Presence Of Civil Element In Allegations Of Forgery Or Cheating Does Not Bar Criminal Prosecution: Supreme Court

The Court was hearing appeals arising from a judgment of the Madras High Court, which had declined to interfere with changes introduced to the admission process after its commencement.

A Bench comprising Justice Sanjay Karol and Justice Prashant Kumar Mishra observed that “adjudication of forgery, cheating or use of forged documents in relation to a settlement deed will always carry a civil element” and held that “there cannot be any general proposition that whenever dispute involves a civil element, a criminal proceeding cannot go on.”

The appellants were represented by G. Sivabalamurugan, AOR, while the respondents were represented by Senior Advocate S. R. Rajagopal.

Background

The dispute arose from the execution of registered settlement deeds in respect of immovable properties. Allegations were subsequently raised that the deeds had been procured by fraud, impersonation, and use of forged documents, and were thereafter used dishonestly to derive proprietary benefit.

Parallel civil proceedings were instituted seeking declarations in relation to the validity of the settlement deeds, along with consequential reliefs. During the pendency of such proceedings, a criminal complaint was also lodged alleging the commission of offences under the Indian Penal Code, 1860, including forgery, cheating, and use of forged documents.

FIR was registered, an investigation was carried out, and a final report was filed. Cognisance of the offences was taken by the competent criminal court.

Respondents approached the High Court under Section 482 of the Code of Criminal Procedure, 1973, seeking quashing of the criminal proceedings on the ground that the dispute was essentially civil in nature and that the civil court had already adjudicated upon the settlement deeds.

The High Court accepted the contention and quashed the criminal proceedings, leading to the present appeals.

Court’s Observation

The Supreme Court examined the scope of the inherent jurisdiction of the High Court under Section 482 of the Code of Criminal Procedure, 1973, and reiterated that such power is extraordinary and must be exercised sparingly and with circumspection. At the stage of quashment, the Court held, the High Court is required to examine only whether the uncontroverted allegations, taken at face value, disclose the commission of any cognizable offence.

The Court observed that adjudication in civil matters and criminal prosecution proceed on different principles. A decree passed by a civil court does not record findings on criminal intent, nor does it determine the existence of offences such as forgery, cheating, or use of forged documents.

The Bench noted that adjudication of disputes concerning settlement deeds may inherently involve a civil element. However, it rejected any general proposition that the presence of such a civil element would bar criminal prosecution. Criminal liability, the Court held, “must be examined independently” based on the allegations and evidence adduced in the criminal proceedings.

On the facts of the case, the Court found that the complaint contained specific allegations relating to the fabrication of documents, dishonest intention at the inception of the transactions, and the use of such documents as genuine to derive an unlawful benefit. These allegations, if taken at face value, disclosed the ingredients of cognizable offences requiring adjudication at trial.

The Court further observed that the civil proceedings in the present case had not attained finality. Even otherwise, the pendency or outcome of civil litigation could not be treated as determinative of criminal culpability at the stage of quashment.

The Bench emphasised that entitlement to acquittal arises only upon failure of proof at trial, and not at the threshold stage under Section 482 of the Code of Criminal Procedure, 1973. To permit quashing of criminal proceedings solely on the ground that a civil suit had been instituted, the Court held, “would encourage unscrupulous litigants to defeat criminal prosecution by resorting to parallel civil proceedings”.

The Court also considered the contention raised regarding the conduct of the appellant, including the delay in lodging the criminal complaint and the appellant’s participation in the civil proceedings. The Court held that such aspects pertain to the appreciation of evidence and assessment of credibility, which fall within the domain of trial.

The Supreme Court found that the High Court had “erred in law by embarking upon an inquiry with regard to the conduct of the appellant and credibility or otherwise of the allegations in the complaint and the FIR”.

Conclusion

The Supreme Court allowed the appeals and set aside the High Court's judgment, which had quashed the criminal proceedings. It held that the criminal case must proceed in accordance with the law, independently of the civil proceedings.

The Court clarified that all observations were confined to the consideration of the quashing petition and would not influence the trial court while adjudicating the criminal case on its own merits. The appeals were accordingly allowed.

Cause Title: C.S. Prasad v. C. Satyakumar And Others (Neutral Citation: 2026 INSC 39)

Appearances

Appellant: G. Sivabalamurugan, AOR

Respondents: Senior Advocate S. R. Rajagopal with Advocates Abhilasha Shrawat, S. Santanam Swaminadhan, Vidhusan C., Shanmitha, Aarthi Rajan, AOR & others.

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