Court On Its Own Motion vs Zenith Mining Pvt Ltd & Anr
2013 Latest Caselaw 3423 Del

$~8
*      IN THE HIGH COURT OF DELHI AT NEW DELHI
                                                  Date of decision: 05.08.2013
+                           CONT.CAS(C) 147/2012
       In Re.
       COURT ON ITS OWN MOTION

                            versus

       ZENITH MINING PVT LTD & ANR                    ..... Respondents

Through: Mr. A.K. Thakur, Advocate for NAFED. Mr. Narender Mann, Spl. P.P. for CBI with Mr. Manoj Pant, Advocate and Inspr. T.P. Singh, CBI.

Mr. M. Padhi with Mr. Pratap Sahni, Advocates for Resp-2.

CORAM:

HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE NAJMI WAZIRI

MR. JUSTICE S.RAVINDRA BHAT (OPEN COURT)

%

1. In this suo motu contempt proceedings, the Court is considering whether appropriate action is required having regard to the observations made on 21.01.2010 while disposing off FAO (OS) 228/2009.

2. Briefly, the facts are that the respondent (hereafter referred to as NAFED) claimed that the appellant Zenith Mining Pvt. Ltd. (hereafter referred to as "Zenith") owed it a sum of `89 crores, of

Cont.Cas (C) 147/12 Page 1 which, after a due adjustment, an amount of `71 crores was outstanding as payable as on 08.01.2007. The contract between the parties contained an arbitration clause. In these circumstances, NAFED approached the Court under Section 9 of the Arbitration and Conciliation Act seeking a direction to secure amounts due to it by Zenith. On a prima facie view, the learned Single Judge by an order dated 25.11.2008 directed Zenith to indicate how it would secure the payments in the event of NAFED succeeding in arbitration proceedings. Learned Single Judge also directed that Zenith should deposit `4,50,000/- every month in the Court. Zenith felt aggrieved and approached the Division Bench earlier by filing FAO (OS) 495/2008 which was disposed off on 17.12.2008. The Division Bench on that occasion noticed that there was no dispute that Zenith was liable to the extent of `89 crores to NAFED. Zenith, in its written statement/reply before the Arbitrator had submitted that only `45 crores was payable. In the course of the proceedings, the appellant, i.e., Zenith had submitted that supplies of iron ore to the tune of 1,20,000 M.t. had been made to NAFED which was valued at `25 crores and that due adjustment of the same had been given. Learned Single Judge held that Zenith had not complied with its order directing deposit of monthly payment. In these circumstances, Zenith was restrained from alienating, mortgaging or in any manner creating third party interest in the properties specified in the order. Zenith, therefore, appealed by filing FAO (OS) 228/2009.

3. The Court had, in the appeal, on 29.05.2009 noticed that Zenith had made a statement that as against sum of `89 crores received from

Cont.Cas (C) 147/12 Page 2 NAFED a sum of `91 crores had already been paid. While saying so, the Zenith claimed that the value of the 1,20,000 M.t. allegedly given for supply to the NAFED was of `25 crores. This assertion was ultimately not accepted by the Division Bench while disposing of appeal on 21.01.2010. The Division of this Court observed as follows: -

"5. We take a serious view of such a practice if found to have been followed by the appellants. Since what has been filed before this court as Annexure P-12 is a photocopy, we enquired from the senior counsel for the appellants as to where the original was and as to who has signed the same on behalf of the appellant No.1 and on behalf of the respondent No.1. He, on instructions states that the appellants are not in possession of the original; it is stated to be signed by the then CEO of the appellant No.1 company; the name or designation of the officer of the respondent No.1 who has purported to sign the same is not disclosed. It is further informed that the appellant No.2 who is the CMD of the appellant No.1 company had received a fax from the then CEO; it is further stated that a copy of the said letter was also handed over by the officials of the respondent No.1 in meetings with the appellant No.2; however the counsel is unable to give the exact date of the said meetings.

