Holding

The High Court was not justified in staying the criminal investigation; civil and criminal proceedings may proceed simultaneously, and the High Court may set aside the trial court’s findings on the receipt, while the interim possession order remains valid.

Summary

The appellant, owner of a cinema theatre, entered into a sale agreement with the respondent for Rs. 94 lakh, of which Rs. 32.97 lakh was paid. The respondent filed a suit for specific performance, relying on a receipt (Ex A.15) for a further Rs. 4.03 lakh and claiming possession of the property. The trial court dismissed the suit, holding the receipt forged and the respondent failed to prove possession. The High Court, acting as a final fact‑court, granted the respondent interim possession subject to a monthly deposit of Rs. 30,000 and stayed the criminal investigation into the alleged forgery. The Supreme Court held that the High Court could set aside the trial court’s findings on the receipt, that civil and criminal proceedings may proceed simultaneously, and that Section 195(1)(b)(ii) CrPC does not bar a criminal complaint for a forged document. Consequently, the High Court erred in staying the criminal investigation, but the interim possession order was left undisturbed. The Court allowed the appeal challenging the stay of the criminal case and dismissed the appeal seeking modification of the interim possession order.

Issues considered

Whether the High Court, as a final fact‑court, can set aside the trial court’s findings on the authenticity of a receipt.
Whether a civil suit and a criminal proceeding arising from the same transaction can run concurrently.
Whether Section 195(1)(b)(ii) of the Criminal Procedure Code bars a criminal complaint for a forged document filed after the document has been produced in civil proceedings.
Whether the High Court’s interim order allowing possession subject to a monthly deposit should be interfered with.

Legislation cited

Code of Civil Procedures. 151, s. 94
Code of Criminal Procedure, 1973s. 195(1)(b)(ii)
Transfer of Property Acts. 53-A

Subjects

specific performancesale agreementforged receiptauthenticity of documentcivil and criminal concurrent proceedingsSection 195 CrPCinterim possession orderhigh court as fact court

Judgment

(2008] 3 S.C.R. 900
,.
(
A P. SWAROOPA RANI
II.
M. HARi NARAYANA@ HARi BABU
(Civil Appeal No. 1734 of 2008)
MARCH 04, 2008
B
[S.B. SINHA AND V.S. SIRPURKAR, JJ.] ..
High Court : Suit for specific performance of agreement
"
of sale of suit property - Plaintiff placed on record a receipt
c based on which allegedly he had obtained possession of suit ...
property - Trial court dismissed the suit on the ground that
plaintiff failed to prove authenticity of the receipt -Interim order
by High Court to the effect that plaintiff would remain in
possession of the suit property subject to deposit of Rs. 30, 000
p.m. - Interference with - Held: Not called for- High Court is
D ~ r
a final court of fact and it may go into correctness of findings
arrived at by trial court - A fortiori it can set aside findings of
court below that the receipt was forged one.
Civil and criminal proceedings - Simultaneous
E proceeding - Permissibility of - Held: Permissible.
Appellant-defendant agreed to sell the suit property
for Rs. 64 lacs to respondent-plaintiff. Respondent made
part payment of Rs. 32.97 lacs. As no sale deed was
executed in terms of the agreement, respondent filed suit "' I...

