Reportable  IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO                    OF 2010 [Arising out of SLP (C) No.19894/2009]

M/s. Kapil Corepacks Pvt.Ltd. & Ors. … Appellants

Vs.

Shri Harbans Lal (since deceased) Through Lrs. … Respondents

J U D G M E N T

R.V.RAVEENDRAN, J.

Leave granted.  This appeal relates to the scope of Rule 2 of Order 10  

of  Code  of  Civil  Procedure  (‘Code’  for  short)  and  the  correctness  of  

invoking of Section 340 of the Code of Criminal Procedure (‘Cr.P.C.’ for  

short) in regard to answers given by a party in an examination under Order  

10 Rule 2 of the Code.

2. Late Harbans Lal (for short the ‘plaintiff’ of whom the respondents  

are  the  legal  heirs)  filed  a  suit  against  the  appellants  on  5.9.2006,  for  

recovery of Rs. 66 lakhs. He alleged that second appellant and his brother  

late Sohan Lal Dua (father of third appellant) on behalf of the first appellant,  

had executed an Agreement/Receipt dated 7.9.2003 agreeing to sell him an  

industrial property for a consideration of Rs. 2,02,41,600/- and had received  

a sum of Rs. 33 lakhs made up of Rs. 9 lakhs by cheque and Rs. 24 lakhs in  

cash towards the said agreement.  He further alleged that the appellants were  

unwilling  to  convey  the  property  and  failed  to  produce  the  documents  

necessary to satisfy him about their title to the property; and that therefore in  

terms  of  the  agreement,  he  was  suing  for  refund  of  double  the  amount  

advanced by him.

3. The  appellants  filed  a  criminal  complaint  dated  23.2.2007  against  

Harbans  Lal  and  certain  others  alleging  that  the  purported  signatures  of  

second appellant and late Sohanlal Dua on the said agreement/receipt were  

forged  and  that  they  had  not  executed  any  such  agreement/receipt.  On  

5.3.2007, they also filed their written statement in the suit filed by Harbans  

Lal denying the claim, and making a counter claim seeking a declaration that  

the agreement/receipt  put forth by the plaintiff  was forged and void. The  

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appellants alleged that second appellant and his late brother had never signed  

the agreement/receipt and the signatures found thereon, (purporting to be the  

signatures of second appellant and his late brother) were clever forgeries;  

that they did not receive Rs.24 lakhs said to have been paid in cash; that the  

sum of Rs. 9 lakhs paid by cheque by Harbans Lal, was an advance to their  

company (first appellant) obtained by late Sohanlal Dua to tide over a short  

term financial crisis and the said amount was treated as share application  

money.

4. In the said suit, the appellants filed an application under Section 151  

of the Code for referring the agreement/receipt to a hand writing expert or a  

Government Forensic Laboratory for examination of the signatures therein  

and for keeping the said document in safe custody. On 31.7.2007 a learned  

Single Judge of the High Court made an order  directing as follows :  (a)  

parties to file their original documents within four weeks and matter to be  

listed  before  the  Joint  Registrar  for  admission/denial  of  documents  on  

27.9.2007;  (b)  matter  to  be  listed  before  court  for  framing  issues  on  

8.1.2008; (c) parties to be personally present on the next date of hearing for  

recording their statement under Order 10 Rule 2 of the Code; and (d) the  

original  receipt/agreement  of  sale  dated  7.9.2003  should  be  kept  in  safe  

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custody in a sealed cover. In regard to the appellants’ application seeking  

reference  to  a  hand  writing  expert,  the  learned  single  Judge  directed  as  

follows:  

“……Insofar as the directions sought for sending the receipt/agreement to  sell to a hand writing expert is concerned, I am of the considered view that  the parties can lead their respective evidence including of hand writing  expert in support of their pleas. Application stands disposed of.”

5. The appellants filed an appeal aggrieved by the refusal to refer the  

matter  to  a  hand  writing  expert,  contending  that  they  had  obtained  a  

Preliminary  Report  dated  4.2.2007  from  a  Handwriting  Expert  with  

reference  to  a  photocopy  of  the  Agreement/Receipt;  and  that  the  

Handwriting Expert could give expert evidence on the genuineness of the  

document, only if he got an opportunity to examine the original also. The  

said  appeal  was  disposed  of  by  a  Division  Bench of  the  High Court  on  

1.11.2007 with the following observations:  

“In our considered opinion, the apprehension of the learned counsel for the  appellant  is  misplaced  and  unfounded  as  the  appellant  can  file  an  application before the learned Single Judge seeking intervention of  the  court  to  permit  a  hand  writing  expert  to  examine  the  original  receipt/agreement to sell dated 7.9.2003 take photographs etc. and give his  opinion with regard to the genuineness of the said document.

