In the Supreme Court of India s3

Equivalent Citation: 2009(4)AWC3405(SC), JT2009(13)SC44, 2009(8)SCALE698, (2009)13SCC729

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 3238 of 2009 (Arising out of SLP (C) No. 10997 of 2008)

Decided On: 05.05.2009

Sh. Vishnu Dutt Sharma Vs. Smt. Daya Sapra

Hon'ble Judges: S.B. Sinha and Mukundakam Sharma, JJ.

Counsels: For Appellant/Petitioner/Plaintiff: J.M. Kalia, Adv. for Raj Singh Rana, Adv

For Respondents/Defendant: Kuldeep Kumar, Adv. for Sanjay Jain, Adv.

Subject: Banking

Subject: Civil

Acts/Rules/Orders: Negotiable Instruments Act - Sections 13(1), 118, 138 and 139; Evidence Act - Sections 40 to 43; Criminal Procedure Code (CrPC) - Section 300; Indian Penal Code - Section 420; Civil Procedure Code (CPC), 1908 - Sections 9, 11, 12 and 151 - Order 7, Rule 11

Cases Referred: Vishnu Dutt Sharma v. Daya Sapra Suit No. MANU/SC/1101/2009 ; Krishna Janardhan Bhat v. Dattatraya G. Hegde MANU/SC/0503/2008; Bharat Barrel & Drum Manufacturing Company v. Amin Chand Payrelal MANU/SC/0123/1999; Noor Aga v. State of Punjab MANU/SC/2913/2008 ; Seth Ramdayal Jat v. Laxmi Prasad MANU/SC/0582/2009; M.S. Sheriff and Anr. v. State of Madras and Ors. MANU/SC/0055/1954; K.G. Premshanker v. Inspector of Police and Anr. MANU/SC/0771/2002; Karam Chand Ganga Prasad and Anr. etc. v. Union of India and Ors. MANU/SC/0058/1970; Iqbal Singh Marwah and Anr. v. Meenakshi Marwah and Anr. MANU/SC/0197/2005; P. Swaroopa Rani v. M. Hari Narayana @ Hari Babu MANU/SC/7280/2008

Cases Overruled / Reversed: Daya Sapra Vs. Vishnu Dutt Sharma (MANU/DE/8922/2007)

Prior History / High Court Status: From the Judgment and Order dated 14.12.2007 of the High Court of Delhi at New Delhi in C.M. (M) No. 1011 of 2007 (MANU/DE/8922/2007)

Disposition: Appeal allowed

Citing Reference:

Vishnu Dutt Sharma v. Daya Sapra MANU/SC/1101/2009 Mentioned

Krishna Janardhan Bhat v. Dattatraya G. Hegde MANU/SC/0503/2008 Discussed

Bharat Barrel & Drum Manufacturing Company v. Amin Chand Payrelal MANU/SC/0123/1999 Discussed

Noor Aga v. State of Punjab MANU/SC/2913/2008 Discussed

Seth Ramdayal Jat v. Laxmi Prasad MANU/SC/0582/2009 Mentioned

M.S. Sheriff and Anr. v. State of Madras and Ors. MANU/SC/0055/1954 Discussed

K.G. Premshanker v. Inspector of Police and Anr. MANU/SC/0771/2002 Discussed

Karam Chand Ganga Prasad and Anr. etc. v. Union of India and Ors. MANU/SC/0058/1970 Discussed

Iqbal Singh Marwah and Anr. v. Meenakshi Marwah and Anr. MANU/SC/0197/2005 Discussed

P. Swaroopa Rani v. M. Hari Narayana @ Hari Babu MANU/SC/7280/2008 Discussed

JUDGMENT

S.B. Sinha, J.

