Vishnu Dutt Sharma Vs.
Daya Sapra [2009] INSC 944 (5 May 2009)
Judgment
IN THE SUPREME COURT
OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 3238 OF 2009 (Arising
out of SLP (C) No. 10997 of 2008) Sh. Vishnu Dutt Sharma ... Appellant Versus
Smt. Daya Sapra ... Respondent
S.B. SINHA, J.
1.
Leave
granted.
2.
The
effect of a judgment passed in a criminal proceeding on a pending civil
proceeding is the question involved herein.
It arises in the
following factual matrix.
Respondent borrowed a
sum of Rs.1,50,000/- (Rupees One Lakh Fifty Thousand Only) from the appellant herein
on or about 10th August, 1999.
On a demand having
been made in that regard by the appellant, the respondent issued a cheque for
the aforementioned sum on or about 20th 2 October, 1999. The said cheque was
presented by the appellant to the Oriental Bank of Commerce, Shahdra, Delhi,
but the cheque was received back by the appellant with remarks `insufficient
funds'.
3.
A
complaint petition was filed by the appellant against the respondent for
alleged commission of offences under Section 138 of the Negotiable Instruments
Act and Section 420 of the Indian Penal Code on 29-01-2000.
He also filed a suit
for recovery of a sum of Rs. 2,04,000/- on 19-10-2002 in the Court of Senior
Civil Judge at Delhi which was marked as Suit No. 253 of 2003.
Both in the criminal
as also in the civil proceedings the defence raised by the respondent was that
she had not taken any loan from the appellant as alleged or at all. It was
furthermore asserted that the cheque issued by her was not in respect of
repayment of any loan, since no such loan had been taken.
Respondent urged that
the appellant had met her husband who was a property dealer in connection with
some business who made a representation that pertaining to the same deal the
police had to be bribed, whereafter on 10-08-1999 the appellant accompanied by
one Ms. Malhotra, retired ACP and his son came to the office of her husband and
forcibly took the cheque in question from her husband since the cheque book was
with him.
4.
By
reason of the Judgment dated 26-09-2003, the learned Sessions Judge recorded a
judgment of acquittal in favour of the respondent holding that he had
successfully proved that the cheque in question was not issued to the
complainant by way of repayment of any loan.
5.
Respondent
thereafter during the pendency of the trial suit filed an application in the
said civil suit purported to be under Order 7 Rule 11 (d) read with Section 151
of the Code of Civil Procedure for rejection of the plaint on the ground that
the criminal complaint had already been dismissed.
The learned Civil
Judge dismissed the said application inter alia opining that the findings of a
criminal court in the proceeding under Section 138 of the Negotiable
Instruments Act would not operate as `res judicata' in the civil suit for
recovery of money as the nature of proceeding in both the cases was different.
6.
Respondent
approached the High Court in a writ petition questioning the order of dismissal
of the said application and praying inter alia for the following reliefs:
4 "(a) To set
aside and quash the impugned order dated 17.3.2007 passed by the Hon'ble Court
of Shri Shailender Malik, Civil Judge, Delhi in Suit No. 356/06/02 titled as
(2) Pass such other further orders as this Hon'ble Court deems just and proper
in the facts and circumstances of the matter."
7.
By
reason of the impugned Judgment the High Court allowed the said writ petition.
The High Court in arriving at its finding applied the principles of
res-judicata. It also opined that the suit filed by the appellant was nothing
but an abuse of the process of law.
8.
Mr.
J.M. Kalia, learned counsel appearing on behalf of the appellant would contend
that the High Court committed a serious error in passing the impugned judgment
in so far as it failed to take into consideration that the principle of
res-judicata is not applicable in the facts and circumstances of the case.
9.
The
learned counsel appearing on behalf of the respondent, on the other hand, would
urge that having regard to the fact that both in the civil as also in the
criminal proceeding, the burden was on the defendant-accused and he having
successfully discharged the same, the appellant could not have been allowed to
continue the civil proceedings in view of the judgment rendered by the criminal
court. The plaint was, on the said premise, directed to be rejected.
