M/S Sri Krishna Agencies vs State Of A.P.& Anr

M/s Sri Krishna Agencies .. Appellant(s)

Versus

State of A.P. & Anr. .. Respondent(s)

ORDER

Leave granted.

This appeal is directed against the judgment and order dated 24th

September, 2007, passed by the Andhra Pradesh High Court in Criminal Petition No.

4508 of 2007 quashing the proceedings, being C.C. No. 982 of 2005, on the file of the

IInd Additional Chief Metropolitan Magistrate, Hyderabad, under Section 138 of the

Negotiable Instruments Act, 1981 (for short the Act) in exercise of powers under

Section 482 of the Code of Criminal Procedure.

As would appear from the complaint, the same was filed on account of stop

payment orders issued with regard to three cheques of Rs. 5 lakhs each.

Before the High Court, it was sought to be contended on behalf of respondent

No. 2 that since the appellant herein had already taken recourse to arbitration

proceedings, the

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dispute was obviously of a civil nature and the criminal complaint could not be

proceeded with. Accepting the statements made on behalf of respondent No. 2, the

High Court quashed the complaint as indicated hereinabove.

Mr. Adhyaru, learned senior counsel appearing in support of the appeal,

submitted that the High Court has apparently confused the issue relating to the

continuance of the arbitration proceedings as also the criminal proceedings, since

when the cheques were dishonoured, a separate liability arose in terms of Section 138

of the Act, whereas the arbitration proceedings were under the agreement signed

between the parties. It was submitted by him that the commencement and the

continuance of the arbitration proceedings could in no way affect criminal proceedings

taken separately.

In support of his submissions, Mr. Adhyaru, referred to the decision of this

Court in Trisuns Chemical Industry vs. Rajesh Agarwal and Ors., (1999) 8 SCC 686,

where the same question arose in relation to arbitration proceedings taken during the

continuance of a complaint filed under Sections 415 and 420 of the Code of Criminal

Procedure. In the said decision, it was held that merely because arbitration

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proceedings have been undertaken, the criminal proceedings could not be thwarted.

On behalf of respondent No. 2, the submissions which had been urged before

the High Court, were reiterated, which, however, appears to be unacceptable having

regard to the decision cited by Mr. Adhyaru. We are also of the view that there can be

no bar to the simultaneous continuance of a criminal proceeding and a civil proceeding

if the two arise from separate causes of action. The decision in Trisuns Chemical

Industry's case (supra) appears to squarely cover this case as well.

We, accordingly, allow the appeal and set aside the order passed by the High

Court and restore the complaint before the learned IInd Additional Chief

Metropolitan Magistrate, Hyderabad to be proceeded with in accordance with law.

....................J [ ALTAMAS KABIR ]

....................J [ MARKANDEY KATJU ]

NEW DELHI, NOVEMBER 11, 2008.