Reaffirming the Finality of Criminal Orders: Supreme Court Clarifies Review Power under Section 362 CrPC and the Criminal Nature of Section 340 Proceedings

1. Introduction

The decision in Vikram Bakshi & Ors. v. R.P. Khosla & Anr., 2025 INSC 1020, resolves a long-running corporate quarrel that had spilled into criminal litigation. At its core the case concerns:

Whether a High Court can review or recall an order passed on an application under Section 340 of the Criminal Procedure Code, 1973 (CrPC); and
Whether proceedings under Section 340 CrPC are truly “criminal”, thereby triggering the tight bar on review contained in Section 362 CrPC.

The Court, speaking through Justice Augustine George Masih, answered both questions emphatically in the negative for the High Court, and in doing so restated and systematised the jurisprudence on the limited exceptions to Section 362 CrPC. The ruling will have a profound impact on future attempts to re-open concluded criminal matters, especially where parties seek to disguise such efforts as mere “procedural” corrections or invoke the Code of Civil Procedure, 1908 (CPC).

2. Summary of the Judgment

Allowing the appeal, the Supreme Court:

Set aside the Delhi High Court’s order of 05-05-2021 by which the High Court had recalled its earlier reasoned order dated 13-08-2020 disposing of Criminal Misc. (Co.) No. 4/2019 (a Section 340 application alleging perjury).
Held that Section 362 CrPC imposes an absolute prohibition on altering or reviewing a final criminal order except to correct clerical or arithmetical mistakes or where such power is expressly conferred by statute.
Clarified that an application under Section 340 CrPC is itself a criminal proceeding; therefore review provisions contained in the CPC have no application.
Enumerated exhaustively the five narrowly tailored exceptional grounds on which a criminal court may revisit its own order—none of which was satisfied in the present case.
Reiterated that lower courts are bound by the Supreme Court’s consent order of 08-05-2014 that had routed all perjury-related issues to the Company Law Board/NCLT, and the High Court’s attempt to reopen the matter violated that mandate.

3. Analysis

3.1 Precedents Cited and Their Influence

State of Kerala v. M.M. Manikantan Nair (2001) 4 SCC 752 – established that criminal courts become functus officio once a judgment is signed.
Hari Singh Mann v. Harbhajan Singh Bajwa (2001) 1 SCC 169 – reaffirmed Section 362’s embargo and concept of finality.
Sanjeev Kapoor v. Chandana Kapoor (2020) 13 SCC 172 – clarified the two statutory “gateways” that can bypass Section 362.
Grindlays Bank Ltd. v. CGIT 1980 Supp SCC 420 – introduced the distinction between “procedural” and “substantive” review. Applied to show that the High Court’s action was not a mere procedural recall.
Budhia Swain v. Gopinath Deb (1999) 4 SCC 396 – listed limited circumstances (fraud, lack of jurisdiction, etc.) permitting recall; Supreme Court adopts and refines this list.
Ganesh Patel v. Umakant Rajoria 2022 SCC OnLine SC 2050 – upheld procedural recall where ex-parte order was obtained on false representation; distinguished in present case.
Consent Order dated 08-05-2014 in SLP (Crl.) 6873/2010 – binding directive that all perjury issues be dealt with by CLB/NCLT. Violation of this order was a separate ground for intervention.

3.2 Court’s Legal Reasoning

a. Nature of Section 340 Proceedings

The Court reasoned that because a Section 340 enquiry can culminate in a criminal trial for perjury (under Sections 191–193 IPC), the proceeding is criminal in substance. Therefore the procedural code governing it is the CrPC, not the CPC. This finding disposes of the Respondents’ attempt to invoke Order XLVII CPC for review.

b. Absolute Bar under Section 362 CrPC

Section 362 states that “no court, when it has signed its judgment or final order ... shall alter or review the same.” The Court synthesised previous decisions to crystallise five exceptional categories permitting recall:

Statutory provision expressly authorises it;
Lack of inherent jurisdiction when the order was passed;
Order obtained by fraud/collusion on the court;
Palpable mistake by the court causing prejudice; or
Proceedings suffered from non-representation of a necessary party or of a deceased party’s estate.

None of these applied: withdrawal of CP 114/2007 was known to the Respondents and could have been disclosed at the earlier hearing; concealment by a party does not transform a concluded judicial determination into a void order.

c. Misuse of “Procedural Review” Doctrine

The High Court had styled its action as a “recall simpliciter”. The Supreme Court, after parsing the 05-05-2021 order, concluded that the recall was not to cure an inadvertent clerical slip but to change the outcome because of additional facts. That is the essence of a substantive review and is squarely barred.

d. Binding Force of Earlier Supreme Court Direction

Even on merits, the High Court could not have proceeded because the 2014 consent order had expressly channelled all perjury complaints to the CLB/NCLT. Lower courts are constitutionally precluded from acting contrary to a Supreme Court mandate (Art. 141 & 144).

3.3 Likely Impact of the Ruling

Narrowing of “Recall” Window: Trial courts and High Courts will find it far more difficult to entertain review/recall applications in criminal matters, including bail orders, sentence modifications, or Section 340 enquiries.
Section 340 Strategy: Litigants can no longer oscillate between civil and criminal procedures to keep perjury allegations alive; once a Section 340 order is signed, reopening options are practically nil.
Corporate Litigations: Clarifies that perjury allegations embedded in company-law disputes should follow the CrPC route and respect tribunal allocations decreed by higher courts, fostering procedural discipline before the NCLT/NCLAT.
Institutional Efficiency: By reinforcing finality, the decision curbs serial litigation and forum shopping, relieving docket pressure on High Courts.
Judicial Hierarchy Respect: Reasserts that lower courts cannot dilute Supreme Court directives through creative procedural devices.

4. Complex Concepts Simplified

Section 340 CrPC: Allows a court to decide if it should file a complaint of perjury against a person who allegedly lied or forged documents in that court’s proceedings. Think of it as a court-initiated “first step” toward a criminal case for lying to the court.
Section 362 CrPC: A gatekeeper clause that freezes a criminal court’s final order—no changes except minor arithmetic/typographical corrections.
Functus Officio: Once a court signs its final order, it has completed its job in that matter and loses power to revisit it (subject to rare statutory exceptions).
Procedural vs. Substantive Review: • Procedural review corrects an order passed without hearing a party or due to accidental oversight. • Substantive review re-examines merits; Section 362 forbids this.
SPV (Special Purpose Vehicle): A company created for a specific project—here, Montreaux Resorts Pvt. Ltd. (MRPL) for developing a resort.
Oppression & Mismanagement Petition (Sections 397/398 of Companies Act 1956): A shareholder remedy when majority actions prejudice minority interests.

5. Conclusion

By striking down the High Court’s recall order, the Supreme Court has closed a tempting procedural back-door that litigants often exploit to re-argue lost criminal causes. The judgment meticulously catalogues the exceptional scenarios in which a criminal court may revisit its own order, and in the process affirms that:

Section 340 enquiries are indisputably criminal;
CPC review provisions have no application to such proceedings;
Section 362’s bar is near-absolute, the rare exceptions being grounded in jurisdictional nullity, fraud, or clerical slip—none present here;
Lower courts must faithfully implement Supreme Court directives without inventive detours.

The ruling thus strengthens the doctrine of finality, promotes judicial economy, and enhances certainty in criminal justice administration. Going forward, litigants must bring all their cards to the table in the first round; once the gavel falls, only extraordinary statutory exceptions can resurrect the contest.