10.
Order
7 Rule 11(d) of the Code of Civil Procedure, 1908 (for short, "Code")
provides for rejection of a plaint inter alia on the premise the suit was
barred by any statute. Such an embargo in the maintainability of the suit must
be apparent from the averments made in the plaint.
11.
There
cannot be any doubt or dispute that a creditor can maintain a civil and
criminal proceeding at the same time. Both the proceeding, thus, can run
parallely. The fact required to be proved for obtaining a decree in the civil
suit and a judgment of conviction in the criminal proceedings may be
overlapping but the standard of proof in a criminal case vis-a-vis a civil
suit, indisputably is different. Whereas in a criminal case the prosecution is
bound to prove the commission of the offence on the part of the accused beyond
any reasonable doubt; in a civil suit `preponderance of probability' would
serve the purpose for obtaining a decree.
12.
Section
138 of the Negotiable Instruments Act provides that dishonour of a cheque
subject to fulfillment of condition precedent as laid down in the proviso
appended thereto is a cognizable offence.
13.
The
cause of action for institution of the civil suit was grant of loan whereas
that of the criminal case was return of a cheque inter alia on the premise that
the account of the accused was insufficient to honour it or that it exceeded
the amount arranged to be paid from that account by an agreement with the bank.
14.
Section
138 of the Act contains a non-obstante clause.
In terms of Section
139 of the Act, a presumption in favour of the holder of the cheque may be
raised that he had received the cheque of the nature referred to in Section 138
for the discharge, in whole or in part, of any debt or other liability.
Section 118 occurring
in Chapter XIII of the Act provides for special rules of evidence; clause (a)
whereof reads as under:
"118. Presumptions
as to negotiable instruments.- Until the contrary is proved, the following
presumptions shall be made:- "(a) of consideration.--that every negotiable
instrument was made or drawn for consideration, and that every such instrument,
when it has been accepted, indorsed, negotiated or transferred, was accepted,
indorsed, negotiated or transferred for consideration."
Proviso appended
thereto reads as under:
7 "Provided
that, where the instrument has been obtained from its lawful owner, or from any
person in lawful custody thereof, by means of an offence or fraud, or has been
obtained from the maker or acceptor therof by means of an offence or fraud, or
for unlawful consideration, the burden of proving that the holder is a holder
in due course lies upon him."
15.
What
would be the effect of a judgment passed in the criminal proceedings in
relation to the subject matter for which a civil proceedings has also been
initiated is the question.
16.
In
a criminal proceeding, although upon discharge of initial burden by the
complainant, the burden of proof may shift on an accused, the court must apply
the principles of `presumption of innocence as a human right'. The statutory
provisions containing the doctrine of reverse burden must therefore be
construed strictly. Whereas a provision containing reverse burden on an accused
would be construed strictly and subject to the strict proof of the foundational
fact by the complainant, in a civil proceeding no such restriction can be
imposed.
Application of
Section 118(a) and 139 of the Negotiable Instruments Act on the touchstone of
the principles of presumption of innocence fell for Hegde reported in [2008 (1)
SCALE 421] wherein it was categorically held :
"19.
Indisputably, a mandatory presumption is required to be raised in terms of
Section 118(b) and Section 139 of the Act. Section 13(1) of the Act defines
'negotiable instrument' to mean "a promissory note, bill of exchange or
cheque payable either to order or to bearer".
Section 138 of the
Act has three ingredients, viz.:
(i) that there is a
legally enforceable debt;
(ii) that the cheque
was drawn from the account of bank for discharge in whole or in part of any
debt or other liability which presupposes a legally enforceable debt;
and (iii) that the
cheque so issued had been returned due to insufficiency of funds.
20. The proviso
appended to the said section provides for compliance of legal requirements
before a complaint petition can be acted upon by a court of law.
Section 139 of the
Act merely raises a presumption in regard to the second aspect of the matter.
