Holding

Criminal proceedings cannot be quashed merely because a civil suit is pending; the High Court was not justified in exercising its inherent powers under Section 482 to dismiss the case.

Summary

The appellant alleged that the respondents forged documents to withdraw large sums from a bank, invoking several sections of the Indian Penal Code. A magistrate took cognizance and issued process, but the respondents filed a petition under Section 482 of the CrPC seeking to quash the criminal proceedings, arguing that a civil suit concerning the authenticity of the documents was pending. The High Court quashed the criminal case on that ground. The Supreme Court held that the High Court was not justified in doing so, emphasizing that pendency of a civil suit is not a proper ground to quash criminal proceedings and that the complaint prima facie disclosed an offence. The Court reiterated the limited scope of the inherent powers under Section 482 and restored the magistrate’s order, allowing the appeal.

Issues considered

Whether the mere pendency of a civil suit can be a ground for quashing criminal proceedings under Section 482 CrPC.
Whether the complaint filed by the appellant disclosed a prima facie case of offence warranting continuation of criminal proceedings.
Scope and limits of the inherent powers of the High Court under Section 482 of the CrPC.

Legislation cited

Code of Criminal Procedure, 1973s. 482
Indian Penal Code, 1860s. 120B, s. 193, s. 196, s. 197, s. 209, s. 406, s. 465, s. 468, s. 471

Subjects

Section 482 CrPCquashing criminal proceedingspendency of civil suitinherent powers of courtcheating and forgerycriminal vs civil jurisdictionabuse of process

Judgment

M. KRISHNAN A
V.

VIJAY SINGH AND ANR.

OCTOBER II, 2001

[M.B. SHAH AND R.P. SETHI, JJ.] B

Criminal Law :

Code of Criminal Procedure, 1973-Section 482-Criminal
Proceedings-Quashing of-When civil disputes pending between the parties-:- c
Held justified.

Respondents withdrew huge amounts from bank on the basis of
forged documents showing the appellant as guarantor. Appellant filed a
complaint against respondents alleging commission of various offences
under the Indian Penal Code. Magistrate took cognizam:e and issued D
process against the respondents. Instead of appearing before the Magistrate,
respondents approached the High Court under Section 482 Cr. P.C. for
quashing the proceedings initiated against them. High Court quashed the
proceedings on the ground that in view of the pendency of civil disputes
between the parties where the genuineness of the documents relied upon
E
by the complainant was in dispute, no criminal action could be initiated
against the respondents. Hence the present appeal.

Allowing the appeal, the Court

HELD : 1. High Court was not justified in quashing the crimfnal
proceedings against the respondents. The High Court appears to have been F
impressed by the fact that as the nature of the dispute was primarily of a civil
nature, the appellant was not justified in resorting to criminal proceedings.
This would be against the provisions oflaw inasmuch as in all cases of cheating
and fraud, in the whole transaction, there is generally some element of civi~
nature even though the allegations relate to forging of documents and G
acquiring gains on the basis of such forged documents. Further the
proceedings could not be quashed only because the respondents had filed a
civil suit with respect to the aforesaid documents. In a criminal court the
allegations made in the complaint have to be established independently
notwithstanding the adjudication by a civil court. [48-A; B; CJ
H
45
46 SUPREME COURT REPORTS [2001] SUPP. 4 S.C.R.
A 2. If mere pendency of a suit is made a ground for quashing criminal
proceedings, unscrupulous litigants, apprehending criminal action against
them, would be encouraged tO frustrate the course of justice and law by
filing suits with respect to the documents intended to be used against them
after the initiation of criminal proceedings or ·in anticipation of such
proceedings. Such a course cannot be the mandate of law. Civil proceedings,
B
as distinguished from criminal action, have to be adjudicated and concluded
by adopting separate yardsticks. The onus of proving the allegations
beyond reasonable doubt, in criminal case, is not applicable in the civil
proceedjngs which can be decided merely on the basis of the probabilities
with respect to the acts compiained of. [48-D-F]
c
3. Where factual foundations for the offence have been laid down in
the complaint, High Court should not hasten to quash criminal proceedings
mereJy·on the premise that one or two ingredients have not been stated with
the d~tails
.
or' that the facts. . narrated reveal the existence of commercial or
D money transaction between the parties. [48-G; H; 49-A]

· 4.- It cannot be said that the complaint filed by the appellant did not
disclose the commission of an offence or there existed any other circumstance
which can be made the basis for quashing the proceedings. In fact the
allegations made in the complaint required adjudication and the complaint
E could not have be2n aborted in the manner it has been done by the High
Court. (50-C]

R.P. Kapur v. State of Punjab, AIR (1960) SC 866, relied on .

