Paragraph numbers below are the court’s original numbering, recovered from the source text.
9. The ratio of the decision in M.S. Sheriff1 is that no hard and fast rule can be laid down as to which of the proceedings – civil or criminal – must be stayed. It was held that possibility of conflicting decisions in the civil and criminal courts cannot be considered as a relevant consideration for stay of the procee~ings as law envisaged such an eventuality. Embarrassment was considered to be a relevant aspect and having regard to certain factors, this Court found expedient in M. S. Sheriff1 to stay the civil proceedings. The Court made it very clear that this, however, was not hard and fast rule; special considerations obtaining in any particular case might make some other course more expedient and just. M. S. Sheriff1 does not lay down an invariable rule that simultaneous prosecution of criminal proceedings and civil suit will embarrass the accused or that.invariably the proceedings in the civil suit should be stayed until disposal of criminal case.
10. In Mis. Karam Chand Ganga Prasad and Another etc. A v. Union of India and Others2, this Court in paragraph 4 of the Report (Pg. 695) made the following general observations, "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." This statement has been held to be confined to the B facts of that case in a later decision in K. G. Premshanker v. Inspector of Police and Another3, to which we shall refer to a little later.
11. In V.M. Shah v. State of Maharashtra and Another4, while dealing with the question whether the conviction under C Section 630 of the Companies Act was sustainable, this Court, while noticing the decision in M.S. Sheriff1 in para 11 (pg. 770) of the Report, held as under: "11. As seen that the 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 The findings, recorded by the criminal court, stand superseded by the findings recorded by the civil court.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. The mere pendency of the appeal does not have the effect of suspending the operation of the decree of the trial court and neither the finding of the civil court gets nor the decree becomes inoperative."
12. The statement of law in V.M. Shah4, as quoted above, has been expressly held to be not a good law in K.G. Premshanker3 . 2. 1910 (3) sec 694. 3. (2002) s sec a1. H 4. (1995) s sec 767. GURU GRANTH SAHEB STHAN MEERGHAT VANARAS v. VED PRAKASH [R.M. LODHA, J.]
13. In State of Rajasthan v. Kalyan Sundaram Cement Industries Ltd. and Others5 , this Court made the following statement in paragraph 3 (pgs. 87-88): "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 the 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 their power. We have never come across stay of any civil suits by the courts so far. The High Court of Rajasthan is only an exception to pass such orders. The High Court proceeded on a 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. Even otherwise, it no longer subsists, since many of them have filed their defences in the civil suit. On principle of law, we hold that the approach adopted by the High Court is not correct. But since the defence has already been filed nothing survives in this matter."
14. We may now refer to a three-Judge Bench decision of this Court in KG. Premshanker. The three-Judge Bench took into consideration Sections 40, 41, 42 and 43 of the Evidence Act, 1872 and also the decision of this Court in M. S. Sheriff' and observed in paragraph 32 of the Report that the decision rendered by the Constitution Bench in M.S. Sheriff case1 would be binding wherein it has been specifically held that no hard and fast rule can be laid down and that possibility of conflicting decision in civil and criminal courts is not a relevant consideration.
15. Section 40 of the Evidence Act makes it plain that the existence of any judgment, order or decree which by law . prevents any Courts from taking cognizance of a suit or holding 5. (1996) 3 sec s1. [2013) 5 S.C.R. A a trial is a relevant fact when the question is whether such Court ought to take cognizance of such suit, or to hold such trial.
16. Section 41 provides for relevancy of judgments passed in the exercise of probate, matrimonial admiralty or insolvency 8 jurisdiction by the Competent Court. It reads as follows : "S. 41. Relevancy of certain judgments in probate, etc., jurisdiction.-A final judgment, order or decree of a competent Court, in the exercise of probate, matrimonial admiralty or insolvency jurisdiction which confers upon or takes away from any person any legal character, or which declares any person to be entitled to any such character, or to be entitled to any specific thing, not as against any specified person but absolutely, is relevant when the existence of any such legal character, or the title of any such person to any such thing, is relevant. Such judgment, order or decree is conclusive proof.- that any legal character, which it confers accrued at . the time when such judgment, order or decree came into operation; that any legal character, to which it declares any such person to be entitled, accrued to that person at the time when such judgment, order or decree declares it to have accrued to that person; · that any legal character which it takes away from any such person ceased at the time from which such judgment, order or decree declared that it had ceased or should cease; and that anything to which it declares any person to be so entitled was the property of that person at the time from which such judgment, order or decree declares that it had been or should be his property." GURU GRANTH SAHEB STHAN MEERGHAT VANARAS v. VED PRAKASH [R.M. LODHA, J.]
17. Section 42 deals with relevancy and effect of A judgments, orders or decrees, other than those mentioned in Section 41. It reads as under: "S.42. Relevancy and effect of judgments, orders or decrees, other than those mentioned in section 41.- Judgments, orders or decrees other than those mentioned in section 41, are relevant if they relate to matters of a public nature relevant to the enquiry; but such judgments, orders or decrees are not conclusive proof of that which they state."
18. Section 43 provides that the judgments, orders or decrees other than those mentioned in Sections 40, 41 and 42 are irrelevant unless the existence of such judgment, order or decree is a fact' in issue or is relevant under some other c provisions of the Evidence Act
19. In K.G. Premshanker3, the effect of the above provisions (Sections 40 to 43 of the Evidence Act) has been broadly noted thus: if the criminal case and civil proceedings are for the same cause, judgment of the civil court would be relevant if conditions of any of Sections 40 to 43 are satisfied but it cannot be said that the same would be conclusive except as provided in Section 41. Section 41 provides which judgment would be conclusive proof of what is stated therein. Moreover, the judgment, order or decree passed in previous civil proceedings, if relevant, as provided under Sections 40 and 42 or other provisions of the Evidence Act then in each case the Court has to decide to what extent it is binding or conclusive with regard to the matters decided therein. In each and every case the first question which would require consideration is, whether judgment, order or decree is relevant; if relevant, its effect. This would depend upon th::i facts of each case.
20. In light of the above legal position, it may be immediately observed that the High Court was not at all justified in staying the proceedings in the civil suit till the decision of [20131 s s.o. A criminal case. Firstly, because even if there is possibility of conflicting decisions in the civil and criminal courts, such an eventuality cannot be taken as a relevant consideration. Secondly, in the facts of the present case there is no likelihood of any embarrassment to the defendants (respondent nos. 1 to B 4 herein) as they had already filed the written statement in the civil suit and based on the pleadings of the parties the issues have been framed. In this view of the matter, the outcome and/ or findings that may be arrived at by the civil court will not at all prejudice the defence(s) of the respondent nos. 1 to 4 in the c criminal proceedings.
21. For the above reasons, appeal is allowed. The impugned order dated 24.11.2008 passed by the Division Bench of the Madhya Pradesh High Court is set aside. The proceedings in the civil suit ~hall now proceed further in D accordance with law. The parties shall bear their own costs. K.K.T. Appeal allowed.