M/S. KAPIL COREPACKS PVT. LTD. & ORS.versusSHRI HARBANS LAL (SINCE DECEASED) THROUGH LRS.

                     [2010] 9 S.C.R. 500


A        M/S. KAPIL COREPACKS PVT. LTD. & ORS.
                              v.
     SHRI HARBANS LAL (SINCE DECEASED) THROUGH
                             LRS.
               (Civil Appeal No. 6207 of 2010)
B                        AUGUST 3, 2010

        [R.V. RAVEENDRAN AND H.L. GOKHALE, JJ.]

        Code of Civil Procedure, 1908:
c
       0. 10 r. 2 - Scope and ambit of- Held: Examination ul
  r. 2 of 0. 10 enables the court to examine not only any party,
  but also any person accompanying either party or his pleader,
  to obtain answer to any material question relating to the suit,
D either at the first hearing or subsequent hearings - Object of
  oral examination u/r. 2 of 0. 10 is not to elicit admissions nor
  does it provide for or contemplate admissions - Statement
  made by a party in an examination ulr. 2 is not under oath,
  and is not intended to be a substitute for a regular
  examination under oath ulo. 18 :__Power ulo. 10 r. 2, cannot
E be converted into a process of selective cross-examination
  by the court, before the party has an opportunity to put forth
  his case at the trial.

        0. 10 r. 2 - Examination under - Confrontation of
F defendant with only the signature portion of a disputed
  unexhibited document filed by plaintiff by covering remaining
  portions of document and require him to identify seal/stamp
  and signature - Permissibility of - Held: Not permissible -
  Any attempt to either prove or disprove a document or to
G cross-examine a party by adopting the stratagem of covering
  portions of a document used by cross-examining counsel, are
  outside the scope of examination u/o 10 r. 2 - Confrontation
  of signature alone without disclosing the document is not an
  admission of executio_r: of agreement/receipt.
H                              500
KAPIL COREPACKS PVT. LTD. v. HARBANS LAL (SINCE 501
           DECEASED) THROUGH LRS.

     0. 10 r. 2 - Answer given by a party, in response to a      A
question u/o. 10 r. 2- Prosecution uls. 340 Cr.P.C: rlw s. 195
/PC on basis thereof - Held: Party giving an answer to a
question put ulo. 10 r. 2 when not under oath and when not
being examined as a witness, cannot attract s. 195 /PC and
ss.195(1)(b) and 340 - Power u/s.340 Cr.P.C. rlw s. 195 /PC      B
can be exercised only where someone fabricates false
evidence or gives false evidence - Code of Criminal
Procedure, 1973 - ss.195(1)(b) and 340 - Penal Code, 1860
- s.195.

     H-predecessor of respondents filed a recovery suit
                                                                 c
against the appellants. He contended that the second
appellant and his brother-5 had executed an agreement/
receipt to sell the property for consideration, on behalf
of the first appellant; and that the appellants were not
willing to convey the property and failed to produce the         D
n~cessary documents. The appellants filed a criminal
                            I
complaint against H and others alleging that the
purported signatures of second appellant and S on the
said agreement/receipt were forged; that they had not
executed any such agreement/receipt; and also denied             E
the same in the written statement to the recovery suit. The
appellants then filed an application for referring the
agreement/receipt to a hand writing expert or a
Government Forensic Laboratory for examination of the
signatures therein and for keeping the said document in          F
safe custody which was disposed of by High Court.
Thereafter, the first appellant was examined under Order
10 rule 2 CPC. He admitted the signature on the
agreeinent/receipt. The Single Judge of High Court
directed to list the matter to examine whether the               G
Managing Director of the first appellant was to be
prosecuted u/s. 340 Cr.P.C. and s. 195 IPC. The Division
Bench upheld the order. Hence the appeal.

    The questions which arose for consideration in this
                                                                 H
    502     SUPREME COURT REPORTS              [2010] 9 S.C.R.


A appeal are as to (i) what is the scope and ambit of Order
  10 Rule 2 CPC; (ii) whether the court could, in an
  examination under Order 10 Rule 2 of the Code, confront
  a defendant with only the signature portion of a disputed
  unexhibited document filed by the plaintiff (by covering
B the remaining portions of the document) and require him
  to identify the seal/stamp and signature; and (iii) whether
  on the basis of the answer given by a party, in response
  to a question under Order 10 Rule 2 of the Code, the court .
  could prosecute him under Section 340 of Code of
C Criminal Procedure read with Section 195 IPC.

          Allowing the appeal, the Court

         HELD: 1.1 The examination under rule 2 of Order 10
    of the Code of Civil Procedure, 1908 need not be
D   restricted to allegations in the pleadings of the other
    party, but can relate to elucidating any matter in
    controversy in the suit. Under rule 1 of Order 10, the court
    can examine only the parties and their advocates, that too
    at the 'first hearing'. On the other hand, Rule 2 enables
E   the court to examine not only any party, but also any
    person accompanying either party or his pleader, to
    obtain answer to any material question relating to the suit,
    either at the first hearing or subsequent hearings. The
    object of oral examination under rule 2 of Order 10 is to
F   ascertain the matters in controversy in suit, and not to
    record evidence or to secure admissions. The statement
    made by a party in an examination under rule 2 is not
    under oath, and is not intended to be a substitute for a
    regular examination under oath under Order 18 of the
    Code. It is intended to elucidate what is obscure and
G   vague in the pleadings. In other words, while the purpose
    of an examination under rule 1 is to clarify the stand of a
    party in regard to the allegations made against him in the
    pleadings of the other party, the purpose of the oral
    examination under rule 2 is mainly to elucidate the
H
KAPIL COREPACKS PVT. LTD. v. HARBANS LAL (SINCE 503
           DECEASED) THROUGH LRS.

allegations even in his own pleadings, or any documents           A
filed with the pleadings. The power under Order 10 rule
2, cannot be converted into a process of selective cross-
exa mi nation by the court, before the party has an
opportunity to put forth his case at the trial. [Para 11] [516-
D-H; 517-A]                                                       B

    Manmohan Das v. Mt. Ramdei and Anr. AIR 1931 PC
175; Arunagiri Goundan v. Vasantharoya Koundan and Ors.
AIR 1949 Ma.dras 707 - referred to.