F for specific performance of the contract. During hearing ,
of the suit, a receipt (Ex A.15) was filed showing payment
of Rs. 4.03 lacs. On the basis of the receipt, allegedly
possession of the suit property was obtained by the
respondent. The Trial Judge, however, dismissed the suit
G holding that respondent failed to prove that he came into
possession of suit property in pursuance of the part
performance of the contract and that he paid Rs. 4.03 lacs ,..
towards part payment of sale consideration. In· vi_ew of·
the said observations, appellant lodged FIR alleging that
H 900
P. SWAROOPA RANI v. M. HARi NARAYANA@ 901
HARi BABU
(
the said receipt was a fabricated document. Respondent A
I.
filed appeal and application for interim stay of the
operation of the judgment.
On 24.5.2006, High Court granted interim direction
to the effect that the respondent would be entitled to
remain in possession of the suit property subject to B
x• deposit of a sum of Rs. 30,000/- per month.
)
Respondent filed Misc. Petition in the said appeal for
modification of order dated 24.5.2006 which was allowed
by order dated 17.7.2006. c
By another order dated 17 .7 .2006, the High Court
stayed the criminal proceedings.
Both the orders dated 24.5.2006 and 17.7.2006 were
challenged before this Court.
D
,
I Dismissing the appeal against order dated 24.5.2006
and allowing the appeal against order dated 17.7.2006,
the Court
HELD : 1. The High Court indisputably is a final court
of fact. It may go into the correctness or otherwise of the E
findings arrived at by the Trial Judge. A' fortiori it can set
aside the findings of the court below that Ex. A.15 is a
forged document or its authenticity could not be proved
,)
_.J\.
by the respondent. It is, however, well-settled that in a
given case, civil proceedings and criminal proceedings F
can proceed simultaneously. Whether civil proceedings
or criminal proceedings shall be stayed depends upon
the fact and circumstances of each case. It is furthermore
trite that s.195(1)(b)(ii) Cr.P.C. would not be attracted
where a forged document has been filed. [Paras 12-14) G
[906-A, B, C, DJ
M.S. Sheriff v. State of Madras AIR 1954 SC 397 Iqbal
·~ .
Singh Marwah v. Meenakshi Marwah (2005) 4 SCC 370;
Institute of Chartered Accountants of India v. Assn. of
H
902 SUPREME COURT REPORTS [2008] 3 S.C.R.

J
A Chartered Certified Accountants (2005) 12 SCC 226 -
relied on.
2. Filing of an independent criminal proceeding,
although initiated in terms of some observations made
by the civil court, is not barred under any statute. The High
B Court, therefore, was not correct in staying the
investigation in. the said matter. The simultaneous
proceedings of a civil and a criminal case is permissible.
..
[Paras 15,16,19} (908-C, D; 910-A]
C 3. The interim order dated 24.05.2006 as modified by
an order dated 17.07.2006 need not be interfered with
particularly in view of the fact that according to the
respondent it had made a payment of Rs. 35.47 lacs
besides the disputed payment of Rs. 4.03 lacs and made
deposits of Rs. 67 .54 lacs. (Para 20) (910-B, CJ
0
CIVILAPPELLATE JURISDICTION : Civil Appeal No. 1734
of 2008.
From the final Order dated 17/7/2006 of the High Court of
Judicature, Andhra Pradesh at Hyderabad in A.S.M.P. No. 1067/
E 2006 in A.S. No. 271/2006
WITH
Civil Appeal. No. 1735 of 2008 ..
V. R. Reddy, M. Vijaya Bhaskar and P.S. Narsimah for the
F Appellant.
Bhaskar Gupta, Y. Raja Gopala Rao and Y. Vismai for the
Respondent.
The Judgment of the Court was delivered by
G
S.B. SINHA, J. 1. Leave granted.
2. Appellant is the owner of a cinema theatre. An
agreement of sale dated 28.03.2001 was entered into by and
between the parties hereto in respect of the said property for a
H consideration of Rs. 94 lakhs. Respondent made part payment
P. SWAROOPA RANI v. M~ HARi NARAYANA@ 903
HARi BABU [S.B. SINHA, J.]

of Rs. 32,97,000/- of the said amount. A suit for specific A
performance of the contract was filed as no deed of sale was
executed in terms of the said agreement dated 28.03.2001.
3. During hearing of the said suit, a receipt was filed
showing payment of a sum of Rs. 4,03,000/- to the appellal')t
herein. The said receipt was marked as Exhibit A.15. On the B
.' said basis, allegedly, possession of the theatre was obtained
by the respondent. The learned Trial Judge, however, dismissed
the said suit by an order dated 29.04.2006 inter alia opining:

