Axis Bank Ltd vs M.T. Pratibha Koyna And 7 Ors. And ...
2017 Latest Caselaw 9821 Bom

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                 IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                 ADMIRALTY AND VICE ADMIRALTY JURISDICTION
                        NOTICE OF MOTION NO.1575 OF 2016
                                       IN
                          ADMIRALTY SUIT NO.77 OF 2013
Axis Bank Limited                                  ....Applicant/Plaintiff
          Vs.
M.T. Pratibha Koyna and Ors.                 ....Defendants       
                                      ----
Mr. Nimay Dave a/w. Mr. Mayur Bhojwani and Ms. Prangana Barua i/b. 
M/s. Manilal Kher Ambalal and Co. for applicant/plaintiff.
Mr. Bimal Rajasekhar i/b. Mr. Ashwin Shanker for Intervener.
Mr. Rajiv Singh i/b. Mr. Rahul P. Jain for defendant nos.9 and 10 and for 
respondent.
Mr. Sharan Jagtiani for Official Liquidator for defendant no.4.
                                      ----
                                       CORAM  : K.R.SHRIRAM, J.

                                       DATE      : 20th DECEMBER, 2017
P.C.:
                 NOTICE OF MOTION NO.1575 OF 2016

1                 This notice of motion is taken out by applicant (a) to declare 

the written statement dated 20th December, 2013 filed on behalf of

defendants as false; (b) to inquire into the offences under Sections 191 and

193 of Indian Penal Code, 1860 as per the provisions of the Section 340

read with Section 195 (b) of Criminal Procedure Code, 1973 and deal with

respondent in accordance with law for making false statements on oath

during judicial proceedings and (c) to direct and commit the matter to the

concerned Metropolitan Magistrate Court to prosecute respondent.

2 Plaintiff has filed this suit against seven vessels, i.e., defendant

nos.1,2,3,5,6,7 and 8, which were owned by Pratibha Shipping Company

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Limited (in liquidation). The company in liquidation is defendant no.4.

Plaintiff has filed this suit for recovering all the amounts lent to defendant

no.4 (in liquidation) as per various facility agreement entered into between

plaintiff and defendant no.4. Defendant nos.2,3,5,6 and 8 have been sold

and the sale proceeds are lying either with this Court or with Madras High

Court. Defendant no.1 is still in the possession of Arab Shipbuilding and

Repair Yard (ASRY) of Bahrain. Defendant no.7 has been sold by Chinese

Shipyard after adjusting the amounts payable to it and has paid over the

surplus amount to Corporation Bank Limited. This is what the Court learnt

from the submissions made by counsel.

3 It is the case of applicant that respondent, who had declared

the written statement on behalf of the company (in liquidation) defendant

no.4, had made false statements knowing them to be false. The relevant

portions on which, applicant is making this allegation, could be found in

paragraph 2 and paragraph 4 of the written statement, which read as

under :

2. With reference to paragraph 2, the Defendants state that the current status of Defendant Nos.1,2 and 3 is as follows :

a) Defendant No.1, to the best of our knowledge, is in control of ASRY yard Bahrain which is exercising possessory lien over the same.

..........

..........

4. With reference to paragraph 4, the Defendants state that the status of Defendant Nos.5,6,7 and 8 as on date is as follows :

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a. .........

b. .........

c. Defendant No.7 is Zhoushan Xinya Shipyard Limited, China and Zhoushan Xinya Shipyard Limited, China is exercising possessory lien on the Defendant Vessel."

4 It is the case of applicant that from the affidavit filed by ASRY

in chamber summons that applicant had taken out being chamber

summons no.652 of 2014, it came to light that possessory lien (incorrectly

mentioned in the affidavit in support as "order of arrest") has been given

up by ASRY and the vessel was infact trading on the date the written

statement was declared. Applicant has relied upon a copy of not only the

affidavit filed by ASRY but also copy of the corporate guarantee dated

1st October, 2013 entered into between plaintiff, Pratibha Oil and Natural

Gas Private Limited (PONG) and ASRY. Mr. Dave, counsel for applicant

states that from the corporate guarantee it is quite evident that defendant

no.1, viz., Pratibha Koyna has been released to the Managers/Charterers

upon executing the said corporate guarantee. Mr. Dave further states that

the name of Pratibha Koyna has been changed to Surya Kuber to defraud

the creditors. Mr. Dave states that respondent, who has signed the

corporate guarantee on behalf of PONG, is the same person who had

declared the written statement dated 20 th December, 2013 and respondent

having signed the said corporate guarantee, was aware that Pratibha Koyna

was no more under possessory lien or arrest of ASRY and ought to have

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disclosed the same in the written statement and by stating in the written

statement "Defendant No.1, to the best of our knowledge, is in control of

ASRY yard Bahrain which is exercising possessory lien over the same" has

made an incorrect statement in the written statement and therefore, is

guilty of perjury.

