State Of Rajasthan vs M/S.KALYAN Sundaram Cement Industries Ltd. & Ors.
- SCC(1996) 3 SCC 87
- Neutral1996 INSC 227
- SCR[1996] 2 SCR 463
Ratio decidendi
The rule this decision rests on
The pendency of criminal proceedings under the Negotiable Instruments Act and the Indian Penal Code does not constitute grounds to stay civil suits for recovery based on the same transaction, as the criminal and civil courts deal with distinct matters—the criminal court with offences under the Act and the civil court with rights and liabilities between parties—and the principle that an accused might be compelled to disclose their defence in criminal proceedings by proceeding with the civil suit is not a sound basis in law for granting such stay.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
RESPONDENT: M/S.KALYAN SUNDARAM CEMENT INDUSTRIES LTD. & ORS.
DATE OF JUDGMENT: 12/02/1996
BENCH: RAMASWAMY, K. BENCH: RAMASWAMY, K. G.B. PATTANAIK (J)
CITATION: 1996 SCC (3) 87 JT 1996 (3) 162 1996 SCALE (2)403
ACT:
HEADNOTE:
JUDGMENT:
O R D E R Leave granted.
This appeal by special leave arises from the order of the learned single Judge made in Civil Revision No.209/94 on 16.11.1994 of the High Court of Rajasthan. Admittedly, the respondent-Company after inviting tenders had executed an agreement on 13.4.1969 for execution of the project. Thereafter, three post-dated cheques of dates between May and July 1989 were given for a sum of Rs.6,87,100/- each of which got bounced. After issuing said notice, the suits were filed for recovery. Simultaneously, proceedings were initiated under Section 138 of the Negotiable Instrument Act and also under Section 420 IPC in three complaints, CC Nos.219, 220 and 254 of 1989. The High Court stayed the proceedings of the civil suits pending disposal of the criminal cases. This appeal came to be filed against the said order.
It is settled law that pendency of the criminal matters would not be an impediment to proceed with the civil suits. The criminal court would deal with offence punishable under the Act. On the other hand, the courts rarely stay the criminal cases and only when the compelling circumstances require the exercise of power. We have never come across stay of any civil suits by the courts so far. The High Court of Rajasthan is only an exception to pass such orders. The High Court proceeded on wrong premise that the accused would be expected to disclose their defence in the criminal case by asking them to proceed with the trial of the suit. It is not a correct principle of law. Even otherwise it longer subsists, since many of them have filed their defences in the civil suit. On principle of law, we hold that the approach adopted by the High Court is not correct. But since the defence has already been filed nothing survives in this matter.
The appeal is accordingly allowed. The order of the High Court is set aside. No costs.
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