As and when any application is field by the appellant, the same shall be  considered by the learned Single Judge in terms of the observations made  herein  giving due weightage to the submissions of  the learned counsel  appearing for the appellant.”

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In  pursuance  of  it,  the  appellants  filed  an  application  on 7.1.2008 under  

Order  26  Rule  10A  of  the  Code  to  permit  their  Handwriting  Expert  to  

inspect the original Agreement/Receipt dated 7.9.2003 and take photographs  

thereof so that he can give a further report as also evidence. They also made  

another  application on 7.1.2008 to modify the order  dated 31.7.2007 and  

defer the examination under Order 10 Rule 2 of the Code till the report of  

the  Handwriting  Expert  was  received.  In  the  meanwhile,  the  plaintiff  

Harbans Lal having died on 12.11.2007, his legal representatives came on  

record on 29.4.2008.

6. On 3.10.2008, a learned Single Judge directed the Principal Officer  

and Managing Director of the first appellant-company to appear in person on  

12.11.2008  along  with  its  annual  returns  filed  with  the  Registrar  of  

Companies, income tax returns and the balance sheets for the financial year  

2003-2004 onwards.  In pursuance of the said order,  the second appellant  

appeared before the court with the relevant documents on 12.11.2008. The  

second appellant was examined under Order 10 Rule 2 of the Code and his  

statement recorded by the learned Single Judge, is extracted below:  

“I am the Managing Director of M/s. Kapil Corepacks Pvt.Ltd. Rs. 9 lacs  received from the plaintiff is shown in the statement of  account of the  

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defendant No.1 - Company. However, the said amount is not reflected in  the annual return of the defendant No.1-Company which was filed in the  Registrar of Companies.  It is correct for the period ending 31st March,   2004 receipt of share application money of Rs. 9 lacs is not shown and  mentioned.  As  on  31st March,  2004,  the  paid  up  share  capital  of  the  defendant No. 1- Company was Rs. 51 lacs. This did not include Rs. 9  lacs. Defendant No.1-Company is a Pvt. Ltd. company.

The plaintiff  did not  fill  up any share application form/share allotment  form before payment of money. I am not aware whether a request letter or  a share application form is required to be filled up by a party before shares  can be  allotted.  At  no point  of  time,  defendant  No.  1  has  recorded or  mentioned entry of Rs. 24 lacs as received from the plaintiff in cash. We  know the plaintiffs. We have known them for several years.  

Question :  Please  examine  the  stamp and the  signatures  and state  whether they belong to the defendant No. 1 – Company and who has  signed?

(Witness was shown copy of Agreement/Receipt in a manner that only  the rubber stamp and the signature on the document was visible and  the rest portion of the document was covered by a blank paper. For  the sake of convenience, the Agreement/receipt is marked ‘A’)

Answer : Stamp at point ‘A’ is that of defendant No.1 - Company and  the same has been signed by me.  

Question : Are you ready and willing to pay back Rs. 9 lacs?

Answer : We are ready and willing to pay Rs. 9 lacs.

(emphasis supplied)

On conclusion of the said examination, the learned Single Judge made the  

following order on 12.11.2008:    

“Statement  of  the  Managing  Director  of  the  defendant  No.  1  –  Company  has  been  recorded  today  in  the  court.  The  Managing  Director has admitted his signature on the Agreement/receipt as well  as stamp of the defendant No. 1 – Company on the said document.  The  said  document  was  thereafter  shown  to  the  witness  after  removing blank paper. I may note here that the said document was  denied at the time of admission/denial and in the written statement.  

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Witness –Managing Director of defendant No. 1 Company has produced  copy of annual returns. These will be indexed and filed in the Registry  within two days. Copy of the same be supplied to the learned counsel for  the plaintiff within one week.

List this matter on 21st January, 2009 when all pending applications will  be considered.  

Court on the next date will also examine whether or not  to initiate  proceedings against Mr. Harish Kumar Dua, Managing Director of  defendant  No.  1  Company  under  Section  340  Code  of  Criminal  Procedure, 1973 and 195 of the Indian Penal Code.”