   1.2 The obj~ct of Order 10 rule 2 is not to elicit             C
admissions. Nor does it provide for or contemplate
admissions. [Para 13] [517-G-H]

    1.3 The power of court to call upon a party to admit
any document and record whether the party admits or               D
refuses or neglects to admit such document is traceable
to Order 12 Rule 3A rather than Order 10 rule 2 of the
Code. Nothing however comes in the way of the court
combining the power under Order 12 rule 3A with its
power under Order 10 rule 2 and calling upon a party to
admit any document when a Party is being examined                 E
under Order 10 rule 2. But the court can only call upon a
party to admit any document and cannot cross-examine
a party with reference to a document. [Para 14] [518-C-
D]
                                                                  F
     Bhanwarlal Kavad v. Shyamsunder AIR 1984 Raj. 113;
Amrita Devi v. Sripat Rai AIR 1962 All. 111; Rajiv Srivastava
v. Sanjiv Tu/i AIR 2005 Del. 319; Gautam Adani v. Container
Corporation of India 150 (2008) DLT 281 - referred to.

     2.1 The object of the examination under Order 10 rule        G
2 of the Code is to identify the matters in controversy and
not to prove or disprove the matters in controversy, nor
to seek admissions, nor to decide the rights or
obligations of parties. If the court had merely asked the
                                                                  H
   504     SUPREME COURT REPORTS              [201 OJ 9 S.C.R.

A second appellant whether he had executed the
  agreement/receipt or not, by showing him the document
  (by marking the document for purposes of identification
  only and not as an exhibit), it might have been possible
  to justify it as examination under Order 1O rule 2, Order
8 12 rule 3A of the Code. But any attempt by the Court, to
  either to prove or disprove a document or to cross-
  examine a party by adopting the stratagem of covering
  portions of a document used by cross-examining
  counsel, are clearly outside the scope of an examination
C under Order 10 rule 2 of the Code. and the power to call
  upon a party to admit any document under Order 12. rule
  3A of the Code. What the High Court has done in this
  case is to 'cross-examine' the second appellant and not
  examine him as contemplated under Order 10 rule 2. The
  purported examination under Order 10 rule 2 of the Code,
D by confronting a party only with a signature on a
  disputed and unexhibited document by adopting the
  process of covering the remaining portions thereof is
  impermissible, being beyond the scope of an
  examination under Order 10 Rule 2 of the Code. [Para 17]
E [520-E-H; 521-A-B]

       2.2 The instant case, the appellant-defendants denied
  having signed/executed any agreement/receipt in favour
  of the respondents. In the examination under Order 10
F rule 2, the court did not ask the second appellant whether
  he had signed the document or not, by showing the
  document. What was done was confrontation of a
  signature alone without disclosing the document. When
  so confronted, the second appellant admitted the
G signature shown as his signature. But that is not an
  admission of execution of agreement/receipt. The specific
  case of appellants in the written statement was that the
  Agreement/Receipt dated 7.9.2003 was a clever forgery.
  If a signature is a clever forgery, there is a likelihood of
H the same passing the normal scrutiny of the person to
KAPIL COREPACKS PVT. LTD. v. HARBANS LAL (SINCE 505
           DECEASED) THROUGH LRS.

whom it is attributed. If a false signature is very different     A
from the real signature, and is easily identifiable, it will be
a 'forgery' but not a 'clever forgery'. Therefore, if the
document allegedly containing the forged signature is
covered in such a manner as to show only a stamp/seal
and signature, and if a question is put by the court under        B
Order 10 rule 2 to identify the seal/stamp and the
signature and if the witness identifies the signature as his
and the stamp/seal as that of his company, there are two
possibilities: The first is that what is shown is the
genuine signature of the party and the genuine stamp of           c
his company, and that he has identified and admitted
them. The second is that they are clever forgeries and the
party could not obviously identify the forgery when it was
shown to him by covering other portions of the
document, when he is given only a normal glance without           0
an opportunity to scrutinize it properly. Whether it is a
forgery or not will have to be determined with reference
to the expert evidence and after the evidence of both
plaintiff and defendants tested by cross-examination.
[Para 18] [521-C-H; 522-A]
                                                                  E
     2.3 Both the Single Judge and the Division Bench of
the High Court committed an obvinus error in equating
admission of a signature which is claimed to be a clever
forgery, as an admission of execution of the agreement/
receipt and the contents thereof. Admission must                  F
obviously be a conscious and deliberate act. Admission
can be explained. An admission of a signature is not an
admission of execution of a document. The power to
identify the matters in controversy by examination of
parties at the pre-trial stage under Order 1O rule 2, is          G
completely different from the power exercised by the
court under section 165 of the Evidence Act to put any
question it pleases in any form, to a witness or a party in
order to discover or to obtain proper proof of relevant
facts, or the power under Order 18 rule 14 of the Code to         H
    506    SUPREME COURT REPORTS               [2010] 9 S.C.R.