Rajesh Bajaj v. State NCT of Delhi & Ors., JT (1999) 2 SC 112 and
F Shanti/al .v. Vimalchand & Ors., JT (2000) 8 SC 109, referred to.

CRIMINAL APPELLATE ruRISDICTION : Criminal Appeal No. 1028
of 2001.

From the Judgment and Order dated 5.1.2001 of the Karnataka High
G Court in Crl. P. No. 3266 of 1998.

S.N. Bhat for the Appellant.

K.S. Nagaraja Rao and K.K. Mani for the Respondents.

H The Judgment of the Court was delivered by
M. KRISHNAN v. VUAY SINGH [SETHI, J.] 47
SETID, J. Leave granted. A
The appellant filed a complaint against the respondent alleging commission
of offences punishable under Sections 193, 196, 197,406, 465, 468 and 471
of the Indian Penal Code. The Magistrate took the cognizance and issued
.;!!. process against the two out of the three accused, named in the complaint.
Instead of appeari_ng before the Trial magistrate, the respondents approached B
the High Court by way of a petition under Section 482 of the Code of Criminal
Procedure (hereinafter refened to as "the Code") praying for quashing the
proceedings initiated against them. The High Court accepted the prayer of the
accused and quashed the proceedings initiated against the respondents mainly
on the ground that in view of the pendency of civil disputes between the parties C
where the genuineness of the documents, relied upon by the complainant, was
in dispute, no criminal action could be initiated against the accused persons.
Feeling aggrieved by the order of the High Court, the complainant has
prefened this appeal contending that the High Court has committed a mistake
of law by quashing the proceedings under Section 482 of the Code at the initial
D
stage without affording the complaint an opportunity to prove his case against
the accused as detailed in his complaint.

In his complaint, the appellant had made serious allegations against the
respondents and prima facie satisfied the Magistrate about the commission of
the offences under various sections of the Indian Penal Code. It was alleged E
that to prevent legal action against them, the accused persons filed a suit on
false and flimsy claim by creating and. forging documents/bonds/papers, etc.
Those documents w~re alleged to have been got filled up by the first acc~d
which he had obtained from the complainant on blank papers for production
before the Bank as guarantor. The accused were alleged to have betrayed the
F
good faith and confidence reposed in them by the complainant and thus
withdrew huge amounts on the basis of the forged documents. Along with the
complaint the appellant filed a number of documents and got the statements
recorded . .After perusal of the complaint, the sworn statements of the complainant,
his witness and inspecting the documents produced along with the complaint,
the Trial Magistrate, vide his detailed order dated 3.8.1998 (Annexure P-7) G
directed the registration of the case against the accused No.1 and 2 for offences
punishable under Sections 193, 209, 406, 468 and 471 IPC read with Section
120B IPC and issued process against them.

Despite referring to various judgments of this Court relating to the H
48 SUPREME COURT REPORTS [2001) SUPP. 4 S.C.R.
A interpretation and scope of Section 482 of the Code and the indictment that
the High Court should be slow in interfering with the proceedings at the initial
stage, the learned Single Judge of the High Court passed the impugned order.
The High Court appears to have been impressed by the fact that as the nature
of the dispute was primarily of a civil nature, the appellant was not justified
B in resorting to the criminal proceedings.

