Tollman International Private Limited Vs. Capstech Network Private Limited - Perjury jurisdiction cannot be invoked to penalize every pleading defect or omission, particularly where the matter has already been examined in the substantive proceedings and the Tribunal has adjudicated upon the correct financial position.

 NCLT ND-IV (2026.06.01) in Tollman International Private Limited Vs. Capstech Network Private Limited  [(2026) ibclaw.in 1891 NCLT, I.A. 206/ND/2025 in C.P. (IB) 2/ND/2024] held that;

• Perjury jurisdiction cannot be invoked to penalize every pleading defect or omission, particularly where the matter has already been examined in the substantive proceedings and the Tribunal has adjudicated upon the correct financial position.

• The principal insolvency proceedings in CP (IB) No. 2/ND/2024 already stood finally disposed of on 07.01.2025. Once the substantive proceedings attain finality, the Tribunal becomes functus officio in relation to collateral issues, save in narrowly circumscribed situations such as clerical correction or implementation of executory directions.

• The Hon’ble Supreme Court in Ajay Kumar Jain v. State of Uttar Pradesh [2024 INSC 958] has reaffirmed that miscellaneous applications in disposed proceedings are generally not maintainable where they seek to agitate fresh causes of action or revive concluded matters.

Excerpts of the Order; 

# 1. The present application I.A. No. 206/ND/2025 in C.P. (IB) No. 2/ND/2024 is filed on 09.01.2025 by the Applicant under Rule 11 of National Company Law Tribunal Rules, 2016 read with Section 227 & 229 of Bharatiya Nyaya Sanhita, 2023 read with Section 215 & 379 Of Bharatiya Nagrik Suraksha Sanhita, 2023 seeking an inquiry into Perjury committed by the Respondent.

# 2. The Applicant has made the following prayers in the application:

a) “Allow the present Application, and conduct preliminary inquiry into the offence of perjury committed by the Petitioner in the proceedings in the present matter under the provisions of Bharatiya Nyaya Sanhita, 2023 and Bharatiya Nagrik Suraksha Sanhita, 2023 and submit a complaint to the concerned ld. Magistrate to take cognizance of the said offence;

b) Pass any other or further order(s) as may be deemed fit and proper in the interests of justice.”

# 3. Contentions of the Applicant

Brief facts of the case and the contentions of the applicant as mentioned in the instant application are as follows:

i. Applicant and the Respondent had entered into a contract whereby the Respondent had agreed to supply computers/laptops and its parts to the Applicant upon issuance of invoices. The Applicant submits that it made timely payments against the goods supplied.

ii. On 18.08.2023, the Respondent issued a demand notice to the Applicant for a payment of Rs. 1,04,74,992/-. After several meetings between the Applicant and the Respondent to determine outstanding dues, the Applicant made part payment of Rs. 10,00,000/- which was duly received by the Respondent.

iii. However, despite regular payments, the Respondent filed a petition under Section 9 of IBC, 2016 bearing CP (IB) No. 2/ND/2024, seeking initiation of Corporate Insolvency Resolution Process (‘CIRP’) against the Applicant for a purported default in payment of INR 1,04,74,992.89/- (inclusive of interest) on 04.10.2023. The petition was initially filed on 04.10.2023 and then refiled and registered after curing defects only on 18.12.2023.

iv. The Applicant submits that it had made another part payment of Rs. 10,00,000/- on 11.10.2023 which was duly received and acknowledged by the Respondent.

v. These part-payments of Rs. 20,00,000/- made by the Applicant were not acknowledged by the Respondent in the petition. This fact was neither disclosed nor adjusted by the Respondent during the course of the proceedings or in the additional submissions made by it. It was submitted by the Respondent that the total amount due and payable by the Applicant was Rs. 1,00,61,134/-.

vi. The Applicant submits that the Respondent has grossly abused the law and has committed perjury before this Hon’ble Tribunal. It is further submitted that the Respondent has maliciously withheld material facts despite having multiple occasions to apprise this Hon’ble Tribunal regarding part-payments of total outstanding by the Applicant, despite having knowledge of the said part-payments.

