In case in hand, the complainant/respondent initiated the criminal proceedings for cheque dishonour under Section 138 of the Negotiable Instruments Act, 1882 against the appellant/accused. On the other hand, the appellant/accused initiated civil proceedings restraining the complainant/respondent to encash the said cheque given by the appellant/accused. The appellant was found guilty of cheque dishonour and was awarded a punishment of one-year imprisonment and a Rs. 2 lakhs fine. On the contrary, the civil court decreed the suit against the complainant/respondent and restrained them from encashing the cheque amount. The conviction of the appellant/accused was upheld by the High Court. Aggrieved by this decision a criminal appeal was filed before the Supreme Court.

Whether judgment of the civil court will be binding on the criminal court to the extent of sentences or damages or not?

The Supreme Court observed that “The position as per K.G. Premshanker vs. Inspector of Police & Anr is that sentence and damages would be excluded from the conflict of decisions in civil and criminal jurisdictions of the Courts. Therefore, in the present case, considering that the Court in criminal jurisdiction has imposed both sentence and damages, the ratio of the above-referred decision dictates that the Court in criminal jurisdiction would be bound by the civil Court having declared the cheque, the subject matter of dispute, to be only for the purposes of security.”

The Supreme Court allowed the appeal and set aside the conviction in a criminal case for cheque dishonour under Section 138 of the Negotiable Instruments Act.