ORDER SHEET

IN THE HIGH COURT AT CALCUTTA
Original Jurisdiction
ORIGINAL SIDE
CA 134 of 2016
CP 33 of 1988
HUNGERFORD INVESTMENT TRUST LIMITED
Versus
TURNER MORRISON & CO. LTD.
BEFORE:
THE HON’BLE JUSTICE ANIRUDDHA BOSE
Date : 18th April, 2017.
APPERANCE
MR. UTPAL BOSE, SR. ADVOCATE, MR. D. N. SHARMA, MR.ANUNOY BASU, MR. SRINJOY BHATTACHARYA,
ADVOCATES
MR. DEEPAK KHOSLA, ADVOCATE

ANIRUDDHA BOSE, J.:1.

This application, supported by Judge’s summons has been
taken out by Hungerford Investment Trust, (the applicant) seeking
an enquiry under Section 340 of the Code of Criminal Procedure,
1973. Prayers have also been made for initiation of contempt
proceeding in relation to making of false statements in four
different pleadings in proceedings registered as C.A. No. 493 of
2006, counter-affidavit to C.A. No. 106 of 2015, counter-affidavit
to C.A. No. 109 of 2015 and supplementary counter-affidavit to C.A.
No. 360 of 2015.

The applicant further seeks an inquiry into

 offences alleged to have been committed under Section 195(1)(b)
of the 1973 Code, against the persons whose names have been
disclosed in paragraphs 81 and 82 of the application and recordal of
finding thereof and also direction upon an officer to be appointed
by this Court for making complaint into the offences under
Sections 191, 192, 193, 199, 200, 202, 209 and 120B of the Indian
Penal Code, 1860 and for sending such complaint to the Magistrate
having jurisdiction in relation to such complaint. There are other
directions which the applicant has made prayer for in this
application, which include referring the matter for criminal
contempt of the Court to a Division Bench of this Court in exercise
of power under Section 15(2) of the Contempt of Courts Act, 1971.
Direction has also been sought for providing the applicant with a
sum of Rs.2,50,000/- being legal costs and expenses in connection
with this application, in exercise of power of this Court under
Section 382 of the 1973 Code.

 2.

The substance of the allegations of the applicant in relation
making false statements in the aforesaid four pleadings is in
connection with an application registered as C.P. No. 33 of 1988.
That application, instituted under Sections 397 and 399 of the
Companies Act, 1956 was dismissed by a learned Single Judge of
this Court on 21st June 2007, and the order of dismissal was
sustained by an Hon’ble Division Bench of this Court. Subsequently,
Hungerford Investment Trust (H.I.T.) had taken out an application
on 2nd July 2006, registered as C.A. No. 491 of 2012 seeking to
substantiate control over Turner Morrison & Co. Ltd. and its
subsidiaries, and various directions were prayed for in that regard.
The main ground for dismissal of the petition under Sections 397
and 399 of the Companies Act, 1956 was lack of locus on the part
of the applicant and it was found by the Court that the applicant
had lost the eligibility criteria. A petition seeking to review the
dismissal order of the Appellate Bench was also dismissed by a
Division Bench of this Court on 7th April, 2015.

 3.

The specific plea of the applicant is making of false
statements have been outlined in paragraph 2(a) of the subject
application. The facts narrated in the aforesaid pleadings, which
according to the applicant constitutes false statements, are:-

i.

“That the applicant company’s entire

shareholding in Turner Morrison of 2295
shares have been sold by auction in 1994.
ii.

That the 12 shares registered in the
names of 4 individuals do not belong to
the applicant company,

iii.

That Turner Morrison Ltd has never
recognised the right of the applicant
Company over these 12 shares.

iv.

That by sale of shares by auction in 1994,
the applicant is now left with no shares in
Turner Morrison Ltd.”

 The allegations made by the applicant of making false
statements appear to have a bearing on the reasoning based on
which the applicant’s petition for mismanagement and oppression
was dismissed.

