Introduction:
In a significant judgment reinforcing the sanctity of judicial proceedings and the obligation of litigants to approach courts with honesty and clean hands, the Delhi High Court recently directed initiation of perjury proceedings against a company after finding prima facie evidence that false averments had been made in a civil suit supported by allegedly fabricated Non-Disclosure Agreements (NDAs).
The order was passed by Justice Subramonium Prasad in the matter titled Manipal Business Solutions Private Limited v. Aurigain Consultants Private Limited and Ors., arising out of CRL.M.A. 14926/2023. The case emerged from a commercial dispute involving allegations of breach of confidentiality obligations, employee poaching, and misuse of proprietary information by former employees who had joined a competing company.
The plaintiff company, Manipal Business Solutions Private Limited, had instituted a civil suit against rival company Aurigain Consultants Private Limited and several former employees alleging that confidential information and trade secrets were being unlawfully used after the employees left the plaintiff organization. According to the plaintiff, the employees had executed Non-Disclosure Agreements during their employment and were therefore bound by confidentiality and non-compete obligations even after resignation.
On the strength of these pleadings and the NDAs relied upon by the plaintiff, the Delhi High Court had initially granted an ad-interim injunction on April 4, 2022, restraining the defendants from engaging in activities allegedly violating the confidentiality obligations.
However, the interim injunction was subsequently vacated on August 17, 2022 after the Court noticed deficiencies in the evidence and inconsistencies in the plaintiff’s claims. Thereafter, the defendants approached the Court under Section 340 read with Section 195(1)(b) of the Code of Criminal Procedure, alleging that the plaintiff company had deliberately made false statements before the Court and relied upon fabricated or unsigned NDAs in order to secure interim relief.
The application raised serious allegations concerning abuse of judicial process, fabrication of evidence, and deliberate misrepresentation before the Court. Several defendants denied having executed the NDAs relied upon by the plaintiff, while one defendant went to the extent of alleging forgery of signatures. A forensic report produced before the Court further indicated a “strong possibility” that signatures had been electronically transplanted from a common source document.
The case thus evolved beyond an ordinary commercial dispute and raised larger questions concerning the integrity of judicial proceedings, the duty of litigants to make truthful disclosures, and the consequences of attempting to secure judicial orders on the basis of false pleadings and fabricated documents.
In allowing the application and directing initiation of criminal proceedings, the Delhi High Court emphasized that knowingly placing false material before a court strikes at the very foundation of the administration of justice. The judgment serves as an important reminder that the legal system cannot tolerate litigants who attempt to misuse judicial processes through deception, forged documents, or false verification of pleadings.
Arguments of the Parties:
The defendants, who had moved the application under Section 340 read with Section 195(1)(b) CrPC, argued that the plaintiff company had deliberately misled the Court by falsely claiming that several former employees had executed Non-Disclosure Agreements binding them to confidentiality obligations.
According to the defendants, many of the NDAs relied upon by the plaintiff were either unsigned, never executed, or fabricated after initiation of the dispute. It was submitted that despite having full knowledge of these deficiencies, the plaintiff made categorical averments in the plaint asserting that the defendants were bound by valid confidentiality agreements.
The defendants emphasized that the interim injunction granted earlier by the Court had been obtained solely on the basis of these false pleadings and allegedly fabricated documents. They argued that the plaintiff’s conduct amounted to abuse of judicial process and directly affected the administration of justice.
Certain defendants filed sworn affidavits specifically denying execution of the NDAs attributed to them. One defendant further alleged that his signatures appearing on the documents had been forged. In support of these allegations, the defendants relied upon a forensic report which reportedly indicated a strong likelihood that signatures had been electronically transplanted from the same source document.
The applicants contended that the plaintiff had knowingly filed false pleadings and fabricated material with the intention of securing favourable interim orders. Such conduct, according to the defendants, clearly attracted offences contemplated under Section 195(1)(b) CrPC and justified initiation of perjury proceedings under Section 340 CrPC.
The defendants further argued that the sanctity of judicial proceedings would be severely undermined if litigants were permitted to obtain injunctions and other reliefs through false representations and forged documents without facing legal consequences.
Reliance was also placed upon the Supreme Court’s decision in Iqbal Singh Marwah v. Meenakshi Marwah, where it was held that proceedings under Section 340 CrPC are intended to preserve the purity of judicial proceedings and protect the administration of justice from deliberate falsehoods.
On the other hand, the plaintiff company opposed the application and attempted to defend the pleadings made in the original suit. It was argued that the suit had been filed bona fide to protect confidential business information and proprietary data from misuse by former employees and a competing company.