(emphasis supplied)

7. Feeling  aggrieved,  the  appellants  filed  an  intra-court  appeal  on  

16.1.2009. A Division Bench of the High Court dismissed the said appeal,  

by the following order dated 20.1.2009.  

“The Managing Director of the appellant had denied his signatures  earlier on the agreement/receipt but when his statement was recorded  under order 10 CPC before the court,  an admission came that the  signature were his and stamp of defendant No. 1 company. The truth  emerged though belatedly.  

We see nothing wrong with this process by which the learned judge has  recorded statement under Order 10 of CPC which is a tool for the court to  obtain  elucidation  of  the  matter  and  to  obtain  answer  to  any  material  question. The authority of the court to examine a party under Order 10  Rule 2 CPC can hardly be doubted and undoubtedly the crucial document  is the agreement/receipt in respect of the matter in controversy.  

We find that the appeal is wholly misconceived and without any merit.”  

    (emphasis supplied)

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8. The said order is challenged in this appeal by special leave. On the  

contentions urged by the learned counsel, the following questions arise for  

our consideration:   

(i ) What is the scope and ambit of Order 10 Rule 2 of  the Code?

(ii) Whether the court could, in an examination under Order 10 Rule 2 of  the Code, confront a defendant with only the signature portion of a disputed  unexhibited  document  filed  by  the  plaintiff  (by  covering   the  remaining  portions of the document)  and require him to identify the seal/stamp and  signature?  

(iii) Whether on the basis of the answer given by a party, in response to a  question under Order 10 Rule 2 of the Code, the court could prosecute him  under Section 340 of Code of Criminal Procedure read with Section 195 of  the Indian Penal Code?

Re : Question (i)

9. We may first advert to the relevant provisions. Rule 2 of Order 10 of  

the Code as also Rules 1 and 3 are relevant and they are extracted below   :

“ORDER 10 – EXAMIANTION OF PARTIES BY THE COURT

1.  Ascertainment  whether  allegations  in  pleadings  are  admitted  or  denied-

At the first hearing of the suit the Court shall ascertain from each party or  his  pleader whether he admits  or denies such allegations of fact  as are  made in the plaint or written statement (if any) of the opposite party, and  as are not expressly or by necessary implication admitted or denied by the  party  against  whom  they  are  made.  The  Court  shall  record  such  admissions and denials.

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2. Oral examination of party, or companion of party --

(1) At the first hearing of the suit, the Court-

(a) shall, with a view to elucidating matters in controversy in the  suit  examine  orally  such  of  the  parties  to  the  suit  appearing in  person or present in Court, as it deems fit; and

(b) may orally examine any person, able to answer any material  question  relating  to  the  suit,  by  whom  any  party  appearing  in  person or present in Court or his pleader is accompanied.

(2) At any subsequent hearing, the Court may orally examine any party  appearing in person or present in Court, or any person, able to answer any  material question relating to the suit, by whom such party or his pleader is  accompanied.

(3) The Court may, if it thinks fit, put in the course of an examination  under this rule questions suggested by either party.

3.   Substance of examination to be written --

The substance of the examination shall be reduced to writing by the Judge,  and shall form part of the record.”

10. Rule 1 enables the court to ascertain from each of the parties (or his  

pleader),  at  the  first  hearing  whether  he  admits  or  denies  such  of  those  

allegations of fact made in the pleadings of the other party, which were not  

expressly or by necessary implication admitted or denied by him. In other  

words,  if  the  defendant  in  his  written  statement  fails  to  expressly  or  by  

necessary implication admit or deny any of the plaint allegations, the court  

can ascertain from the defendant, whether he admits or denies the said plaint  

allegations. Similarly, if the defendant has made some allegations against the  

plaintiff in his written statement, and no reply is filed thereto by the plaintiff,  

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the court can ascertain whether plaintiff admits or denies those allegations.  

Resort to Rule 1 of Order 10 is necessary only in cases where the court finds  

that the plaintiff or the defendant has failed to expressly or impliedly admit  

or  deny  any  of  the  allegations  made  against  him,  by  the  other  party.  

Examination under Order 10 Rule 1 of the Code will not be necessary where  

the pleadings of each party have been fully and clearly traversed by the other  

party.  

