Criminal Action For Forged Documents Lies Only If It Occurs In Tribunal Custody: NCLT Chennai Reaffirms

The National Company Law Tribunal (NCLT) at Chennai has recently reiterated that that it cannot invoke its criminal jurisdiction for alleged forgery or fabrication of evidence unless the offence is shown to have been committed while the document was in its custody It observed, “It is not the case that, Respondent No.1 had given a false evidence under oath or fabricated a false evidence. Therefore, the Applicant's reference to the Section 227, 228 and 229 of BNS is misplaced and the relief under Section 215 (1)(b)(i) of BNSS would not lie before this Tribunal."A coram of Judicial Member Sanjiv Jain and Technical Member Venkataraman Subramaniam made the observations while dismissing applications filed by Dr Ravi Shankar Vedam against M. Poobalan, authorised representative of Udhayaman Investments Pvt. Ltd. The proceedings relate to the admission of insolvency proceedings against Tiffins Barytes Asbestos and Paints Limited in 2018 on a petition filed by Udhayaman Investments. Vedam, a shareholder and brother of the company's former managing director, alleged that the insolvency was triggered on the basis of a forged memorandum of understanding dated April 16, 2016. He claimed that different versions of the document existed and that a fabricated version was produced before the tribunal. On this basis, Vedam sought directions for the tribunal to initiate criminal action for offences such as giving false evidence and fabricating evidence, and also sought to invoke provisions of the Insolvency and Bankruptcy Code alleging that the insolvency proceedings had been initiated fraudulently and with malicious intent. Poobalan and others opposed the plea, contending that similar allegations had been raised and rejected in earlier rounds of litigation, including before the appellate tribunal and the Supreme Court. They further argued that the resolution plan had since been approved and implemented. While examining the maintainability of the plea, the tribunal noted that its jurisdiction under the Bharatiya Nagarik Suraksha Sanhita is limited and guided by apex court's ruling in Iqbal Singh Marwah and another vs Meenkashi Marwah and another (2005). In Marwah, the court held that, "Section 195(1)(b)(ii) Cr.P.C. would be attracted only when the offences enumerated in the said provision have been committed with respect to a document after it has been produced or given in evidence in a proceeding in any Court i.e. during the time when the document was in custodia legis." Applying the same, it concluded, “It is not the case of the Applicant that the MoU dated 16.04.2016 was forged in the custodia legis of this Tribunal. Therefore, this Tribunal holds that the relief sought for by the Applicant in IA/462/2024 and IA/2306/2024 under Section 215(1)(b)(ii) would not lie before this Tribunal.” The tribunal also declined to interfere with the insolvency proceedings on the ground of alleged fraud or malice. It observed that the Vedam had “failed to provide any corroborative or substantial evidence to explicitly prove fraudulent intent to initiate CP/39/2018,” and dismissed all the applications without costs. Case Title : Dr. Ravi Shankar Vedam v. M Poobalan Case Number: IA(IBC)/462/CHE/2024 in CP(IB)/39(CHE)/2018 For Applicant: Advocates V Venkata Sivakumar, T Deenadhayalam For Respondent: Sr Advocate OmprakashClick Here To Read/Download Order

Criminal Action For Forged Documents Lies Only If It Occurs In Tribunal Custody: NCLT Chennai Reaffirms

Shilpa Soman

Tags