Tribunal emphasizes that minor discrepancies in financial statements do not warrant perjury proceedings unless deliberate falsehood affecting administration of justice is established
In a significant ruling delivered on September 3, 2026, the National Company Law Tribunal (NCLT), Mumbai Bench-I, dismissed applications filed by Mr. Aditya Raheja alleging perjury by Omkara Assets Reconstruction Pvt. Ltd. ("Omkara") in the Corporate Insolvency Resolution Process (CIRP) of M/s GSTAAD Hotels Pvt. Ltd. and M/s Neo Capricorn Plaza Pvt. Ltd. The applications sought initiation of perjury proceedings on the ground that Omkara submitted inconsistent financial records before various judicial forums, including the NCLT, National Company Law Appellate Tribunal (NCLAT), and the Supreme Court.
The applicant contended that Omkara relied on multiple, mutually contradictory statements of accounts, debt computations, default narratives, and liability figures during the insolvency proceedings, which formed the foundation for invocation of insolvency jurisdiction and subsequent resolution processes. The discrepancies highlighted included variations in repayment histories, penal interest calculations, secured creditor status, and pre-assignment repayment entries for periods prior to Omkara's assignment as financial creditor.
However, the Tribunal, comprising Shri Prabhat Kumar (Technical Member) and Shri Sushil Mahadeorao Kochey (Judicial Member), after hearing the parties and examining the record, found that these discrepancies did not amount to deliberate falsehood on a matter of substance warranting perjury proceedings. The Tribunal noted that reconciliation differences and legal disputes about financial transactions are common in insolvency cases and do not necessarily imply fraud or perjury.
The Tribunal reiterated the legal principles governing perjury proceedings under Section 340 of the Code of Criminal Procedure (CrPC) and the corresponding provisions of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS). It observed that perjury proceedings are exceptional and require a clear demonstration of deliberate falsehood materially affecting the administration of justice. Merely inaccurate or inconsistent financial data, without evidence of intent to deceive, is insufficient.
Referring to precedents including Santokh Singh v. Izhar Hussain (1973) 2 SCC 406, State of Punjab vs. Jasbir Singh (2022), and James Kunjwal v. State of Uttarakhand (2024), the Tribunal emphasized that the court must assess whether prosecution is "expedient in the interests of justice" and not merely based on suspicion or minor inaccuracies.
Furthermore, the Tribunal pointed out that the discrepancies highlighted by the applicant had no material bearing on the threshold jurisdictional facts such as the existence of default exceeding Rs. 1 crore, which was undisputed. It also noted that the various statements of account and reports were subjected to scrutiny, including independent Chartered Accountant reports, and the Tribunal had earlier adjudicated on these documents while admitting the insolvency petitions.
The respondent Omkara had also contended that many of the disputed documents were either not filed by them or were subject to reconciliation, and the applicant failed to show any specific provision of BNSS violated by Omkara. The Tribunal accepted these submissions and found no prima facie case warranting reference to the Magistrate for inquiry into perjury allegations.
Accordingly, the NCLT dismissed the applications IA 2724 and IA 2730 of 2026, holding that the matters raised were essentially accounting and legal disputes and did not disclose a fraud or offence affecting the administration of justice.
This judgment underscores the careful judicial scrutiny required before initiating criminal proceedings for perjury in insolvency matters and reaffirms that minor inconsistencies in financial records should not derail the insolvency resolution process unless proven to be deliberate and material falsehoods.
Bottom Line:
Allegations of perjury in insolvency proceedings require demonstration of deliberate falsehood on matters of substance that have a material impact on the administration of justice. Minor inaccuracies or reconciliation differences in financial statements do not warrant initiation of perjury proceedings unless exceptional circumstances exist.
Statutory provision(s):
Insolvency and Bankruptcy Code, 2016 Section 7, Section 60(5); Code of Criminal Procedure, 1973 Section 340, Section 195(1)(b); Bharatiya Nagarik Suraksha Sanhita, 2023 Section 379
