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M/s New Era Fabrics Ltd. v. Bhanumati Keshrichand Jhaveri & Ors.

Miscellaneous Application · 2020 INSC 257Decided 3 Mar 2020
Miscellaneous Application No. 1301 of 2018
Justice Mohan M. Shantanagoudar · Justice R. Subhash Reddy

Background

In an earlier tenancy eviction case, the company (as tenant) argued the Small Causes Court had no jurisdiction because its paid-up share capital exceeded Rs. 1 crore, claiming it had since reduced this via a "buy-back" of shares. The Trial Court disbelieved this, and the Supreme Court dismissed the company's Special Leave Petition on this point in 2018. A respondent then filed this separate application asking the Supreme Court to initiate criminal perjury proceedings against the company, alleging it had submitted a secretly altered version of its auditor's balance sheet to the Supreme Court that was different from the one actually exhibited in the Trial Court.

Decision Breakdown

Comparing the original Trial Court record against the documents filed in the Supreme Court, the Court found a genuine, unexplained handwritten alteration: the phrase "Weighted average number of Equity Shares" had been changed to "number of Equity Shares as on 1/4/07" only in the copy filed before the Supreme Court, nowhere in the original trial record. The Court explained that this changed the apparent meaning of a key financial figure in a way that happened to patch over an inconsistency the Trial Court had flagged. Finding this to be prima facie fabrication of evidence intended to mislead the Court, the Supreme Court directed its Secretary General to depute a senior court officer to file a formal criminal complaint for perjury (under Sections 193 and 199 IPC) against the company and its director before a Magistrate in Delhi, and allowed the application.

Lesson Learnt

Courts cross-check documents filed before them against the original record from lower courts, and altering even a single word or phrase in a previously-exhibited document before resubmitting it to a higher court can expose a litigant and its officers to criminal perjury prosecution, regardless of the outcome of the underlying case.

Official source (sci.gov.in)View Judgment (PDF)

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