Prem Raj vs Poonamma Menon

2024 INSC 260 REPORTABLE

IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO………………OF 2024 (Arising out of Special Leave Petition (Crl.) No.9778/2018)

PREM RAJ … APPELLANT(S)

VERSUS

POONAMMA MENON & ANR. …RESPONDENT(S)

JUDGMENT

SANJAY KAROL, J.

Leave granted.

2. Appellant herein challenges judgment and order dated 23 rd January, 2018

passed in Crl.R.P. No.1111 of 20111, whereby the High Court of Kerala allowed,

only in part, his Revision Petition against the judgment and order of the learned

Additional Sessions Judge, Thrissur,2 dated 11th January, 2011, in Criminal

Appeal No.673 of 2007, which, in turn, upheld his conviction, as handed down

by the learned Judicial First Class Magistrate 3 vide order dated 14th August, Signature Not Verified Digitally signed by Jayant Kumar Arora Date: 2024.04.02 17:43:20 IST Reason:

1 ‘Impugned Judgment’ 2 ‘Lower Appellate Court’ 3 ‘Trial Court’

1| SLP (Crl) 9778 of 2018 2007 in CC No.51 of 2003, under Section 138 of the Negotiable Instruments

Act, 1881.4

3. The sole issue that we are required to consider is, whether, a criminal

proceeding can be initiated and the accused therein held guilty with natural

consequences thereof to follow, in connection with a transaction, in respect of

which a decree by a competent Court of civil jurisdiction, already stands passed.

4. The facts necessary to put into perspective the issue in the present appeal

are:-

4.1 The Appellant borrowed Rs.2,00,000/- from the Complainant,

K.P.B Menon “Sreyes," with the promise that he would repay it on

demand.

4.2 On receipt of such demand, he issued a cheque dated 30 th June,

2002 for the said amount from the South Indian Bank, encashment

thereof was to be through Canara Bank, Irinjalakuda Branch, to which

the cheque was sent through the post with a covering letter dated 24 th

September, 2002.

4.3 It was dishonoured due to insufficient funds and ‘payments stopped

by drawer’. The Complainant came to know of such dishonour and

issued a notice of demand dated 22nd December, 2002. Accounting for

no action on the part of the appellant, the complaint, the subject matter

of the instant proceedings, came to be filed.

4 ‘N.I. Act’

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5. Equally, though, the appellant (accused) had filed Original Suit No.1338

of 2002. The five parties impleaded as defendants were, (i) K.P. Bhaskara

Menon; (ii) K.P. Vipinendra Kumar5; (iii) Praveen Menon; (iv) The Manager

South Indian Bank Limited Kathikudam, Via Koratty, Trichur; and (v) N.T.

Raghunandanan. The prayers made therein were to, (a) declare cheque

No.386543 of the South Indian Bank Limited, Kathikudam, as a security

cheque; (b) issue mandatory injunction directing the 1 st defendant to return the

said cheque; and (c) issue a permanent prohibitory injunction restraining

defendants 1 to 4 named hereinabove from taking any steps to encash the said

cheque.

5.1 The Additional District Munsif, Irinjalakuda, decreed the Suit on

11th April, 2003 in favour of the plaintiff (accused). The Suit in respect of

defendant No.4, namely the Manager, South Indian Bank, was dismissed

and the Suit was wholly decreed against the remaining defendants.

5.2 Defendant No.1 filed an appeal before the Additional Subordinate

Judge, Irinjalakuda in C.M.A.No.6/2006. In its judgment dated 30 th

January, 2007, the Court observed that “The lower court correctly

analysed the facts and arrived at the right conclusion. I find no reason to

interfere the order of the lower court. Hence I dismissed this appeal.”

5 2nd defendant

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6. Therefore, it appears from the record that the very same cheque was in

issue before the Civil Court and also the Court seized of the Section 138 N.I.

Act complaint.

The conclusions drawn by the Courts below, subject matter of the instant lis, are

as under:

6.1 The Trial Court convicted the appellant herein to undergo simple

imprisonment for one year as well as pay compensation of Rs.2 lakhs in

default whereof, he was to undergo further simple imprisonment for six

months. The determination of the issues, i.e., whether the decree passed by

the Munsif Court would be binding on it, is of note. It was observed that a

Court exercising jurisdiction on the criminal side is not subordinate to the

Civil Court. Further, it was held “That order was an ex-parte order as far

as criminal complaint is concerned the order of injunction issued cannot be

granted and the hands of the criminal court cannot be fettered by the civil

court”.

6.2 The First Appellate Court framed primarily one point for

consideration – whether the cheque was issued against a legally

enforceable debt, thereby attracting the offence under Section 138 of the

N.I. Act. This point was held against the appellant and therefore, the

conviction handed down by the Court below, accordingly confirmed.

4| SLP (Crl) 9778 of 2018

7. The High Court, in revision, observed that no perversity could be

indicated in the concurrent findings of the Trial Court and First Appellate Court.

The same was dismissed.

8. We find the manner in which this matter has travelled up to this Court to

be quite concerning. We fail to understand as to how a civil as well as criminal

course could be adopted by the parties involved, in respect of the very same

issue and transaction, in these peculiar facts and circumstances.