11. On the other hand, the examination under Rule 2 of Order 10 of the  

Code, need not be restricted to allegations in the pleadings of the other party,  

but can relate to elucidating any matter in controversy in the suit. Further,  

under Rule 1 of Order 10, the court can examine only the parties and their  

advocates, that too at the ‘first hearing’. On the other hand, Rule 2 enables  

the court to examine not only any party, but also any person accompanying  

either party or his pleader, to obtain answer to any material question relating  

to the suit, either at the first hearing or subsequent hearings. The object of  

oral  examination under Rule 2 of Order 10 is  to ascertain the matters  in  

controversy in suit, and not to record evidence or to secure admissions. The  

statement made by a party in an examination under Rule 2 is not under oath,  

and is not intended to be a substitute for a regular examination under oath  

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under Order 18 of the Code. It is intended to elucidate what is obscure and  

vague in the pleadings. In other words, while the purpose of an examination  

under Rule 1 is to clarify the stand of a party in regard to the allegations  

made against him in the pleadings of the other party, the purpose of the oral  

examination under Rule 2 is mainly to elucidate the allegations even in his  

own pleadings, or any documents filed with the pleadings. The power under  

Order 10 Rule 2 of the Code, cannot be converted into a process of selective  

cross-examination by the court, before the party has an opportunity to put  

forth his case at the trial.  

12. The above position of law is well settled. We need refer only to two  

decisions in this behalf. In Manmohan Das v. Mt. Ramdei & Anr. [AIR 1931  

PC 175], the Privy Council observed:

“No doubt under Order 10, Rule 2, any party present in Court may be  examined orally by the Court at any stage of the hearing, and the Court  may  if  it  thinks  fit  put  in  the  course  of  such  examination  questions  suggested by either party.  But this power is intended to be used by the   Judge  only  when  he  finds  it  necessary  to  obtain  from  such  party   information on any material questions relating to the suit and ought not to   be  employed  so  as  to  supersede  the  ordinary  procedure  at  trial  as   prescribed in Order 18.”

(emphasis supplied)

A  Division  Bench  of  the  Madras  High  Court  in  Arunagiri  Goundan  v.   

Vasantharoya Koundan & Ors (AIR 1949 Madras  707),  held  as  follows  

referring to Order 10 Rule 2 of the Code :  

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“At the outset it must be pointed out that this (Order 10 Rule 2) does not  provide for an examination on oath. This provision was intended to be  used to elucidate the matters in controversy in suit before the trial began.  This  is  not  a  provision  intended  to  be  used  to  supersede  the  usual  procedure to be followed at the trial.”

13. The object of Order 10 Rule 2 is not to elicit admissions. Nor does it  

provide  for  or  contemplate  admissions.  The  admissions  are  usually  

contemplated (i)  in  the  pleadings (express  or  constructive  under  Order  8  

Rule 5 of the Code); (ii) during examination of a party by the court under  

Order 10 Rule 1 of the Code;  (iii) in answers to interrogatories under Order  

11 Rule 8 of the Code; (iv) in response to notice to admit facts under Order  

12 Rule 4 of the Code; (v) in any evidence or in an affidavit, on oath; and  

(vi) when any party voluntarily comes forward during the pendency of a suit  

or proceedings to make an admission.

14. The power of court to call upon a party to admit any document and  

record  whether  the  party  admits  or  refuses  or  neglects  to  admit  such  

document is traceable to Order 12 Rule 3A rather than Order 10 Rule 2 of  

the Code. Nothing however comes in the way of the court combining the  

power under Order 12 Rule 3A with its power under Order 10 Rule 2 of the  

Code and calling upon a party to admit any document when a Party is being  

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examined under Order 10 Rule 2. But the court can only call upon a party to  

admit any document and cannot cross-examine a party with reference to a  

document.  

Re : Question No.(ii)

15. Learned  counsel  for  the  appellants  contended  that  confronting  the  

signature  portion  of  a  disputed  document  by  covering  up  the  remaining  

portions,  is  a  tool  in  the  arsenal  of  the  cross  examining  counsel.  He  

submitted that the court examining a party under Order 10 Rule 2 of the  

Code  while  purporting  to  elucidate  the  matters  in  controversy,  cannot  

confront  the  signature  portion  of  a  disputed  unexhibited  document  by  

adopting the procedure of covering up the other portions of the agreement.  