"45. Therefore, in the circumstances I find that there is no c
evidence produced by the plaintiff which is sufficient to
outweigh the opinion and the evidence of D.W.4. Further
it is to be seen that though after execution of Ex. A.15 he
· came to know about huge debts by defendant under the
said mortgage deeds, taxes dues and other statutory
liabilities and that defendant were not cooperating and D
adopted evasive attitude in clearing the debts, dues and .
other liabilities and were not allowing him to discharge the
mortgage debt to the Union Bank of India, he kept quite
till filing of the suit, without even issuing a notice to the E
defendant. Even if he was in possession as claimed by
him with effect from the date of Ex.A.15, in view of the
huge debts and liabilities, which to his knowledge the
defendant was not in a position to discharge and not
making any efforts to discharge the same he would not
have kept quite in the normal circumstances without issuing F
any notice to the defendant. Thus there is no mention about
this Ex.A.15 dated 18.09.2002 in the written form anywhere
till he filed the plaint on 05.12.2002. Therefore, these
circumstances also render the oral evidence of P. W.1 and
P.W.2 highly doubtful on this aspect. Therefore, in these G
circumstances I find that the evidence of D.W.4 and the
contents of Ex.C.4 opini°on and Ex.C.5 reasons for opinion
are sufficient to prove that the signature of D.W.1 is forged
in Ex.A.15. Therefore in the circumstances it shall be held
that the contention of the plaintiff and the evidence of P.W.1 H
904 SUPREME COURT REPORTS [2008] 3 S.C.R.
,_
A that on 18.09.2002 he paid Rs. 4,03,000/- towards part of
sale consideration and D W.1 delivered possession of
plaint schedule theater to him is not true. Therefore, in the
circumstances it also shall be held that the plaintiff failed
to prove that he came into possession of the plaint
B schedule property in pursuance of the part performance
of the contract covered by Ex.A.4."
It was furthermore opined: ~

"Therefore, following this decision of the Honourable High
c Court of Andhra Pradesh it shall be held that the plaintiff,
since failed to prove that he paid Rs. 4,03,000/- towards
part payment of sale consideration of D.W.1 and she
delivered possession of plaint schedule to him on
18.092002 and passed Ex.A.15 receipt. It shall be held
that tho~gh the time is not the essence of the contract and •
D
the plaintiff is justified in not making further remaining part
of sale consideration by 31.12 .2001, since he approached ' '
the court with unclean hands he cannot be granted a decree
for specific performance. Since it is a specific case that
he came into possession of plaint schedule property in
E part performance of Ex. A.4 agreement of sale, on
18.09.2002 under Ex. A.15 and failed to prove the same,
it is irrelevant and not necessary to decide how he came
into possession of the plaint schedule property. Therefore,
in the circumstances he is also not entitled for protection ;.
~

F under section 53-A of Transfer of Property Act and hence
is not entitled to seek perpetual injunction." "
4. Appellant, in view of the said observations, lodged a
First Information Report, which was marked as Crime No. 79 of
2006, in the Kadapa Police Station alleging that the said receipt
G
(Ex. A.15) was a fabricated document.
5. Respondent, however, preferred an appeal against the
. i"
said judgment and decree dated 29.04.2006. In the said appeal
preferred by the respondent. an application for interim stay of
H the operation of the said judgmP.nt was filed A Division Bench
P. SWAROOPA RANI v. M. HARi NARAYANA@ 905
HARi BABU [S.B. SINHA. J.]
J.'
of the High Court by a judgment and order dated 24.05.2006 A
directed:
"Going by the principle that an appeal is a continuation of
the suit and the state of affairs obtaining during the
pendency of the suit must be continued, as far as possible,
during the appeal also, we grant an interim direction to the B
.' effect that the petitioner shall be entitled to remain in
possession of the suit schedule theatre, subject to the
" condition that it shall deposit a sum of Rs. 30,000/- (Rupees
thirty thousand only) per month, commencing from June
2006, until further orders. It shall also be open to the c
respondent to withdraw the amount without furnishing any
security." •
6. Respondent filed Miscellaneous Petition in the said
appeal, being ASMP No. 995 of 2006, for modification of the
D
order dated 24.05.2006, which was allowed by an order dated
' 17.07.2006.
7. By another order dated 17.07.2006, the High Court
stayed the proceedings in Crime No. 79 of 2006.
8. Appellant is, thus, before us. E