5 Another ground for alleging respondent having committed

perjury is with regard to defendant no.7 vessel. According to Mr. Dave, it is

stated in the written statement that "defendant no.7 is under the

possessory lien of Zhoushan Xinya Shipyard Limited, China (the said

Shipyard)" which is also incorrect because the said vessel had been sold by

the said Shipyard to the knowledge of company (in liquidation) some time

in June, 2013. Mr. Dave states that when the company (in liquidation), of

which respondent was the Managing Director, was aware in June, 2013

that the vessel had been sold, still respondent chose on 20 th December,

2013 to state in the written statement that the said Shipyard was exercising

possessory lien over the defendant vessel.

6 Mr. Jagtiani, counsel appearing for Official Liquidator

supported the views expressed by Mr. Dave and relied upon a judgment of

the Apex Court in the matter of Pritish vs. State of Maharashtra and

Ors.1 to submit that once the court forms an opinion that the matter has to

1. (2002) 1 SCC 253

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be referred to the Magistrate, it is not mandatory that there should be an

inquiry made into any offence which appears to have been committed.

7 Mr. Singh, counsel for respondent states that respondent has

not made any statement intentionally which could be termed incorrect.

Mr. Singh further states that the statements made in the written statement

were based on the understanding of respondent. So far as Pratibha Koyna is

concerned, Mr. Singh states that on the date the written statement was

declared, ASRY continued to exercise control over the vessel. So far as

defendant no.7, i.e., Pratibha Chandrabhaga is concerned, respondent was

still under the impression that the vessel was yet to be sold on the date the

written statement was declared.

8 I have considered the affidavit in support, reply and rejoinder.

So far as Pratibha Koyna is concerned, it is indisputed that in the written

statement respondent has verified a statement that defendant no.1 was in

control of ASRY which is exercising possessory lien over the same though

he has qualified it with "to the best of our knowledge". In the corporate

guarantee dated 1st October, 2013 it is stated as under :

........... The Beneficiary has possessory lien of marine vessel, "Pratibha Koyna" currently berthed in the port of ASRY Shipyard, Bahrain for the total outstanding sum of US$ 5.42 million (US Dollars Five million and four hundred twenty thousand only) ..............

ii. In the event there is a breach by the Charterers (with the Owners pertaining to the Charterparty Agreement as per Annex A), in respect

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of the timely payments to the Beneficiary, the Guarantor/Owners will deliver at their own costs, marine vessel "Pratibha Koyna" to the Beneficiary at the nearest nominated port of call as per the instructions of the Beneficiary...............

9 It is not disputed that the vessel Pratibha Koyna was

redelivered to ASRY on 26th December, 2014 as could be found in

paragraph 7.3 of the affidavit filed by ASRY in company application no.609

of 2015. It is also to be noted that subsequently on 17 th February, 2015 a

seizure order was passed by the Civil Court of the Kingdom of Bahrain for

arrest of defendant no.1 vessel - Pratibha Koyna.

10 So far as Pratibha Chandrabhaga is concerned, there is a letter

annexed to the affidavit in reply from Corporation Bank dated 24 th October,

2013 in which it is noted that "competent authority has accorded

permission to issue No Objection Certificate to Chinese Shipyard for sale of

vessel MT Pratibha Chandrabhaga."

11 The explanation of respondent in view of this letter is that the

Corporation Bank having accorded its permission only in late October,

2013, the vessel was still in possession of the Chinese Shipyard and was yet

to be sold. Mr. Singh states that even for a moment, we take that the vessel

had been sold by the Chinese Shipyard, the surplus from the sale proceeds

was anyway going to Corporation Bank and it cannot be alleged that the

money went into the pocket of respondent.

