Krishnaswami Nayudu, J.
1. Application No. 4499 of 1954 as amended by order in application No. 770 of 1955, is for sanction to prosecute by directing that a complaint be filed against (a) K. Chengalvaraya Mudaliar, the first respondent, under Section 209, Penal Code, and (b) K. Bahi Mudaliar, M. Natesa Mudaliar and S. Velu Mudaliar, respondents 2 to 4 under Section 195, Penal Code and also under Section 209, Penal Code coupled with Section 109, Penal Code.
2. The first respondent filed application No. 2583 of 1951 on the Original Side of the High Court for a declaration that the dissolution of the Thirumagal Corporation Ltd., was void and for consequential proceedings to be taken as if the company had not been dissolved, for the realisation of the moneys due to the first respondent.
The case of the first respondent was that the Thirumagal Corporation was a private limited company incorporated under the Indian Companies Act on 6-9-1946 with a share capital of Rs. 2,00,000, divided into one hundred shares of Rs. 2000 each, that he was a share-holder owning five fully paid up shares of the value of Rs. 10,000, that Messrs. Ganesh and Company were the managing agents of the Company, that at the extraordinary general meeting held on 17-4-1949, a special resolution was passed resolving to wind up the company voluntarily as Members Voluntary Winding up and appointing the. applicant, S.T. Shanmugesan, as a Liquidator at a certain remuneration, that the requirements of the Companies Act were complied with as regards the further steps to be taken, that at a meeting of the shareholders held on 4-9-1949 a statement of receipts and disbursements was placed and the Liquidator assured the shareholders at that meeting that the moneys due to the shareholders would be paid to them and that the first respondent was not paid his subscribed capital of Rs. 10,000.
Application No. 2583 of 1951 was presented on 28-4-1951, more than 11/2 years after the general body meeting of the share-holders dated 4-9-1949. The applicant denied that any assurance was given at the meeting on 4-9-1949 that the shareholders would be paid their subscribed share capital. His case was that the voluntary winding up of the company was with a view to constitute a partnership firm known as Canesh and Company with a capital of Rs. 1,32,500 and that it was agreed that the share capital of the shareholders of the dissolved company was to be transferred and shown as capital of the Firm of Ganesh and Company, that there were no assets of the company still available for distribution, that the first respondent instituted O. S. No. 20 of 1951 for the dissolution of the new partnership Ganesh and Company in which the applicant was appointed as the managing partner and that the case set up by the first respondent was false and not bona fide.
3. Application No. 2583 of 1951 came up before me and when evidence was taken, the respondents 2 to 4 herein were cited as witnesses on behalf of the first respondent, the first respondent himself not figuring as witness. In so far as capital of the partnership was concerned, the first respondent's share capital was Rs. 20,000 and it is the applicant's case that Rs. 10,000 being his share value of the company was adjusted and given credit to and the first respondent paid in cash only two sums of Rs. 5000.
The second respondent, who is the brother of the first respondent, stated that Rs. 20,000 was paid by the first respondent in cash, and not by adjustment, in two instalments of Rs. 15,000 and Rs. 5000 and that the moneys were paid to the applicant. The third respondent admitted that he was one of the managing directors and also managing partner and he wrote the accounts. He stated that the share capital was returned to him and that he paid cash towards his share capital of the new partnership.
Similar is the evidence of the fourth respondent in so far as his share of capital was concerned, but in answer to a question whether he knew that the first respondent paid Rs. 15,000 to Ganesh and Company, lie said he knew it from what the parties told him. On this and other evidence and circumstances, I found that the first respondent's case that of Rs. 10,000 of his share capital was not by adjustment towards the share capital of the partnership and that he paid his share capital of the partnership in cash was false. He did not choose to get into the witness box and speak to the fact of having paid Rs. 15,000 in cash for which a receipt dated 10-12-1948 was issued. He sought to support his case by the evidence of his brother without the assistance of any other document.