A recall and examine any witness. The court's anxiety to do
  justice by speeding up the process of the suit should not
  itself lead to injustice. [Para 19] [522-8-G]

          3.1 Section 195 IPC provides that whoever gives or
    fabricates false evidence intending thereby to cause, or
8
    knowing it to be likely that he will thereby cause, any
                1
    person to be convicted of an offence punishable with
    imprisonment for life, or imprisonment for a term of seven
    years or upwards, shall be punished as a person
    convicted of that offence would be liable to be punished.
C   Section 195 (1)(b) Cr.P.C. provides that no court shall take
    cognizance of any offence punishable under section 195
    IPC when such offence is alleged to have been committed
    in, or in relation to, any proceeding in any Court, except
    on the complaint in writing of that Court. Section 340
D   Cr.P.C. provides that when upon an application made to
    it in that behalf or otherwise, any Court is of opinion that
    it is expedient in the interests of justice that an inquiry
    should be made into any offence referred to in clause (b)
    of sub-section (1) of section 195 Cr.P.C. which appears
E   to have been committed in or in relation to a proceeding
    in that Court or, as the case may be, in respect of a
    document produced or given in evidence in a proceeding
    in that Court, such Court may, after such preliminary
    inquiry, if any, as it thinks necessary, record a finding to
F   that effect, make a complaint thereof in writing, sent it to
    a Magistrate of the first class having jurisdiction etc.
    Thus, the power under section 340 CrPC read with
    section 195 IPC can be exercised only where someone
    fabricates false evidence or gives false evidence. By no
G   stretch of imagination, a party giving an answer to a
    question put under Order 10 rule 2 of the Code when not
    under oath and when not being examined as a witness,
    can attract section ·195 IPC and consequently cannot
    attract section 195(1 )(b) and section 340 Cr.P.C. [Para 20]
H   [523-A-G]
KAPIL COREPACKS PVT. LTD. v. HARBANS LAL (SINCE 507
           DECEASED) THROUGH LRS.

    Sa tish Kumar v Union of India 2009 (108) DRJ 317 -       A
disapproved.

     B.K. Gupta v. Damodar H. Bajaj 2001 (9) SCC 742 -
referred to.

    3.2 In the instant case, the High Court proceeded on B
the basis that the second appellant spoke the 'truth' in
response to the question in the examination under Order
10 rule 2 of the Code. There is no finding that second
appellant made a 'false statement' in his examination
under Order 10 rule 2 Consequently, the decision of the C
court in Satish Kumar case to consider initiation of
proceedings under section 340 Cr.P.C. read with section
195 IPC in regard to an answer to a question put unde.r
Order 10 rule 2 of the Code is ill-conceived and wholly .
without jurisdiction. [Paras 21 and 22) [524-F-H]         D

    4. The order dated 20.1.2009 of the Division Bench
and the order dated 12.11.2008 of the Single Judge,
directing the matter to be listed to consider whether the
second appellant should be prosecuted under section
                                                              E
340 Cr.P.C., are set aside. As the process of confrontation
of an unexhibited document by covering portions of it by
a court, is beyond the scope of "xamination under Order
10 rule 2 of the Code, the answer to such question would
be excluded from consideration and completely
disregarded. The court conducting the trial and hearing       F
arguments would decide the suit in accordance with law
on the basis of evidence placed and ignore the said
'answer' under Order 10 rule 2 of the Code. [Para 23) [525-
A-C]
                                                              G
                    Case Law Reference:
    AIR 1931 PC 175         ,Referred to.        Para 12
    AIR 1949 Madras 707     Referred to.         Para 12
                                                              H
    508       SUPREME COURT REPORTS               [20i0] 9 S.C.R.


A         AIR 1984 Raj. 113       Referred to.          Para 16
          AIR 1962 All. 111       Referred to.          Para 16
          AIR 2005 Del. 319       Referred to.          Para 16

          150 (2008) DLT 281      Referred to.          Para 16
B
          2009 (108) DRJ"317      Disapproved.          Para 21

          2001 (9) sec 142        Referred to.          Para 21

          CIVIL APPELLATE JURISDICTION : Civil Appeal No.
c 6207 of 2010.
        From the Judgment & Order dated 20.01.2009 of the High
    Court of Delhi at New Delhi in FAO (OS) No. 16 of 2009.

D       Chaitan Sharma, Gaurav Kejriwal, Suveni Banerjee for the
    Appellants.

          Sudhir Kumar, Abhijat P. Medh for the Respondents.

          ·The Judgment of the Court was delivered by
E
         R.V.RAVEENDRAN, J. 1. Leave granted. This appeal
    relates to the scope of Rule 2 of Order 10 of Code of Civil
    Procedure ('Code' for short) and the correctness of invoking
    of Section 340 of the Code of Criminal Procedure ('Cr.P.C.'
    for short) in regard to answers given by a party in an
F   examination under Order 10 Rule 2 of the Code.

       2. Late Harbans Lal (for short the 'plaintiff' of whom the
  respondents are the legal heirs) filed a suit against the
  appellants on 5.9.2006, for recovery of Rs. 66 lakhs. He alleged
G that second appellant and his brother late Sohan Lal Dua
  (father of third appellant) on behalf of the first appellant, had
  executed an Agreement/Receipt dated 7.9.2003 agreeing to
  sell him an industrial property for a consideration of Rs.
  2,02,41,600/- and had received a sum of Rs. 33 lakhs made
H up of Rs. 9 lakhs by cheque and Rs. 24 lakhs in cash towards
KAPIL COREPACKS PVT. LTD. v. HARBANS LAL (SINCE 509
 DECEASED) THROUGH LRS. [R.V. RAVEENDRAN, J.]

the said agreement. He further alleged that the appellants were        A
unwilling to convey the property and failed to produce the
documents necessary to satisfy him about their title to the
property; and that therefore in terms of the agreement, he was
suing for refund of double the amount advanced by him.
                                                                       B
     3. The appellants filed a criminal complaint dated
23.2.2007 against Harbans Lal and certain others alleging that
the purported signatures of second appellant and late Sohanlal
Dua on the said agreement/receipt were forged and that they
had not executed any such agreement/receipt. On 5.3.2007,              C
they also filed their written statement in the suit filed by Harbans
Lal denying the claim, and making a counter claim seeking a
declaration that the agreement/receipt put forth by the plaintiff
was forged and void. The appellants alleged that second
appellant and his late brother had never signed the agreement/
receipt and the signatures found thereon, (purporting to be the        D
signatures of second appellant and his late brother) were clever
forgeries; that they did not receive Rs.24 lakhs said to have
been paid in cash; that the sum of Rs. 9 lakhs paid by cheque
by Harbans Lal, was an advance to their company (first
appellant) obtained by late Sohanlal Dua to tide over a short          E
term financial crisis and the said amount was treated as share
application money.

