PREM RAJ versus POONAMMA MENON & ANR.
[2024] 4 S.C.R. 29, Supreme Court of India, 2024
Outcome: Appeal(s) allowed (Granted)
Segment: Issues
* Author
[2024] 4 S.C.R. 29 : 2024 INSC 260
Prem Raj 
v. 
Poonamma Menon & Anr.
(Criminal Appeal No. 1858 of 2024)
02 April 2024
[Sanjay Karol* and Aravind Kumar, JJ.]
Issue for Consideration
Whether, a criminal proceeding can be initiated and the accused 
therein held guilty with natural consequences thereof to follow, in 
connection with a transaction, in respect of which a decree by a 
competent Court of civil jurisdiction, already stands passed.
Headnotes
Negotiable Instruments Act, 1881 – s.138 – Appellant borrowed 
Rs.2,00,000/- from the complainant – On receipt of demand, 
appellant issued a cheque for the said amount – It was 
dishonoured due to insufficient funds and ‘payments stopped 
by drawer’ – The complainant issued a notice of demand – 
No action on the part of the appellant was taken – Pursuant 
thereto, a criminal proceeding was initiated against appellant 
– Equally, though, the appellant had filed a civil suit with 
prayers to declare the said cheque as a security; direction for 
return of cheque and prohibitory injunction restraining any 
steps to encash the said cheque – The suit was decreed in 
favour of appellant – However, the Court seized of the s.138 
N.I. Act complaint, convicted the appellant herein to undergo 
simple imprisonment for one year as well as pay compensation 
of Rs.2 lakhs in default whereof, he was to undergo further 
simple imprisonment for six months – First Appellate upheld 
the conviction – The High Court, in revision, observed
no 
perversity in the concurrent findings of the Trial Court and 
First Appellate Court – Propriety:
Held: 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
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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 – In that view of the 
matter, the criminal proceedings resulting from the cheque being 
returned unrealised due to the closure of the account would be 
unsustainable in law and, therefore, are to be quashed and set 
aside. [Paras 11 and 12]
Case Law Cited
Iqbal Singh Marwah v. Meenakshi Marwah [2005] 2 
SCR 708 : (2005) 4 SCC 370 – followed.
K.G. Premshanker v. Inspector of Police & Anr. [2002] 
Supp. 2 SCR 350 : (2002) 8 SCC 87 – relied on.
Karam Chand Ganga Prasad & Anr. v. Union of India & 
Ors. (1970) 3 SCC 694;  M.S. Sheriff v. State of Madras 
[1954] 1 SCR 1144 : AIR 1954 SC 397; Vishnu Dutt 
Sharma v. Daya Sapra (Smt.) [2009] 7 SCR 977 : (2009) 
13 SCC 729; Satish Chander Ahuja v. Sneha Ahuja 
[2020] 12 SCR 189 : (2021) 1 SCC 414 – referred to.
List of Acts
Negotiable Instruments Act, 1881.
List of Keywords
Dishonour of cheque; Criminal Proceedings; Civil suit; Conflict of 
decisions in civil and criminal jurisdictions.
Case Arising From
CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. 1858 
of 2024
From the Judgment and Order dated 23.01.2018 of the High Court 
of Kerala at Ernakulam in CRLRP No. 1111 of 2011
Appearances for Parties
K. Parameshwar, Ms. Arti Gupta, Ms. Kanti, Chinmay Kalgaonkar, 
Ms. Raji Gururaj, Advs. for the Appellant.
Pranjal Kishore, Atul Shankar Vinod, Dilip Pillai, Ajay Jain, Ms. Madiya 
Mushtaq Nadroo, M. P. Vinod, Alim Anvar, Nishe Rajen Shonker, 
Mrs. Anu K Joy, Advs. for the Respondents.
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31
Prem Raj v. Poonamma Menon & Anr.
Judgment / Order of the Supreme Court
Judgment
Sanjay Karol, J.
Leave granted.
2.	
Appellant herein challenges judgment and order dated 23rd January, 
2018 passed in Crl.R.P. No.1111 of 20111, whereby the High Court of 
Kerala allowed, only in part, his Revision Petition against the judgment 
and order of the learned Additional Sessions Judge, Thrissur,2 dated 
11th January, 2011, in Criminal Appeal No.673 of 2007, which, in turn, 
upheld his conviction, as handed down by the learned Judicial First 
Class Magistrate3 vide order dated 14th August, 2007 in CC No.51 of 
2003, under Section 138 of the Negotiable Instruments Act, 1881.4 
3.	
