Availability Of Civil Remedy No Grounds To Disallow Continuation Of Criminal Proceedings, Both Remedies Are Co-Extensive: Rajasthan HC

The Rajasthan High Court has ruled that the availability of a civil remedy does not preclude setting of criminal proceedings in motion. It was held that the two remedies are not mutually exclusive but co-extensive having different content and consequences. It held:

“It is an anathema to suppose that when a civil remedy is available, a criminal prosecution is completely barred. The two types of actions are quite different in content, scope and import. Many a cheatings are committed in the course of commercial and also money transactions.”

The bench of Justice Rajendra Prakash Soni was hearing an application for anticipatory bail filed by the directors of a company charged with cheating as well as cheque dishonour. The applicants' company had purchased some agricultural commodities through the directors from the complainant and the credit account of the former was going on with the latter for a long time. When a cheque was issued for partially clearing off this debt, the same was dishonoured. The complainant filed an FIR alleging the applicants of criminal breach of trust.

The counsel for the applicants argued that the dispute between the parties pertained to the excess amount being fraudulently claimed by the complainant from the applicants misusing the security cheques deposited by the applicants with the complainant. Hence, the matter was purely civil in nature but with malafide complaint being filed was given a criminal colour by the complainant. It was further argued that there was no dishonest intention from the beginning of the transaction.

On the other hand, the public prosecutor argued that criminal prosecution could not be thwarted at the initial stage only because civil remedy was available. Hence, availability of civil remedy could not be made a basis for anticipatory bail.

Agreeing with the arguments of the public prosecutor, the Court observed that in certain cases, the same set of facts might give rise to remedies in both civil and criminal laws but the availability of civil remedy did not preclude proceedings under criminal laws. The Court further opined that many cheatings of a criminal nature were committed during commercial or money transactions. Illustration “F” to Section 415, IPC was referred to back this observation. Court said:

“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.”

In the background of this analysis, the Court highlighted that in the complaint, it was stated that the complainant was induced to believe that the applicants would honour the payment obligations but he realized later that the intentions of the applicants were not clear. It was also mentioned that no payment was made by the applicants after receiving the goods.

The Court stated that such allegations made a prima facie case for investigation. If the allegations disclosed a civil dispute, it could not be grounds for not allowing criminal proceedings to continue.

“In my view, since the case is at the threshold and the investigations are underway, it will be practically scuttling the investigation, in case the anticipatory bail is granted to the petitioners which would create hurdle in arriving at the truth.”

Accordingly, the application for anticipatory bail was rejected.

Title: Girraj Bansal & Ors. v State of Rajasthan

Citation: 2024 LiveLaw (Raj) 159

Click Here To Read/Download Order