In an application filed by Fortis Healthcare Limited (Fortis) (Respondent) before the Delhi High Court under Section 340 of the Code of Criminal Procedure, 1973 (CrPC) read with Section 195 of CrPC and Section 193, 196, 199, 200, 209, and 464 of the Indian Penal Code, 1860 (IPC) on grounds that Walmark Holdings Limited (Walmark) (Petitioner) committed fraud to obtain favourable orders, a Single Judge Bench of Justice Amit Bansal found the case to be fit for invoking the jurisdiction of the Court and directed the transmission of the entire documents related to petition under Section 9 of the Arbitration and Conciliation Act, 1996 (A&C Act) to the Judicial Magistrate for action to be taken in accordance with law.
The main petition was filed by Walmark against Fortis under Section 9 of the A&C Act based on the draft Term Sheet and Side Letters dated 06-12-2017.
A non-binding Term Sheet (NBTS), valid for 30 days, was executed between the parties and was not extended. Between 03-12-2017 and 06-12-2017, representatives of both parties prepared a draft Term Sheet, which was not executed on behalf of Fortis. On 16-05-2018, Fortis received an email from Walmark with an attachment of a Term Sheet, which lacked the signature of the erstwhile CEO of Fortis. In a civil suit pending before the District Court, Patiala House, New Delhi, Walmark moved an impleadment application along with a copy of said Term Sheet.
Thereafter, Walmark filed a complaint against Fortis with SEBI, NSE, and BSE, in which the Term Sheet bearing the forged signature of the erstwhile CEO of Fortis was disclosed for the first time. However, Walmark admitted that the CEO was not present when the parties executed the Term Sheet. Thereafter, the said main petition was filed seeking interim relief, including a security of Rs. 490 crores against Fortis, in which reliance was placed on the Term Sheet and Side Letters.
During the proceedings, Fortis challenged the execution of the Term Sheet and was directed to file an affidavit in support of the same. Walmark filed an application to withdraw the main petition. On 24-02-2020, the petition was dismissed as withdrawn. This scenario led to the filing of the present application.
A reply was filed on behalf of two Walmark officials (non-applicants 1 and 2), affirming that the Terms Sheet never came into force. Hence, it was directed that the present application shall not proceed against the two said officials. Thereafter, Fortis pointed out various discrepancies in the said Term Sheet and Side Letters to contend that, despite being fully aware that the said documents were not signed on behalf of Fortis, Walmark, and its officials (non-applicants 3 and 4) had filed the main petition and made false assertions based on the forged documents while also supporting the same by a falsely sworn affidavit.
It was found to be evident from the evidence on record that the Term Sheet bearing the signature of the erstwhile CEO was non-existent till the filing of the impleadment application in the pending civil suit. It was noted that Walmark has made sufficient admissions stating that the Term Sheet had not been executed by the said CEO.
The Court stated that the dishonesty of non-applicants 3 and 4 was apparent as they had failed to file a reply or appear before the Court despite service. Further, it was noted that by a separate judgment in a connected suit, it was held that the Term Sheet was executed by the said CEO, and the same was declared to be non-est and void.
Further, the Court referred to Pritish v. State of Maharashtra, (2002) 1 SCC 253, and found that Section 340 of CrPC does not mandate a preliminary inquiry and an opportunity of hearing to the would-be-accused before a complaint is made by a Court. The Court held that Fortis made out a fit case to invoke the jurisdiction of the Court under Section 340 of the CrPC regarding the conduct of non-applicants 3 and 4. It was also said that the non-applicants could not have been unaware of the consequences of falsely swearing an affidavit before the Court, which they knew to be false.
The Court directed the Registrar General to lodge a complaint with the Judicial Magistrate concerned within 4 weeks and to transmit the entire documents related to the main petition under Section 9 of the A&C Act for action to be taken in accordance with the law.
Thus, the application was disposed of.
Appearances:
For Petitioner – None
For Respondent – Mr. H.S. Chandhoke, Mr. Saleem Hasan