1. Leave granted. 3. A complaint petition was filed by the appellant against the 2. The effect of a judgment passed respondent for alleged commission in a criminal proceeding on a of offences under Section 138 of pending civil proceeding is the the Negotiable Instruments Act question involved herein. and Section 420 of the Indian Penal Code on 29-01-2000. He It arises in the following factual also filed a suit for recovery of a matrix. sum of Rs. 2,04,000/- on 19-10- 2002 in the Court of Senior Civil Respondent borrowed a sum of Rs. Judge at Delhi which was marked 1,50,000/- (Rupees One Lakh Fifty as Suit No. 253 of 2003. Thousand Only) from the appellant herein on or about 10th August, Both in the criminal as also in the 1999. On a demand having been civil proceedings the defence made in that regard by the raised by the respondent was that appellant, the respondent issued a she had not taken any loan from cheque for the aforementioned the appellant as alleged or at all. It sum on or about 20th October, was furthermore asserted that the 1999. The said cheque was cheque issued by her was not in presented by the appellant to the respect of repayment of any loan, Oriental Bank of Commerce, since no such loan had been taken. Shahdra, Delhi, but the cheque was received back by the appellant Respondent urged that the with remarks `insufficient funds'. appellant had met her husband who was a property dealer in civil suit for recovery of money as connection with some business the nature of proceeding in both who made a representation that the cases was different. pertaining to the same deal the police had to be bribed, whereafter 6. Respondent approached the on 10-08-1999 the appellant High Court in a writ petition accompanied by one Ms. questioning the order of dismissal Malhotra, retired ACP and his son of the said application and praying came to the office of her husband inter alia for the following reliefs: and forcibly took the cheque in question from her husband since (a) To set aside and quash the the cheque book was with him. impugned order dated 17.3.2007 passed by the Hon'ble Court of 4. By reason of the Judgment dated Shri Shailender Malik, Civil 26-09-2003, the learned Sessions Judge, Delhi in Suit No. 356/06/02 Judge recorded a judgment of titled as "Vishnu Dutt Sharma v. acquittal in favour of the Daya Sapra; and respondent holding that he had successfully proved that the (2) Pass such other further orders cheque in question was not issued as this Hon'ble Court deems just to the complainant by way of and proper in the facts and repayment of any loan. circumstances of the matter.

5. Respondent thereafter during the 7. By reason of the impugned pendency of the trial suit filed an Judgment the High Court allowed application in the said civil suit the said writ petition. The High purported to be under Order 7 Rule Court in arriving at its finding 11(d) read with Section 151 of the applied the principles of res- Code of Civil Procedure for judicata. It also opined that the suit rejection of the plaint on the filed by the appellant was nothing ground that the criminal complaint but an abuse of the process of law. had already been dismissed. 8. Mr. J.M. Kalia, learned Counsel The learned Civil Judge dismissed appearing on behalf of the the said application inter alia appellant would contend that the opining that the findings of a High Court committed a serious criminal court in the proceeding error in passing the impugned under Section 138 of the judgment in so far as it failed to Negotiable Instruments Act would take into consideration that the not operate as `res judicata' in the principle of res-judicata is not applicable in the facts and Whereas in a criminal case the circumstances of the case. prosecution is bound to prove the commission of the offence on the 9. The learned Counsel appearing part of the accused beyond any on behalf of the respondent, on the reasonable doubt; in a civil suit other hand, would urge that having `preponderance of probability' regard to the fact that both in the would serve the purpose for civil as also in the criminal obtaining a decree. proceeding, the burden was on the defendant-accused and he having 12. Section 138 of the Negotiable successfully discharged the same, Instruments Act provides that the appellant could not have been dishonour of a cheque subject to allowed to continue the civil fulfillment of condition precedent proceedings in view of the as laid down in the proviso judgment rendered by the criminal appended thereto is a cognizable court. The plaint was, on the said offence. premise, directed to be rejected. 13. The cause of action for 10. Order 7 Rule 11(d) of the Code institution of the civil suit was of Civil Procedure, 1908 (for short, grant of loan whereas that of the "Code") provides for rejection of a criminal case was return of a plaint inter alia on the premise the cheque inter alia on the premise suit was barred by any statute. that the account of the accused was Such an embargo in the insufficient to honour it or that it maintainability of the suit must be exceeded the amount arranged to apparent from the averments made be paid from that account by an in the plaint. agreement with the bank.