9. Mr. V.R. Reddy, learned Senior Counsel appearing on
behalf of the appellant in Civil Appeal arising out of SLP (C) No.
.... 15670 of 2006, would submit that the High Court committed a
J serious illegality in staying the investigation of a criminal case. F
~ . 10. Mr. P.S. Narsima, learned counsel appearing on behalf
of the appellant in Civil Appeal arising out of SLP (C) No. 16215 0
of 2006, would submit that keeping in view the observations
made by the learned Trial Judge.and furthermore in view of the
fact that the respondent had not approached the court with clean G
hands, no interim order in his favour should have been passed.
11. Mr. Bhaskar Gupta, learned senior counsel appearing
~
on behalf of the respondent, on the other hand, submitted that
the court has power to grant injunction even in respect of a
H
906 SUPREME COURT REPORTS [2008] 3 S.C.R.

A proceeding which is stricto sensu not the subject matter of the ..
proceedings before the High Court.
12. The High Court indisputably is a final court of fact. It
may go into the correctness or otherwise of the findings arrived
at by the learned Trial Judge. A' fortiori it can set aside the
8 findings of the court below that the Ex. A.15 is a forged document
or its authenticity could not be proved by the respondent.
13. It is, however, well-settled that in a given case, civil .c
proceedings and criminal proceedings can proceed
c simultaneously. Whether civil proceedings or criminal
proceedings shall be stayed depends upon the fact and
circumstances of each case. [See M.S. Sheriff v. State of
Madras AIR 1954 SC 397, Iqbal Singh Marwah v. Meenakshi
Marwah (2005) 4 SCC 370 and Institute of Chartered
Accountants of India v. Assn. of Chartered Certified
0
Accountants (2005) 12 SCC 226]
14. It is furthermore trite that Section 195(1 )(b)(ii) of the ~
Code of Criminal Procedure would not be attracted where a
forged document has been filed. It was so held by a Constitution
E Bench of this Court in Iqbal Singh Marwah (supra) stating:
"25. An enlarged interpretation to Section 195(1 )( b )( ii},
whereby the bar created by the said provision would also
operate where after commission of an act of forgery the
document is subsequently produced in court, is capable ,,_
F of great misuse. As pointed out in Sachida Nand Singh
after preparing a forged document or committing an act of ,
forgery, a person may manage to get a proceeding
instituted in any civil, criminal or revenue court, either by
himself or through someone set up by him and simply file
G the document in the said proceeding. He would thus be
protected from prosecution, either at the instance of a
private party or the police until the court, where the
document has been filed, itself chooses to file a complaint.. ,..
The litigation may be a prolonged one due to which the
H actual trial of such a person may be delayed indefinitely.
P. SWAROOPA RANI v. M. HARi NARAYANA@ 907
HARi BABU [S.B. SINHA, J.]
.. Such an interpretation would be highly detrimental to the
interest of the society at large.
A

26. Judicial notice can be taken of the fact that the courts
are normally reluctant to direct filing of a criminal complaint
and such a course is rarely adopted. It will not be fair and
proper to give an interpretation which leads to a situation B
where a person alleged to have committed an offence of:
n
the type enumerated in clause ( '? )( ii ) is either not placed
~
for trial on account of non-filing of a complaint or if a
complaint is filed, the same does not come to its logical
end. Judging from such an angle will be in consonance c
with the principle that an unworkable or impracticable result
should be avoided. In Statutory Interpretation by Francis
Bennion (3rd Edn.), para 313, the principle has been
stated in the following manner:
D
"The court seeks to avoid a construction of an enactment
that produces an unworkable or impracticable result, since
' this is unlikely to have been intended by Parliament.
Sometimes, however, there are overriding reasons for
applying such a construction, for example, where it appears
that Parliament really intended it or the literal meaning is E
too strong.""

In regard to the possible conflict of findings between civil
and criminal court, however, it was opined:
"32. Coming to the last contention that an effort should be F
made to avoid conflict of findin9s 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 G
entire burden lies on the prosecution and proof beyond
reasonable doubt has to be given. There is neither any
statutory provision nor any legal principle that the findings
recorded in one proceeding may be treated as final or
binding in the other, as both the cases have to be decided H
908 SUPREME COURT REPORTS [2008] 3 S.C.R.