     4. In the said suit, the appellants filed an application under
Section 151 of the Code for referring the agreement/receipt to         F
a hand writing expert or a Government Forensic Laboratory for
examination of the signatures therein and for keeping the said
document in safe custody. On 31.7.2007 a learned Single Judge
of the High Court made an order directing as follows : (a)
parties to file their original documents within four weeks and         G
matter to be listed before the Joint Registrar for admission/
denial of documents on 27.9.2007; (b) matter to be listed
before court for framing issues on 8.1.2008; (c) parties to be
personally present on the next date of hearing for recording their
statement under Order 10 Rule 2 of the Code; and (d) the
                                                                       H
    510      SUPREME COURT REPORTS                 [2010] 9 S.C.R.


A   original receipUagreement of sale dated 7.9.2003 should be
    kept in safe custody in a sealed cover. In regard to the
    appellants' application seeking reference to a hand writing
    expert, the learned single Judge directed as follows:

          " ...... Insofar as the directions sought for sending the
B
          receipt/agreement to sell to a hand writing expert is
          concerned, I am of the considered view that the parties can
          lead their respective evidence including of hand writing
          expert in support of their pleas_. Application stands
          disposed of."
c
       5. The appellants filed an appeal aggrieved by the refusal
  to refer the matter to a hand writing expert, contending that they
  had obtained a Preliminary Report dated 4.2.2007 from a
  Handwriting Expert with reference to a photocopy of the
D AgreemenUReceipt; and that the Handwriting Expert could give
  expert evidence on the genuineness of the document, only if
  he got an opportunity to examine the original also. The said
  appeal was disposed of by a Division Bench of the High Court
  on 1.11.2007 with the following observations:
E
          "In our considered opinion, the apprehension of the learned
          counsel for the appellant is misplaced and unfounded as
          the appellant can file an application before the learned
          Single Judge seeking intervention of the court to permit a
          hand writing expert to examine the original receipt/
F         agreement to sell dated 7.9.2003 take photographs etc.
          and give his opinion with regard to the genuineness of the
          said document.

          As and when any application is field by the appellant, the
G         same shall be considered by the learned Single Judge in
          terms of the observations made herein giving due
          weightage to the submissions of the learned counsel
          appearing for the appellant."

H In pursuance of it, the appellants filed an application on
KAPIL COREPACKS PVT. LTD. v. HARBANS LAL (SINCE 511
 DECEASED) THROUGH LRS. [R.V. RAVEENDRAN, J.]

7.1.2008 und~r Order 26 Rule 1QA of the Code to permit their         A
Handwriting Expert to inspect the original AgreemenUReceipt
dated 7.9.2003 and take photographs thereof so that he can
give a further report as also evidence. They also made another
application on 7 .1.2008 to modify the order dated 31. 7 .2007
and defer the examination under Order 10 Rule 2 of the Code          B
till the report of the Handwriting Expert was received. In the
meanwhile, the plaintiff Harbans Lal having died on 12.11.2007,
his legal representatives came on record on 29.4.2008.

     6. On 3.10.2008, a learned Single Judge directed the
Principal Officer and Managing Director of the first appellant-      C
company to appear in person on 12.11.2008 along with its
annual returns filed with the Registrar of ComP.anies, income
tax returns and the balance sheets for the financial year 2003-
2004 onwards. In pursuance of the said order, the second
appellant appeared before the court with the relevant documents      D
on 12.11.2008. The second appellant was examined under
Order 10 Rule 2 of the Code and his statement recorded by
the learned Single Judge, is extracted below:

    "I am the Managing Director of M/s. Kapil Corepacks              E
    Pvt.Ltd. Rs. 9 lacs received from the plaintiff is shown in
    the statement of account of the defendant No.1 - Company.
    However, the said amount is not reflected in the annual
    return of the defendant No.1-Company which was filed in
    the Registrar of Companies. It is correct for the period         F
    ending 31st March, 2004 receipt of share application
    money of Rs. 9 lacs is not shown and mentioned. As on
    31st March, 2004, the paid up share capital of the
    defendant No. 1- Company was Rs. 51 lacs. This did not
    include Rs. 9 lacs.. Defendant No.1-Company is a Pvt. Ltd.       G
    company.

    The plaintiff did not fill up any share application form/share
    allotment form before payment of money. I am not aware
    whether a request letter or a share application form is
                                                                     H
    512       SUPREME COURT REPORTS                 [2010] 9 S.C.R.


A         required to be filled up by a party before shares can be
          allotted. At no point of time, defendant No. 1 has recorded
          or mentioned entry of Rs. 24 lacs as received from the
          plaintiff in cash. We know the plaintiffs. We have known
          them for several years.
B
          Question : Please examine the stamp and the signatures
          and state whether they belong to the defendant No. 1 -
          Company and who has signed?

          (Witness was shown copy of Agreement/Receipt in a
c         manner that only the rubber stamp and the signature on
          the document was visible and the rest portion of the
          document was covered by a blank paper. For the sake
          of convenience, the Agreement/receipt is marked 'A')

D         Answer : Stamp at point 'A' is that of defendant No. 1 -
          Company and the same has been signed by me.

          Question : Are you ready and willing to pay back Rs. 9
          lacs?

E         Answer : We are ready and willing to pay Rs. 9 lacs.

