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CHEQUE BOUNS

civil suit for recovery, criminal case for cheque bouns, criminal case ended in acquital, what is the fate of civil case for recovery basing on that cheque -(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

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 REPORTABLE

 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

 JUDGMENT

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
 3

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
 "Vishnu Dutt Sharma Vs. Daya Sapra; and
 (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
 5

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.
 6

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

consideration before this Court in Krishna Janardhan Bhat Vs. Dattatraya G.

Hegde reported in [2008 (1) SCALE 421] wherein it was categorically held :
 8

"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.
 9

 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

Manufacturing Company Vs. Amin Chand Payrelal reported in [(1999) 3

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."
 10

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."

18. The said dicta was followed by this Court in Noor Aga Vs. State of

Punjab reported in [2008 (9) SCALE 68] wherein it was noticed:

 "58. In Glanville Williams, Textbook of Criminal
 Law (2nd Edn.) page 56, 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
 11

 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."
 12

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
 15

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."
 17

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.
 18

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.
 19

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;
May 5, 2009
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