Civil Court’s Ruling Binding On Criminal Court For Certain Limited Purpose Only-SC

Written by:

Adv Rahul Pandey

Updated: 03-04-2024

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In a recent hearing in the case of PremRaj v Poonamma Menon & Anr., the Supreme Court overturned the decision of the lower Courts, where the wrongdoer was convicted in a criminal case of cheque dishonour as provided under Section 138 of the Negotiable Instruments Act. The Apex Court observed that the Civil Court’s judgement shall be binding on the Criminal Court upto the extent of the sentence or damages provided.

As decided in the case of K.G. Prem Shankar vs. Inspector of Police & Anr, the sentence and damages shall not be included in case of conflict of decisions between the jurisdiction of civil and criminal courts. Hence, in the present case, as both the sentence and damages were imposed by the criminal court, as per the ratio explained in the case mentioned above, as the subject matter of the dispute is the cheque, only for the matter related to the security, would the decision of the civil court binding on the criminal court.

Facts of the Matter-

The complainant/respondent initiated criminal proceedings against the appellant/accused for the matter of cheque dishonour under Section 138 of the Negotiable Instrument Act, 1882. On the other hand, the appellant/accused also initiated civil proceedings to restrain the other party from encashing the cheque he had given.
The criminal court found the accused/appellant guilty of the charge of cheque dishonour and sentenced him with punishment for a period of one year as well as a fine of Rs. 2 lakhs. On the other hand, the Civil Court decided against the complainant/ respondent restraining them from having the cheque encashed.
In an appeal to the High Court, the conviction of the accused/appellant was upheld, leading to which a criminal appeal was filed in the Supreme Court of India.

Observation by the Supreme Court

The Supreme Court noticed that the decisions of the Criminal Court and the Civil Court are in conflict and could not be binding on each other, however, the decision of the Civil Court shall be binding on the Criminal Court up to the extent where the the sentence or damages are imposed by the Criminal Court in order to make them unsustainable in law.
The Court took reference from the Case of Iqbal Singh Marwah vs. Meenakshi Marwah which further was based on the observation in the case of K.G. Prem Shankar, as mentioned above. In the case of Iqbal Singh Marwah, that neither under the statutory provision nor under any legal principle, it is expressed that the findings of any proceeding which are recorded, must be treated as final and binding in the other proceedings, as both different proceedings are being decided on the basis of the evidence produced.
The Court observed that in case there comes an eventuality where criminal and civil court have conflicting decisions, the decisions of one court shall not be binding on the other except for some limited purposes, for example on the matters of sentence or damages.
On the basis of the observations made above, the Supreme Court noted came to the conclusion that as the Civil Court in the present case restrained the encashment of the cheque, the decision of the criminal court based on the reason that the cheque returned unrealised as the account was closed, was set aside by the Supreme Court.
Thus, allowing the appeal, the damages ordered by the Civil Court under the NI Act have been ordered to be returned to the appellant.
While setting aside the judgement, it was mentioned by Justice Sanjay Karol, that law does not stipulate that the findings of the Civil Court must be binding on the Criminal Court, as the proceedings under the Court would be decided on the basis of the evidence produced.

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