The Supreme Court of India has set aside an order passed by the Madras High Court that quashed criminal proceedings against accused persons on the ground that the dispute was civil in nature and had been adjudicated by a civil court. The Bench, comprising Justice Sanjay Karol and Justice Prashant Kumar Mishra, held that civil liability and criminal liability may arise from the same set of facts, and the pendency or conclusion of civil proceedings does not bar criminal prosecution where the ingredients of a criminal offence are disclosed.
The Court allowed the appeal in the case of C.S. Prasad vs. C. Satyakumar and Others, restoring the trial for offences including cheating and forgery.
Background of the Case
The dispute centers on three registered settlement deeds executed in 2010 and 2012 regarding immovable properties in Chennai owned by Late Dr. C. Satyanarayana and his wife Late Smt. C. Lakshmi Devi. The couple had three sons: Respondent No. 1 (Dr. C. Satyakumar), the Appellant (Dr. C.S. Prasad), and Dr. C. Ranga Rao (predeceased).
The settlement deeds were executed in favour of Respondent No. 1. A Power of Attorney (PoA) was executed by the father in favour of Respondent No. 1 on March 28, 2012, shortly before his death.
In 2014, Respondent No. 5 (nephew) filed a civil suit (O.S. No. 2190 of 2014) seeking a declaration that the settlement deeds were null and void. The Appellant was a defendant in this suit but remained ex parte. The Civil Court dismissed the suit on January 24, 2023, upholding the validity of the deeds. An appeal against this decree is pending before the High Court.
During the pendency of the civil suit, the Appellant lodged a police complaint on January 8, 2020, alleging fraud, impersonation, and forgery. Following a direction from the Magistrate under Section 156(3) CrPC, FIR No. 229 of 2021 was registered for offences under Sections 417, 420, 465, 468, 471, and 120B of the Indian Penal Code (IPC). A Final Report was filed, and the Magistrate took cognizance in C.C. No. 2 of 2023.
The Madras High Court, vide order dated October 22, 2024, quashed the proceedings, holding that the validity of the documents had been upheld by the Civil Court and that continuation of criminal prosecution would amount to a misuse of the process of law.
Arguments of the Parties
The Appellant’s Submissions: Learned counsel for the Appellant argued that Respondent No. 1 misused the limited authority granted by the PoA to execute settlement deeds in his own favour. It was submitted that the documents were fraudulent and obtained by deceiving the late father. Counsel highlighted that the High Court failed to consider the “mental state of Late Dr. C. Satyanarayana at the time of executing the settlement deeds.” It was further contended that civil and criminal proceedings can co-exist if the ingredients of the offence are made out.
The Respondents’ Submissions: Learned counsel for Respondent Nos. 1 to 3 supported the High Court’s order, arguing that the petition was a misuse of criminal process to reopen a family property dispute already decided in civil proceedings. It was pointed out that the Appellant had full knowledge of the transactions since 2014 and had deliberately remained ex parte in the civil suit. Counsel argued that the complaint was “grossly delayed” and filed as a retaliatory measure.
Court’s Analysis
The Supreme Court examined whether the High Court erred in quashing the proceedings under Section 482 of the Code of Criminal Procedure (CrPC).
Scope of Section 482 CrPC: Referring to the precedents set in State of Haryana vs. Bhajan Lal and Neeharika Infrastructure Private Limited vs. State of Maharashtra, the Court reiterated that the power to quash must be exercised sparingly. The Court observed that the High Court “cannot go embarking upon the genuineness of the allegations made” and must only consider whether sufficient material exists to proceed.
Civil vs. Criminal Liability: The Bench disapproved of the High Court’s reliance on the Civil Court’s decree. Justice Mishra, writing for the Bench, observed:
“It is a settled principle of criminal jurisprudence that civil liability and criminal liability may arise from the same set of facts and that the pendency or conclusion of civil proceedings does not bar prosecution where the ingredients of a criminal offence are disclosed.”
Citing the recent decision in Kathyayini vs. Sidharth P.S. Reddy (2025), the Court noted that civil adjudication and criminal prosecution proceed on different principles. The Court stated:
“The decree passed by the Civil Court neither records findings on criminal intent nor on the existence of offences such as forgery, cheating, or use of forged documents. Therefore, civil adjudication cannot always be treated as determinative of criminal culpability at the stage of quashment.”
The Court further held that adjudication of forgery or cheating in relation to a settlement deed will always carry a civil element, but that does not preclude criminal proceedings.
“To permit quashing on the sole ground of a civil suit would encourage unscrupulous litigants to defeat criminal prosecution by instituting civil proceedings.”
On Delay and Conduct: The Supreme Court rejected the High Court’s findings regarding the Appellant’s delay in filing the complaint and his non-participation in the civil suit. The Bench held:
“Delay in filing a complaint, by itself, is never a ground for quashing criminal proceedings at the threshold. Whether the delay stands satisfactorily explained or whether it impacts the credibility of the prosecution, is a matter of appreciation of evidence before the Trial Court and not for summary determination by the High Court under Section 482 of the Cr.PC.”
The Court emphasized that issues regarding the mental state of executants, fraudulent intent, and the manner in which proprietary advantage was obtained “require a full-fledged trial on evidence.”
Decision
The Supreme Court allowed the appeal and set aside the impugned order of the Madras High Court dated October 22, 2024.
The Court directed:
“C.C. No. 2 of 2023 shall stand restored for trial before the learned Special Metropolitan Magistrate-I, Special Court for Exclusive Trial of Land Grabbing Cases, Allikulam, Egmore, Chennai.”
The Bench clarified that the Trial Court shall independently arrive at its conclusion based on the evidence tendered before it, without being influenced by the observations in this judgment.
Case Details
Case Title: C.S. Prasad vs. C. Satyakumar and Others
Case No.: Criminal Appeal No. 140 of 2026 (Arising out of S.L.P. (Crl.) No. 397 of 2025)
Bench: Justice Sanjay Karol and Justice Prashant Kumar Mishra