XXX XXX XXX

8. We are not satisfied of the appellants having paid approximately Rs.25 crores to the respondent No.1 in the manner aforesaid. It is inconceivable that if a large sum of Rs.25 crores had been paid as aforesaid as far back as in 2004, mention thereof would not have been made before this court at the initial stage of the proceedings and/or in the arbitration proceedings. We are also not satisfied with the explanation given with respect to the document. It is inconceivable that goods of the value of Rs.25,12,00,000/- would have been handed over in the manner aforesaid. The endorsement on the photocopy of the letter filed is only of a receipt of the letter and not even of the goods. No particulars of the officer of the respondent No.1 to whom goods of such high value were handed over is forthcoming. There is no other proof whatsoever of such

Cont.Cas (C) 147/12 Page 3 transaction and which is highly unlikely. We are thus prima facie of the opinion that the appellant has forged and fabricated the document filed as Annexure P-12 for use in the present proceedings and has made false representation to this court on 29th May, 2009 of payment of Rs.91 crores to the respondent No.1. The appeal is liable to be dismissed on this ground alone.

9. Even on merits, we do not find any ground to interfere. The order of injunction with respect to properties and attachment of bank accounts came when the appellants failed to comply with the earlier orders directing the appellants to furnish security and/or to pay a sum of Rs.4.5 lacs every month. The appellants having availed of finance of such a large sum from the respondent No.1, unless such orders are made, the respondent No.1 even if succeeding in the arbitration would be left merely with a paper award incapable of enforcement. The respondent No.1 has drawn our attention to In Re: suo moto proceedings against R. Karuppan, Advocate 2001 5 SCC 289 where the Supreme Court has taken note of the increasing practice of giving false evidence on affidavit and advocated stern action for preventing the evil of perjury. We even otherwise, as aforesaid had, at the outset only indicated that if the claim of the appellants is found to be false, stern action shall follow. Accordingly, while dismissing the appeal, notice to show cause is issued to both the appellants as to why they should not be punished for contempt of this court and/or for the offences of forging and fabricating documents for use in this proceedings and for misrepresenting before this court.

Reply be filed within two weeks. Appellant No.2 is also directed to appear in person before this court in person on 15th February, 2010."

Pursuant to the notice, the Chairman and Managing Director of Zenith, Shri Syed Najam Ahmed filed an affidavit on 25.08.2010. The explanation given in the affidavit is that the letter dated 12.08.2004 relied upon by Zenith to say that it had supplied 1,20,000 M.t. and, therefore, was entitled to claim adjustment in that regard was neither fabricated nor forged. The explanation sought to be

Cont.Cas (C) 147/12 Page 4 given was that even though the letter is not part of the record in OMP 449/2007, the document itself was made available during the second week of December, 2008 and was consequently produced thereafter. The reply of the other respondent, Shri Mohd. Javed Sultan is dated 21.09.2010. It appears that during the course of the proceedings, the other respondent, Shri Mohd. Javed Sultan denied his signatures on the letter dated 12.08.2004. Apparently, an investigation was made about the signatures appearing on that document; the material on record indicate that the denial of his signatures was incorrect. This was of course the conclusion of a private handwriting expert. In a further affidavit, the Managing Director Shri Syed Najam Ahmed levelled allegations against the official of NAFED as well as Shri Mohd. Javed Sultan and specifically stated that he had created another company and was involved in siphoning funds from Zenith.

4. The materials on record indicate that the original of the letter dated 12.08.2004 is not on the record in any proceedings. It was not made part of the record nor even adverted to at any stage when NAFED approached the Court, in any of the replies or pleadings relied upon by Zenith. The explanation now sought to be given by one of the respondents is that a copy of the letter itself became available sometime at the end of December, 2008 and was consequently relied upon in appellate proceedings. This Court has by its order of 21.01.2010 taken a prima facie view that the letter appears to have been fabricated and was not on the record; it does not also appear to have been a part of any correspondence contemporaneously exchanged between NAFED and Zenith or any of

Cont.Cas (C) 147/12 Page 5 the officials.