                                               (emphasis supplied)

    On conclusion of the said examination, the learned Single
F   Judge made the following order on 12.11.2008:

          "Statement of the Managing Director of the defendant No.
          1 - Company has been recorded today in the court. The
          Managing Director has admitted his signature on the
          Agreement/receipt as well as stamp of the defendant No.
G         1 - Company on the said document. The said document
          was thereafter shown to the witness after removing blank
          paper. I may note here that the said document was
          denied at the time of admission/denial and in the written
          statement.
H
KAPIL COREPACKS PVT. LTD. v. HARBANS LAL (SINCE 513
 DECEASED) THROUGH LRS. [RV RAVEENDRAN, J.)
    Witness -Managing Director of defendant No. 1 Company           A
    has produced copy of annual returns. These will be
    indexed and filed in the Registry within two days. Copy of
    the same be supplied to the learned counsel for the plaintiff
    within one week.
                                                                    B
    List this matter on 21st January, 2009 when all pending
    applications will be considered.

    Court on the next date will also examine whether or not
    to initiate proceedings against Mr. Harish Kumar Dua,
    Managing Director of defendant No. 1 Company under              C
    Section 340 Code of Criminal Procedure, 1973 and 195
    of the Indian Penal Code."

                                           (emphasis supplied)
                                                                    D
    7. Feeling aggrieved, the appellants filed an intra-court
appeal on 16.1.2009. A Division Bench of the High Court
dismissed the said appeal, by the following order dated
20.1.2009.

    "The Managing Director of the appellant had denied his          E
    signatures earlier on the agreement/receipt but when his
    statement was recorded under order 10 CPC before the
    court, an admission came that the signature were his and
    stamp of defendant No. 1 company. The truth emerged
    though belatedly.                                               F

    We see nothing wrong with this process by which the
    learned judge has recorded statement under Order 10 of
    CPC which is a tool for the court to obtain elucidation of
    the matter and to obtain answer to any material question.       G
    The authority of the court to examine a party under Order
    10 Rule 2 CPC can hardly be doubted and undoubtedly
    the crucial document is the agreement/receipt in respect
    of the matter in controversy.

                                                                    H
    514      SUPREME COURT REPORTS                    [201 O] 9 S.C.R.

A         We find that the appeal is wholly misconceived and without
          any merit."

    (emphasis supplied)

       8. The said order is challenged in this appeal by special
B leave. On the contentions urged by the learned counsel, the
  following questions arise for our consideration:

       (i ) What is the scope and ambit of Order 10 Rule 2 of the
    Code?
c        (ii) Whether the court could, in an examination under Order
    10 Rule 2 of the Code, confront a defendant with only the
    signature portion of a disputed unexhibited document filed by
    the plaintiff (by covering the remaining portions of the document)
    and require him to identify the seal/stamp and signature?
0
       (iii) Whether on the basis of the answer given by a party,
  in response to a question under Order 10 Rule 2 of the Code,
  the court could prosecute him under Section 340 of Code of
  Criminal Procedure read with Section 195 of the Indian Penal
E Code?

    Re : Question (i)

         9. We may first advert to the relevant provisions. Rule 2 of
    Order 10 of the Code as also Rules 1 and 3 are relevant and
F   they are extracted below :

          "ORDER 10 - EXAM/ANT/ON OF PARTIES BY THE
          COURT

          1. Ascertainment whether allegations in pleadings are
G
          admitted or denied-

          At the first hearing of the suit the Court shall ascertain from
          each party or hi~ pleader whether he admits or denies such
          allegations of fact as are made in the plaint or written
H         statement (if any) of the opposite party, and as are not
KAPIL COREPACKS PVT. LTD. v. HARBANS LAL (SINCE 515
 DECEASED) THROUGH LRS. [R.V. RAVEENDRAN, J.]

    expressly or by necessary implication admitted or denied          A
    by the party against whom they are made. The Court shall
    record such admissions and denials.

    2. Oral examination of party, or companion of party -

    (1) At the first hearing of the suit, the Court-                  B

            ( a) shall, with a view to elucidating matters in
            controversy in the suit examine orally such of the
            parties to the suit appearing in person or present
            in Court, as it deems fit; and                            c
            (b) may orally examine any person, able to answer
            any material question relating to the suit, by whom
            any party appearing in person or present in Court
            or his pleader is accompanied.
                                                                      D
    (2) At any subsequent hearing, the Court may orally
    examine any party appearing in person or present in
    Court, or any person, able to answer any material question
    relating to the suit, by whom such party or his pleader is
    accompanied.                                                      E

    (3) The Court may, if it thinks fit, put in the course of an
    examination under this rule questions suggested by either
    party.

     3. Substance of examination to be written -                      F

    The substance of the examination shall be reduced to
    writing by the Judge, and shall form part of the record."

     10. Rule 1 enables the court to ascertain from each of the       G
parties (or his pleader), at the first hearing whether he admits
or denies such of those allegations of fact made in the
pleadings of the other party, which were not expressly or by
necessary implication admitted or denied by him. In other
words, if the defendant in his written statement fails to expressly
                                                                      H
    516      SUPREME COURT REPORTS                    [2010] 9 S.C.R.


A or by necessary implication admit or deny any of the plaint
  allegations, the court can ascertain from the defendant, whether
  he admits or denies the said plaint allegations. Similarly, if the
  defendant has made some allegations against the plaintiff in
  his written statement, and no reply is filed thereto by the plaintiff,
B the court can ascertain whether plaintiff admits or denies those
  allegations. Resort to Rule 1 of Order 10 is necessary only in
  cases where the court finds that the plaintiff or the defendant
  has failed to expressly or impliedly admit or deny any of the
  allegations made against him, by the other party. Examination
c under Order 10 Rule 1 of the Code will not be necessary where
  the pleadings of each party have been fully and clearly traversed
  by the other party.