All these and his failure to explain as to his means to make the payment were taken into consideration and I observed that the arrangement pleaded by the applicant was true and that the first respondent had come to court with a false case of actual payment with a view to see if possible, whether he could make a profit out of it from the applicant between whom and the first respondent there was no love lost .and I dismissed the application with costs on 5-11-1951.
The first respondent took the matter on appeal in O.S.A. No. 69 of 1952 and the appeal was dismissed on 1-3-1954. The appellate Court observed:
'The appellant himself did not give evidence, nor did he produce his accounts. There is no proof whatever of payment by him of the sum of Rs. 10,000 on 10-12-1948 though there is an entry in the books of Ganesh and Company giving him a credit in that sum. The appellant's brother gave evidence and he was asked how the appellant got this amount of Rs. 10,000 which was according to the appellant paid towards the capital of Ganesh and Company. The witness was unable to give any version which was worthy of credence,'
and it was found that arrangement pleaded by the applicant was true and the application of the first respondent was not sustainable.
4. The applicant filed an application, Appln. No. 1740 of 1952, for sanction to prosecute, on 15-4-1952. It came up before Ramaswami Goundar J. and he passed an order on 2-9-1952 permitting the applicant to withdraw the application, since the matter in controversy was involved in Original Side Appeal, with liberty to renew it after the appeal is disposed of. The present application was filed on 30-8-1954, and by order dated 29-11-1954; Ramaswami Goundar J. had the matter posted before me, as both the parties agreed that I might hear the application.
5. Section 476, Criminal P.C., provides that:
'When any civil, revenue or criminal court is, whether on application made to it in this behalf or otherwise, of opinion that it is expedient in the interests of justice that an enquiry should be made into any offence referred to in Section 195, Sub-section (1), Clause (b), or Clause (c), which appears to have been committed in by in relation to a proceeding in that court, sue court may, after such, preliminary inquiry, if any, as it thinks necessary, record a finding to that effect and make a complaint thereof in writing signed by the presiding officer of the court, and shall forward the same to a Magistrate of the First Class having jurisdiction, and may take sufficient security for the appearance of the accused before such Magistrate or if the alleged offence is non-available, may, if it thinks necessary so to do, send the accused in custody to such Magistrate, and may bind over any person to appear and give evidence before such Magistrate;
Provided that, where the court making thecomplaint is a High Court, the complaint may besigned by such officer of the court as the courtmay appoint.............'
The first respondent is said to have committedan offence under Section 209, Penal Code and theother respondents punishable under Sections 193 and also209 Penal Code, road with Section 109, Penal Code. Inrespect of these offences, Section 195 (1) (b), Criminal P.C., provides that no court shall take cognisance ofthe offences punishable under the said sections except on a complaint in writing of such court, andit therefore becomes necessary to examine whetherin the interests of justice it is necessary to make acomplaint.
6. Section 209, Penal Code runs:
'Who ever fraudulently or dishonestly, or with intent to injure or annoy any person, makes in a court of justice any claim which he knows to be false, shall be punished with imprisonment of either description for a term which may extend to two years, and shall also be liable to fine.'
The first respondent has been found to have made a false claim in the High Court and I am satisfied that he knew his claim to be false having been a party to the arrangement for adjusting his share capital of Rs. 10,000 and there is every reason to believe that he made this claim with intent to defraud and also to cause wrongful, gain to himself and to injure and annoy the applicant.
His conduct in setting up his brother the second respondent to support a false case, especially where the alleged payment was not supported by independent documentary evidence, coupled with his failure to go into the witness box, is sufficient to impute to him a dishonest intention of making a false claim in court and I am satisfied having myself dealt with the case and after going through the affidavits that a complaint should be laid against him that he be prosecuted for having committed an offence under Section 209, Penal Code.
7. As regards the other respondents, respondents 3 and 4, though they came to support the application of the first respondent in general and denied the arrangement as to the transfer and adjustment of the respective share capital in the company to the partnership firm, have not definitely and clearly in their evidence spoken to their having seen to the first respondent paying the sum of Rs. 15,000.
