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

J U D G M E N T

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

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  

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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:

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“(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  

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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.

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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:

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“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 :

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“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.

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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.”

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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  

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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.”

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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  

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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.”

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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  

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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  

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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.”

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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.   

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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.

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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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