9. In advancing his submissions, Mr. K. Parameshwar, learned counsel

appearing for the appellant, placed reliance on certain authorities of this Court.

In M/s. Karam Chand Ganga Prasad & Anr. vs. Union of India & Ors.6, this

Court observed that:

“…….It is a well-established principle of law that the decisions of the civil courts are binding on the criminal courts. The converse is not true.”

In K.G. Premshanker vs. Inspector of Police & Anr7., a Bench of three

learned Judges observed that, following the M.S. Sheriff vs. State of Madras8,

no straight-jacket formula could be laid down and conflicting decisions of civil

and criminal Courts would not be a relevant consideration except for the limited

purpose of sentence or damages.

6 (1970) 3 SCC 694 7 (2002) 8 SCC 87 8 AIR 1954 SC 397

5| SLP (Crl) 9778 of 2018

10. We notice that this Court in Vishnu Dutt Sharma vs. Daya Sapra (Smt.)9,

had observed as under:

“26. It is, however, significant to notice a decision of this Court in Karam Chand Ganga Prasad v. Union of India (1970) 3 SCC 694, wherein it was categorically held that the decisions of the civil court will be binding on the criminal courts but the converse is not true, was overruled therein…”

This Court in Satish Chander Ahuja vs. Sneha Ahuja10 considered a numerous

precedents, including Premshanker (supra) and Vishnu Dutt Sharma (supra),

to opine that there is no embargo for a civil court to consider the evidence led in

the criminal proceedings.

The issue has been laid to rest by a Constitution Bench of this Court in Iqbal

Singh Marwah vs. Meenakshi Marwah11 :

“32. Coming to the last contention that an effort should be made to avoid conflict of findings between the civil and criminal courts, it is necessary to point out that the standard of proof required in the two proceedings are entirely different. Civil cases are decided on the basis of preponderance of evidence, while in a criminal case, the entire burden lies on the prosecution, and proof beyond reasonable doubt has to be given. There is neither any statutory provision nor any legal principle that the findings recorded in one proceeding may be treated as final or binding in the other, as both the cases have to be decided on the basis of the evidence adduced therein. While examining a similar contention in an appeal against an order directing filing of a complaint under Section 476 of the old Code, the following observations made by a Constitution Bench in M.S. Sheriff v. State of Madras [1954 SCR 1144: AIR 1954 SC 397: 1954 Cri LJ 1019] give a complete answer to the problem posed: (AIR p. 399, paras 15-16)

“15. As between the civil and the criminal proceedings, we are of the opinion that the criminal matters should be given precedence. There is some difference of opinion in the High Courts of India on 9 (2009) 13 SCC 729 10 (2021) 1 SCC 414 11 (2005) 4 SCC 370

6| SLP (Crl) 9778 of 2018 this point. No hard-and-fast rule can be laid down but we do not consider that the possibility of conflicting decisions in the civil and criminal courts is a relevant consideration. The law envisages such an eventuality when it expressly refrains from making the decision of one court binding on the other, or even relevant, except for certain limited purposes, such as sentence or damages. The only relevant consideration here is the likelihood of embarrassment.

16. Another factor which weighs with us is that a civil suit often drags on for years and it is undesirable that a criminal prosecution should wait till everybody concerned has forgotten all about the crime. The public interests demand that criminal justice should be swift and sure; that the guilty should be punished while the events are still fresh in the public mind and that the innocent should be absolved as early as is consistent with a fair and impartial trial.

Another reason is that it is undesirable to let things slide till memories have grown too dim to trust.

This, however, is not a hard-and-fast rule. Special considerations obtaining in any particular case might make some other course more expedient and just. For example, the civil case or the other criminal proceeding may be so near its end as to make it inexpedient to stay it in order to give precedence to a prosecution ordered under Section 476. But in this case we are of the view that the civil suits should be stayed till the criminal proceedings have finished.”

(Emphasis Supplied)

11. The position as per Premshanker (supra) is that sentence and damages

would be excluded from the conflict of decisions in civil and criminal

jurisdictions of the Courts. Therefore, in the present case, considering that the

Court in criminal jurisdiction has imposed both sentence and damages, the ratio

of the above-referred decision dictates that the Court in criminal jurisdiction

would be bound by the civil Court having declared the cheque, the subject

matter of dispute, to be only for the purposes of security.

12. In that view of the matter, the criminal proceedings resulting from the

cheque being returned unrealised due to the closure of the account would be

7| SLP (Crl) 9778 of 2018 unsustainable in law and, therefore, are to be quashed and set aside. Resultantly,

the damages as imposed by the Courts below must be returned to the appellant

herein forthwith.

13. The appeal is allowed in the aforesaid terms. Hence, the judgment and

order passed by Additional Sessions Judge, Thrissur, in Criminal Appeal 673 of

2007, which upheld the conviction, as handed down by the learned Judicial First

Class Magistrate in CC No. 51 of 2003, which came to affirmed by the High

Court of Kerela in Crl.R.P.No.1111 of 2011 is quashed and set aside. Pending

application(s), if any, shall stand disposed of.

……………………….J. (SANJAY KAROL)

……………………….J. (ARAVIND KUMAR) New Delhi April 02, 2024

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