Preliminary Enquiry U/S 340 CrPC Can Only Be Initiated In Interest Of Justice And In Relation To Court Proceedings: J&K High Court

Deferring the consideration of an application seeking criminal proceedings for alleged false statements, due to the ongoing arbitration process Justice Sanjay Dhar observed,

“.. It is not a case where the petitioner is stated to have made any contradictory statements in his pleadings but it is a case where he has made certain allegations, the veracity of which is yet to be determined… this Court feels that the prayer of the respondents/applicants for initiating preliminary enquiry under Section 340 of the Cr. P. C cannot be considered at this stage”

Background of the Case:

The case revolved around a dispute between Roshan Lal Tickoo (the petitioner) and Predimant Krishan Tickoo (the respondent) involving a partnership concern, M/s Shayam Lall & Co.

The petitioner had filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996, seeking various interim reliefs, including the appointment of a receiver for 18 tankers, forensic auditing of the partnership's finances, and restraining the respondent from executing agreements or selling assets of the partnership.

However, with the appointment of an Arbitral Tribunal and the parties submitting to its jurisdiction, the petition was rendered infructuous. Amidst this, the respondent filed an application under Section 340 of the Cr. P. C, accusing the petitioner of perjury by making false statements in the original petition.

The respondent's counsel argued that the petitioner's statements regarding unauthorized sales and financial discrepancies were palpably false, constituting an offense of perjury. They sought a preliminary enquiry under Section 340 of the Cr. P. C to initiate criminal proceedings.

Conversely, the petitioner's counsel contended that the application was premature. They argued that unless the veracity of the allegations made in the petition was determined by an appropriate forum, the application under Section 340 could not be entertained.

Court's Observations:

Justice Sanjay Dhar meticulously analyzed the legal provisions of Section 340 Cr. P. C and noted that before any enquiry could be initiated under this section, the court must be convinced that it is expedient in the interests of justice. The Court must form an opinion that the offense of perjury appears to have been committed and that it warrants further investigation, he underscored.

Referring to Rugmini Ammal by LR's v. V. Narayana Reddiar, the Court reiterated that normally, a direction for filing a complaint under Section 340 is issued only after the proceedings have concluded. The Court emphasized that the determination of whether to initiate such proceedings should consider the impact on the administration of justice rather than the magnitude of injury to the parties involved.

Justice Dhar also referenced the Delhi High Court's decision in Punjab Tractors Ltd. vs. International Tractors Ltd., which held that applications under Section 340 should typically be dealt with at the final stage of proceedings to prevent the misuse of the provision for settling private grievances.

In light of these observations, the Court held that the veracity of the allegations made by the petitioner, which were claimed to be false by the respondent, was yet to be determined by the Arbitral Tribunal.

As there was no prima facie material suggesting that the statements were false, the Court found it premature to initiate a preliminary enquiry at this stage.

The application under Section 340 was therefore deferred, with liberty granted to the respondent to revive the application after the conclusion of the arbitration proceedings.

Case Title: ROSHAN LAL TICKOO Vs PREDIMANT KRISHAN TICKOO

Citation: 2024 LiveLaw (JKL) 232

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