Orders to initiate criminal prosecution. Directions issued to the Registrar of the High Court to file the complaint as the complainant.
“If the Court fails to order criminal prosecution against the persons responsible for such fraudulent acts committed by a corporate entity and allows them to go scot-free, future generations will never forgive the judiciary for such negligence,” the High Court observed in strong and unequivocal terms in its judgment. (Godrej & Boyce Manufacturing Co. Pvt. Ltd. v. Union of India, 1992 Cri. L.J. 3752)
The High Court also placed on record its appreciation for the efforts of several officers of the Central Government who took considerable pains, faced risks, and demonstrated unwavering commitment in uncovering what appeared, at first glance, to be a massive fraud.
The Court noted that these officers, acting with integrity, courage and a strong sense of duty, played a decisive role in exposing the large-scale fraud at the preliminary stage itself. It was largely due to their persistent efforts that the serious aspects of the matter were brought clearly before the Court.
Mumbai: One of the country’s prominent industrial houses, Godrej & Boyce Manufacturing Co. Pvt. Ltd., has suffered a major setback following a historic judgment delivered by a Division Bench of the Bombay High Court. In its decision, the Court recorded serious observations that the company had misled the Court, fabricated documents, committed forgery, and tendered false evidence (perjury), and accordingly ordered the initiation of criminal proceedings.
The judgment was delivered in Godrej & Boyce Manufacturing Co. Pvt. Ltd. v. Union of India (1992 Cri. L.J. 3752). The Court categorically held that the company had committed a grave offence by defrauding the Court, engaging in forgery, producing fabricated documents, and giving false evidence with the objective of securing substantial financial gain.
The Court further observed that creating false documents, misleading the Court, and deliberately manipulating the judicial process in order to obtain wrongful gains amounting to crores of rupees constitute extremely serious offences. The Bench made it clear that such conduct cannot be tolerated by a court of law under any circumstances.
The Court also emphasized that if powerful corporate entities are permitted to manipulate judicial proceedings and escape accountability, it would severely undermine the credibility of the justice delivery system and erode public confidence in the judiciary.
In this background, the High Court held that in the interest of justice it was necessary to initiate criminal proceedings for producing fabricated documents and misleading the Court. Accordingly, the Court directed that a complaint be filed under the relevant provisions of the Indian Penal Code and that prosecution be initiated.
The Court further directed that criminal proceedings be initiated against the following persons and entities:
- Godrej & Boyce Manufacturing Company (P) Ltd., Godrej Bhavan, Home Street, Fort, Mumbai
- N. Naoroji
- Phiroze Dinsha Lam, Vice-President (Corporate Services) and Director
- K. R. Hathi, General Manager (Marketing)
- S. G. Murthi, Regional Manager (Southern Region)
- Putushbai Chandrakant Shah, Shrenik Traders, Valsad
- Narsar Harichandra Wadia, Partner, M/s M. H. Wadia, Porbandar
- Ashwinibhai Dhirajilal Shah, Partner, Dhirajlal Narsidas Shah, Bhavnagar
- Mandakini Amin, M. Amin & Co., Baroda
- Jagadish Vadilal Udani, Jodiavala Trading Company, Jamnagar
- Malcolin Kekobar Nanavati, Proprietor, Nanavati & Company, Surat
In this regard, the Court specifically directed that the Registrar of the Bombay High Court shall file the complaint as the complainant. The Court further directed that, considering the seriousness of the matter, the State of Maharashtra should appoint a Special Prosecutor to conduct the prosecution before the Magistrate.
In its judgment, the Court also expressed special appreciation for the officers who played a key role in uncovering the fraud involved in the case. The Court noted that several officials worked with great courage, honesty, and dedication, and it was largely due to their efforts that the prima facie existence of a large-scale fraud was brought to light. The Court emphasized that the contribution of these officers, who remained steadfastly committed to the truth, was highly commendable.
Additionally, taking into account the prolonged judicial proceedings in the matter, the Court also imposed costs on the Godrej company. The case involved a revenue issue of nearly ₹4 crores, and the litigation continued for more than ten years, requiring the examination of extensive records and documents. Considering all these factors, the Court directed that a consolidated cost of ₹10,000 be paid by the company to the Union of India.
Through this judgment, the Bombay High Court sent a clear and strong message that no matter how powerful a corporation or how strong its financial standing may be, acts such as misleading the Court, fabricating documents, and giving false evidence will not be tolerated. The Court stated in unequivocal terms that strict action in such cases is essential to preserve the credibility and integrity of the justice delivery system.
Some Further Remarks
The Court also placed on record its appreciation for the efforts made by several officials who took considerable pains, faced risks, and displayed dedication in uncovering what appeared to be a massive fraud. The Court observed that these officials worked with integrity and courage, and their efforts played a crucial role in revealing, at least prima facie, the true nature of the large-scale fraud involved in the case.
The Court also noted that knowledgeable administrators had praised the role played by such officials. In this context, the Court referred to an observation made by an expert in administrative studies:
“Some men cannot resist the natural instinct to protest when they see things going wrong; others can and do. Possibly among successful officials there are more of the former type than of the latter.” (John P. Thompson – Mont Ford Report, para 310)
The eminent administrator Sir Harcourt Butler had described such officials as “people who quietly do good work without seeking attention.”
The Court further noted that, right up to the Central Board level, several officials demonstrated unwavering fidelity to truth and discharged their duties with remarkable integrity, which the Court considered a matter of great satisfaction.
