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Sunday, Jul 30, 2006

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Supreme Court deplores the tendency to turn civil cases into criminal ones

Legal Correspondent

Such efforts should be discouraged, judiciary told

New Delhi: The Supreme Court has deprecated the tendency, particularly in business circles, to convert purely civil disputes into criminal cases and the courts entertaining such matters for adjudication.

Expressing serious concern over such a practice, a Bench of Justice H.K. Sema and Justice R.V. Raveendran said, "This is obviously on account of a prevalent impression that civil law remedies are time consuming and do not adequately protect the interests of lenders/creditors. Such a tendency is seen in several family disputes also, leading to irretrievable breakdown of marriages/families."

Mr. Justice Raveendran, writing the judgment, said: "There is also an impression that if a person could somehow be entangled in a criminal prosecution, there is a likelihood of imminent settlement. Any effort to settle civil disputes and claims, which do not involve any criminal offence, by applying pressure through criminal prosecution should be deprecated and discouraged."

The Bench said that while no one with a legitimate cause or grievance should be prevented from seeking remedies available in criminal law, a complainant who initiated or persisted with a prosecution, being fully aware that criminal proceedings were unwarranted, should be made accountable at the end of such misconceived criminal proceedings.

"A serious matter"

Quoting an earlier decision, the Bench said: "It is to be seen if a matter, which is essentially of civil nature, has been given a cloak of criminal offence. Criminal proceedings are not a short cut of other remedies available in law. Before issuing process a criminal court has to exercise a great deal of caution. For the accused it is a serious matter."

The Bench said: "One positive step that can be taken by the courts, to curb unnecessary prosecutions and harassment of innocent parties, is to exercise their power under Section 250 Cr.P.C. (to award compensation for accusation without reasonable cause) more frequently, where they discern malice or frivolous or ulterior motives on the part of the complainant."

The apex court was dealing with an appeal preferred by Indian Oil Corporation against a judgment of the Madras High Court quashing criminal proceedings initiated against NEPC India Ltd and others for breach of contractual obligations.

The High Court had held that mere breach of contractual terms would not amount to cheating unless fraudulent or dishonest intention was shown right at the beginning of the transaction.

Not justified

Disagreeing with this view, the Bench said that in this case the High Court was not justified in quashing the complaints/criminal proceedings in entirety. The Bench set aside the High Court order insofar as it quashed the complaints and directed the two trial courts where the matters were pending to proceed further in accordance with law.

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