11. There cannot be any doubt or 14. Section 138 of the Act contains dispute that a creditor can maintain a non-obstante clause. a civil and criminal proceeding at the same time. Both the In terms of Section 139 of the Act, proceeding, thus, can run parallely. a presumption in favour of the The fact required to be proved for holder of the cheque may be raised obtaining a decree in the civil suit that he had received the cheque of and a judgment of conviction in the nature referred to in Section the criminal proceedings may be 138 for the discharge, in whole or overlapping but the standard of in part, of any debt or other proof in a criminal case vis-a-vis a liability. civil suit, indisputably is different. Section 118 occurring in Chapter proceedings has also been initiated XIII of the Act provides for special is the question. rules of evidence; Clause (a) whereof reads as under: 16. In a criminal proceeding, although upon discharge of initial 118. Presumptions as to burden by the complainant, the negotiable instruments.- Until the burden of proof may shift on an contrary is proved, the following accused, the court must apply the presumptions shall be made: principles of `presumption of innocence as a human right'. The (a) of consideration.--that every statutory provisions containing the negotiable instrument was made doctrine of reverse burden must or drawn for consideration, and therefore be construed strictly. that every such instrument, when Whereas a provision containing it has been accepted, indorsed, reverse burden on an accused negotiated or transferred, was would be construed strictly and accepted, indorsed, negotiated or subject to the strict proof of the transferred for consideration. foundational fact by the complainant, in a civil proceeding Proviso appended thereto reads as no such restriction can be imposed. under: Application of Section 118(a) and Provided that, where the 139 of the Negotiable Instruments instrument has been obtained Act on the touchstone of the from its lawful owner, or from principles of presumption of any person in lawful custody innocence fell for consideration thereof, by means of an offence before this Court in Krishna or fraud, or has been obtained Janardhan Bhat v. Dattatraya G. from the maker or acceptor Hegde reported in therof by means of an offence or MANU/SC/0503/2008 : fraud, or for unlawful 2008CriLJ1172 wherein it was consideration, the burden of categorically held: proving that the holder is a holder in due course lies upon 19. Indisputably, a mandatory him. presumption is required to be raised in terms of Section 118(b) 15. What would be the effect of a and Section 139 of the Act. judgment passed in the criminal Section 13(1) of the Act defines proceedings in relation to the 'negotiable instrument' to mean "a subject matter for which a civil promissory note, bill of exchange or cheque payable either to order of a debt also. The courts below, in or to bearer". our opinion, committed a serious error in proceeding on the basis Section 138 of the Act has three that for proving the defence the ingredients, viz.: accused is required to step into the witness box and unless he does so (i) that there is a legally he would not be discharging his enforceable debt; burden. Such an approach on the part of the courts, we feel, is not (ii) that the cheque was drawn correct. from the account of bank for discharge in whole or in part of 22. An accused for discharging the any debt or other liability which burden of proof placed upon him presupposes a legally enforceable under a statute need not examine debt; and himself. He may discharge his burden on the basis of the (iii) that the cheque so issued had materials already brought on been returned due to insufficiency records. An accused has a of funds. constitutional right to maintain silence. Standard of proof on the 20. The proviso appended to the part of an accused and that of the said section provides for prosecution in a criminal case is compliance of legal requirements different. before a complaint petition can be acted upon by a court of law. Noticing the decision of this Court Section 139 of the Act merely in Bharat Barrel & Drum raises a presumption in regard to Manufacturing Company v. Amin the second aspect of the matter. Chand Payrelal reported in Existence of legally recoverable MANU/SC/0123/1999 : debt is not a matter of presumption [1999]1SCR704 , this Court held: under Section 139 of the Act. It merely raises a presumption in 24. Furthermore, whereas favour of a holder of the cheque prosecution must prove the guilt of that the same has been issued for an accused beyond all reasonable discharge of any debt or other doubt, the standard of proof so as liability. to prove a defence on the part of an accused is 'preponderance of 21. The courts below, as noticed probabilities'. Inference of hereinbefore, proceeded on the preponderance of probabilities can basis that Section 139 raises a be drawn not only from the presumption in regard to existence materials brought on records by country like India. This, the parties but also by reference to however, shall not mean that the the circumstances upon which he courts shall put a blind eye to the relies. ground realities. Statute mandates raising of presumption 25. A statutory presumption has an but it stops at that. It does not evidentiary value. The question as say how presumption drawn to whether the presumption should be held to have rebutted. whether stood rebutted or not, Other important principles of must, therefore, be determined legal jurisprudence, namely keeping in view the other presumption of innocence as evidences on record. For the said human rights and the doctrine of purpose, stepping into the witness reverse burden introduced by box by the appellant is not Section 139 should be delicately imperative. In a case of this nature, balanced. Such balancing acts, where the chances of false indisputably would largely implication cannot be ruled out, depend upon the factual matrix the background fact and the of each case, the materials conduct of the parties together brought on record and having with their legal requirements are regard to legal principles required to be taken into governing the same. consideration. 18. The said dicta was followed by 17. As regards the purpose of this Court in Noor Aga v. State of introduction of reverse burden in Punjab reported in Section 139 of the Act, this Court MANU/SC/2913/2008 :2008 (9) observed: SCALE 68 wherein it was noticed:

33. We are not oblivious of the 58. In Glanville Williams, fact that the said provision has Textbook of Criminal Law (2nd been inserted to regulate the Edn.) page 56, it is stated: growing business, trade, commerce and industrial Harking back to Woolmington, it activities of the country and the will be remembered that Viscount strict liability to promote greater Sankey said that "it is the duty of vigilance in financial matters the prosecution to prove the and to safeguard the faith of the prisoner's guilt, subject to the creditor in the drawer of the defence of insanity and subject cheque which is essential to the also to any statutory exception".... economic life of a developing Many statutes shift the persuasive burden. It has become a matter of the loss of protection which will routine for Parliament, in respect be suffered by the accused. of the most trivial offences as well Fairness and reasonableness of as some serious ones, to enact that trial as also maintenance of the the onus of proving a particular individual dignity of the accused fact shall rest on the defendant, so must be uppermost in the court's that he can be convicted "unless he mind. proves" it. 19. Reverse burden or evidentiary 59. But then the decisions rendered burden on an accused, thus, would in different jurisdictions are replete require strict interpretation and with cases where validity of the application. However, in a civil provisions raising a presumption suit such strict compliance may not against an accused, has been be insisted upon. upheld. If that be so, it may not be correct Noticing the provisions of the to contend that a judgment Universal Declaration of Human rendered in criminal proceeding Rights and European Convention would make continuation of a civil for the Protection of Human Rights proceeding an abuse of the process and Fundamental Freedoms as also of court. International Convention on Civil and Political Rights and 20. Any person may as of right consequent change in the approach have access to the courts of justice. in some of the courts, it was Section 9 of the Code of Civil opined that limited inroads on Procedure enables him to file a suit presumption would be justified. of civil nature excepting those, the Noticing that even applicability of cognizance whereof is expressly or doctrine of res ipsa loquitur may by necessary implication barred. not be applicable in a criminal proceeding, it was held that the 21. Order 7 Rule 11(d) is one of trial must be fair and the accused such provision which provides for must be provided with rejection of plaint, if it is barred by opportunities to effectively defend any law. himself. Order 7 Rule 11(d) of the Code The court held: being one of the exceptions, thus, must be strictly construed. 88. Placing persuasive burden on the accused persons must justify 22. This leads us to another question namely whether the civil suit was barred on the day on Previous judgments relevant to which it was filed. Answer to the bar a second suit or trial. - The said question indisputably must be existence of any judgment, order rendered in the negative. If as on or decree which by law prevents the date of institution of the suit, any Courts from taking the plaint could not be rejected in Cognizance of a suit or holding a terms of Order 7 Rule 11(d) of the trial is a relevant fact when the Code of Civil Procedure; whether question is whether such Court its continuation would attract the ought to take cognizance of such principles of abuse of processes of suit or to hold such trial. court only because the accused was acquitted in the criminal This principle would, therefore, be proceeding is the question. applicable, inter alia, if the suit is found to be barred by the principle 23. Dismissal of a suit on the of res judicata or by reason of the ground that it attracts the provisions of any other statute. provisions of Section 12 of the Code, keeping in view of the 25. It does not lay down that a content of provisions of Section 11 judgment of the criminal court thereof may now be considered. would be admissible in the civil The principle of res-judicata as court for its relevance is limited. contained in Section 11 of the {See Seth Ramdayal Jat v. Laxmi Code is not attracted in this case. Prasad MANU/SC/0582/2009 : Even general principle of res- 2009(5)SCALE527 }. judicata would also not be attracted. A suit cannot be held to The judgment of a criminal court be barred only because the in a civil proceeding will only principle of estoppel subject to have limited application, viz., inter requisite pleading and proof may alia, for the purpose as to who was be applied. The said principle may the accused and what was the not be held to be applicable only at result of the criminal proceedings. a later stage of the suit. 26. Any finding in a criminal It brings us to the question as to proceeding by no stretch of whether previous judgment of a imagination would be binding in a criminal proceeding would be civil proceeding. relevant in a suit. In M.S. Sheriff and Anr. v. State of 24. Section 40 of the Evidence Act Madras and Ors. reads as under: MANU/SC/0055/1954 : [1954]1SCR1144 , a Constitution can be relied upon as provided Bench of this Court was seized under Sections 40 to 43 of the with a question as to whether a Evidence Act; (2) in civil suits civil suit or a criminal case should between the same parties, principle be stayed in the event both are of res judicata may apply; (3) in a pending. It was opined that the criminal case, Section 300 CrPC criminal matter should be given makes provision that once a person precedence. is convicted or acquitted, he may not be tried again for the same In regard to the possibility of offence if the conditions conflict in decisions, it was held mentioned therein are satisfied; (4) that the law envisages such an if the criminal case and the civil eventuality when it expressly