16. The learned counsel for the respondents on the other hand submitted  

that the power of the court under Order 10 Rule 2 of the Code, to examine  

any  party  with  reference  to  any  document  is  wide  and  unrestricted  and  

therefore, any procedure adopted to arrive at the truth, could not be said to  

be a deviation from the normal examination under Order 10 Rule 2 of the  

Code. He relied upon the decisions of several High Courts in support of his  

contention that the court could confront a party with a document and seek  

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his admission in respect of its  execution. The decisions relied upon are :  

Bhanwarlal Kavad v. Shyamsunder [AIR 1984 Raj.  113], Amrita Devi v.   

Sripat Rai [AIR 1962 All. 111],  Rajiv Srivastava v. Sanjiv Tuli [AIR 2005  

Del. 319] and Gautam Adani v. Container Corporation of India [150 (2008)  

DLT 281]. On a careful consideration of these decisions, we find that they  

are not of any assistance in this case.  

16.1)   In Bhanwar Lal Kavad (supra), a learned Single Judge of Rajasthan  

High Court held:  

“In my opinion the court should resort to the examination of the parties  under Rule 2, particularly on the documents, which are said to be signed  by the parties. …. it is better that the original documents are put to the  party and admission or denial is obtained after visual observations by the  party himself of the original documents. After looking into the documents,  the party would be in a position to admit or deny the same, which would  not be possible, if the same is got done by his pleader.”

16.2)   Learned Single Judge of the Allahabad High Court in  Amrita Devi  

(supra)  and the Division Bench of  Delhi  High Court  in  Rajiv  Srivastava  

(supra) held that an admission made by a party under Order 10 Rule 2 of the  

Code is conclusive against him, and the court can proceed to pass judgment  

on the basis of such admission.

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16.3)   In Gautam Adani (supra), a Division Bench of the Delhi High Court  

referred to the scope of Order 10 Rule 2 thus:  

“…..we are of the view that examination of the parties is a matter that is  per se intended not so much for determining any right or obligation in the  suit or resolving or adjudicating upon a controversy as it is for identifying  the  precise  area  of  controversy  so  that  the  same  can  be  effectively  adjudicated  upon.  The distinction between any order  which adjudicates  upon a controversy or a part thereof and another which simply attempts to  identify the real area in controversy cannot be lost sight of. Inasmuch as  the  impugned  order  directed  the  defendants  to  remain  present  for  recording their statements under Order 10 Rule 2, it  was an attempt to  identify the real issues in controversy and to elucidate matters which, in  the opinion of the learned Single Judge, required to be elucidated.”       

16.4) None of these decisions assists the respondents.  Bhanwar Lal Kavad  

recognizes the power of the court to call upon a party to admit a document.  

Amrita Devi and Rajiv Srivastava reiterate the position that if a party makes  

an admission of fact, it will be binding on him. Gautam Adani supports the  

contention of the appellants that the scope of Order 10 Rule 2 of the Code is  

limited to identifying the matters in controversy and not to adjudicate upon  

the matters in controversy.  

17. The object of the examination under Order 10 Rule 2 of the Code is  

to  identify  the matters  in controversy  and not  to prove or  disprove the  

matters in controversy, nor to seek admissions, nor to decide the rights or  

obligations of parties. If the court had merely asked the second appellant  

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whether he had executed the agreement/receipt or not, by showing him the  

document (by marking the document for purposes of identification only  

and  not  as  an  exhibit),  it  might  have  been  possible  to  justify  it  as  

examination under Order 10 Rule 2 read with Order 12 Rule 3A of the  

Code.  But  any  attempt  by  the  Court,  to  either  to  prove  or  disprove  a  

document  or  to  cross-examine  a  party  by  adopting  the  stratagem  of  

covering  portions  of  a  document  used  by  cross-examining  counsel,  are  

clearly outside the scope of an examination under Order 10 Rule 2 of the  

Code and the power to call  upon a party to admit any document under  

Order 12 Rule 3A of the Code.  What the High Court has done in this case  

is  to  ‘cross-examine’  the  second  appellant  and  not  examine  him  as  

contemplated under Order 10 Rule 2 of the Code.  We therefore hold that  

the  purported  examination  under  Order  10  Rule  2  of  the  Code,  by  

confronting a party only with a signature on a disputed and unexhibited  

document  by  adopting  the  process  of  covering  the  remaining  portions  

thereof is impermissible, being beyond the scope of an examination under  

Order 10 Rule 2 of the Code.  