Though they have come to support a false claim and their conduct is, on that ground, reprehensible and they might be considered to have, abetted the first respondent in the commission of the offence and therefore liable to be prosecuted under Section 209 read with Section 109, Penal Code, in view of their having not corroborated by false, evidence the claim, as the second respondent did, I 'do not consider that interests of justice require that, they should be prosecuted for any offence either under Section 209 read with Section 109, Penal Code or under Section 193, Penal Code.
8. The case of the second respondent is, however, different. It was he who came to support the false claim of his brother and spoke to the actual payment of the cash. He stated that his brother, the first respondent, had invested Rs. 20,000 in Ganesh and Company and paid the amount in two instalments of Rs. 15,000 and Rs. 5000 and he denied that the payment of Rs. 15,000 was partially by way of adjustment of the share capital of his brother in the company.
He further stated that he was present at the informal meeting held on 10-12-1948 and his brother did not agree to the transfer, that he saw the payment of Rs. 15,000, that the money was business money but there was no account to support it, that himself and his brother had each . Rs. 7500 cash and the entire cash of Rs. 15,000 was paid to the applicant, and that this payment was apart from Rs. 10,000 which was paid by the first respondent as his share capital in the company. He also stated that he was doing lunghi business and no accounts were maintained and no income-tax was paid.
There can be no doubt that apart from his abetting the false claim made by his brother he and his brother colluded together to injure and annoy the applicant and he is therefore not only liable to te proceeded against under Section 209 read with Section 109, Penal Code but also under Section 193, Penal Code for intentionally giving fake evidence in the High Court in Application No. 2583 of 1951, and the interests of justice eminently require that a complaint should be filed against him for offences under Section 209 read with Section 109, Penal Code and Section 193, Penal Code.
9. The first and second respondents have filed counter affidavits stating that the facts set out in support of the application are not admitted and that the application is misconceived and unsustainable. To similar effect respondents 3 and 4 have filed counter affidavits.
10. The main contention of Mr. Mohanarunga Pillai for the respondents was that there has been considerable delay in making this application for sanction to prosecute and in view of the Full Bench decision of this Court in -- 'Rahimadulla Sahib v. Emperor', 31 Mad 140 (A), and --'Aiyakannu Pillai v. Emperor', 32 Mad 49 (B), the present application is not sustainable.
In 31 Mad 140 (A), a Full Bench of this court, Sir Arnold White C.J. and Wallis J. with Miller J. dissenting held that it was the intention of the. Legislature in enacting Section 476 that an order under this section should be made either at the close of the proceedings or so shortly thereafter that it may reasonably be said that the order is part of the proceedings.
Since doubts were expressed as to the correctness of the ruling in that case by a Bench of this Court consisting of Benson and Miller JJ. the question as to whether a court had jurisdiction to take action under Section 476 of the Criminal P.C. at any time after the conclusion of the judicial proceedings in the course of which the offence was committed was again referred to a Fuller Bench of five Judges, consisting of Sir Arnold White C.J., Wallis, Miller, Sankaran Nair, and Pinhey JJ. and it was held by the Bench, Miller J. again dissenting that
'the power conferred by Section 476 can be exercised by the Court only in the course of the judicial proceeding or at its conclusion or so shortly thereafter as to make ft really the continuation of the same proceeding in the course of which the offence is committed.' Miller J. took the view that 'the procedure provided by the section isnot incomepatible with the commencement of action by the court after the close of the proceedingin the course of which an offence is committed ordisclosed.'
11. Sankaran Nair J. observed at p. 58 that,
'the words of the section contemplate immediate action and the scheme of the Code requires it. When a court in the course of any proceeding sees reason to suspect the commission of any offence referred to in Section 195, then the court may set the criminal law in motion for the detection of the offence or the conviction of the supposed offender by filing a complaint.'
12. The judgment -of Mack J. in -- 'Mahomed Abubacker v. Mohammad Mohideen', CRP No. 1912 of 1951 (Mad) (C), is also relied on in support. In that case, the Subordinate Judge of Ramanathapuram in his judgment dated 14-8-1947 found a wakfnama dated 1-4-1945 purporting to be executed by the plaintiff's deceased brother to be a forgery. That finding was confirmed in appeal by the High Court in Appeal No. 124 of 1948.
