Whether findings recorded by the civil court get precedence over the findings recorded by the criminal court.

The criminal court is not competent to decide a dispute of purely civil nature or a question of title involved in any dispute.

Supreme Court in V. M. Shah v. State of Maharashtra, wherein it was observed  that the findings recorded by the criminal court stood superseded by the findings recorded by the civil court and there by the findings of the civil court got precedence over the findings recorded by the criminal court. In our opinion the relevant observation of the Supreme Court in that decision also will have to be understood not in a sense permitting its blanket application in all circumstances but only in the particular sense that responds to the circumstances in which such observation was made. The facts involved in the said decision were like this. The appellant therein had joined the services of M/s. Rallies India Ltd on March 10, 1965. He had occupied a particular residential flat. He resigned on 15th July, 1986. The said company initiated criminal proceedings in January, 1987 against the appellant under Section 408 1PC and Section 630 of the companies Act for the continued occupation of the said flat by the appellant. The Magistrate found the appellant guilty of offence under Section 630 of the companies Act and directed restitution of the flat. On appeal the sessions Judge altered the sentence while confirming the conviction. The High Court confirmed the same against which the Supreme Court was moved. Pending criminal proceeding the said company also filed a suit in small Causes Court for eviction of the appellant on the plea that the company had tenancy right in the flat and consequent upon joining the service, the appellant was inducted into possession thereof and on his resignation he ceased to be an employee of the company and was therefore enjoined to deliver possession of the flat to the company which he did not do. In the suit the case of the appellant/defendant was that there was no Jural relationship between the appellant and the company and he was not in occupation of the premises in his capacity as an employee of the company and that the company had surrendered the tenancy right in the flat to the owners and thereafter the appellant occupied the flat and was in possession thereof as a direct tenant under the owner-landlord. In the suit the trial court held that the company failed to prove their tenancy right in respect of the suit premises and that the company had not given the premises to the appellant under leave and licence agreement as pleaded by them in the plaint. The trial court also held that the appellant was a monthly tenant of the premises under the landlord pleaded by him and accordingly the suit was dismissed. It is in this background the Supreme Court in paragraph 11 of the said decision in V. M. Shah v. State of Maharashtra (supra) observed thus :–

“As seen that Civil Court after full dressed trial recorded the finding that the appellant had not come into possession through the company but had independent tenancy rights from the principal landlord and, therefore, the decree for eviction was negatived. Until that finding is duly considered by the appellate court after weighing the evidence afresh and if it so warranted reversed, the findings bind the parties. The findings, recorded by the criminal court, stand superseded by the findings recorded by the civil court. Thereby, the findings of the civil court get precedence over the findings recorded by the trial court, in particular, in summary trial for offences like Section 630.”

For appreciating the import of the said observations of the Supreme Court the back-ground of the case will have to be kept in view. Section 630 of the companies Act prescribes penalty for wrongful withholding of property. It provides that if an employee of a company wrongfully obtains possession of any property of the company or having such property in his possession wrongfully withholds it or knowingly applies it to unauthorised purposes, in that case he becomes liable to punishment and the court is also empowered to direct the employee to deliver up or refund such property. In dealing with a case under Section 630 of the Companies Act the criminal court is primarily concerned with the question of possession of the concerned property including the quality of such possession. But it is likely that in certain circumstances for the purpose of deciding the question of possession, the question of title may also got raised, as happened in the case under consideration of the Supreme Court in V.M. Shah v. State of Maharashtra (supra) where the appellant claimed independent title as tenant in the concerned premises under the owner landlord. It is a cardinal principle of law that ordinarily the question of title or a question of civil nature is for the civil court to decide in view of Section 9 of the Civil Procedure Code, 1908. The criminal court is not competent to decide a dispute of purely civil nature or a question of title involved in any dispute. Even if in any criminal case the criminal court incidentally comes across any question of title and forms and opinion about the same for the purpose of the criminal case such opinion must be only of an ad hoc nature, as the criminal court is not competent to declare title or finally decide any question of title or to decide upon a dispute of purely civil nature. Therefore whenever any bona fide question of title is raised in connection with any dispute relating to the quality of possession in a criminal court, any opinion of the criminal court regarding the question of tille will be only of a provisional of ad hoc nature and will be subject to the decision of a competent civil court in the matter. It is only in such circumstances or where the dispute is of a purely civil nature that the finding of the civil court will get precedence over the finding of the criminal court and that is also the clear import of the decision of the Supreme Court in V.M. Shah v. Slate of Maharashtra (supra). This principle is also reflected and illustrated in the provisions of Section 456 of the Criminal Procedure Code, the Sub-section (1) of which empowers the criminal court to restore possession of immovable property in certain circumstances and at the same time makes it clear in Sub-Section (4) that no such order of the criminal court will prejudice any right or interest of any person in such property which such person may be able to establish in a civil suit.

Supreme Court in State of Rajasthan v. Kalyan Sundaram Cement Industries Ltd. and Ors. 1996(1) Orissa Law Reviews (SC) 411: Judgments, today 1996(3) SC 162 squarely sustains our view. That was an appeal before the Supreme Court by special leave against an order of the High Court of Rajasthan. There were suits for recovery of certain amounts in respect of which the cheques got bounced and also simultaneous criminal proceedings under Section 138 of the Negotiable Instrument Act and Section 420 IPC. The High Court stayed the proceedings of the civil suits pending disposal of the criminal cases. The Supreme Court in appeal in the said decision observed thus:-

“3. It is settled law that pendency of the criminal matters would not be an impediment to proceed with the civil suits. The criminal court would deal with offence punishable under the Act. On the other hand, the courts rarely stay the criminal cases and only when the compelling circumstances require the exercise of power. We have never come across stay of any civil suits by the courts so far. The High Court of Rajasthan is only and exception to pass such orders. The High Court proceeded on wrong premise that the accused would be expected to disclose their defence in the criminal case by asking them to proceed with the trial of the suit. It is not a correct principle of law.”