        11. On the other hand, the examination under Rule 2 of
    Order 10 of the Code, need not be restricted to allegations in
D the pleadings of the other party, but can relate to eluciaating
  any matter in controversy in the suit. Further, under Rule 1 of
  Order 10, the court can examine only the parties and their
  advocates, that too at the 'first hearing'. On the other hand, Rule
  2 enables the court to examine not only any party, but also any
E person accompanying either party or his pleader, to obtain
  answer to any material question relating to the suit, either at
  the first hearing or s• 1bsequent hearings. The object of oral
  examination under Rule 2 of Order 10 is to ascertain the
  matters in controversy in suit, and not to record evidence or to
F secure admissions. The statement made by a party in an
  examination under Rule 2 is not under oath, and is not intended
  to be a substitute for a regular examination under oath under
  Order 18 of the Code. It is intended to elucidate what is obscure
  and vague in the pleadings. In other words, while the purpose
G of an examination under Rule 1 is to clarify the stand of a party
  in regard to the allegations made against him in the pleadings
  of the other party, the purpose of the oral examination under
  Rule 2 is mainly to elucidate the allegations even in his own
  pleadings, or any documents filed with the pleadings. The
H power under Order 10 Rule 2 of the Code, cannot be converted
KAPIL COREPACKS PVT. LTD. v. HARBANS LAL (SINCE 517
 DECEASED) THROUGH LRS. [R.V. RAVEENDRAN, J.]

into a process of selective cross-examination by the court,         A
before the party has an opportunity to put forth his case at the
trial.

     12. The above position of law is well settled. We need
refer only to two decisions in this behalf. In Manmohan Das v.      B
Mt. Ramdei & Anr. [AIR 1931 PC 175], the Privy Council
observed:

    "No doubt under Order 10, Rule 2, any party present in
    Court may be examined orally by the Court at any stage
    of the hearing, and the Court may if it thinks fit put in the   C
    course of such examination questions suggested by either
    party. But this power is intended to be used by the Judge
    only when he finds it necessary to obtain from such party
    information on any material questions relating to the suit
    and ought not to be employed so as to supersede the             D
    ordinary procedure at trial as prescribed in Order 18."

                                          (emphasis supplied)

A Division Bench of the Madras High Court in Arunagiri
Goundan v. Vasantharoya Koundan & Ors (AIR 1949 Madras              E
707), held as follows referring to Order 10 Rule 2 of the Code


    "At the outset it must be pointed out that this (Order 10
    Rule 2) does not provide for an examination on oath. This       F
    provision was intended to be used to elucidate the matters
    in controversy in suit before the trial began. This is not a
    provision intended to be used to supersede the usual
    procedure to be followed at the trial."

                                          (emphasis supplied)       G

    13. The object of Order 10 Rule 2 is not to elicit
admissions. Nor does it provide for or contemplate admissions.
The admissions are usually contemplated (i) in the pleadings
                                                                    H
    518     SUPREME COURT REPORTS                 [2010] 9 S.C.R.


A (express or constructive under Order 8 Rule 5 of the Code); (ii)
  during examination of a party by the court under Order 10 Rule
  1 of the Code; (iii) in answers to interrogatories under Order
  11 Rule 8 of the Code; (iv) in response to notice to admit facts
  under Order 12 Rule 4 of the Code; (v) in any evidence or in
B an affidavit, on oath; and (vi) when any party voluntarily comes
  forward during the pendency of a suit or proceedings to make
  an admission.

       14. The power of court to call upon a party to admit any
  document and record whether the party admits or refuses or
C neglects to admit such document is traceable to Order 12 Rule
  3A rather than Order 10 Rule 2 of the Code. Nothing however
  comes in the way of the court combining the power under Order
  12 Rule 3A with its power under Order 10 Rule 2 of the Code
  and calling upon a party to admit any document when a Party
D is being examined under Order 10 Rule 2. But the court can
  only call upon a party to admit any document and cannot cross-
  examine a party with reference to a document.

    Re : Question No.(ii)
E
         15. Learned counsel for the appellants contended that
    confronting the signature portion of a disputed document by
    covering up the remaining portions, is a tool in the arsenal of
    the cross examining counsel. He submitted that the court
    examining a party under Order 10 Rule 2 of the Code while
F   purporting to elucidate the matters in controversy, cannot
    confront the signature portion of a disputed unexhibited
    document by adopting the procedure of covering up the other
    portions of the agreement.

G      16. The learned counsel fot the respondents on the other
  hand submitted that the power of the court under Order 1O Rule
  2 of the Code, to examine any party with reference to any
  document is wide and unrestricted and therefore, any procedure
  adopted to arrive at the truth, could not be said to be a
H deviation from the normal examination under Order 10 Rule 2
KAPIL COREPACKS PVT. LTD. v. HARBANS LAL (SINCE 519
 DECEASED) THROUGH LRS. [R.V. RAVEENDRAN, J.]

 of the Code. He relied upon the decisions of several High              A
 Courts in support of his contention that the court could confront
 a party with a document and seek his admission in respect of
 its execution. The decisions relied upon are: Bhanwar/al Kavad
 v. Shyamsunder [AIR 1984 Raj. 113],_Amrita Devi v. Sripat
 Rai [AIR 1962 All. 111], Rajiv Srivastava v. Sanjiv Tufi [AIR          B
 2005 Del. 319] and Gautam Adani v. Container Corporation
·of India [150 (2008) DLT 281]. On a careful consideration of
 these decisions, we find that they are not of any assistance in
 this case.

    16.1. In Bhanwar Lal Kavad (supra), a learned Single                C
Judge of Rajasthan High Court held:

     "In my opinion the court should resort to the examination
     of the parties under Rule 2, particularly on the documents,
     which are said to be signed by the parties ..... it is better D
     that the original documents are put to the party and
     admission or denial is obtained after visual observations
     by the party himself of the original documents. After looking
     into the documents, the party would be in a position to
     admit or deny the same, which would not be possible, if · E
     the same is got done by his pleader."