The sole issue that we are required to consider is, whether, a criminal 
proceeding can be initiated and the accused therein held guilty 
with natural consequences thereof to follow, in connection with a 
transaction, in respect of which a decree by a competent Court of 
civil jurisdiction, already stands passed. 
4.	
The facts necessary to put into perspective the issue in the present 
appeal are:-
4.1	 The Appellant borrowed Rs.2,00,000/- from the Complainant, 
K.P.B Menon “Sreyes,” with the promise that he would repay 
it on demand. 
4.2	 On receipt of such demand, he issued a cheque dated 30th 
June, 2002 for the said amount from the South Indian Bank, 
encashment thereof was to be through Canara Bank, Irinjalakuda 
Branch, to which the cheque was sent through the post with a
covering letter dated 24th September, 2002. 
4.3	 It was dishonoured due to insufficient funds and ‘payments 
stopped by drawer’. The Complainant came to know of such 
dishonour and issued a notice of demand dated 22nd December, 
1	
‘Impugned Judgment’
2	
‘Lower Appellate Court’
3	
‘Trial Court’ 
4	
‘N.I. Act’
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2002. Accounting for no action on the part of the appellant, the 
complaint, the subject matter of the instant proceedings, came 
to be filed. 
5.	
Equally, though, the appellant (accused) had filed Original Suit 
No.1338 of 2002. The five parties impleaded as defendants were, 
(i) K.P. Bhaskara Menon; (ii) K.P. Vipinendra Kumar5; (iii) Praveen 
Menon; (iv) The Manager South Indian Bank Limited Kathikudam, 
Via Koratty, Trichur; and (v) N.T. Raghunandanan. The prayers 
made therein were to, (a) declare cheque No.386543 of the South 
Indian Bank Limited, Kathikudam, as a security cheque; (b) issue 
mandatory injunction directing the 1st defendant to return the said 
cheque; and (c) issue a permanent prohibitory injunction restraining 
defendants 1 to 4 named hereinabove from taking any steps to 
encash the said cheque. 
5.1	 The Additional District Munsif, Irinjalakuda, decreed the Suit on 
11th April, 2003 in favour of the plaintiff (accused). The Suit in 
respect of defendant No.4, namely the Manager, South Indian 
Bank, was dismissed and the Suit was wholly decreed against 
the remaining defendants. 
5.2	 Defendant No.1 filed an appeal before the Additional Subordinate 
Judge, Irinjalakuda in C.M.A.No.6/2006. In its judgment dated 
30th January, 2007, the Court observed that “The lower court 
correctly analysed the facts and arrived at the right conclusion. 
I find no reason to interfere the order of the lower court. Hence
I dismissed this appeal.” 
6.	
Therefore, it appears from the record that the very same cheque 
was in issue before the Civil Court and also the Court seized of the 
Section 138 N.I. Act complaint. 
The conclusions drawn by the Courts below, subject matter of the 
instant lis, are as under: 
6.1	 The Trial Court convicted the appellant herein to undergo simple 
imprisonment for one year as well as pay compensation of 
Rs.2 lakhs in default whereof, he was to undergo further simple 
imprisonment for six months. The determination of the issues, 
i.e., whether the decree passed by the Munsif Court would be 
5	
2nd defendant
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Prem Raj v. Poonamma Menon & Anr.
binding on it, is of note. It was observed that a Court exercising 
jurisdiction on the criminal side is not subordinate to the Civil 
Court. Further, it was held “That order was an ex-parte order 
as far as criminal complaint is concerned the order of injunction 
issued cannot be granted and the hands of the criminal court 
cannot be fettered by the civil court”. 
6.2	 The First Appellate Court framed primarily one point for 
consideration – whether the cheque was issued against a legally 
enforceable debt, thereby attracting the offence under Section 
138 of the N.I. Act. This point was held against the appellant 
and therefore, the conviction handed down by the Court below, 
accordingly confirmed. 
7.	
The High Court, in revision, observed that no perversity could be 
indicated in the concurrent findings of the Trial Court and First 
Appellate Court. The same was dismissed. 
8.	
We find the manner in which this matter has travelled up to this Court 
to be quite concerning. We fail to understand as to how a civil as 
well as criminal course could be adopted by the parties involved, 
in respect of the very same issue and transaction, in these peculiar 
facts and circumstances.
9.	
In advancing his submissions, Mr. K. Parameshwar, learned counsel 
appearing for the appellant, placed reliance on certain authorities of 
this Court. In M/s. Karam Chand Ganga Prasad & Anr. vs. Union 
of India & Ors.6, this Court observed
that: 
“…….It is a well-established principle of law that the 
decisions of the civil courts are binding on the criminal 
courts. The converse is not true.” 
