The Supreme Court held that proceedings under Section 340 CrPC are criminal in nature and thus governed by the CrPC. Consequently, a review petition filed under Order XLVII of the CPC is not maintainable. The Court reiterated that Section 362 CrPC bars criminal courts from altering or reviewing their own judgments, except for correcting clerical errors, and the High Court’s recall order constituted an impermissible substantive review.
Facts Of The Case:
The dispute originated between two groups, the Khosla Group and the Bakshi Group, regarding a joint venture to develop a resort in Kasauli. A key point of contention was the validity of the Annual General Meeting (AGM) of their joint venture company, Montreaux Resorts Private Limited (MRPL), held on 30.09.2006. The Bakshi Group relied on the minutes of this AGM to assert the directorship of its members. The Khosla Group alleged these minutes were forged. This allegation led Ms. Sonia Khosla to file an application under Section 340 of the Code of Criminal Procedure (CrPC) before the Company Law Board (CLB), seeking prosecution of the Bakshi Group for perjury. The Supreme Court, in a 2014 consent order, directed the CLB (now NCLT) to decide the main company petition (CP 114 of 2007) and the connected Section 340 application, and restrained the High Court from proceeding with a similar application. Years later, the Delhi High Court, in 2020, dismissed a fresh Section 340 application filed by the Khosla Group, citing the Supreme Court’s directive. However, in 2021, the High Court recalled its own 2020 order upon learning that the underlying company petition had been withdrawn, and decided to hear the Section 340 application on merits. The Supreme Court appeal challenges this 2021 recall order by the High Court.
Procedural History:
The procedural history of this case is extensive and multi-layered. It commenced with a company petition before the Company Law Board (CLB) in 2007, alleging oppression and mismanagement. A pivotal allegation concerning forged AGM minutes led to an application under Section 340 CrPC before the CLB for perjury. Subsequently, a similar application was filed before the Delhi High Court (Cri.M. (Co.) 3/2008). The Supreme Court, in 2014, intervened by directing the CLB to decide both the main company petition and the Section 340 application, while expressly restraining the High Court from proceeding with its parallel application. Following the dismissal of that High Court application in 2018, the Khosla Group filed a fresh Section 340 application (Cri.M. (Co.) 4/2019) in the High Court. In 2020, the High Court dismissed this application, upholding the Supreme Court’s 2014 directive. The Khosla Group then filed a review petition under the Code of Civil Procedure, leading to the impugned 2021 order where the High Court recalled its own 2020 judgment. It is this 2021 recall order that was challenged before and ultimately set aside by the Supreme Court in the present judgment.
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Court Observation:
The Supreme Court made pivotal observations on the nature of proceedings under Section 340 of the CrPC and the strict limitations on a court’s power to review its own judgments in criminal matters. The Court authoritatively held that a proceeding initiated under Section 340 CrPC is inherently criminal in nature, as it is a preliminary step that may lead to prosecution for offences under the Indian Penal Code. Consequently, such proceedings are governed exclusively by the CrPC, making a review petition filed under the Code of Civil Procedure, 1908, patently not maintainable. The Court rigorously applied the bar under Section 362 CrPC, which prohibits alteration or review of a judgment except for correcting clerical errors. It distinguished between a permissible “procedural review” (e.g., to correct a mistake due to fraud or lack of jurisdiction) and an impermissible “substantive review” on merits, concluding that the High Court’s recall order constituted the latter. The Court further condemned the attempt to circumvent the finality of judicial proceedings, especially when a factual development (the withdrawal of the company petition) was known to the party but not brought to the court’s attention during the original hearing.
Final Decision & Judgement:
The Supreme Court allowed the appeal and set aside the impugned order dated 05.05.2021 passed by the Delhi High Court. The Court held that the High Court’s order, which recalled its own final judgment in a proceeding under Section 340 CrPC, was a substantive review expressly barred by Section 362 of the CrPC. It ruled that the review petition filed by the Khosla Group under the Code of Civil Procedure was not maintainable, as proceedings under Section 340 CrPC are criminal in nature and governed exclusively by the CrPC. The Supreme Court’s judgment effectively reinstates the High Court’s order dated 13.08.2020, which had dismissed the application under Section 340 CrPC in line with the Supreme Court’s earlier directives.
Case Details:
Case Title: Vikram Bakshi and Others Versus R.P. Khosla and Another Criminal Appeal No.: [Arising out of Special Leave Petition (Crl.) No. 3425 of 2022] Date of Judgement: August 20, 2025 Judges/Justice Name: Chief Justice B. R. Gavai & Justice Augustine George Masih
Download The Judgement Here