proceedings are for the same refrains from making the decision cause, judgment of the civil court of one Court binding on the other, would be relevant if conditions of or even relevant, except for certain any of Sections 40 to 43 are limited purposes, such as sentence satisfied, but it cannot be said that or damages. It was held that the the same would be conclusive only relevant consideration was except as provided in Section 41. the likelihood of embarrassment. Section 41 provides which judgment would be conclusive 27. If a primacy is given to a proof of what is stated therein. criminal proceeding, indisputably, the civil suit must be determined 31. Further, the judgment, order or on its own keeping in view the decree passed in a previous civil evidence which has been brought proceeding, if relevant, as on record before it and not in terms provided under Sections 40 and 42 of the evidence brought in the or other provisions of the Evidence criminal proceeding. Act then in each case, the court has to decide to what extent it is The question came up for binding or conclusive with regard consideration in K.G. Premshanker to the matter(s) decided therein. v. Inspector of Police and Anr. Take for illustration, in a case of MANU/SC/0771/2002 : alleged trespass by A on B's 2002CriLJ4343 , wherein this property, B filed a suit for Court inter alia held: declaration of its title and to recover possession from A and suit 30. What emerges from the is decreed. Thereafter, in a aforesaid discussion is -- (1) the criminal prosecution by B against previous judgment which is final A for trespass, judgment passed between the parties in civil context of the facts of the case proceedings would be relevant and stated above. The Court was not the court may hold that it required to consider the earlier conclusively establishes the title as decision of the Constitution well as possession of B over the Bench in M.S. Sheriff case as property. In such case, A may be well as Sections 40 to 43 of the convicted for trespass. The Evidence Act. illustration to Section 42 which is quoted above makes the position 28. Sections 42 & 43 of the clear. Hence, in each and every Evidence Act providing for the case, the first question which relevance of other decrees, order would require consideration is -- and judgment read as under: whether judgment, order or decree is relevant, if relevant -- its effect. 42. Relevancy and effect of It may be relevant for a limited judgment, order or decrees, purpose, such as, motive or as a other than those mentioned in fact in issue. This would depend Section 41. - Judgments, orders or upon the facts of each case. decrees other than those mentioned in Section 41, are relevant if they It is, however, significant to notice relate to matters of a public nature a decision of this Court in Karam relevant to the inquiry; nut such Chand Ganga Prasad and Anr. etc. judgments, orders or decrees are v. Union of India and Ors. not conclusive proof of that which MANU/SC/0058/1970 : they state. 1971CriLJ1072 , wherein it was categorically held that the 43. Judgments, etc., other than decisions of the civil court will be those mentioned in Sections 40, binding on the criminal courts but 41 and 42, when relevant - the converse is not true, was Judgments, orders or decrees other overruled therein, stating: then those mentioned in Sections 40, 41 and 42 are irrelevant, unless 33. Hence, the observation made the existence of such judgment, by this Court in V.M. Shah case order or decree, is a fact in issue, that the finding recorded by the or is relevant, under some other criminal court stands superseded provision of this Act. by the finding recorded by the civil court is not correct 29. If judgment of a civil court is enunciation of law. Further, the not binding on a criminal court, it general observations made in is incomprehensible that a Karam Chand case are in judgment of a criminal court will be binding on a civil court. We reasonable doubt has to be have noticed hereinbefore that given. Section 43 of the Evidence Act categorically states that judgments, 31. The question yet again came orders or decrees, other than those up for consideration in P. mentioned in Sections 40, 41 and Swaroopa Rani v. M. Hari 42 are irrelevant, unless the Narayana @ Hari Babu existence of such judgment, order MANU/SC/7280/2008 : or decree, is a fact in issue, or is AIR2008SC1884 , wherein it was relevant in some other provisions categorically held: of the Act, no other provisions of the Evidence Act or for that matter 13. It is, however, well-settled any other statute had been brought that in a given case, civil to our notice. proceedings and criminal proceedings can proceed 30. Another Constitution Bench of simultaneously. Whether civil this Court had the occasion to proceedings or criminal consider the question in Iqbal proceedings shall be stayed Singh Marwah and Anr. v. depends upon the fact and Meenakshi Marwah and Anr. circumstances of each case. MANU/SC/0197/2005 : 2005CriLJ2161 . Relying on M.S. 32. In view of these authoritative Sheriff (supra) as also various pronouncements, we have no other decisions, it was doubt in our mind that principles categorically held: of res judicata are not applicable in the facts and circumstances of this 32. Coming to the last case. contention that an effort should be made to avoid conflict of 33. The impugned judgment findings between the civil and cannot be sustained. It is set aside criminal courts, it is necessary to accordingly. The appeal is point out that the standard of allowed. However, in the facts and proof required in the two circumstances of this case, there proceedings are entirely shall be no order as to costs. different. Civil cases are decided on the basis of preponderance of evidence while in a criminal © Manupatra Information case the entire burden lies on the Solutions Pvt. Ltd. prosecution and proof beyond