In K.G. Premshanker vs. Inspector of Police & Anr7., a Bench 
of three learned Judges observed that, following the M.S. Sheriff 
vs. State of Madras8, no straight-jacket formula could be laid down 
and conflicting decisions of civil and criminal Courts would not be 
a relevant consideration except for the limited purpose of sentence 
or damages. 
6	
(1970) 3 SCC 694
7	
[2002] Supp. 2 SCR 350 : (2002) 8 SCC 87
8	
[1954] 1 SCR 1144 : AIR 1954 SC 397
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10.	 We notice that this Court in Vishnu Dutt Sharma vs. Daya Sapra 
(Smt.)9, had observed as under:
“26. It is, however, significant to notice a decision of 
this Court in Karam Chand Ganga Prasad v. Union of 
India (1970) 3 SCC 694, wherein it was categorically 
held that the decisions of the civil court will be binding 
on the criminal courts but the converse is not true, was 
overruled therein…”
This Court in Satish Chander Ahuja vs. Sneha Ahuja10 considered 
a numerous precedents, including Premshanker (supra) and Vishnu 
Dutt Sharma (supra), to opine that there is no embargo for a civil 
court to consider the evidence led in the criminal proceedings.
The issue has been laid to rest by a Constitution Bench of this Court 
in Iqbal Singh Marwah vs. Meenakshi Marwah11 :
“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 
standard 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. While 
examining a similar contention in an appeal against an 
order directing filing of a complaint under Section 476 
of the old Code, the following observations made by a 
Constitution Bench in M.S. Sheriff v. State of Madras 
[1954 SCR 1144 : AIR 1954 SC 397: 1954 Cri LJ 1019] 
give a complete answer to the problem posed: (AIR p. 
399, paras 15-16)
9	
[2009] 7 SCR 977 : (2009) 13 SCC 729
10	
[2020] 12 SCR 189 : (2021) 1 SCC 414
11	
[2005] 2 SCR 708 : (2005) 4 SCC 370
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Prem Raj v. Poonamma Menon & Anr.
“15. As between the civil and the criminal proceedings, 
we are of the opinion that the criminal matters should 
be given precedence. There is some difference of 
opinion in the High Courts of India on this point. No 
hard-and-fast rule can be laid down but we do not 
consider that the possibility of conflicting decisions in 
the civil and criminal courts is a relevant consideration. 
The law envisages such an eventuality when it 
expressly refrains from making the decision of one 
court binding on the other, or even relevant, except 
for certain limited purposes, such as sentence or 
damages. The only relevant consideration here is 
the likelihood of embarrassment.
16. Another factor which weighs with us is that a civil 
suit often drags on for years and it is undesirable 
that a criminal prosecution should wait till everybody 
concerned has forgotten all about the crime. The 
public interests demand that criminal justice should 
be swift and sure; that the guilty should be punished 
while the events are still fresh in the public mind and 
that the innocent should be absolved as early as 
is consistent with a fair and impartial trial. Another 
reason is that it is undesirable to let things slide till 
memories have grown too dim to trust.
This, however, is not a hard-and-fast rule. Special 
considerations obtaining in any particular case might 
make some other course more expedient and just. For 
example, the civil case
or the other criminal proceeding 
may be so near its end as to make it inexpedient to stay 
it in order to give precedence to a prosecution ordered 
under Section 476. But in this case we are of the view that 
the civil suits should be stayed till the criminal proceedings 
have finished.”
(Emphasis Supplied)
11.	 The position as per Premshanker (supra) 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
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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. 
12.	 In that view of the matter, the criminal proceedings resulting from the 
cheque being returned unrealised due to the closure of the account 
would be unsustainable in law and, therefore, are to be quashed 
and set aside. Resultantly, the damages as imposed by the Courts 
below must be returned to the appellant herein forthwith. 
13.	 The appeal is allowed in the aforesaid terms. Hence, the judgment 
and order passed by Additional Sessions Judge, Thrissur, in Criminal 
Appeal 673 of 2007, which upheld the conviction, as handed down 
by the learned Judicial First Class Magistrate in CC No. 51 of 2003, 
which came to affirmed by the High Court of Kerela in Crl.R.P.No.1111 
of 2011 is quashed and set aside. Pending application(s), if any, 
shall stand disposed of.
Headnotes prepared by: Ankit Gyan
Result of the case: 

Appeal allowed.