vii. The Applicant states that the Respondent chose to make incorrect and false statements at the following instances in the pleadings filed by it, which it knows to be entirely false:

a) The petition filed with an affidavit of the Managing Director (filed on 04.10.2024) whereby the Petitioner claimed the outstanding debt to be a total of INR 1,04,74,992.89/- (inclusive of interest). The part-payment made by the Respondent on 30.09.2023 finds no mention in either the List of Dates or the chart of payments @ Annexure C of the petition.

b) The petition with an affidavit of the Managing Director was re-filed and registered after curing defects only on 18.12.2023. The part-payments made by the Respondent on 30.09.2023 and 11.10.2023 find no mention in the re-filed petition as well.

c) Petitioner filed additional submissions pursuant to order dated 03.01.2024 through its Managing Director, stating the total amount due as Rs. 1,00,61,134/- without either disclosing or adjusting the payments of Rs. 20 lakhs.

d) Brief Submissions filed pursuant to order dated 10.05.2024, without either disclosing or adjusting the payments of Rs. 20 lakhs.

e) During arguments advanced in the hearings before this Hon’ble Court on 03.01.2024, 19.01.2024, 26.02.2024, 20.03.2024, 22.04.2024, 10.05.2024, 30.05.2024 and 04.07.2024, the Petitioner maliciously chose to withhold such material information from this Hon’ble Tribunal and proceeded to make false statements regarding the total outstanding amount.

viii. This Hon’ble Tribunal has the jurisdiction to conduct a preliminary inquiry into the offence of providing false statements and evidence under Section 227 of BNS, 2023 punishable under Section 229 of BNS, 2023 and pass necessary directions for prosecution under Section 215 r/w Section 379 of the BNSS, 2023. Reference is also made to Section 424 of the Companies Act, 2013.

ix. It is submitted that as per Section 424(4) of the Companies Act, 2013 (as amended in 2016), proceedings before this Hon’ble Tribunal have been deemed to be judicial proceedings under Section 193 of the Indian Penal Code, 1860 (and its corresponding provision under Section 229 of BNS, 2023). Further, for the purposes of sub- clause (1)(b)(i) and sub-clause (3) of Section 215 r/w Section 379(4) of BNSS, 2023, this Hon’ble Tribunal is deemed to be a “court/tribunal” as constituted under Section 408 of the Companies Act, 2013.

# 4. Contentions of the Respondent

i. The Corporate Debtor/Applicant frequently delayed payments by 60—70 days after the issuance of invoices, which were always accompanied by terms and conditions.

ii. The Insolvency Petition was duly filed and listed for admission on 03.01.2024. On the said date, it was instructed that a fresh calculation of the applicable interest be made. Pursuant to the order dated 03.01.2024, the Operational Creditor recalculated the due amount by excluding interest on interest. The recalculated amount as of 18.08.2023 was Rs. l,00,61,134.72/-.

iii. On 07.01.2025 final order was pronounced where the insolvency application was dismissed on the ground that the CP No.: IB 02(ND)/2024 doesn’t cross the threshold of Rs. 1 crore after adjusting the part-payments of Rs. 20 lakhs.

iv. The interlocutory application filed by the corporate debtor/applicant is itself non—maintainable on the ground that it violates the principle of Natural Justice as the principal application / matter has been disposed of. It is settled principle of law that once the main proceeding is disposed off, all applications linked to it, such interlocutory applications, miscellaneous applications, etc. are also considered disposed off. Hence, the application in its present form is not maintainable

v. The Respondent submits that although, admittedly the present application was filed in September 2024, however, the applicant has very cleverly kept the application in objection at the registry and bid time till the final disposal of the main application. Once the main application was finally disposed off on 07.01.2025, they quickly undertook all the corrections and removed the objections and the application was then listed on 09.01.2025.

vi. The payment of Rs. 20 lakhs by the Applicant was made to avert the threshold limit of pecuniary jurisdiction of this Hon’ble Tribunal, which is also mentioned in the brief submission filed by the Applicant dated 07.07.2024.

