Jojy George Koduvath

Dispute Essentially of a Civil Nature Cannot be used as a Weapon of Harassment

A mere breach of contract, by one of the parties, would not attract prosecution for criminal offence in every case, (Sarabjit Kaur v. State of Punjab, 2023-5 SCC 360; Referred to by the Supreme Court in: Naresh Kumar v. The State of Karnataka, March 12. 2024)

In Paramjeet Batra v. State of Uttarakhand, 2013-11 SCC 673, it is held as under:

• “A complaint disclosing civil transactions may also have a criminal texture. But the High Court must see whether a dispute which is essentially of a civil nature is given a cloak of criminal offence. In such a situation, if a civil remedy is available and is, in fact, adopted as has happened in this case, the High Court should not hesitate to quash the criminal proceedings to prevent abuse of process of the court.” (Quoted by the Supreme Court in: Naresh Kumar v. The State of Karnataka, March 12. 2024; Followed in: Randheer Singh v. State of U.P., 2021-14 SCC 626; Usha Chakraborty v. State of West Bengal, 2023 SCC OnLine SC 90)

Distinction: Cheating and Breach of Contract – Fraudulent Intention at the time of Promise

There is distinction between the offence of cheating and a mere breach of contractual obligations. In  Vesa Holdings (P) Ltd. v. State of Kerala, (2015) 8 SCC 293, has held that every breach of contract would not give rise to the offence of cheating, and it is required to be shown that the accused had fraudulent or dishonest intention at the time of making the promise. (Referred to by the Supreme Court in: Naresh Kumar v. The State of Karnataka, March 12. 2024)

Standard of proof is different in Civil and Criminal Cases.

In Avitel Post Studioz Limited v. HSBC PI Holdings (Mauritius) Limited, 2021-4 SCC 713, the principles in K.G. Premshanker v. Inspector of Police, (2002) 8 SCC 87: AIR 2002 SC 3372, is followed and held –

• “18. Thus, in view of the above, the law on the issue stands crystallised to the effect that the findings of fact recorded by the civil court do not have any bearing so far as the criminal case is concerned and vice versa. Standard of proof is different in civil and criminal cases. In civil cases it is preponderance of probabilities while in criminal cases it is proof beyond reasonable doubt. There is neither any statutory nor any legal principle that findings recorded by the court either in civil or criminal proceedings shall be binding between the same parties while dealing with the same subject-matter and both the cases have to be decided on the basis of the evidence adduced therein. However, there may be cases where the provisions of Sections 41 to 43 of the Evidence Act, 1872, dealing with the relevance of previous judgments in subsequent cases may be taken into consideration.

It is further pointed out in Avitel Post Studioz Limited v. HSBC PI Holdings (Mauritius) Limited, 2021-4 SCC 713 –

• “Moreover, the judgment, order or decree passed in previous civil proceedings, 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 matters decided therein. In each and every case the first question which would require consideration is, whether the judgment, order or decree is relevant; if relevant, its effect. This would depend upon the facts of each case.”

No Statutory Provision nor any Legal Principle – Findings in one treated as Final

Standards of proof required in the two proceedings are entirely different

In Iqbal Singh Marwah v. Meenakshi Marwah, 2005-4 SCC 370, (relying inter alia on M.S. Sheriff v. State of Madras, AIR 1954 SC 397) it was held as under:

• “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 standards 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. 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 on the basis of the evidence adduced therein.”