A on the basis of the evidence adduced therein ... " -
,

It was concluded:
"33. In view of the discussion made above, we are of the
opinion that Sachida Nand Singh has been correctly
B decided and the view taken therein is the correct view.
Section 195(1 )( b )( ii ) CrPC would be attracted only
when the offences enumerated in the said provision have
been committed with respect to a document after it has
'...
been produced or given in evidence in a proceeding in
c any court i.e. during the time when the document was in
custodia legis."

15. Filing of an independent criminal proceeding, although
initiated in terms of some observations made by the civil court,
is not barred under any statute.
D
16. The High Court, therefore, in our opinion, was not
correct in staying the investigation in the said matter. ' \

Reliance has been placed by Mr. Gupta on Mahar Jahan
and Others v. State of Delhi and Others [(2004) 13 SCC 421]
E wherein this Court was dealing with a proceeding under Section
145 of the Code of Criminal Procedure. This Court noticed that
a civil dispute was given the colour of a criminal case. As therein
a proceeding under Section 145 of the Code of Criminal
Procedure was pending, when a civil suit was also pending
F before a competent court of law, it was opined:
"4. It is not disputed by the learned counsel for the parties ,.
that this very property which is the subject-matter of these
criminal proceedings is also the subject-matter of the civil
suit pending in the civil court. The question as to
G possession over the property or entitlement to possession
would be determined by the civil court. The criminal
proceedings have remained pending for about a decade.
We do not find any propriety behind allowing these ·~
proceedings to continue in view of the parties having
H already approached the civil court. Whichever way
~ P. SWAROOPA RANI v. M. HARi NARAYANA@
HARi BABU [S.B. SINHA, J.]
909

" proceedings under Section 145 CrPC may terminate, the A
order of the criminal court would always be subject to
decision by the civil court. Inasmuch as the parties are
already before the civil court, we deem it proper te let the
civil suit be decided and therein appropriate interim order
be passed taking care of the grievances of the parties by B
making such arrangement as may remain in operation
during the hearing of the civil suit."
.,.
It was furthermore observed:
"7. We have simply noted the contentions raised by the c
parties. The civil court, in our opinion, would be the most
appropriate forum to take care of such grievances and
pass such interim order as would reasonably protect the
interests of both the parties. The civil court may issue an
ad interim injunction, may appoint a Commissioner or
D
Receiver or may make any other interim arrangement as
> to possession· or user of the property which is the subject-
matter of proceedings in the civil court exercising the power
conferred on it by Sections 94 and 151 of the Code of
Civil Procedure."
E
It was, therefore, a case where this Court quashed a
·proceeding under Section 145 of the Code of Criminal
Procedure as the matter pending before it arose out of a civil
proceedings. Such observations· were made keeping in view
.... the fact that possession of the parties over the property in suit
F
was in question.
17. The impugned order, therefore, cannot be sustained
which is set aside accordingly. Civil Appeal arising out of SLP
(C) No. 15670 of 2006 is allowed.
G
18. We, however, are of the opinion that the High Court
should be requested to hear the appeal as early as possible
and preferably within a period of three months from the date of
"' . receipt of a copy of this order. This, however, may not be taken
to mean that we have entered into the merit of the matter.
H
910 SUPREME COURT REPORTS [2008] 3 S.C.R.

A 19. It goes without saying that the respondent shall be at 11

liberty to take recourse to such a remedy which is available to
him in law. We have interfered with the impugned order only
because in law simultaneous proceedings of a civil and a
criminal case is permissible.
B 20. In view of the aforementioned observations, we are of
the opinion that the interim order dated 24.05.2006 as modified
by an order dated 17.07.2006 need not be interfered with
particularly in view of the fact that according to the
respondent it had made a payment of Rs. 35,47,000/- besides
C the disputed payment of Rs. 4,03,000/- and made deposits of
Rs. 67,54,088/-.
21. For the reasons aforementioned, Civil Appeal arising
out of SLP (C) No. 16215 of 2006 is dismissed.
D D.G. Civil Appeal No. 1734 of 2008 allowed and
Civil Appeal No. 1735 of 2008 dismissed.
' l

. ,,

. ,,.