Existence of legally recoverable debt is not a matter of presumption under
Section 139 of the Act. It merely raises a presumption in favour of a holder of
the cheque that the same has been issued for discharge of any debt or other
liability.
21. The courts below,
as noticed hereinbefore, proceeded on the basis that Section 139 raises a
presumption in regard to existence of a debt also. The courts below, in our
opinion, committed a serious error in proceeding on the basis that for proving
the defence the accused is required to step into the witness box and unless he
does so he would not be discharging his burden. Such an approach on the part of
the courts, we feel, is not correct.
22. An accused for discharging
the burden of proof placed upon him under a statute need not examine himself.
He may discharge his burden on the basis of the materials already brought on
records. An accused has a constitutional right to maintain silence. Standard of
proof on the part of an accused and that of the prosecution in a criminal case
is different."
Noticing the decision
of this Court in Bharat Barrel & Drum SCC 35], this Court held:- "24.
Furthermore, whereas prosecution must prove the guilt of an accused beyond all
reasonable doubt, the standard of proof so as to prove a defence on the part of
an accused is 'preponderance of probabilities'. Inference of preponderance of
probabilities can be drawn not only from the materials brought on records by
the parties but also by reference to the circumstances upon which he relies.
25. A statutory
presumption has an evidentiary value. The question as to whether the
presumption whether stood rebutted or not, must, therefore, be determined
keeping in view the other evidences on record. For the said purpose, stepping
into the witness box by the appellant is not imperative. In a case of this
nature, where the chances of false implication cannot be ruled out, the
background fact and the conduct of the parties together with their legal
requirements are required to be taken into consideration."
17.
As
regards the purpose of introduction of reverse burden in Section 139 of the
Act, this court observed :
"33. We are not
oblivious of the fact that the said provision has been inserted to regulate the
growing business, trade, commerce and industrial activities of the country and
the strict liability to promote greater vigilance in financial matters and to
safeguard the faith of the creditor in the drawer of the cheque which is essential
to the economic life of a developing country like India. This, however, shall
not mean that the courts shall put a blind eye to the ground realities. Statute
mandates raising of presumption but it stops at that. It does not say how
presumption drawn should be held to have rebutted. Other important principles
of legal jurisprudence, namely presumption of innocence as human rights and the
doctrine of reverse burden introduced by Section 139 should be delicately
balanced. Such balancing acts, indisputably would largely depend upon the
factual matrix of each case, the materials brought on record and having regard
to legal principles governing the same."
Punjab reported in
[2008 (9) SCALE 68] wherein it was noticed:
"58. In
Glanville Williams, Textbook of Criminal Law (2nd Edn.), it is stated:
Harking back to
Woolmington, it will be remembered that Viscount Sankey said that "it is
the duty of the prosecution to prove the prisoner's guilt, subject to the
defence of insanity and subject also to any statutory exception".... Many
statutes shift the persuasive burden. It has become a matter of routine for
Parliament, in respect of the most trivial offences as well as some serious
ones, to enact that the onus of proving a particular fact shall rest on the
defendant, so that he can be convicted "unless he proves" it.
59. But then the
decisions rendered in different jurisdictions are replete with cases where
validity of the provisions raising a presumption against an accused, has been
upheld."
Noticing the
provisions of the Universal Declaration of Human Rights and European Convention
for the Protection of Human Rights and Fundamental Freedoms as also
International Convention on Civil and Political Rights and consequent change in
the approach in some of the courts, it was opined that limited inroads on
presumption would be justified.
Noticing that even
applicability of doctrine of res ipsa loquitur may not be applicable in a
criminal proceeding, it was held that the trial must be fair and the accused
must be provided with opportunities to effectively defend himself.
The court held :
"88. Placing
persuasive burden on the accused persons must justify the loss of protection
which will be suffered by the accused. Fairness and reasonableness of trial as
also maintenance of the individual dignity of the accused must be uppermost in
the court's mind."