On 19-11-1947 during the pendency of the appeal and more than three months after the disposal of the suit, the plaintiff applied wide Section 476, Criminal P.C. for laying a complaint against the second defendant and eight others for forgery and it remained pending in the Subordinate Judge's court and the learned Subordinate Judge, who disposed of the suit, was transferred, and, after the disposal of the appeal by the High Court, his successor passed- orders on 13-12-19.50 directing a complaint to be laid.
An appeal was filed against that order. It came up before the District Judge of Ramanathapuram, who did not consider it expedient in the interests of justice that a complaint should be launched and allowed the appeal.
The matter came up before Mack J. in a revision petition against the judgment of the District Judge, Mack J. observed that this category of cases was one of frequent occurrence and was confined to material placed before the trying Judge himself in the trial of the suit, that it was primarily, his duty and responsibility to decide suo motu at the time of the judgment whether it was a fit case in which it was expedient in the interests of justice to lay a complaint and that it was always in the interests of justice for a court to lay such a complaint if the nature of the evidence was prima facie sufficient to warrant a criminal prosecution, as otherwise a premium would be put on these offences being committed with impunity in relation to civil justice.
The learned Judge agreed with the principle laid down in 31 Mad 140 (A), and 32 Mad 49 (B), observing that such petitions when made under Section 476, Criminal P.C., must be deemed to be within the scope of the suit itself.
But the learned Judge was, however, of the view that the filing of these petitions several months after the judgments must be strongly deprecated and that the sanction to prosecute must have been applied for during the trial of the suit or even in the course of the arguments and there was nothing to prevent the petitioner from asking the court to sanction the prosecution of those responsible for the forgery in anticipation of the judgment.
The learned Judge observed that a Judge who had not tried the suit should deal with an application in cases such as the one before him under Section 476, Criminal P.C., was one which should if possible be avoided at all costs, and he strongly deprecated the procedure which had resulted in that application under Section 476, Criminal P.C., being kept in cold storage pending the disposal of the appeal with the appellate court being in complete ignorance as to such an application having been made.
13. In so far as the present application is concerned, the Judge who tried the matter out of which this application arises is himself dealing with the present application under Section 476. Criminal P.C. But the question still remains whether by the mere circumstance that the Judge, who heard the suit in the course of which the offence was committed, is not available when the court is moved under Section 476, Criminal P.C., the offence if any committed should go unnoticed and unpunished.
Otherwise, it will be putting, with respect, a premium on these offences being committed with impunity in relation to civil justice. Further, the question, however, is one of principle as to whether the court cannot ordinarily take notice of a similar application if it is moved, as in the present case, sometime after the disposal but during the pendency of the appeal and permitted to be withdrawn wil'i liberty to file a fresh one after the disposal of the appeal, and whether such an application should be rejected on the ground of the lapse of time mainly consequent on the pendency of an appeal.
Ramaswami Goundar J. if I may observe with respect, very properly expressed his view that the disposal of the appeal will resolve the controversy and that the proper time for the consideration oE the commission of the offence would he after the disposal of the appeal, being dependent on the ultimate decision which the appellate court may come to.
If the appellate court had expressed itself against the view taken by me as to the evidence in this case and allowed the application No. 2583 of 1951, there would be no occasion for consideration of any application under Section 476. If, on the other hand, the rule must invariably be that an application under Section 476 should immediately follow the suit or matter in which the offence in relation to court has been committed and the court must direct the complaint to be filed and criminal proceedings to be taken, there is the possibility of the criminal proceedings ending in a conviction with the chance of the appellate court reversing the judgment in the suit or matter.
That would lead to an anomaly and injustice, which must, however, be avoided. The proper course therefore in such matters should be, notwithstanding any strong expression of opinion by the Judge who disposed of the matter as to any offence committed in the course of the trial by any of the parties or witnesses, to await the result of any appeal filed against the decision in that suit or matter before directing a complaint to be filed under Section 476, Criminal P.C.
