon original financial statements for the period 2013-14 and 2014-15 signed by Board of Directors, PAN Cards, Power of Attorney executed on 31.07.2006, which were required to be sent to Central Forensic Science Laboratory in order to has a clear correct picture. This Appellate Tribunal observe that the Tribunal has taken decision before taking of the main company petition still pending before the Tribunal. This Appellate Tribunal do not find any error on this ground also. This Appellate Tribunal does not find any error in the impugned order dated 13.10.2020 - the Appeal being devoid of any merits , is set aside and therefore stands dismissed .

Summary

Issues Involved:
1. Whether NCLT can order for production of documentary evidence and for forensic examination under section 424, Companies Act 2013 read with rule 43 of the NCLT Rules?
2. Whether the Respondent had pleaded forgery of his signatures and documents in the main company petition?

Issue-wise Detailed Analysis:

Issue No. 1: Whether NCLT can order for production of documentary evidence and for forensic examination under section 424, Companies Act 2013 read with rule 43 of the NCLT Rules?

a) Relevant Provisions:
- Rule 43 of NCLT Rules, 2016: Allows the Bench to require parties to produce further documentary or other evidence necessary to ascertain the truth of allegations or for passing orders.
- Section 424 of Companies Act, 2013: Empowers the Tribunal and Appellate Tribunal to regulate their own procedure, require the discovery and production of documents, and receive evidence on affidavits, among other powers.

b) Tribunal's Statutory Powers:
- The Tribunal, under Rule 43 and Section 424, can ask for documentary evidence to meet the ends of natural justice. It can allow applications for forensic examination if forgery or fabrication of statutory records is alleged.

c) Application to Present Case:
- The Tribunal ordered forensic examination because the Respondent's signatures did not match his original signature, and the Appellants corroborated the variance. The Tribunal's decision was based on the need to verify the signatures and documents, and it was within its statutory powers.

d) Fact-Finding Exercise:
- The forensic examination is a fact-finding exercise and does not affect the rights of the Appellant or give special privileges to the Respondent. The Tribunal's order is supported by the powers delegated under NCLT Rules, 2016 and Companies Act, 2013.

Issue No. 2: Whether the Respondent had pleaded forgery of his signatures and documents in the main company petition?

a) Appellant's Contention:
- The Appellant argued that the Respondent did not plead forgery in the main company petition.

b) Respondent's Pleadings:
- The Respondent elaborated on the forging of financial accounts in the main Company Petition, in paragraphs (o) to (s). The Appellant agreed that the signature in the financial statements varies and claimed that the Respondent had a practice of using multiple signatures.

c) Tribunal's Powers:
- The Tribunal exercised its powers under Rule 424 of Companies Act, 2013, and Rule 43 of NCLT Rules, 2016, to ascertain the correctness of documents. The Tribunal called for original financial statements, PAN Cards, and Power of Attorney to be sent to the Central Forensic Science Laboratory for a clear picture.

Conclusion:

The Appellate Tribunal found no error in the impugned order dated 13.10.2020, passed in TIA No. 102/KOB/2020 in T.C.P. 8/KOB/2019. The Tribunal's decision to order forensic examination was within its statutory powers and necessary to ascertain the truth of the allegations. The appeal was devoid of any merits and was dismissed. No costs were awarded, and connected pending Interlocutory Applications were closed.