18. In this case the appellants-defendants denied having signed/executed  

any agreement/receipt in favour of the respondents. In the examination under  

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Order 10 Rule 2, the court did not ask the second appellant whether he had  

signed the document or not, by showing the document. What was done was  

confrontation of a signature alone without disclosing the document. When so  

confronted,  the  second  appellant  admitted  the  signature  shown  as  his  

signature.  But that is not an admission of execution of agreement/receipt.  

The  specific  case  of  appellants  in  the  written  statement  was  that  the  

Agreement/Receipt dated 7.9.2003 was a  clever forgery.  If a signature is a  

clever forgery, there is a likelihood of the same passing the normal scrutiny  

of the person to whom it is attributed. Similar is the position in regard to  

stamping the name of the company. If a false signature is very different from  

the real signature, and is easily identifiable, it will be a ‘forgery’ but not a  

‘clever forgery’. Therefore, if the document allegedly containing the forged  

signature  is  covered in such a manner  as to show only a stamp/seal  and  

signature, and if a question is put by the court under Order 10 Rule 2 to  

identify the seal/stamp and the signature and if  the witness identifies  the  

signature as his and the stamp/seal as that of his company, there are two  

possibilities : The first is that what is shown is the genuine signature of the  

party and the genuine stamp of his company, and that he has identified and  

admitted them. The second is that they are clever forgeries and the party  

could  not  obviously  identify  the  forgery  when  it  was  shown  to  him by  

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covering other portions of the document, when he is given only a normal  

glance  without  an  opportunity  to  scrutinize  it  properly.  Whether  it  is  a  

forgery  or  not  will  have  to  be  determined  with  reference  to  the  expert  

evidence and after the evidence of both plaintiff and defendants tested by  

cross-examination.  

19. Both the learned Single Judge and the Division Bench committed an  

obvious error in equating admission of a signature which is claimed to be a  

clever forgery, as an admission of execution of the agreement/receipt and the  

contents thereof. The observations of the learned Single Judge in his order  

that  “The  Managing  Director  has  admitted  his  signature  on  the  

agreement/receipt as well as stamp of the defendant no.1 company on the  

said  document”  and the further  observation  that  on the  basis  of  the  said  

answer,  the  second  appellant  could  be  proceeded  under  Section  195  of  

Indian Penal Code read with Section 340 of Code of Criminal Procedure, are  

without any basis. Equally unwarranted is the observation of the Division  

Bench : “The Managing Director of the appellant had denied his signature  

earlier on the agreement/receipt, but when his statement was recorded under  

Order 10 CPC before the court, an admission came out that the signature  

were  his….  The  truth  emerged  though  belatedly”.  Admission  must  

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obviously be a conscious and deliberate act. Admission can be explained.  

An admission of a signature is not an admission of execution of a document.  

The power to identify the matters in controversy by examination of parties at  

the pre-trial stage under Order 10 Rule 2, is completely different from the  

power exercised by the court under Section 165 of the Evidence Act to put  

any question  it  pleases  in  any form,  to  a  witness  or  a  party  in  order  to  

discover  or  to  obtain  proper  proof  of  relevant  facts,  or  the  power  under  

Order 18 Rule 14 of the Code to recall and examine any witness. The court’s  

anxiety to do justice by speeding up the process of the suit should not itself  

lead to injustice.   

Re : Question No.(iii)

20. The  Division  Bench  has  affirmed  the  order  of  the  learned  Single  

Judge  that  he  will  next  hear  whether  he  should  proceed  to  initiate  

proceedings  under  Section  340  Cr.P.C.  read  with  Section  195  of  Indian  

Penal Code (‘IPC’ for short). Section 195 of Cr.P.C. provides that whoever  

gives or fabricates false evidence intending thereby to cause, or knowing it  

to be likely that he will thereby cause, any person to be convicted of an  

offence punishable with imprisonment for life, or imprisonment for a term of  

seven years  or  upwards,  shall  be punished as a  person convicted of  that  

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offence would be liable to be punished. Section 195 (1)(b) of the Cr.P.C.  

provides that no court shall take cognizance of any offence punishable under  

section 195 of IPC when such offence is alleged to have been committed in,  

or in relation to, any proceeding in any Court, except on the complaint in  

writing of that Court.  Section 340 of the Cr.P.C. provides that when upon an  

application made to it in that behalf or otherwise, any Court is of opinion  

that it is expedient in the interests of justice that an inquiry should be made  

into any offence referred to in clause (b) of sub-section (1) of section 195 of  

Cr.P.C.  which  appears  to  have  been  committed  in  or  in  relation  to  a  

proceeding in that Court or, as the case may be, in respect of a document  

produced or given in evidence in a proceeding in that  Court,  such Court  

may, after such preliminary inquiry, if any, as it thinks necessary, record a  

finding  to  that  effect,  make  a  complaint  thereof  in  writing,  sent  it  to  a  