The procedure adopted in the present case appears to me to be the correct one and it cannot be said in view of the events that had happened and referred to that there has been any undue delay in filing the application. The objection as to the Judge who disposed of the suit or matter being not available to deal with the offences committed in the course of the trial cannot, however, arise in the present case.
It remains, however, to consider whether by reason of the decisions in 31 Mad 140 (A), and 32 Mad 49 (B), the present application could be said to be unsustainable. Since the said two decisions, Section 476 has been amended. Sections 476, 476-A and 476-B were substituted for the original Section 47(5 of the Criminal Procedure (Amendment) Act, 1923 (18 of 1923) by Section 128.
Even before the amendment, a Full Bench of seven Judges of the Calcutta High Court in --'Bahadur v. Eradatullah Mallick', 37 Cal 642 (D), held that the word 'court' in Section 476, Cr.P.C., includes the successor of the Judge before whom the alleged offence was committed, or to. whose notice the commission of it was brought in the course of a judicial proceeding.
14. In -- 'Bai Kasturbai v. Vanmalidas', : AIR1925Bom436 (E), it was held that in the case of an application under Section 476, Criminal P.C., 1898, in respect of an offence alleged to have been committed in a proceeding before a Judge of the High Court, the word 'court' in the section must be taken to mean 'High Court', and any other Judge of that High Court would, therefore, have power to dispose of the application.
As pointed out by the learned Judge in that case, the words 'committed before it or brought under its notice in the course of a judicial proceeding', which existed in Section 476 before its amendment, are no longer to be found in the section. The present words corresponding to them are 'in respect of any offence referred to therein and alleged to have been committed in or in relation to any proceeding in any such suit.'
15. Burn J. in -- 'Maromma v. Emperor : AIR1933Mad125 , held that a Sessions Judge had Jurisdiction to order a prosecution under Section 476 even six months even after the conclusion of the sessions trial, especially when he was not a private person applying for sanction. With reference to the contention that the Sessions Judge had no jurisdiction to order the prosecution because his order was passed nearly six months after the conclusion of the sessions trial, the learned Judge observed that the authorities cited for that proposition presumably including the Full Bench decision in 31 Mad 140 (A), and 32 Mad 49 (B), were all cases which were decided prior to the amendment of the Criminal Procedure Code in 1923 and had no application to the present provisions of Section 476.'
The learned Judge further observed' that it was not a case of a private person applying for sanction, but was a case of Public Prosecutor of Bellary moving the sessions court to prosecute. That, however, would not, in my view, make any difference in view of the language of the present section,
16. In -- 'Bhagwandas Narandas v. D. D. Patel and Co.,' : AIR1940Bom131 (G), all the authorities bearing on this question prior to and after the amendment Act of 1923 were reviewed and it was held that Section 476 as amended contained words which were not present in the former section, namely, 'whether on application made to it in this behalf or otherwise', and therefore it is open to the court to, entertain an application under Section 476 at the instance of a stranger to the proceedings in the course of which the offence is alleged to have been committed and out of which the application arises, and that under Section 476, as it now stands, the application need not be made in the course of the proceedings out of which it arises, or immediately thereafter, and whether the court would accede to an application made long after the termination of the proceedings out of which it arises is a matter which would arise upon the merits and would no doubt depend upon all the circumstances. With this view, I am in respectful agreement.
17. Having considered all these matters carefully, I have no hesitation in holding that this is a case in which in the interests of justice it is, expedient that an enquiry should be made into the offence under Section 209, Penal Code against the first respondent and under Section 193, Penal Code and Section 209 read with Section 109 of the Penal Code against the second respondent, and I hereby record a finding to that effect.
The action to be taken will be that a complaint will be made by the High Court signed by the Registrar of the High Court, or the First Assistant Registrar, Original side. The application against the other respondents is dismissed, but with no order as to costs. The first and second respondents will pay the costs of this application.