Judgments quoted by Applicant and Respondent

# 5. Ld. Counsel for the Applicant has relied upon a judgement of the Hon’ble Supreme Court in James Kunjwal v. State of Uttarakhand., [2024 INSC 601 (para 16)], wherein essential factors to prove whether an offence of perjury has been committed, have been enumerated:

• “What we may conclude from a perusal of the above-noticed judicial pronouncements is that:-

• (i) The Court should be of the prima facie opinion that there exists sufficient and reasonable ground to initiate proceedings against the person who has allegedly made a false statement(s);

• (ii) Such proceedings should be initiated when doing the same is “expedient in the interests of justice to punish the delinquent” and not merely because of inaccuracy in statements that may be innocent/immaterial;

• (iii) There should be “deliberate falsehood on a matter of substance”;

• (iv) The Court should be satisfied that there is a reasonable foundation for the charge, with distinct evidence and not mere suspicion;

• (v) Proceedings should be initiated in exceptional circumstances, for instance, when a party has perjured themselves to beneficial orders from the Court.”

# 6. Ld. Counsel for the Applicant has also relied upon KVR Industries Pvt Ltd. v. PP Bafna Ventures Pvt Ltd., [CA(AT)(INS) No. 626/2020] where the Hon’ble NCLAT has affirmed that the Hon’ble Tribunal has the jurisdiction to conduct a preliminary inquiry into the offence of providing false statements and evidence under Section 227 of BNS, 2023 punishable under Section 229 of BNS, 2023 and pass necessary directions for prosecution under Section 215 r/w Section 379 of the BNSS, 2023.

# 7. Ld. Counsel for the Applicant has submitted that while the present application was filed on 09.09.2024, the defects in the application were marked by the registry only on 25.11.2024, which were promptly cured on 29.11.2024. Even thereafter, the case status reflected that the application was under scrutiny. It was only upon the Applicant’s email to the ld. Registrar dated 05.12.204, was the application scrutinised and another defect regarding memo of parties was marked. In the interim, the time for re-filing the application expired and the Applicant had to move an application before the ld. Registrar vide email dated 04.01.2025 to condone the said delay. Soon after the delay was condoned, the Applicant re-filed the application on 09.01.2025. Thus, the listing of the present application after disposal of the Section 9 petition was not deliberate or intentional, as has been falsely alleged by the Respondent.

# 8. Ld. Counsel for the Respondent has relied upon the judgment of the Hon’ble Supreme Court Ajay Kumar Jain v. State of Uttar Pradesh [2024 INSC 958] which addressed the non-maintainability of miscellaneous applications after the main proceedings have been disposed off. Further, reliance was placed where Hon’ble Punjab & Haryana High Court has made observation in Nachhattar Singh vs Rai Singh And Anr. [(2022) CRM-M-I771-2018] that:

• “As per the settled proposition of law as enumerated hereinabove, proceedings under Section 340 Cr. P. C. are not to be initiated in every case where offences are purportedly made out. In fact, the said proceedings are to be initiated only in a situation, where the Court considers it expedient in the interest of justice to make a complaint.”

Our Findings

# 9. We have gone through the documents on record filed by the Applicant as well as heard the arguments advanced by counsels of the Applicant and the Respondents.

10. In the present case, the foundation of the Applicant’s allegations is that the Respondent did not disclose two part-payments against the operational debt aggregating to Rs. 20,00,000/- in the pleadings filed and during the Section 9 proceedings in C.P. (IB) 2/ND/2024. Hence, such allegations relate to only computation and adjustment of the claim amount.

# 11. Further, it is evident that the alleged omission did not result in any beneficial order being obtained by the Respondent, as the underlying insolvency petition under section 9 IBC bearing C.P. (IB) 2/ND/2024 itself stood dismissed on the ground that the threshold of Rs. 1 crore is not satisfied after due consideration of the financial adjustments including these part payments. Thus, the essential test of expediency in the interests of justice, which is sine qua non for invoking perjury jurisdiction, remains unsatisfied. Perjury jurisdiction cannot be invoked to penalize every pleading defect or omission, particularly where the matter has already been examined in the substantive proceedings and the Tribunal has adjudicated upon the correct financial position. The alleged suppression stood cured during adjudication, and the final decision in the main petition was rendered with due consideration of the part-payments.

# 12. The present application also suffers from maintainability concerns. The principal insolvency proceedings in CP (IB) No. 2/ND/2024 already stood finally disposed of on 07.01.2025. Once the substantive proceedings attain finality, the Tribunal becomes functus officio in relation to collateral issues, save in narrowly circumscribed situations such as clerical correction or implementation of executory directions. The Hon’ble Supreme Court in Ajay Kumar Jain v. State of Uttar Pradesh [2024 INSC 958] has reaffirmed that miscellaneous applications in disposed proceedings are generally not maintainable where they seek to agitate fresh causes of action or revive concluded matters.