Magistrate of the first class having jurisdiction etc. Thus the power under  

section 340 CrPC read with section 195 IPC can be exercised only where  

someone fabricates false evidence or gives false evidence. By no stretch of  

imagination, a party giving an answer to a question put under Order 10 Rule  

2  of  the  Code  when not  under  oath  and when not  being  examined  as  a  

witness,  can  attract  section  195  of  IPC  and  consequently  cannot  attract  

section 195(1)(b) and section 340 of Cr.P.C.

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21. The respondents relied upon the decision of a Division Bench of the  

High Court  in  Satish  Kumar v  Union of  India [2009 (108)  DRJ 317]  to  

contend that there can be a prosecution under Section 340 Cr.P.C. in regard  

to a statement under Order 10 Rule 2 of the Code. The conclusion in Satish  

Kumar that  a  party  can be prosecuted  under Section 340 Cr.P.C.  for  his  

answers in an examination under Order 10 Rule 2 is erroneous and unsound.  

As noticed above, the answers to an examination under Order 10 Rule 2 are  

not on oath and therefore the party is not deposing as a witness on oath when  

giving his answers under Order 10 Rule 2 of the Code. In Satish Kumar, the  

Delhi High Court purported to rely upon the decision of this Court in B.K.  

Gupta v. Damodar H. Bajaj  [2001 (9) SCC 742], to hold that prosecution  

under  section  340  CrPC is  permissible  in  regard  to  answer  given  under  

Order 10 Rule 2 of the Code. What this Court observed in B.K. Gupta was  

that a complaint can be filed against a person who has given false affidavit  

or evidence in a proceeding before the court. But a party giving an answer in  

an examination under Order 10 Rule 2 is neither giving evidence nor giving  

a affidavit. Section 340 of the Code will not be attracted with reference to  

any statement under Order 10 Rule 2 of the Code assuming that the Delhi  

High  Court  had  laid  down  the  law  rightly  in  Satish  Kumar,  the  said  

observation will not help the respondent in this case. In Satish Kumar, it was  

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held that a false statement given in the examination under Order 10 Rule 2  

of  the  Code  can  give  rise  to  criminal  prosecution  under  Section  340  of  

Cr.P.C. But in this case the High Court has proceeded on the basis that the  

second  appellant  spoke  the  ‘truth’  in  response  to  the  question  in  the  

examination under Order 10 Rule 2 of the Code. There is no finding that  

second appellant made a ‘false statement’ in his examination under Order 10  

Rule 2 CPC. Therefore, the said decision will be inapplicable, even if it had  

been rightly decided.  

22. Consequently,  the  decision  of  the  court  to  consider  initiation  of  

proceedings under section 340 Cr.P.C. read with section 195 IPC in regard  

to an answer to a question put under Order 10 Rule 2 of the Code is ill-

conceived and wholly without jurisdiction.  

Conclusion

23. In  view  of  the  above,  this  appeal  is  allowed.  The  order  dated  

20.1.2009  of  the  Division  Bench  and  the  order  dated  12.11.2008  of  the  

learned Single Judge, directing the matter to be listed to consider whether  

the second appellant should be prosecuted under Section 340 Cr.P.C., are set  

aside.  As  the  process  of  confrontation  of  an  unexhibited  document  by  

covering portions of it by a court, is beyond the scope of examination under  

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Order 10 Rule 2 of the code, the answer to such question shall be excluded  

from consideration and completely  disregarded.  The court  conducting the  

trial and hearing arguments shall decide the suit in accordance with law on  

the basis of evidence placed and ignore the said ‘answer’ under Order 10  

Rule 2 of the Code.  

24. We make it clear that whatever we have stated or observed during the  

course of this Judgment, are only in the context of examining the correctness  

of  the  procedure  adopted  under  Order  10  Rule  2  of  the  Code,  and  not  

intended to be findings of fact.  

………………………J. (R V Raveendran)

New Delhi; ……………………..J. August 3, 2010. (H L Gokhale)                

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