The judgments and orders of dismissal of the

applicant’s appeal (APOT No. 440 of 2007) and the Review Petition
were, however, not appealed against before any superior forum.
4.

The applicant has named nine individuals and a firm of
Advocates & Solicitors against whom it seeks to initiate criminal
prosecution for perjury. In my order of 17th June 2016, I had
directed service of copy of this application upon learned counsel
for Turner Morrison & Co. Ltd.

No service, however, has been

effected upon the other persons whom the applicant seeks to
prosecute.

At this stage, Mr. Khosla, learned counsel for the

applicant has submitted that no notice ought to be issued against
those persons. His submission on such service is that there is bar
on this Court in issuing such notice while examining an application
under Section 340 of the 1973 Code at the initial stage. He has

 relied on four judgments in this regard being (i) Pritish Vs. State

of Maharashtra (AIR 2002 SC 236), (ii) Godrej & Boyce
Manufacturing Co (P) Ltd. Vs. Union of India (1992 Cri LJ 3752),
(iii) Madan Lal Sharma Vs. Punjab & Haryana High Court (2000
Cri LJ 1512) and (iv) Devinder Mohan Zakhmi Vs. Amritsar

Improvement Trust [2002 Cri LJ 485 (4487) (P&H)].
5.

The Judge’s summons in the present application was taken out
on 18th February 2016. In my order passed on 4th February 2016, I
had adjourned hearing of applications in connection with C.P. 33 of
1988, and the following order, inter alia, was passed in respect of
two applications, being C.A. No. 714 of 2015 and C.A. No. 708 of
2015, both taken out in connection with C.P. No. 33 of 1988:-

“In the event, however, any affidavit or
application is there in support of the aforesaid
two applications, such affidavits or applications
will be heard together. I also want to make it
clear that it is not possible for this Court to

 fix a specific date for hearing of applications
in connection of CP No. 33 of 1988, as I am in
the midst of hearing of another application in
which, there are some contesting sides who are
common to the both sets of litigants, the said
proceeding being CP No. 90 of 1983. The
applications involving CP No.33 of 1988 would
be posted for hearing after conclusion of the
proceedings taken out in connection with CP
No. 90 of 1983 and for that purpose liberty is
given to the learned Counsel for the parties to
mention the same before this Court for listing
after the proceedings arising out of CP 90 of
1983 are concluded.”
Subsequently, this application was called on for hearing at the
instance of Mr. Khosla.

 6.

The Companies Act 2013 has become operational in the
meantime. By a notification dated 1st June 2016 bearing no. S.O.
1933 (E), issued by the Central Government, the National Company
Law Appellate Tribunal has become functional.

A further

notification has been issued by the Ministry of Corporate Affairs
on 7th December 2016 in exercise of powers under Sections 434 (1
& 2) of the Companies Act, 2013 read with Section 239 (1) of the
Insolvency and Bankruptcy Code, 2016. Clause 3 of this notification
stipulates :-

“3. Transfer of pending proceedings relating
to

cases

proceedings
proceedings

other

than

under
relating

the

Winding
Act,
to

up.-All
including

arbitration,

compromise, arrangements and reconstruction,
other than proceedings relating to winding up
on the date of coming into force of these rules
shall stand transferred to the Benches of the

 Tribunal

exercising

respective

territorial

jurisdiction:
Provided that all those proceedings which are
reserved for orders for allowing or otherwise
of such proceedings shall not be transferred.”
So far as different applications instituted in connection with
C.P. 33 of 1988 is concerned, my prima facie view is that those
applications ought to be treated as part or extension of C.P. 33 of
1988, and those applications ought to be transferred to the
Tribunal.

