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138 Acquittal won’t bar civil suit for recovery says Supreme Court

Comment : In this case the Court held two basic points :-
i) Civil and Criminal Proceedings can go on, on an acquittal u/s 138 would not automatically oust a civil suit for recovery. 
ii) Doctrine of Reverse Burden – to be proceeded with caution – presumption de hors proof of foundational facts improper. 

Supreme Court of India
Vishnu Dutt Sharma vs Daya Sapra on 5 May, 2009
Bench: S.B. Sinha, Mukundakam Sharma

HELD: 1.1 In the instant case, 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. [Para 13] [984-D-E]

1.2 Order 7 Rule 11(d) CPC 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. 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 ‘prepon-derance of probability’ would serve the purpose of obtaining a decree. [Paras 10 and 11] [983-G-H; 984-A-C]

1.3 In a criminal proceeding, although upon discharge of initial burden by the complaint, 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. 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 cannot be said that a judgment rendered in criminal proceeding would make continuation of a civil proceeding an abuse of the process of court. [Paras 16 and 19] [965-D-F; 989-B-C]

Krishna Janardhan Bhat vs. Dattatraya G. Hegde 2008 (1) SCALE 421; Bharat Barrel & Drum Manufacturing Company v. Amin Chand Payrelal (1999) 3 SCC 35 Noor Aga v. State of Punjab2008 (9) SCALE 68 – referred to

1.4 Any person may as of right have access to the courts of justice. Section 9 CPC enables him to file a suit of civil nature excepting those, the cognizance whereof is expressly or by necessary implication barred. Or. 7 r. 11(d) is one of such provision which provides for rejection of plaint, if it is barred by any law. Or. 7 r. 11(d) being one of the exception, thus, must be strictly construed. Answer to the question whether the civil suit was barred on the day on which it was filed indisputably must be rendered in the negative. If as on the date of institution of the suit, plaint could not be rejected in terms of Or. 7 r. 11(d) 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. [Paras 20, 21 and 22] [989-D-G]

1.5 Dismissal of a suit on the ground that it attracts the provisions of s. 12 CPC, keeping in view of the content of provisions of s. 11 thereof may now be considered. The principle of res-judicata as contained in s. 11 CPC 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. 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. [Paras 23 and 24] [989-G-H; 990-A-D]

1.6 It does not lay down that a judgment of the criminal court would be admissible in the civil court for its relevance is limited. [Para 25] [990- E]

Seth Ramdayal Jat v. Laxmi Prasad 2009 (5) SCALE 527 – referred to

1.7 The judgment of a criminal court in a civil procee-ding 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. Any finding in a criminal proceeding by no stretch of imagination would be binding in a civil proceeding. [Paras 25 and 26] [990-E-F]

M.S. Sheriff & Anr. v. State of Madras & Ors. AIR 1954 SC 397 – referred to

1.8 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 proceedings. [Para 27] [991-B]

K.G. Premshanker v. Inspector of Police and anr. (2002) 8 SCC 87; M/s. Karam Chand Ganga Prasad & Anr. Etc. v. Union of India & Ors. (1970) 3 SCC 694-referred to

1.9 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. Section 43 of the Evidence Act categorically states that judgments, orders or decrees, other than those mentioned in ss. 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. [Para 29] [993-B-D]

Iqbal Singh Marwah & Anr. v. Meenakshi Marwah & Anr. (2005) 4 SCC 370; P. Swaroopa Rani v. M. Hari Narayana @ Hari Babu AIR 2008 SC 1884-referred to

1.10 The principles of res judicata are not applicable in the facts and circumstances of the instant case. The impugned judgment cannot be sustained and is set aside. [Paras 32 and 33] [994-B-C]

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