Accepting such a general proposition would be against the provisions
of law inasmuch as in all cases of cheating and fraud, in the whole transaction,
there is generally some element of civil nature. However, in this case, the
allegations were regarding the forging of the documents and acquiring gains
C on the basis of such forged documents. The proceedings could not be quashed
only because the respondents had filed a civil suit with respect to the aforesaid
documents. In a criminal court the allegations made in the complaint have to
be established independently, notwithstanding the adjudication by a civil court.
Had the complainant failed to prove the allegations made by him in the
D complaint, the respondents were entitled to discharge or acquittal but not
otherwise. If mere pendency of a suit is made a ground for quashing the
criminal proceedings, the unscrupulous litigants, apprehending criminal action
against them, would be encouraged to frustrate the course of justice and law
by filing suits with respect to the documents intended to be used against them
after the initiation of criminal proceedings or in anticipation of such proceedings.
E Such a course cannot be the mandate oflaw. Civil proceedings, as distinguished
from the crimmai action, have to be adjudicated and concluded by adopting
separate yardsticks. The onus of proving the allegations beyond reasonable ·
doubt, in criminal case, is not applicable in the civil proceedings which can
be decided merely on the basis of the probabilities with respect to the acts
F complained of. The High Court was not, in any way, justified to observe :

"In my view, unless and until the civil court decides the question
whether the document are genuine or forged, no criminal action can
be initiated against the petitioners and in view of the same, t!te present
criminal proceedings and taking cognizance and issue of process are
G
clearly erroneous."

Where factual foundations for the offence have been laid down in the
complaint, the High Court should not hasten to quash criminal proceedings ·
merely on the premise that one or two ingredients have not been stated with
H the details or that the facts narrated reveal the existence of commercial or
M. KRISHNAN v. VIJAY SINGH [SETHI, J.] 49
money transaction between the parties. A
This Court in Rajesh Bajaj v. State NCT of Delhi & Ors., JT (1999) 2
SC 112 observed :

- J.
"It may be that the facts stated narrated in the present complaint would
as well reveal a commercial transaction or money transaction. But that
is hardly a reason for holding that the offence of cheating would elude
B

from such a transaction. In fact, many a cheatings were committed
in the course of commercial and also money transactions. One of the
illustrations set out under Section 415 of the Indian Penal Code
(illustrations "f') is worthy of notice now : c
"(f) A intentionally deceives z into a belief that A means to repay
any money that z may lend to him and thereby dishonestly
induces z to lend him money, A not intending to repay it. A
cheats."
D
The crux of the postulated is the intention of the person who induces
the victim of his representation and not the nature of the transaction
which would become decisive in discerning whether there was
commission of offence or not. The complainant has stated in the body
of the complaint that he was induced to believe that respondent would
E
honour payment on receipt of invoices, and that the complainant
realised laki that the intentions of the respondent were not clear. He
also mentioned that respondent after receiving the goods have sold
them to other and still he did not pay the mmley. Such averments
would prima facie make out a case for investigation by the authorities."
F
To the same effect is the judgment in Shanti/al v. Vimalchand & Ors.,
JT (2000) 8 SC 109.

Right from the case of R.P. Kapur v. State of Punjab, AIR (1960) SC

.. 866, this Court has held that revisional or inherent powers for quashing the
proceedings at the initial stage can be exercised only where the allegations
made in the complaint or the first information report, even if taken at their
face value and accepted in their entirety, do not prima facie disclose the
G

commission of an offence or where the uncontroverted allegations made in
the FIR or complaint and the evidence relied in support of the same do not
H
50 SUPREME COURT REPORTS (2001) SUPP. 4 S.C.R.
A disclose the commission of any offence against the accused, or the allegations
are so absurd and inherently improper that on the basis of which no prudent
person could have reached a just conclusion that there were sufficient grounds
in proceeding against the accused or where there is an express legal bar
engrafted in any provisions of the Code or any other statute to the institution
B and continuance of the criminal proceedings or where a criminal proceeding
is manifestly actuated with malafide and has been initiated maliciously with
the ulterior motive for wrecking vengeance on the accused and with a view
to spite him due to private and personal grudge.

Applying the aforesaid test, it cannot be said that the complaint filed
c by the appellant did not disclose the commission of an offence or there existed
any other circumstance which can be made the basis for quashing the
proceedings.· Iil fact allegations made in the complaint required adjudication.
and the complaint could not have been aborted in the manner it has been done
by the High Court vide the impugned order."
D
The impugned judgment being contrary to the settled position of law
is thus not sustainable. The appeal is allowed and the impugned judgment of
the High Court is set aside by upholding the order of the Trial Magistrate dated
3.8.1998. The Trial Magistrate shall now proceed in the matter iri accordance
with law.

N.J. .. Appeal allowed.