Arbitral Tribunal Not Declared As “Court”, False Evidence Before Arbitrator Does Not Attract S.195 CrPC: J&K&L High Court

Clarifying the scope of criminal law in arbitral proceedings, the High Court of Jammu & Kashmir and Ladakh has held that the bar contained in Section 195 of the Code of Criminal Procedure does not apply to allegations of false evidence given before an Arbitral Tribunal, as an arbitrator is not a “court” within the meaning of that provision.“… the term “Court” has been defined in sub-section (3) of Section 195 of Cr. P. C to mean a civil, revenue or criminal court and it includes a Tribunal constituted by or under Central, provincial or State Act if declared by that Act to be a Court for the purposes of said provision… In the Arbitration and Conciliation Act, the Arbitral Tribunal has not been declared as a “court”. Thus, the provisions contained in Section 195 of the Cr. P. C are not attracted to an offence of giving false evidence before the Arbitral Tribunal”, the court explained. Justice Sanjay Dhar rendered this finding while partly allowing a petition challenging two FIRs arising out of a landlord tenant dispute which had already travelled to arbitration.Background:The dispute between the parties originated from a tenancy in respect of the ground floor of “Enso Tower” at Anantnag. Differences escalated into arbitration proceedings, during which a status quo order was operating in respect of the premises. Amidst the pendency of arbitral proceedings, two FIRs came to be registered on the directions of the jurisdictional Magistrate, one alleging unlawful removal of goods from the demised premises despite the status quo order, and the other alleging production of a forged municipal notice and false evidence before the Arbitral Tribunal. Both FIRs were challenged by the landlord before the High Court by invoking its inherent jurisdiction.Court on Criminal Proceedings Despite Civil and Arbitral RemediesWhile examining the challenge to the first FIR, the Court dealt extensively with the contention that the dispute was purely civil in nature and stood concluded by an arbitral award. The Court reiterated settled law that the existence or pendency of civil or arbitral proceedings does not bar criminal prosecution where the allegations disclose cognizable offences.Relying upon Indian Oil Corporation v. NEPC India Ltd., the Court reproduced and applied the principles governing quashing of criminal proceedings, emphasising that a commercial or contractual dispute may give rise to both civil liability and criminal culpability.The Court observed that the allegations regarding removal, damage and shifting of goods from the demised premises, coupled with the report of the Commissioner appointed during arbitration, prima facie disclosed offences of theft and house-breaking. “Removal of even other goods from the ground floor of the premises which was under the occupation of respondent No.3 and their transfer to other portions of the same building which are under the ownership and occupation of the petitioner definitely comes within the mischief of offence of theft in a dwelling house.”, the court remarked. Consequently, the Court held that the FIR disclosed cognizable offences and could not be quashed merely because compensation had been awarded in arbitration.Court on Alleged Forgery and False Evidence Before ArbitratorTurning to another FIR, the Court carefully analysed the allegations relating to production of a municipal notice before the Arbitral Tribunal. The Court first found that the offence of cheating under Section 420 IPC was not made out, as there was no allegation of fraudulent or dishonest inducement resulting in delivery of property.The Court then undertook a detailed examination of the law relating to forgery by referring to Sections 463 and 464 IPC and the Supreme Court judgment in Mohammad Ibrahim v. State of Bihar. It categorically held that the notice in question did not qualify as a “false document” under any of the three categories contemplated by Section 464 IPC.Justice Dhar made it clear that merely because a document contains an incorrect recital, it does not become a forged document, “By no stretch of reasoning, it can be stated that the document dated 26.03.2020 falls in the category of false document and hence a forged document.”, he recorded. At best, the Court observed, the act could amount to making a false statement before the Arbitral Tribunal, which would attract Section 193 IPC.On Section 195 CrPC and Arbitral Tribunal:Addressing the central legal issue, the Court rejected the argument that prosecution for false evidence before an Arbitral Tribunal is barred by Section 195 CrPC. In a clear and categorical finding, the Court held, “The provisions contained in Section 195 of the Cr. P. C are not attracted to an offence of giving false evidence before the Arbitral Tribunal.”The Court reasoned that Section 195 CrPC applies only to “courts” as defined under sub-section (3) thereof, which includes civil, criminal or revenue courts and such tribunals as are expressly declared to be courts...

Arbitral Tribunal Not Declared As “Court”, False Evidence Before Arbitrator Does Not Attract S.195 CrPC: J&K&L High Court

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Arbitral Tribunal Not Declared As “Court”, False Evidence Before Arbitrator Does Not Attract S.195 CrPC: J&K&L High Court

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