2004 (12) TMI 738 - SC - Indian Laws

Summary

In the Supreme Court case (2005) 10 SCC 626, the appellants challenged a High Court order that stayed proceedings under Section 138 of the Negotiable Instruments Act concerning eight cheques, pending completion of related civil proceedings. The respondents had sought a declaration under Articles 226 and 227 of the Constitution, asserting that the criminal complaints were not maintainable due to an arbitration award in their favor.The Supreme Court noted that the criminal proceedings under Section 138 and civil proceedings are based on independent causes of action. The existence of an arbitration award, while potentially a defense, does not automatically justify staying the criminal proceedings. The Court emphasized that "mere making of the award cannot be a ground to stall or stay the proceedings initiated under Section 138 of the Negotiable Instruments Act."Consequently, the Supreme Court set aside the High Court's order and directed that the criminal complaint cases proceed in accordance with the law, without expressing any opinion on the merits of the complaints or defenses. The appeal was allowed on these terms.