VIKRAM BAKSHI AND OTHERS … APPELLANTS
VERSUS
R.P. KHOSLA AND ANOTHER … RESPONDENTS
Order dated:- 20.08.2025
Case Background and Core Dispute
The appeal before the Supreme Court of India arose from a prolonged corporate dispute between two groups—the Khosla Group and the Bakshi Group—regarding the development of a resort in Kasauli, Himachal Pradesh. The legal battle originated from allegations of oppression and mismanagement under the Companies Act, 1956, and later involved accusations of perjury and forgery under the Code of Criminal Procedure, 1973 (CrPC).
The Role of the Company Law Board and High Court
A Memorandum of Understanding (MoU) was signed in 2005, leading to the incorporation of Montreaux Resorts Private Limited (MRPL) as a special purpose vehicle. Disagreements soon emerged, prompting Ms. Sonia Khosla to file a company petition (CP 114 of 2007) before the Company Law Board (CLB), alleging illegal reduction of her shareholding and seeking the removal of Bakshi Group directors.
The CLB initially directed the maintenance of the status quo. The Khosla Group later challenged this order before the High Court, which eventually disposed of the appeals based on a consensus that the matter would be referred to arbitration and the status quo maintained.
Allegations of Forgery and Perjury
The dispute took a serious turn when the Bakshi Group filed an application before the CLB seeking the vacation of an earlier order deferring a company meeting. In support, they submitted the minutes of an Annual General Meeting (AGM) dated 30 September 2006. The Khosla Group alleged these minutes were forged and filed an application under Section 340 CrPC seeking prosecution for perjury.
Supreme Court’s Intervention and Directions
The Supreme Court, in a consent order dated 8 May 2014, directed the CLB (now replaced by the National Company Law Tribunal or NCLT) to decide the company petition and the related Section 340 application within six months. It explicitly restrained the High Court from proceeding with a similar application filed before it.
High Court’s Initial Refusal and Subsequent Recall
In August 2020, the High Court declined to entertain a fresh application under Section 340 CrPC filed by the Khosla Group, noting that the NCLT was still seized of the matter and that the issues were intertwined with the company petition. However, in May 2021, the High Court recalled its own judgment upon learning that the company petition had been withdrawn in February 2020—a fact not disclosed earlier by the Khosla Group.
Legal Issue: Power to Review in Criminal Proceedings
The central question before the Supreme Court was whether a criminal court could review or recall its own judgment or final order, except in limited circumstances. Section 362 of the CrPC explicitly bars any alteration or review of a judgment after it is signed, except to correct clerical or arithmetical errors.
Jurisprudence on Section 362 CrPC
The Court reaffirmed that criminal courts become functus officio once a judgment is signed. The prohibition under Section 362 is strict and allows no substantive review. exceptions exist only for procedural reviews—such as cases involving lack of jurisdiction, fraud on the court, or mistakes causing prejudice—provided the grounds were not available earlier.
Nature of Proceedings Under Section 340 CrPC
The Court held that proceedings under Section 340 CrPC are criminal in nature, as they may lead to prosecution for offences under the Indian Penal Code. Therefore, such proceedings are governed exclusively by the CrPC, and the Civil Procedure Code (CPC) has no application. A review petition under Order XLVII of the CPC was thus not maintainable.
Factual Analysis and Judicial Error
The Supreme Court found that the withdrawal of the company petition was known to the Khosla Group well before the High Court’s August 2020 judgment. Their failure to disclose this fact amounted to a deliberate attempt to mislead the court. The recall order passed by the High Court was substantive in nature and violated the mandate of Section 362 CrPC.
Conclusion and Final Order
The Supreme Court allowed the appeal, setting aside the High Court’s impugned order dated 5 May 2021. It reaffirmed the finality of criminal judgments and emphasized that litigants cannot be permitted to misuse procedural provisions to undermine judicial outcomes. The Court restored the High Court’s earlier judgment dated 13 August 2020, which had rightly refused interference in light of the pending NCLT proceedings.
About the Author
Neeraj Gogia Advocate is expert in commercial litigation, criminal matters, and divorce cases. He provides effective representation across all types of litigation in Delhi’s judicial landscape. Contact: 9891800100.
This article is intended for informational purposes only and does not constitute legal advice.
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