# 13. This Tribunal is also not persuaded that the present case falls within the exceptional category warranting exercise of such extraordinary powers. Proceedings for perjury cannot be permitted to become an instrument for collateral attack or retaliatory litigation arising out of adversarial disputes already adjudicated upon.

Order

# 14. Accordingly, this Interlocutory Application bearing IA No. 206/ND/2025 in C.P. (IB) 2/ND/2024 filed under Rule 11 of the National Company Law Tribunal Rules, 2016 read with Sections 227 and 229 of the Bharatiya Nyaya Sanhita, 2023 and Sections 215 and 379 of the Bharatiya Nagrik Suraksha Sanhita, 2023, stands dismissed.

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Ajay Vij and Anr. Vs. Mr. Abhishek Dutta - Prosecution should be ordered when it is considered expedient in the interests of justice to punish the delinquent and not merely because there is some inaccuracy in the statement which may be innocent or immaterial. There must be prima facie case of deliberate falsehood on a matter of substance and the court should be satisfied that there is reasonable foundation for the charge.

NCLAT (2025.02.28) in Ajay Vij and Anr. Vs. Mr. Abhishek Dutta [(2025) ibclaw.in 158 NCLAT, Company Appeal (AT)(Ins) No. 726 & 728 of 2021 with Company Appeal (AT)(Ins) No. 818-819 of 20211] held that;

• But even if it is presumed just for the arguments’ sake that an offence of perjury stands committed, then also the impugned order dated 04.08.2021 r/w impugned order dated 17.05.2021 permitting the Liquidator to file complaint u/s 340 Cr.P.C is not sustainable there being admittedly no finding recoded to the effect “that it is expedient in the interest of justice a complaint should be filed. In the absence of a finding to the above effect which is a sine qua non under S. 340(1)(a) Cr.P.C, the impugned order dated 04.08.2021 is not sustainable in law.

• Prosecution should be ordered when it is considered expedient in the interests of justice to punish the delinquent and not merely because there is some inaccuracy in the statement which may be innocent or immaterial. There must be prima facie case of deliberate falsehood on a matter of substance and the court should be satisfied that there is reasonable foundation for the charge.”

• The court orders prosecution in the larger interest of the administration of justice and not to gratify feelings of personal revenge or vindictiveness or to serve the ends of a private party.

• Notwithstanding anything in the Code of Criminal Procedure, 1973 (2 of 1974), offences under this Code shall be tried by the Special Court established under Chapter XXVIII of the Companies Act, 2013 (18 of 2013).

• Even otherwise, there are no averments qua commission of an offence u/s 68(i)(a) IBC in IA No. 1248/ND/2020 filed by the RP as a matter of record. Moreso, there is no finding in the impugned order dated 17.05.2021 as to how the said offence is attracted in the present case.

Excerpts of the Order;

These appeals are filed against impugned orders dated 17.5.2021 and 4.8.2021 passed by the Ld. Adjudicating Authority, National Company Law Tribunal, New Delhi in IA No.1248/2020 and IA No.3341/2021. The appellant is aggrieved of the fact that per impugned order, the appellants have been held guilty of perjury and have been imposed a fine of Rs.2 lakh on each of the appellant. The Ld. NCLT had also directed the RP to initiate proceedings for perjury against Mr Ajay Vij per para 10 of the impugned order. The impugned order is as under:-

