REPORTABLE

                IN THE  SUPREME COURT OF INDIA                CRIMINAL  APPELLATE  JURISDICTION                                   CRIMINAL APPEAL NO.   1792  OF 2008   

( Arising out of SLP(Crl.) NO. 6878/2007)   

M/s Sri Krishna Agencies ..   Appellant(s)                   

  Versus

State of A.P. & Anr. ..   Respondent(s)                                                           O R D E R

Leave granted.

This  appeal  is  directed  against  the  judgment  and  order  dated  24th

September, 2007, passed by the Andhra Pradesh High Court in Criminal Petition No.

4508 of 2007 quashing the proceedings, being C.C. No. 982 of 2005, on the file of the

IInd  Additional Chief Metropolitan Magistrate, Hyderabad, under Section 138 of the

Negotiable Instruments Act,  1981  (for short the Act)  in exercise of  powers under

Section 482 of the Code of Criminal Procedure.

As would appear from the complaint, the same was filed on account of stop

payment orders issued with regard to three cheques of Rs. 5 lakhs each.   

Before the High Court, it was sought to be contended on behalf of respondent

No.  2  that  since  the  appellant  herein  had  already  taken  recourse  to  arbitration

proceedings, the  

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Crl.A.1792 of 2008...contd..

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dispute  was  obviously of  a  civil  nature and the  criminal complaint  could  not  be

proceeded with.  Accepting the statements made on behalf of respondent No. 2, the

High Court quashed the complaint as indicated hereinabove.

Mr.  Adhyaru, learned senior counsel  appearing in support of  the appeal,

submitted  that  the  High Court  has  apparently confused  the  issue  relating  to  the

continuance of the arbitration proceedings as also the criminal proceedings,    since

when the cheques were dishonoured, a separate  liability arose in terms of Section 138

of  the  Act,  whereas the  arbitration proceedings  were under the  agreement signed

between the  parties.   It  was  submitted  by  him that  the  commencement and  the

continuance of the arbitration proceedings could in no way affect criminal proceedings

taken separately.

In support of his submissions, Mr. Adhyaru, referred to the decision of this

Court in Trisuns Chemical Industry vs. Rajesh Agarwal and Ors., (1999) 8 SCC 686,

where the same  question arose in relation to arbitration proceedings taken during the

continuance of a complaint filed under Sections 415 and 420 of the Code of Criminal

Procedure.  In the said decision, it was held that merely because arbitration  

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Crl.A.1792 of 2008...contd..

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proceedings have been undertaken, the criminal proceedings could not be thwarted.

On behalf of respondent No. 2, the submissions which had been urged before

the High Court, were reiterated, which, however, appears to be unacceptable having

regard to the decision cited by Mr. Adhyaru.  We are also of the  view that there can be

no bar to the simultaneous continuance of a criminal proceeding and a civil proceeding

if the two arise from separate causes of action.  The decision in  Trisuns Chemical

Industry's case (supra) appears to squarely cover this case as well.

We, accordingly, allow the appeal and set aside the order passed by the High

Court  and  restore  the  complaint  before  the  learned  IInd  Additional  Chief

Metropolitan Magistrate, Hyderabad to be proceeded with in accordance with law.

                                       ....................J            [ ALTAMAS KABIR ]  

                                       ....................J           [ MARKANDEY KATJU ]                         

    NEW DELHI, NOVEMBER 11, 2008.