5. On the appropriate procedure to be adopted, the Constitution Bench's judgment in Iqbal Singh Marwah & Anr. v. Meenakshi Marwah & Anr. 2005 (4) SCC 370 stated as follows: -

"9. The scheme of the statutory provision may now be examined. Broadly, Section 195 Cr.P.C. deals with three distinct categories of offences which have been described in clauses (a), (b)(i) and (b)(ii) and they relate to (1) contempt of lawful authority of public servants, (2) offences against public justice, and (3) offences relating to documents given in evidence. Clause (a) deals with offences punishable under Sections 172 to 188 IPC which occur in Chapter X of the IPC and the heading of the Chapter is 'Of Contempts Of The Lawful Authority Of Public Servants'. These are offences which directly affect the functioning of or discharge of lawful duties of a public servant. Clause (b)(i) refers to offences in Chapter XI of IPC which is headed as 'Of False Evidence And Offences Against Public Justice'. The offences mentioned in this clause clearly relate to giving or fabricating false evidence or making a false declaration in any judicial proceeding or before a Court of justice or before a public servant who is bound or authorized by law to receive such declaration, and also to some other offences which have a direct co-relation with the proceedings in a Court of justice (Sections 205 and 211 IPC). This being the scheme of two provisions or clauses of Section 195, viz., that the offence should be such which has direct bearing or affects the functioning or discharge of lawful duties of a public servant or has a direct correlation with the proceedings in a court of justice, the expression "when such offence is alleged to have been committed in respect of a document produced or given in evidence in a proceeding in a Court" occurring in clause (b)(ii) should normally mean commission of such an offence after the document has actually been produced or given in evidence in the Court. The situation or contingency where an offence as enumerated in this clause has already been committed earlier and later on the document is produced or is given in evidence

Cont.Cas (C) 147/12 Page 6 in Court, does not appear to be in tune with clauses (a)(i) and

(b)(i) and consequently with the scheme of Section 195 Cr.P.C. This indicates that clause (b)(ii) contemplates a situation where the offences enumerated therein are committed with respect to a document subsequent to its production or giving in evidence in a proceeding in any Court.

10. Section 195(1) mandates a complaint in writing of the Court for taking cognizance of the offences enumerated in clauses (b) (i) and (b)(ii) thereof. Sections 340 and 341 Cr.P.C. which occur in Chapter XXVI give the procedure for filing of the complaint and other matters connected therewith. The heading of this Chapter is --'Provisions As To Offences Affecting The Administration Of Justice'. Though, as a general rule, the language employed in a heading cannot be used to give a different effect to clear words of the Section where there cannot be any doubt as to their ordinary meaning, but they are not to be treated as if they were marginal notes or were introduced into the Act merely for the purpose of classifying the enactments. They constitute an important part of the Act itself, and may be read not only as explaining the Sections which immediately follow them, as a preamble to a statute may be looked to explain its enactments, but as affording a better key to the constructions of the Sections which follow them than might be afforded by a mere preamble.(See Craies on Statute Law, 7th Ed. Pages 207, 209). The fact that the procedure for filing a complaint by Court has been provided in Chapter XXVI dealing with offences affecting administration of justice, is a clear pointer of the legislative intent that the offence committed should be of such type which directly affects the administration of justice, viz., which is committed after the document is produced or given in evidence in Court. Any offence committed with respect to a document at a time prior to its production or giving in evidence in Court cannot, strictly speaking, be said to be an offence affecting the administration of justice."

6. This Court is of the opinion that the material on record are such that it would be expedient in the interest of justice that a suitable

Cont.Cas (C) 147/12 Page 7 complaint is made by the Registrar General of this Court to the Court competent to exercise jurisdiction in respect of offences under Section 193 IPC read with the procedure indicated in Section 195 (1) (b) of the Cr.P.C as against the respondent Zenith, Syed Najam Ahmed and Mohd. Javed Sultan. The Registrar General shall take appropriate action in this regard within four weeks.

7. The suo motu proceedings are accordingly disposed of.

                                                    S. RAVINDRA BHAT, J



AUGUST 05, 2013/vks/                                     NAJMI WAZIRI, J




Cont.Cas (C) 147/12                                                      Page 8