• 9. After hearing the parties and perusing the documents, the conversion of the corporate debtor from a company to LLP is analyzed via a vis the provisions of the Companies Act and Limited Liability Partnership Act, 20008. We find that company has intentionally taken steps to convert the entity of the corporate debtor from the private limited company to LLP.to escape the rigors of insolvency code and to shrug off the liabilities of the creditors of the corporate debtor. As also it is evident that neither at the time of passing of the order nor during CIRP. the LLP partner have come forward for compliance of Section 56 and shown any willingness to accept the liability of the corporate debtor and pay its creditors. Considering that LLP partners were also appearing before the bench and had actively participated while handing over the possession of the units to the lessor which were taken on lease by the corporate debtor The Registrar of Companies in its reply has given the details of the directors of the corporate debtor prior to conversion into LLP as well as the list of designated partners of the LLP. We find Mr. Naveen Gambhir as a common name in both the entities. The chronology of the incidents reveal that the management of the corporate debtor has played a fraud on this bench and is guilty of perjury. Mr. Pankaj Gambhir has acted in the entire design as an active participant It is seen from the records that two insolvency applications were filed against the corporate debtor in mid, 2018 and reply in both the application were filed by Mr. Ajay Vij in October 2018, who is reflected as the director of the private limited company. The document submitted for conversion of LLP, as produced before us, shows the date of submission of Form No.18 to Registrar of Companies as 03.11.2019, which was filed by Mr. Ajay Vij. The said Form No. 18 comprising of clause 15 which reads as under:

• whether any proceeding by or against the company is pending in any court or any other authority

• The answer to this statement was replied in negative by Mr. Ajay Vij on behalf of the corporate debtor. This clearly proves the act of perjury by Mr. Ajay Vij in connivance with all the directors of the corporate debtor. It cannot be believed that other directors which includes Mr. Naveen Gambhir and Mr. Ajay Vij were unaware about the insolvency proceeding against the corporate debtor or were ignorant about the information filed in Form No 18 specifically in clause 15. Moreover, it is found that in the present application Mr.Pankaj Gambhir filed an affidavit being the designated partner of LLP declaring that the units under the possession of corporate debtor which were lease hold units were handed over to the parties as back as in December 2016 and Mr. Pankaj Gambhir was unaware about the proceedings of insolvency pending against the corporate debtor. Whereas the Id. counsel appearing for the LLP before the bench on 18.09.2019 admitted that the lease hold units will be handed over to the parties. which were till then, in possession of the corporate debtor/ alleged LLP and further undertook to hand over the same as recorded in the said order. The order further records the statement of the corresponding unit holder of handing over of the possession of respective units. Mr.Naveem Gambhir is the common person being the director in the company and designated partner in alleged LLP has not come forwards for the explanation before the bench.

• 10. The above facts does not leave any doubt in our mind that the management of the corporate debtor in connivance with the alleged LLP partners have acted to defraud the creditors and to make their claims infructuous. We see strong reason to initiate perjury proceedings against the management of the corporate debtor specifically Mr. Ajay Vij. 1 who has submitted incorrect and wrong information while applying for LLP. to RoC. We direct Resolution Professional to immediately initiate appropriate proceedings for perjury against Mr. Ajay Vij. We fail to understand that without any formal agreement/documents/MOU between the corporate debtor and the proposed LLP with respect to the status of creditors, debtors, rights and liabilities, the conversion of accounts and all other formalities with respect to transfer of share capital, how merely on filling Form No. 18 with Registrar of Companies can change/convert the legal status of an entity into entirely different entity especially when both the entities fall under the governance of different statutes The Registrar of Companies is directed to take a cognizance of such kind of conversion on merely filling a single form in the Form No. 18. along with required fees to convert the entity which will have vast and grave repercussions on the public in general, in absence of any detailed document deciding the rights and liabilities of the parties concerned as well as the third parties who will be affected by such simplicit or conversion.

# 2. Thus the reason for holding the appellant guilty for perjury is two fold (a) the appellants have given wrong information to the ROC in Form No.18 required for converting a company into LLP wherein they had stated no proceedings are pending against the company but whereas an Insolvency petition under Section 9 IBC was pending against the company; and (b) the appellants had filed an affidavit wherein the appellants had deposed the units were handed over to the parties way back in December, 2016 but whereas their learned counsel stated the units will be handed over to the parties.

# 3. It was submitted by the Ld. Counsel of the Appellants that the Ld. NCLT has no power to convict the appellants under Section 68 of the IBC since such conviction can be done only by Ld. Special Court established under the Companies Act.

# 4. We have gone through the record of the Ld. NCLT and we find the Ld. NCLT had found the appellant guilty of perjury and had rather invalidated the conversion of company into LLP and by subsequent impugned order dated 4.8.2021, the liquidator was permitted to file a complaint and to take further steps as are required under the provisions of Section 340 of Cr PC.

