Res Judicata Principle Applies In Criminal Proceedings; Findings In One Case Bind Parties In Subsequent Case : Supreme Court

The Supreme Court recently explained that the principle of res judicata is applicable to criminal proceedings, and hence, the findings of fact recorded by a criminal court would be binding on both parties in any subsequent proceedings involving the same issue.

In holding so, the Court explained the perceived divergence between two lines of decision.

One line of cases, with the leading case Pritam Singh & Anr. vs. The State of Punjab, AIR 1956 SC 415, stated that the principle of res judicata applies equally to criminal proceedings as it does to civil cases, emphasizing that it would be impermissible to acquit an accused in a later trial based on the same evidence that had previously formed the basis for a conviction.

However, another line of judgments in cases Devendra & Ors. vs. State of Uttar Pradesh & Anr., (2009) 7 SCC 495 and Muskan Enterprises & Anr. Vs. The State of Punjab & Anr 2024 LiveLaw (SC) 1041 lays down the scenario when the res judicata principle is not applicable to the criminal proceedings, i.e., these are proceedings where the court do not decide on merit. For example, a quashing petition filed under Section 482 Cr.P.C., if dismissed as withdrawn, then the subsequent filing of the quashing petition would not be barred by res judicata because the court didn't decide on the merits.

The Court explained that there was no real divergence between the both set of judgments, as the second set of judgments pertained to proceedings under Section 482 CrPC, while the first set was regarding judgments after a full-fledged trial.

Reading three earlier decisions vis-à-vis the two later decisions parallelly, we do not think that considering the context and the stage of the proceedings in which the matters stood and agitated before this Court, there is any diversion in the applicability of the principle of res judicata. While three earlier decisions in Pritam Singh (Supra), Bhagat Ram (supra) and Tarachand Jain (supra) were decided basis acquittal in previous trial, the subsequent decision in Devendra (supra) and Muskan Enterprises (supra) have been decided at the stage of quashing petition under Section 482 Cr.P.C., thus, in both the matters, there was no final adjudication of merits. While in Devendra (supra), the first petition was for quashing of the FIR and the second petition was preferred after the Magistrate took cognizance of the matter; in Muskan (supra), the first petition was dismissed as withdrawn whereas the second petition was held not maintainable due to earlier withdrawal without any liberty. Thus, these two cases are totally distinguishable.

The Case

The bench comprising Justices Pankaj Mithal and Prashant Kumar Mishra was hearing a case involving a business transaction in which eleven cheques were issued to the appellant's company. All eleven cheques were dishonoured due to insufficient funds, prompting a complaint under Section 138 of the Negotiable Instruments Act, 1881 (“NI Act”).

Separately, to settle liabilities unrelated to the dishonoured cheques, the drawer issued three demand drafts in the name of the appellant's company. During the NI Act proceedings, the court convicted the drawer, clearly recording that the demand drafts were meant to discharge other debts, not those arising from the dishonoured cheques.

Subsequently, the drawer, Tyagi, filed an FIR under Section 420 IPC, alleging that despite making payment through the demand drafts, the appellant fraudulently re-presented and encashed some of the cheques, resulting in double payment.

Challenging the High Court's refusal to quash the FIR, the appellant approached the Supreme Court, arguing that the earlier findings under the NI Act—specifically that the demand drafts were issued for separate liabilities—were conclusive and barred re-litigation of the same issue.

Decision

Setting aside the High Court's decision, the judgment authored by Justice Prashant Kumar Mishra held that the registration of the cheating case against the appellant amounted to an abuse of the legal process and was barred by the principle of res judicata. Since the NI Act proceedings had specifically recorded that the three demand drafts were issued to settle liabilities separate from those related to the dishonoured cheques, the subsequent prosecution under Section 420 IPC could not be permitted to continue.

“For the above reason it is absolutely clear that Tyagi cannot maintain a prosecution on the basis of allegations which were precisely his defence in the earlier proceedings wherein he was an accused. Thus, the present criminal proceedings deserve to be quashed on this ground alone.”, the court observed.

Before coming to such a finding, the Court delineated several precedents which either support or protest against the applicability of the principle of res judicata to criminal proceedings. The court distinguished the Devendra's case which held that res judicata is not applicable to criminal proceedings, with the present case, stating that Devendra's case was based on different factual scenario where the filing of subsequent petition under Section 482 CrPC was justified despite the dismissal of earlier petition as there was no final adjudication of the matter.

Thus, the Court noted that the precedent laid down in Pritam Singh's case that res judicata principle is applicable to the criminal proceedings is applicable in the present case because the NI Court while convicting drawer (Tyagi) of demand draft had categorically recorded a finding that the demand draft was paid for other liabilities and not towards discharge of cheque amount, thus the subsequent proceedings against the appellant on same cause of action cannot be re-litigated.

Resultantly, the Court allowed the appeal, set aside the impugned order, and quashed the section 420 IPC case against the Appellant.

Case Title: S.C. GARG VERSUS STATE OF UTTAR PRADESH & ANR.

Citation : 2025 LiveLaw (SC 436

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Appearance:

For Appellant(s) Mr. Siddharth Aggarwal, Sr. Adv. Ms. Garima Bajaj, AOR Mr. Vishwajeet Singh Bhatti, Adv. Ms. Vismita Diwan, Adv. Mr. Sajal Awasthi, Adv. Mr. S. S. Nehra, AOR Mr. Chetan Sharma, Adv.

For Respondent(s) Mr. Vikas Bansal, Adv. Dr. Vijendra Singh, AOR Mr. Deepak Goel, Adv. Mr. Shailesh Sharma, Adv. M/S. Gaur & Nehra Law Firm, AOR Mr. Prafulla Kumar Behera, Adv. Mr. S S Nehra, Adv. Dr. K S Bhati, Adv. Mr. Sanjay Singh, Adv. Mr. Vikrant Nehra, Adv. Mr. H L Nimba, Adv.