19. Reverse burden or
evidentiary burden on an accused, thus, would require strict interpretation and
application. However, in a civil suit such strict compliance may not be
insisted upon.
If that be so, it may
not be correct to contend that a judgment rendered in criminal proceeding would
make continuation of a civil proceeding an abuse of the process of court.
20. Any person may as
of right have access to the courts of justice.
Section 9 of the Code
of Civil Procedure enables him to file a suit of civil nature excepting those,
the cognizance whereof is expressly or by necessary implication barred.
21. Order 7 Rule
11(d) is one of such provision which provides for rejection of plaint, if it is
barred by any law.
Order 7 Rule 11(d) of
the Code being one of the exceptions, thus, must be strictly construed.
22. This leads us to
another question namely whether the civil suit was barred on the day on which
it was filed. Answer to the said question indisputably must be rendered in the
negative. If as on the date of institution of the suit, the plaint could not be
rejected in terms of Order 7 Rule 11(d) of 13 the Code of Civil Procedure;
whether its continuation would attract the principles of abuse of processes of
court only because the accused was acquitted in the criminal proceeding is the
question.
23. Dismissal of a
suit on the ground that it attracts the provisions of Section 12 of the Code,
keeping in view of the content of provisions of Section 11 thereof may now be
considered. The principle of res-judicata as contained in Section 11 of the
Code is not attracted in this case. Even general principle of res-judicata
would also not be attracted. A suit cannot be held to be barred only because
the principle of estoppel subject to requisite pleading and proof may be
applied. The said principle may not be held to be applicable only at a later
stage of the suit.
It brings us to the
question as to whether previous judgment of a criminal proceeding would be
relevant in a suit.
24. Section 40 of the
Evidence Act reads as under:
"Previous
judgments relevant to bar a second suit or trial. - The existence of any
judgment, order or decree which by law prevents any Courts from taking
Cognizance of a suit or holding a trial is a relevant fact when the question is
whether such Court ought to take cognizance of such suit or to hold such
trial."
14 This principle
would, therefore, be applicable, inter alia, if the suit is found to be barred
by the principle of res judicata or by reason of the provisions of any other
statute.
25. It does not lay
down that a judgment of the criminal court would be admissible in the civil
court for its relevance is limited. {See Seth Ramdayal Jat v. Laxmi Prasad
[2009 (5) SCALE 527}.
The judgment of a
criminal court in a civil proceeding will only have limited application, viz.,
inter alia, for the purpose as to who was the accused and what was the result
of the criminal proceedings.
26. Any finding in a
criminal proceeding by no stretch of imagination would be binding in a civil
proceeding.
In M.S. Sheriff &
Anr. vs. State of Madras & Ors. [AIR 1954 SC 397], a Constitution Bench of
this Court was seized with a question as to whether a civil suit or a criminal
case should be stayed in the event both are pending. It was opined that the
criminal matter should be given precedence.
In regard to the
possibility of conflict in decisions, it was held that 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. It was held that the only relevant consideration
was the likelihood of embarrassment.
27. If a primacy is
given to a criminal proceeding, indisputably, the civil suit must be determined
on its own keeping in view the evidence which has been brought on record before
it and not in terms of the evidence brought in the criminal proceeding.
The question came up
for consideration in K.G. Premshanker vs. Inspector of Police and anr. [(2002)
8 SCC 87], wherein this Court inter alia held:
"30. What
emerges from the aforesaid discussion is -- (1) the previous judgment which is
final can be relied upon as provided under Sections 40 to 43 of the Evidence
Act; (2) in civil suits between the same parties, principle of res judicata may
apply;
(3) in a criminal
case, Section 300 CrPC makes provision that once a person is convicted or
acquitted, he may not be tried again for the same offence if the conditions
mentioned therein are satisfied; (4) if the criminal case and the civil
proceedings are for the same cause, judgment of the civil court would be
relevant if conditions of any of Sections 40 to 43 are satisfied, but it cannot
be said that the same would be conclusive except as provided in Section 41.