# 5. Admittedly the impugned order dated 17.05.2021 has held the appellants guilty of act of perjury only on account of a declaration in Form 18 filed before the ROC (see Page 194 of the Appeal Paper Book). In the said declaration, against point No.15 viz whether any proceedings by or against the company is pending in any court or tribunal or any authority, the answer given by one Mr Ajay Vij, i.e. the appellant No.1 was NO. It is fairly conceded by the learned counsel for the appellant that declaration/Form 18 dated 03.11.2018 was incorrect since by that time i.e. on 25.04.2018 an application under Section 9 IBC stood filed against Corporate Debtor. Further CIRP commenced later on 14.3.2019.

# 6. It is the case of the appellants such wrong answer was inadvertently given by Ajay Vij, a Director of the company while filing declaration/Form 18. It is argued even if it is to be considered as has been intentionally done by one of the directors then also offence of perjury could be attracted only when false declaration touches any material fact. Heard.

# 7. We agree to the submission of the learned counsel for the appellant that Form No.18 was only required to facilitate conversion of the company to LLP, though such declaration filed was not material for such conversion. Further per law the conversion of a company into LLP shall have no effect to the pending proceedings by and against the company since per Section 58(4)(b) of LLP Act, 2008; upon conversion of a company into LLP, all assets, interest, rights, privileges, liabilities, obligation relating to the company and whole of the undertaking of the company stood transferred to the LLP. Clause 6(b) of the 3rd Schedule of LLP Act also supports the same. Even per Section 58(3) read with Clause 8 of third schedule of LLP Act, all proceedings by and against the company pending before any Court, tribunal or other authority can be continued, completed and enforced by or against the LLP.

3 8. Therefore, it is amply clear on conversion to LLP, the Appellants could not have evaded insolvency proceedings, thus the observation made by the Ld. NCLT viz the company has intentionally taken steps to convert the entity of the corporate debtor from private limited company to LLP, to escape the rigors of insolvency code and to shrug off the liabilities of the creditors of the corporate debtor is based on misreading. Thus a wrong declaration in Form 18 allegedly made inadvertently before the ROC cannot be said to be material in the context of conversion from a Company into LLP so as to fall within the definition of perjury u/s 199 IPC. Thus holding the Appellants guilty of an act of perjury deserves to be set aside on this ground alone; and consequential impugned order dated 04.08.2021 permitting the Liquidator to file complaint u/s 340 Cr.P.C also deserves to be set aside.

# 9. Admittedly such declaration in Form 18 was never made/filed before the Ld. NCLT but before the ROC; therefore, it was not for the Ld. NCLT/Liquidator to move u/s 195 Cr.P.C for initiating action on such account.

# 10. Secondly an observation in the impugned order dated 17.05.2021 viz there exists a discrepancy in affidavit of Mr. Pankaj Gambhir/Appellant No. 1 in CA(AT)(Ins.) No. 818 & 819/2021) wherein he deposed ‘lease hold units were handed over to the parties as back as in December 2016’, and statement of their counsel made before the bench on 18.09.2019 wherein the averment ‘lease hold units will be handed over to the parties’, would indicate those are conflicting statements is also factually incorrect on a plain reading of para 5 of the affidavit dated 16.07.2019 where the deponent Mr. Pankaj Gambhir did not use the expression ‘handed over’ but all that he had deposed was the Company had ‘already vacated’ the said premises in December, 2016. Thus, there was no conflict between these two expressions ‘already vacated’ and ‘will be handed over’ used respectively by Mr. Pankaj Gambhir (designated partner of LLP) in his affidavit and the counsel appearing for the LLP before the Ld. NCLT. It is alleged some times a tenant vacates the premises but on actual possession is not taken over by landlord, may be because of pending dispute.. That apart, this statement has no material bearing on the subject of conversion of the Company into LLP because of S. 58(4)(b) of the LLP Act. Thus the impugned orders dated 17.05.2021 and 04.08.2021 deserve to be set aside on this ground too.

# 11. Thus we are of the considered view no act of perjury has been committed by the Appellants. But even if it is presumed just for the arguments’ sake that an offence of perjury stands committed, then also the impugned order dated 04.08.2021 r/w impugned order dated 17.05.2021 permitting the Liquidator to file complaint u/s 340 Cr.P.C is not sustainable there being admittedly no finding recoded to the effect “that it is expedient in the interest of justice a complaint should be filed. In the absence of a finding to the above effect which is a sine qua non under S. 340(1)(a) Cr.P.C, the impugned order dated 04.08.2021 is not sustainable in law.

