Delhi High Court Orders Perjury Proceedings Against Company Over Prima Facie False Pleadings, Fabricated NDAs

The Delhi High Court has directed initiation of perjury proceedings against a company after finding prima facie that it had made false averments and relied on fabricated Non-Disclosure Agreements (NDAs) in a civil suit filed against a rival company and former employees.

Justice Subramonium Prasad passed the order while allowing an application filed under Section 340 read with Section 195(1)(b) of the Code of Criminal Procedure, seeking action against the plaintiff company for allegedly misleading the Court and obtaining an interim injunction on the basis of false pleadings.

The underlying suit had been filed by Manipal Business Solutions Private Limited against Aurigain Consultants Private Limited and several former employees, alleging breach of confidentiality obligations and misuse of proprietary information after the employees joined the rival company.

The plaintiff had sought injunctions restraining the defendants from carrying on competing business activities in violation of alleged NDAs.

The Court noted that the plaintiff had specifically pleaded that defendant employees had executed NDAs and were bound by confidentiality obligations. On the basis of these assertions, the Court had initially granted an ad-interim injunction on April 4, 2022.

However, the injunction was later vacated on August 17, 2022 after the Court found lack of supporting material and evidentiary deficiencies.

In the present proceedings, the defendants argued that many of the NDAs relied upon by the plaintiff were unsigned, fabricated or never executed by the concerned employees.

Certain defendants filed affidavits denying execution of the NDAs, while one defendant specifically alleged that his signatures had been forged. A forensic report produced before the Court also indicated “strong possibility” of electronic transplantation of signatures from the same source document.

The High Court observed that the documentary record itself contradicted the pleadings in the plaint.

“The pleadings are found to be inconsistent with the documents placed on record by the Plaintiff itself. The documentary record revealed that Defendant Nos.5-7 and 12-20 had not signed the NonDisclosure Agreements relied upon by the Plaintiff,” it said.

Accordingly, the Court was of the opinion that ingredients of Section 195(1)(b)(i) CrPC are attracted, as the alleged false statements form part of the judicial record and have a direct bearing on the administration of justice.

“The test is not merely whether the Plaintiff entered the witness box, but whether false statements, knowingly made and verified, were placed before this Court with the intent to secure favourable orders, thereby impacting the sanctity of judicial proceedings. In the present case, averments have been made in the Plaint by the Plaintiff knowing fully well that they are false,” it added.

Reliance was placed on Iqbal Singh Marwah v. Meenakshi Marwah (2005), where the Supreme Court held that proceedings under Section 340 CrPC are intended to protect the sanctity of judicial proceedings and the administration of justice.

As such, the Court directed the Registrar General to prepare and file a criminal complaint before the competent court under Section 195 read with Section 340 CrPC.

Appearance: Ms. Malvika Trivedi, Senior Advocate with Mr. Atanu Mukherjee, Ms. Sujal Gupta and Mr. Shailendra Slaria, Advocates for Plaintiff; Ms. Shantha Devi Raman, Mr. Arihant Jain and Ms. Tanisha Gopal, Advs along with Mr. RK Singh, Defendant No.3

Case title: Manipal Business Solutions Private Limited v. Aurigain Consultants Private Limited And Ors.

Case no.: CRL.M.A. 14926/2023

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