In an unreported judgment of a Coordinate Bench,

delivered on 22nd March 2017 (in C.A. 563 of 2013 with C.P. 611 of
1988, CC 43 of 2014 – Prasanta Kumar Mitra & Ors. Vs. India

Steam Laundry (P) Ltd. & Ors.), similar view has been expressed
in relation to a pending petition pertaining to allegations of
oppression and mismanagement. Operation of that judgment had
been stayed by the Coordinate Bench initially for a period of three
weeks, and in course of hearing today, Mr. Bose, learned Senior

 counsel has apprised this Court that the order of stay has been
directed to continue by the Coordinate Bench for two more weeks,
and that an appeal has been preferred against that judgment. The
opinion I am expressing in this order, I must re-iterate, is my prima
facie view. Mr. Khosla’s submission is that a petition under Section
340 of the 1973 Code stands independently and cannot be affected
by transfer of other applications for the reason that the false
statements alleged by him to have been made were in pleadings
filed before this Court only. He has also submitted that under the
law, the recall petition also ought not to be transferred, and
question of transfer would not arise until the order is recalled. But
having regard to the nature and scope of the present application,
no elaborate argument has been advanced on that count.
7.

Under the aforesaid provisions of the 1973 Code, the Court is
required to make a preliminary inquiry and come to a prima facie
finding about the offence alleged and Mr. Khosla’s submission, as I
have already recorded, is that no service of notice ought to be

 effected on the persons in respect of whom his client wants
proceedings to be commenced. None of the four authorities cited
by Mr. Khosla, however, lays down that a Court considering an
application brought under Section 340 of the 1973 Code is enjoined
from hearing any of the accused persons, against whom inquiry is
asked for.

These authorities lay down the proposition that the

persons against whom an inquiry is contemplated do not have the
right of prior opportunity of hearing before such an inquiry is
directed.

The legislature has not provided in what manner an

inquiry contemplated in Section 340 of the 1973 Code is to be
conducted. It is for the Court making preliminary inquiry for the
purpose of formulation of opinion that it is expedient in the
interests of justice that an inquiry should be made to decide in
what manner such preliminary inquiry ought to be made.

If the

Court at that stage considers it necessary to issue notice to any of
the proposed accused persons to clarify on certain aspects of the
controversy involved for the purpose of forming its opinion, I do

 not think in such a situation the Court would go beyond its
jurisdiction.
8.

In the present case, jurisdictional question is likely to arise
on the question as to whether false statements alleged to have
been made in connection with an application, whose maintainability
before this Court is under cloud having regard to the abovereferred notification stipulating transfer of proceedings to the
Tribunal can be subject-matter of a proceeding under Section 340
of the 1973 Code instituted in this Court. Moreover, facts involved
in this case are complex, with the litigation itself having a long
history, though Mr. Khosla sought to argue that it is a
straightforward case of there being false statements in affidavits
filed before this Court. In my opinion, before considering whether
a direction should be issued for registering a complaint, hearing of
each of the persons against whom the applicant wants this Court to
proceed is necessary, and in this case such hearing would form part
of the preliminary inquiry on the part of this Court. I must make it

 clear that such hearing would be to test the allegations of the
applicant against the persons accused by him would be at the
surface level only. Two other authorities were cited by Mr. Khosla
to contend that the initial proceeding under Section 340 of the
1973 Code is civil in nature. But I do not consider it necessary to
refer to those two authorities for the purpose of deciding whether
I should hear the contemplated accused persons at this stage or
not.
9.

In these circumstances, I propose to hear the persons against
whom the applicant wants to initiate proceeding before I form my
opinion as to whether it is expedient in the interests of justice
that an inquiry should be made into an offence which may come
within Clause (b) of sub Section (1) of Section 195of the 1973
Code. Let service of a copy of this petition be effected on each of
the persons specified in paragraphs 81 and 82 of the application, so
that I can consider their stand on the next date of hearing. As
regards prayer of the applicant for initiation of proceeding for

 contempt, that plea is also founded on the same set of allegations.
I shall examine the prayer of the applicant on that count after
hearing the aforesaid individuals. Let this matter be listed on 10th
May 2017.
10.

Let urgent photostat certified copy of this judgment be given
to the parties forthwith, if applied for upon compliance with all
formalities.

(ANIRUDDHA BOSE, J.)