# 12. The Hon’ble Supreme Court in Chajoo Ram v. Radhey Shyam (1971) 1 SCC 774 has held:

• “7. .… Prosecution should be ordered when it is considered expedient in the interests of justice to punish the delinquent and not merely because there is some inaccuracy in the statement which may be innocent or immaterial. There must be prima facie case of deliberate falsehood on a matter of substance and the court should be satisfied that there is reasonable foundation for the charge.”

# 13. Further the Hon’ble Supreme Court in Santokh Singh v. Izhar Hussain (1973) 2 SCC 406 held:

• “11. ….. Every incorrect or false statement does not make it incumbent on the court to order prosecution. The court has to exercise judicial discretion in the light of all the relevant circumstances when it determines the question of expediency. The court orders prosecution in the larger interest of the administration of justice and not to gratify feelings of personal revenge or vindictiveness or to serve the ends of a private party. Too frequent prosecutions for such offences tend to defeat its very object. It is only in glaring cases of deliberate falsehood where conviction is highly likely, that the court should direct prosecution.”

# 14. The above propositions of law were also reiterated by the Hon’ble Supreme Court in Narendra Kumar Srivastava v. State of Bihar (2019) 3 SCC 318. Further these judgements have also been relied upon by this Appellate Tribunal in its judgment dated 18.12.2020 titled M/s KVR Industries Pvt. Ltd. v. M/s PP Bafna Ventures Pvt. Ltd.

3 15. Further we are also of the view Ld. NCLT has no jurisdiction to convict a person for an offence under Section 68 under Chapter VII of Part II IBC in view of the express provision contained in S. 236(1) IBC to the following effect:

• “Notwithstanding anything in the Code of Criminal Procedure, 1973 (2 of 1974), offences under this Code shall be tried by the Special Court established under Chapter XXVIII of the Companies Act, 2013 (18 of 2013).”

Further S. 236(2) read:

• “No Court shall take cognizance of any offence punishable under this Act, save on a complaint made by the Board or the Central Government or any person authorized by the Central Government in this behalf.”

# 16. The Principal Bench of this Tribunal in its judgment dated 04.02.2022 titled as Writers Business Services Pvt. Ltd. & Ors. v. Ashutosh Agrawala, RP for Cox & Kings Ltd. has categorically held an act which is termed as offence within specific provisions of Chapter VII of Part II IBC could not be dealt with even indirectly by the Adjudicating Authority by imposing a fine. Thus the impugned order dated 17.05.2021 convicting the Appellants u/s 68(i)(a) IBC and imposing a fine of Rs. 2 lac on each Appellant deserves to be set aside on this ground itself. Even otherwise, there are no averments qua commission of an offence u/s 68(i)(a) IBC in IA No. 1248/ND/2020 filed by the RP as a matter of record. Moreso, there is no finding in the impugned order dated 17.05.2021 as to how the said offence is attracted in the present case.

# 17. We have also examined the notification dated 27.7.2016 as under:-

• S.O. 2554(E).-In exercise of the powers conferred by sub-section (1) of section 435 of the Companies Act, 2013 (18 of 2013), the Central Government hereby, with the concurrence of the Chief Justice of the High Court of Delhi, designates the following Court as Special Court for the purposes of providing speedy trial of offences punishable under the Companies Act, 2013 with imprisonment of two years or more under the Companies Act, 2013, namely:-

• 
  

Sl. No	Existing Court	Jurisdiction as Special Court
(1)	(2)	(3)
	Court of Additional Sessions Judge-03, South-West District, Dwarka	National Capital Territory of Delhi

• 2.The aforesaid Court mentioned in column number (2) shall exercise the jurisdiction as Special Court in respect of jurisdiction mentioned in column number (3).

# 18. Thus there exists a Special Court per Section 236 of the Companies Act, 2013, hence the Ld. NCLT has no power to convict the appellants and impose a fine and as such the conviction and the fine imposed by Ld. Adjudicating Authority is hereby set aside.

# 19. The appeals are thus allowed. Pending applications are also disposed of.

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