S.R. RAMARAJ versus SPECIAL COURT, BOMBAY

Citation: [2003] SUPP. 2 S.C.R. 778 · Decided: 19-08-2003 · Supreme Court of India · Bench: S. RAJENDRA BABU · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
B 
S.R. RAMARAJ 
v. 
SPECIAL COURT, BOMBAY 
AUGUST 19, 2003 
(S. RAJENDRA BABU, B.N. SRIKRISHNA ANDG.P. MATHUR, JJ.] 
Practice and Procedure: Security transactions between Banks-Suit 
for refund of certain sum in Go~ernment security-Alleged tendering of false 
C defence in the written statement-Contempt-Special Court held the defence 
as pleaded in the written statement false and repetition thereof in the evidence 
in chief amounts to contempt-On appeal, Held: A person could be held 
liable for making false statement of facts, but not liable on the basis of the 
pleading/facts whi~h are not false-Appellant deposing on t~e basis of 
material on record but had no personal knowledge of the transaction-
D Hence, not liable for contempt of Court-Special Court (Trial of Offences 
relating to Transactions in Securities) Act, 1992-Section 10(/)-lndian 
Penal Code, 1860-Sections 182, 183, 191, 192, 193, 199, 200 and 209. 
Standard Chartered Bank (SCB) filed a suit against Canbank Mutual 
Fund (CMF) for refund of certain sum due under three SGL transfer forms 
E in Government oflndia Security transactions. In the written statement CMF 
took the stand that the transactions were squared off on the basis of available 
records. The Special Court held the appellant, employee ofCMF, liable for 
contempt of Court for taking up false defence as pleaded in the written 
statement and repeated in the evidence-in-chief and ,convicted him. Hence the 
F 
present appeal. 
It was contended for the appellant that the stand ofCMF as taken in the 
written statement was same throughout and supported by documents though 
with reference to other material, the stand might be falsified; that in cases of 
such nature, the party could only be made liable for tendering evidence 
deliberately and that the statement must be false; and that the stand of CMF 
G was in conformity with the plaint filed in another connected suit which was 
held true and correct by the Court; and that when two views are possible on 
the basis of pleadings, the same would not amount to contempt. 
H 
Allowing the appeal, the Court 
HELD: I.I. The verification offacts by the appellant as adverted to in 
778 
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S.R. RAMARAJ v. SPECIAL COURT, BOMBAY 
779 
the written statement was not made on the basis of personal knowledge of the A 
appellant and the defence set up by him was on the basis of the stand taken by 
his employer Canbank Mutual Fund (CMF) in the connected suit. When in a 
suit of the CMF the stand had been accepted, but in the suit against CMF 
such stand had been dis-believed, it can not be held that the appellant had 
deliberately stated falsehood to mislead the Court or to simply gain time to B 
the disadvantage of the other party in this matter. (785-C, DI 
1.2. Where a verification is specific and deliberately false, there is 
nothing in law to prevent a person from being proceeded for contempt In order 
to expose a person to the liability of a prosecution of making false statement 
there must be a false statement of fact and not a mere pleading made on the C 
basis of facts which are themselves not false. Merely because an action or 
defence can be an abuse of process of the Court those responsible for its 
formulation cannot be regarded as committing contempt, but an attempt to 
deceive the Court by disguising the nature of a claim is contempt. If the facts 
leading to a claim or defence are set out, but an inference is drawn thereby 
stating that the stand of the plaintiff or defendant is one way or the other it D 
will not amount to contempt unless it be that the facts as pleaded themselves 
are false. f785-E, F, GI 
1.3 .. In the instant case, when the appellant tried to explain his case in 
his evidence, the same was shut out on the basis that it was hearsay. An officer 
of bank who had no personal knowledge of the transactions in question, and E 
was deposing on the basis of material on record, his evidence cannot be from 
his knowledge and necessarily has to be hearsay. Hence, the Special Court 
was not justified in shutting out that part of the evidence. Hence, the order of 
the Special Court initiating proceedings for contempt and convicting the 
appellant is set aside. 1785-H; 786-A, Bl 
F 
CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. 1491 of 
1995. 
From the Judgment and Order dated 12.9.1995 of the Special Court 
(Trial of Offences Relating to Transactions in Securities) at Bombay in Suo G 
Motu Show Cause Notice No. 5 of 95 in Suit 

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