Fraud/cheating - simultanious civil and criminal case

 We are frequently consulted for quashment of criminal proceedings on the ground that a civil proceeding for same cause of action is already pending. This hapens often in matters relating to transfer of property and money transactions. the question arises as to whether a pure civil dispute can be a subject matter of a criminal proceeding under Sections 420, 467, 468 and 469 of the Indian Penal Code?

In P. Swaroopa Rani v. M. Hari Narayana @ Hari Babu [AIR 2008 SC 1884 : (2008) 5 SCC 765], it was held that “-- it is well-settled that in a given case, civil proceedings and criminal proceedings can proceed simultaneously. Whether civil proceedings or criminal  proceedings shall be stayed depends upon the fact and circumstances of each case."

In Criminal appeal no. 940  of 2009 (Devendra v. state of UP) decided on 6/5/9 the apex court held that:

“There cannot, however, be any doubt or dispute whatsoever that in a given case a civil suit as also a criminal proceeding would be maintainable.They can run simultaneously.  Result in one proceeding would not be

binding on the court determining the issue before it in another proceeding.”

In this case the court further held : “It is, therefore, evident that a misrepresentation from the very beginning is a sine qua non for constitution of an offence of cheating,

although in some cases, an intention to cheat may develop at a later stage of formation of the contract.”

 Thus as the supreme court held in Devendra’s case,

a distinction must be made between a civil wrong and a

criminal wrong. When dispute between the parties constitute only a civil wrong and not a criminal wrong, the courts would not permit a person to be harassed although no case for taking cognizance of the offence has been made out.