The plaintiff sought to contend that there was no deliberate intention to mislead the Court and that the disputes concerning execution of the NDAs were matters requiring adjudication during trial.
It was further argued that initiation of perjury proceedings should not become a routine consequence of every evidentiary dispute arising in civil litigation. According to the plaintiff, Section 340 CrPC should be invoked sparingly and only in cases where deliberate falsehood and intentional interference with administration of justice are clearly established.
The plaintiff also attempted to argue that mere inconsistencies or deficiencies in documentary evidence could not automatically justify criminal prosecution for perjury.
However, the defendants countered these submissions by emphasizing that the issue was not merely evidentiary insufficiency but deliberate and knowing falsehood placed before the Court to obtain judicial orders.
The matter therefore required the High Court to determine whether the material on record disclosed a prima facie case warranting initiation of criminal proceedings for perjury and fabrication of evidence.
Court’s Judgment:
After examining the pleadings, documentary record, affidavits, and forensic material, the Delhi High Court concluded that a prima facie case existed for initiating proceedings under Section 340 CrPC.
Justice Justice Subramonium Prasad observed that the pleadings made by the plaintiff company were inconsistent with the documents placed on record by the plaintiff itself.
The Court noted that the plaintiff had specifically pleaded in the original suit that various defendants had executed Non-Disclosure Agreements and were bound by confidentiality obligations. These assertions had formed the basis upon which the Court initially granted ad-interim injunctions in favour of the plaintiff.
However, upon scrutiny of the documentary record, the Court found that several of the alleged NDAs were not signed by the concerned defendants at all. The Court specifically observed that defendants numbered 5 to 7 and 12 to 20 had not signed the NDAs relied upon by the plaintiff.
The Court recorded:
“The pleadings are found to be inconsistent with the documents placed on record by the Plaintiff itself.”
The High Court further noted that certain defendants had categorically denied execution of the NDAs through sworn affidavits, while one defendant alleged outright forgery of his signatures. Importantly, the forensic report placed before the Court indicated a “strong possibility” that signatures had been electronically transplanted from a common source document.
In light of these circumstances, the Court held that the matter transcended a mere civil dispute concerning contractual obligations and raised serious concerns regarding deliberate falsehood in judicial proceedings.
The Court rejected the argument that initiation of proceedings under Section 340 CrPC required examination only of whether the plaintiff had entered the witness box. Instead, the Court emphasized that knowingly verified false pleadings forming part of judicial records are themselves capable of attracting criminal consequences.
The Court observed:
“The test is not merely whether the Plaintiff entered the witness box, but whether false statements, knowingly made and verified, were placed before this Court with the intent to secure favourable orders, thereby impacting the sanctity of judicial proceedings.”
The High Court found prima facie that the plaintiff had knowingly made false averments in the plaint despite being aware that several NDAs were unsigned or non-existent.
Relying upon the Supreme Court’s decision in Iqbal Singh Marwah v. Meenakshi Marwah, the Court reiterated that proceedings under Section 340 CrPC are intended to preserve public confidence in the judicial process and deter litigants from polluting the stream of justice through fabricated evidence or false statements.
The Court emphasized that judicial proceedings depend fundamentally upon truthfulness and good faith disclosures by litigants. If parties are permitted to obtain judicial orders through false pleadings and fabricated documents, the very credibility of the justice delivery system would be threatened.
Another significant aspect of the judgment was the Court’s recognition that false pleadings affecting interim reliefs can have substantial legal and commercial consequences. The ad-interim injunction initially granted against the defendants had restrained business activities and potentially impacted professional and commercial interests. Therefore, obtaining such relief through false representations constituted a serious abuse of process.
The Court ultimately held that the ingredients of Section 195(1)(b)(i) CrPC stood attracted because the alleged falsehoods formed part of judicial records and directly affected administration of justice.
Accordingly, the Delhi High Court directed the Registrar General to prepare and file a criminal complaint before the competent court under Section 195 read with Section 340 CrPC.
The ruling sends a strong message regarding accountability in litigation and the consequences of misleading courts through false pleadings or fabricated evidence. It also highlights the judiciary’s increasing intolerance toward abuse of judicial processes in commercial disputes where parties may attempt to secure injunctions through deceptive means.
More broadly, the judgment reinforces the principle that courts are institutions founded upon trust, truth, and integrity. Litigants approaching courts are under a solemn obligation to make accurate disclosures and place genuine material before the judiciary. Any deliberate attempt to subvert this obligation strikes at the heart of the administration of justice and warrants strict legal action.