     16.2. Learned Single Judge of the Allahabad High Court
in Amrita Devi (supra) and the Division Bench of Delhi High
Court ir. Rajiv Srivastava (supra) held that an admission made
by a party under Order 10 Rule 2 of the Code is conclusive              F
against him, and the court can proceed to pass judgment on
the basis of such admission.

     16.3. In Gautam Adani (supra), a Division Bench of the
Delhi High Court referred to the scope of Order 10 Rule 2 thus:         G

     " ..... we are of the view that examination of the parties is a
     matter that is per se intended not so much for determining
     any right or obligation in the suit or resolving or adjudicating
     upon a controversy as it is for identifying the precise area
                                                                        H
    520       SUPREME COURT REPORTS                  [2010] 9 S.C.R.


A         of controversy so that the same can be effectively
          adjudicated upon. The distinction betyveen any order which
          adjudicates upon a controversy or a part thereof and
          another which simply attempts to identify the real area in
          controversy cannot be lost sight of. Inasmuch as the
B         impugned order directed the defendants to remain present
          for recording their statements under Order 10 Rule 2, it was
          an attempt to identify the real issues in controversy and to
          elucidate matters which, in the opinion of the learned
          Single Judge, required to be elucidated."
c      16.4. None of these decisions assists the respondents.
  Bhanwar Lal Kavad recognizes the power of the court to call
  upon a party to admit a document. Amrita Devi and Rajiv
  Srivastava reiterate the position that if a party makes an
  admission of fact, it will be binding on him. Gautam Adani
D supports the contention of the appellants that the scope of Order
  10 Rule 2 of the Code is limited to identifying the matters in
  controversy and not to adjudicate upon the matters in
  controversy.

E       17. The object of the examination under Order 10 Rule 2
  of the Code is to identify the matters in controversy and not to
  prove or disprove the matters in controversy, nor to seek
  admissions, nor to decide the rights or obligations of parties.
  If the court had merely asked the second appellant whether he
F had executed the agreement/receipt or not, by showing him the
  document (by marking the document for purposes of
  identification only and not as an exhibit), it might have been
  possible to justify it as examination under Order 10 Rule 2 read
  with Order 12 Rule 3A of the Code. But any attempt by the
G Court, to either to prove or disprove a document or to cross-
  examine a party by adopting the stratagem of covering portions
  of a document used by cross-examining counsel, are clearly
  outside the scope of an examination under Order 10 Rule 2 of
  the Code and the power to call upon a party to admit any
  document under E:>rder 12 Rule 3A of the Code. What the Higi 1
H
KAPIL COREPACKS PVT. LTD. v. HARBANS LAL (SINCE 521
 DECEASED) THROUGH LRS. [R.V. RAVEENDRAN, J.]

Court has done in this case is to 'cross-examine' the second        A
appellant and not examine him as contemplated under Order
10 Rule 2 of the Code. We therefore hold that the purported
examination under Order 10 Rule 2 of the Code, by confronting
a party only with a signature on a disputed and unexhibited
document by adopting the process of coyering the remaining          B
portions thereof is impermissible, being beyond the scope of
an examination under Order 10 Rule 2 of.the Code.

      18. In this case the appellanfs-defendants denied having
signed/executed any agreement/receipt in favour of the
respondents. In the examinatio'n under Order 10 Rule 2, the C
court did not ask the second appellant whether he had signed
the document or not, by showing the document. Wtiat was done
was confrontation of a signature alone without disclosing the
document. When so confronted, the second appellant admitted
the signature shown as his signature. But that is not an D
admission of execution of agreement/receipt. The specific
case of appellants in the written statement was that the
Agreement/Receipt dated 7.9.2003 was a clever forgery. If a
signature is a clever forgery, there is a likelihood of the same
passing the normal scrutiny of the person to whom it is E
attributed. Similar is the position in regard to stamping the
name of the company. If a false sir ··atwe is very different from
the real signature, and !s easily identifiable, it will be a 'forgery'
but not a 'clever forgery'. Therefore, if the document allegedly
containing the forged signature is covered in such a manner · F
as to show only a stamp/seal and signature, and if a question
is put by the court under Order 10 Rule 2 to identify the seal/
stamp and the signature and if the witness ideritifies the
signature as his and thf! stamp/seal as that of his company,
there are two possibilities : The first is that what is shown is G
the genuine signature of the party and the genuine stamp of his
company, and that he has identified and admitted them. The
second is that they are clever forgeries and the party could not
obviously identify the forgery when it was shown to him by
covering other portions of the document, when he is given only H
    522     SUPREME COURT REPORTS                  [2010] 9 S.C.R.


A   a normal glance without an opportunity to scrutinize it properly.
    Whether it is a forgery or not will have to be determined with
    reference to the expert evidence and after the evidence of both
    plaintiff and defendants tested by cross-examination.

B         9. Both the learned Single Judge and the Division Bench
    committed an obvious error in equating admission of a
    signature which is claimed to be a clever forgery, as an
    admission of execution of the agreement/receipt and the
    contents thereof. The observations of the learned Single Judge
C   in his order that 'The Managing Director has admitted his
    signature on the agreemenUreceipt as well as stamp of the
    defendant no.1 company on the said document" and the further
    observation that on the basis of the said answer, the second
    appellant could be proceeded under Section 195 of Indian
    Penal Code read with Section 340 of Code of Criminal
D   Procedure., are without any basis. Equally unwarranted is the
    observation of the Division Bench : "The Managing Director of
    the appellant had denied his signature earlier on the agreemenU
    receipt, but when his statement was recorded under Order 10
    CPC before the court, an admission came out that the signature
E   were his .... The truth emerged though belatedly". Admission
    must obviously be a conscious and deliberate act. Admission
    can be explained. An admission of a signature is not an
    admission of execution of a document. The power to identify
    the matters in controversy by examination of parties at the pre-
F   trial stage under Order 10 Rule 2, is completely different from
    the power exercised by the court under Section 165 of the
    Evidence Act to put any question it pleases in any form, to a
    witness or a party in order to discover or to obtain proper proof
    of relevant facts, or the power under Order 18 Rule 14 of the
G   Code to recall and examine any witness. The court's anxiety
    to do justice by speeding up the process of the suit should not
    itself lead to injustice.