Section 41 provides which judgment would be conclusive proof of what is stated
therein.
31. Further, the
judgment, order or decree passed in a previous civil proceeding, if relevant,
as provided under Sections 40 and 42 or other provisions of the Evidence Act
then in each case, the court has to decide to what extent it is binding or
conclusive with regard to the matter(s) decided 16 therein. Take for
illustration, in a case of alleged trespass by A on B's property, B filed a
suit for declaration of its title and to recover possession from A and suit is
decreed. Thereafter, in a criminal prosecution by B against A for trespass,
judgment passed between the parties in civil proceedings would be relevant and
the court may hold that it conclusively establishes the title as well as
possession of B over the property. In such case, A may be convicted for
trespass. The illustration to Section 42 which is quoted above makes the
position clear. Hence, in each and every case, the first question which would
require consideration is -- whether judgment, order or decree is relevant, if
relevant -- its effect. It may be relevant for a limited purpose, such as,
motive or as a fact in issue. This would depend upon the facts of each case.
It is, however,
significant to notice a decision of this Court in M/s Karam Chand Ganga Prasad
& Anr. etc. vs. Union of India & Ors. [(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,
stating:
"33. Hence, the
observation made by this Court in V.M. Shah case that the finding recorded by
the criminal court stands superseded by the finding recorded by the civil court
is not correct enunciation of law. Further, the general observations made in
Karam Chand case are in context of the facts of the case stated above. The
Court was not required to consider the earlier decision of the Constitution
Bench in M.S. Sheriff Case as well as Sections 40 to 43 of the Evidence
Act."
28. Sections 42 &
43 of the Evidence Act providing for the relevance of other decrees, order and
judgment read as under:
"42. Relevancy
and effect of judgment, order or decrees, other than those mentioned in Section
41.
- Judgments, orders
or decrees other than those mentioned in Section 41, are relevant if they
relate to matters of a public nature relevant to the inquiry; nut such
judgments, orders or decrees are not conclusive proof of that which they state.
43. Judgments, etc.,
other than those mentioned in Sections 40, 41 and 42, when relevant -
Judgments, orders or decrees other then those mentioned in Sections 40, 41 and
42 are irrelevant, unless the existence of such judgment, order or decree, is a
fact in issue, or is relevant, under some other provision of this Act."
29. If judgment of a
civil court is not binding on a criminal court, it is incomprehensible that a
judgment of a criminal court will be binding on a civil court. We have noticed
hereinbefore that Section 43 of the Evidence Act categorically states that
judgments, orders or decrees, other than those mentioned in sections 40, 41 and
42 are irrelevant, unless the existence of such judgment, order or decree, is a
fact in issue, or is relevant in some other provisions of the Act, no other
provisions of the Evidence Act or for that matter any other statute had been brought
to our notice.
30. Another
Constitution Bench of this Court had the occasion to consider the question in
Iqbal Singh Marwah & Anr. vs. Meenakshi Marwah & Anr. [(2005) 4 SCC
370]. Relying on M.S. Sheriff (supra) as also various other decisions, it was
categorically held:
"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."
31. The question yet
again came up for consideration in P. Swaroopa Rani vs. M. Hari Narayana @ Hari
Babu [AIR 2008 SC 1884], wherein it was categorically held:
"13. It is,
however, well-settled that in a given case, civil proceedings and criminal
proceedings can proceed simultaneously. Whether civil proceedings or criminal
proceedings shall be stayed depends upon the fact and circumstances of each
case."
32. In view of these
authoritative pronouncements, we have no doubt in our mind that principles of
res judicata are not applicable in the facts and circumstances of this case.
33. The impugned
judgment cannot be sustained. It is set aside accordingly. The appeal is
allowed. However, in the facts and circumstances of this case, there shall be
no order as to costs.
................................J.
[S.B. Sinha]
................................J.
[Dr. Mukundakam Sharma]
New
Delhi;
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