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12                  I have before me a judgment of the Apex Court in the matter of 

M.S. Ahlawat vs. State of Haryana and Anr. 2 relied upon by Mr. Singh on

behalf of respondent. It will be useful to reproduce paragraphs 5,6 and 7 of

the said judgment and the same read as under :

5. Chapter XI of IPC deals with false evidence and offences against public justice' and Section 193 occurring therein provides for punishment for giving or fabricating false evidence in a judicial proceeding. Section 195 of the Criminal Procedure Code (Cr.P.C.) provides that where an act amounts to an offence of contempt of the lawful authority of public servants or to an offence against public justice such as giving false evidence under Section 193 IPC, etc. or to an offence relating to documents actually used in a court, private prosecutions are barred absolutely and only the court in relation to which the offence was committed may initiate proceedings. Provisions of Section 195 Cr.P.C. are mandatory and no court has jurisdiction to take cognizance of any of the offences mentioned therein unless there is a complaint in writing as required under that Section. It is settled law that every incorrect or false statement does not make it incumbent upon the court to order prosecution, but to exercise judicial discretion to order prosecution only in the larger interest of the administration of justice.

6. Section 340 Cr.P.C. prescribes the procedure as to how a complaint may be preferred under Section 195 Cr.P.C. While under Section 195 Cr.P.C, it is open to the court before which the offence was committed to prefer a complaint for the prosecution of the offender, Section 340 Cr.P.C. prescribes the procedure as to how that complaint may be preferred. Provisions under Section 195 Cr.P.C. are mandatory and no court can take cognizance of offences referred to therein. It is in respect of such offences the court has jurisdiction to proceed under Section 340 Cr.P.C. and a complaint outside the provisions of Section 340 Cr.P.C. cannot be filed by any civil, revenue or criminal court under its inherent jurisdiction.

7. This Court in Chajoo Ram v, Radhey Shyam & Anr., AIR (1971) SC 1367, stated that where the offence relates to a court under Section 195 Cr.P.C. sanction of the court should be obtained first and such sanction should be granted only in those cases where me perjury appears to be deliberate and conscious and the conviction is reasonably probable or likely and to start prosecution for perjury too readily and too frequently without due care and caution and on inconclusive and doubtful material defeats its very end. It is made clear that there is no inherent power to make a complaint apart from the provisions of Section 195 Cr.P.C.

2. (2000) 1 SCC 278

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13 Therefore, even if I proceed on the basis that respondent had

made a false statement or incorrect statement in the written statement, it

would not make it incumbent upon this Court to order prosecution. Having

heard the counsel and also having considered the affidavits filed, I am

unable to come to a conclusion and respondent's interpretation of the

documents cannot be faulted to conclude that respondent had made those

submissions in the written statement deliberately and consciously and

those statements were against the larger interest of administration of

justice.

14 In the circumstances, I am unable to grant the reliefs as sought

in the notice of motion. Notice of motion stands dismissed with no order as

to costs.

GENERAL

15 On 5th March 2014, issues were framed in the present suit.

Thereafter on 14th September 2016, defendant nos.9 & 10 were permitted

to intervene in the present suit and file their written statement. Written

statements have been filed by Defendant Nos.9 & 10. Accordingly, the

following Additional Issues are framed:

i. Whether the Plaintiff carried out due diligence before sanctioning the Financial Facility in question to Defendant No.4 (now in liquidation)?

ii. Whether Defendant Nos.9 & 10 prove that the Plaintiff and Defendant No.4 (now in liquidation) acted in

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collusion?

16 On 18th November 2015, cross-examination of PW-1 was closed

as the Ex- Director/s of the company (in liquidation) had not come forward

to give instructions to the Official Liquidator. Considering that defendant

nos.9 & 10 were impleaded thereafter, by the consent of parties, order

dated 18th November 2015 is partially modified and defendant cos.9 & 10

are permitted to cross-examine PW-1.

17 In view of the Additional Issues framed today, plaintiff is

permitted to file and serve additional affidavit of evidence alongwith

compilation of additional documents, if any, on or before 11 th January

2018.

18 Suit is directed to be listed on 24 th January 2018 at 3.00 p.m.

for marking of additional documents.

(K.R. SHRIRAM, J.)

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