Proposition

 If a person who is made the promoter of the company by forging her signatures can take
the plea of fraud to escape the liability

The person who made false document could be charged fraud under section 463 and 464 of
Indian Penal Code. Section 464 describes three ways in which false document can be made:

1. By making , sealing , signing or executing a document or a part

2. By alternation of a document or an electronic record
3. By causing a person, who is innocent of the contents or nature of the alternation done to a
document or an electronic record to sign, seal or execute.

Thus, a false document said to be made when sign, seal or date is false. In the case of Mir Nagvi
V. CBI1 the court said that a person is said to make a false document or record if he fulfills the
three following conditions. The first condition deals with the situation wherein the document has
been falsifying with the situation wherein the document knows that it was made. The second
situation deals with a case wherein a person without lawful authority alters a document after it
has been made. And the third condition deals with a document, signed by person who due to his
mental capacity does not know the contents of the document because of intoxication or
unsoundness of mind or deception practiced of him.

When we talk about the definition given under Section 463 is itself subject to the definition in
Section 464, I.P.C., in which the two essential elements are that the act should be done
“dishonestly or fraudulently”. In other words, whichever of the intents given in Section 463 may
be applicable, the act itself must be done dishonestly or fraudulently to sustain a conviction for
forgery. In a case of Chari v. State of U.P, 2 where one Deputy Iron and Steel Controller Chari by
name ante dated licenses to make it appear to have been issued upto end of March, 1946. He was
charged inter alia under Section 467, I.P.C. on behalf of the accused the argument put forward
was that none of the intentions mentioned in Section 463 could be imputed to Chari since, in
antedating the licenses, his only intention was not to contravene the directions of the Controller
which, strictly speaking were not binding on him since under the law he was free to grant
licenses upto the end of March, 1946. The High Court repelling the contention held in the case
that there is one ingredient common to both the above sections, that of fraud, so that whoever
makes a false document with intent to commit fraud or that fraud may be committed, commits
forgery, and whoever fraudulently signs or executes a document with the intention of causing it
to be believed that such document or part of the document was signed or executed at a time at
which he knows that it was not signed or executed will be said to make a false document.

Hence, our client can take a plea of fraud due to above mention reason.

1
AIR 2010 SC 528.
2
AIR 1959 All 149