Civil Appeal No Of 2010 [Arising Out Of Slp (C) No.19894/2009]. Case: M/s. Kapil Corepacks Pvt. Ltd. & Ors. Vs Shri Harbans Lal (since deceased) Through Lrs.. Supreme Court

Case Number:Civil Appeal No Of 2010 [Arising Out Of Slp (C) No.19894/2009]
Party Name:M/s. Kapil Corepacks Pvt. Ltd. & Ors. Vs Shri Harbans Lal (since deceased) Through Lrs.
Judges:R V Raveendran & H L Gokhale, JJ.
Issue:Code of Civil Procedure - Section 151, Order 10 Rule 2, Order 18 Rule 14; Code of Criminal Procedure -Section 340; Indian Penal Code - Sections 195, 195(1)(b); Evidence Act - Section 165
Citation:AIR 2010 SC 2809, JT 2010 (8) SC 124, 2010 (7) SCALE 558
Judgement Date:August 03, 2010
Court:Supreme Court


R V Raveendran, J.

  1. Leave granted. This appeal relates to the scope of Rule 2 of Order 10 of Code of Civil Procedure (`Code' for short) and the correctness of invoking of Section 340 of the Code of Criminal Procedure (`Cr.P.C.' for short) in regard to answers given by a party in an examination under Order 10 Rule 2 of the Code.

  2. Late Harbans Lal (for short the `plaintiff' of whom the respondents are the legal heirs) filed a suit against the appellants on 5.9.2006, for recovery of Rs. 66 lakhs. He alleged that second appellant and his brother late Sohan Lal Dua (father of third appellant) on behalf of the first appellant, had executed an Agreement/Receipt dated 7.9.2003 agreeing to sell him an industrial 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 forgeries; that they did not receive Rs.24 lakhs said to have been paid in cash; that the sum of Rs. 9 lakhs paid by cheque by Harbans Lal, was an advance to their company (first appellant) obtained by late Sohanlal Dua to tide over a short term financial crisis and the said amount was treated as share application money.

  4. In the said suit, the appellants filed an application under Section 151 of the Code for referring the agreement/receipt to a hand writing expert or a Government Forensic Laboratory for examination of the signatures therein and for keeping the said document in safe custody. On 31.7.2007 a learned Single Judge of the High Court made an order directing as follows: (a) parties to file their original documents within four weeks and matter to be listed before the Joint Registrar for admission/denial of documents on 27.9.2007; (b) matter to be listed before court for framing issues on 8.1.2008; (c) parties to be personally present on the next date of hearing for recording their statement under Order 10 Rule 2 of the Code; and (d) the original receipt/agreement of sale dated 7.9.2003 should be kept in safe custody in a sealed cover. In regard to the appellants' application seeking reference to a hand writing expert, the learned single Judge directed as follows:

    ......Insofar as the directions sought for sending the receipt/agreement to sell to a hand writing expert is concerned, I am of the considered view that the parties can lead their respective evidence including of hand writing expert in support of their pleas. Application stands disposed of.

  5. The appellants filed an appeal aggrieved by the refusal to refer the matter to a hand writing expert, contending that they had obtained a Preliminary Report dated 4.2.2007 from a Handwriting Expert with reference to a photocopy of the Agreement/Receipt; and that the Handwriting Expert could give expert evidence on the genuineness of the document, only if he got an opportunity to examine the original also. The said appeal was disposed of by a Division Bench of the High Court on 1.11.2007 with the following observations:

    In our considered opinion, the apprehension of the learned counsel for the appellant is misplaced and unfounded as the appellant can file an application before the learned Single Judge seeking intervention of the court to permit a hand writing expert to examine 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 returns filed with the Registrar of Companies, income tax returns and the balance sheets for the financial year 2003-2004 onwards. In pursuance of the said order, the second appellant appeared before the court with the relevant documents on 12.11.2008. The second appellant was examined under Order 10 Rule 2 of the Code and his statement recorded by the learned Single Judge, is extracted below:

    "I am the Managing Director of M/s. Kapil Corepacks Pvt.Ltd. Rs. 9 lacs received from the plaintiff is shown in the statement of account of the defendant No.1 - Company. However, the said amount is not reflected in the annual return of the defendant No.1-Company which was filed in the Registrar of Companies. It is correct for the period ending 31st March, 2004 receipt of share application money of Rs. 9 lacs is not shown and mentioned. As on 31st March, 2004, the paid up share capital of the defendant No. 1- Company was Rs. 51 lacs. This did not include Rs. 9 lacs. Defendant No.1-Company is a Pvt. Ltd. company.

    The plaintiff did not fill up any share application form/share allotment form before payment of money. I am not aware whether a request letter or a share application form is required to be filled up by a party before shares can be allotted. At no point of time, defendant No. 1 has recorded or mentioned entry of Rs. 24 lacs as received from the plaintiff in cash. We know the plaintiffs. We have known them for several years.

    Question: Please examine the stamp and the signatures and state whether they belong to the defendant No. 1 - Company and who has signed?

    (Witness was shown copy of Agreement/Receipt in a manner...

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