    Re : Question No.(iii)

H         20. The Div.ision Bench has affirmed the order of the
KAPIL COREPACKS PVT. LTD. v. HARBANS LAL (SINCE 523
 DECEASED) THROUGH LRS. [R.V. RAVEENDRAN, J.]
learned Single Judge that he will next hear whether he should          A
proceed to initiate proceedings under Section 340 Cr.P.C.
read with Section 19.5 of Indian Penal Code ('IPC' for short).
Section 195 of Cr.P.C. provides that whoever gives or
fabricates false evidence intending thereby to cause, or knowing
it to be likely that he will thereby cause, any person to be           B
convicted of an offence punishable with imprisonment for life,
or imprisonment for a term of seven years or upwards, shall be
punished as a person convicted of that offence would be liable
to be punished. Section 195 (1)(b) of the Cr.P.C. provides that
no court shall take cognizance of any offence punishable under         c
section 195 of IPC when such offence is alleged to have been
committed in, or in relation to, any proceeding in any Court,
except on the complaint in writing of that Court. Section 340 of
the Cr.P.C. provides that when upon an application made to it
in that behalf or otherwise, any Court is of opinion that it is
                                                                       0
expedient in the interests of justice that an inquiry should be
made into any offence referred to in clause (b) of sub-section
(1) of section 195 of Cr.P.C. which appears to have been
committed in or in relation to a proceeding in that Court or, as
the case may be, in respect of a document produced or given
in evidence in a proceeding in that Court, such Court may, after       E
such preliminary inquiry, if any, as it thinks necessary, record
a finding to that effect, make a compl' int thereof in writing, sent
it to a Magistrate of the first class having jurisdiction etc. Thus
the power under section 340 CrPC read with section 195 IPC
can be exercised only where someone fabricates false                   F
evidence or gives false evidence. By no stretch of imagination,
a party giving an answer to a question put under Order 10 Rule
2 of the Code when not under oath and when not being
examined as a witness, can attract section 195 of IPC and
consequently cannot attract section 195(1 )(b) and section 340         G
of Cr.P.C.

    21. The respondents relied upon the decision of a Division
Bench of the High Court in Satish Kumar v Union of India
[2009 (108) DRJ 317] to contend that there can be a                    H
    524     SUPREME COURT REPORTS                  [201 O] 9 S.C.R.


A prosecution under Section 340 Cr.P.C. in regard to a
  statement under Order 10 Rule 2 of the Code. The conclusion
  in Satish Kumar that a party can be prosecuted under Section
  340 Cr.P.C. for his answers in an examination under Order 10
  Rule 2 is erroneous and unsound. As noticed above, the
B answers to an examination under Order 10 Rule 2 are not on
  oath and therefore the party is not deposing as a witness on
  oath when giving his answers under Order 10 Rule 2 of the
  Code. In Satish Kumar, the Delhi High Court purported to rely
  upon the decision of this Court in B.K. Gupta v. Damodar H.
c Bajaj [2001 (9) SCC 742], to hold that prosecution under
  section 340 CrPC is permissible in regard to answer given
  under Order 10 Rule 2 of the Code. What this Court observed
  in B. K. Gupta was that a complaint can be filed against a
  person who has given false affidavit or evidence in a
  proceeding before the court. But a party giving an answer in
0
  an examination under Order 10 Rule 2 is neither giving
  evidence nor giving a affidavit. Section 340 of the Code will
  not be attracted with reference to any statement under Order
  10 Rule 2 of the Code assuming that the Delhi High Court had
  laid down the law rightly in Satish Kumar, the said observation
E will not help the respondent in this case. In Satish Kumar, it was
  held that a false statement given in the examination under Order
  10 Rule 2 of the Code can give rise to criminal prosecution
  under Section 340 of Cr.P.C. But in this case the High Court
  has proceeded on the basis that the second appellant spoke
F the 'truth' in response to the question in the examination under
  Order 10 Rule 2 of the Code. There is no finding that second
  appellant made a 'false statement' in his examination under
  Order 10 Rule 2 CPC. Therefore, the said decision will be
  inapplicable, even if it had been rightly decided.
G
        22. Consequently, the decision of the court to consider
  initiation of proceedings under section 340 Cr.P.C. read with
  section 195 IPC in regard to an answer to a question put under
  Order 10 Ru le 2 of the Code is ill-conceived and wholly without
H jurisdiction.
KAPIL COREPACKS PVT. LTD. v. HARBANS LAL (SINCE 525
 DECEASED) THROUGH LRS. [R.V. RAVEENDRAN, J.)

Conclusion                                                         A

     23. In view of the above, this appeal is allowed. The order
dated 20.1.2009 of the Division Bench and the order dated
12.11.2008 of the learned Single Judge, directing the matter
to be listed to consider whether the second appellant should       8
be prosecuted under Section 340 Cr.P.C., are set aside. As
the process of confrontation of an unexhibited document by
covering portions of it by a court, is beyond the scope of
examination under Order 10 Rule 2 of the code, the answer to
such question shall be excluded from consideration and
completely disregarded. The court conducting the trial and         C
hearing arguments shall decide the suit in accordance with law
on the basis of evidence placed and ignore the said 'answer'
under Order 10 Rule 2 of the Code.

      24. We make it clear that whatever we have stated or         D
observed during the course of this Judgment, are only in the
context of examining the correctness of the procedure adopted
under Order 10 Rule 2 of the Code, and not intended to be
findings of fact.

N.J.                                          Appeal allowed.