P L D 1962 Dacca 11 (PLP)

It appears that the accused opposite‑party was one of the Direc tors of a Registered Private Limited Company styled "Adhakhya Mathur Babu's Shakti Aushadalaya, Dacca (Private) Limited" whereof the complainant is said to have been appointed Manager with effect from 24‑1‑

59. The company is exclusively confined to the members of the founder's family, i.e., the founder and his two brothers and is managed by three Directors representing the said three branches. On 28‑7‑59 a suit, being Title Suit No. 90 of 1959 of the last Court of the Subordinate Judge, Dacca, was instituted on behalf of the Company against the accused oppo site‑party accusing him of gross mis‑deeds in relation to the affairs of the Company including misappropriation of its pro perties and falsification of accounts and praying, inter alia accord ingly for declaring certain specified properties as the properties of the Company and also for accounts. As the accused opposite- party, It is alleged, went on with his misdeeds even after the institution of this suit, the share‑holders of the company by a resolution passed in their Extraordinary General Meeting, dated 14‑9‑59, removed him from the office of Director. He, however, did not make over charge in pursuance of that resolu tion and appears, as alleged, to have created a fraudulent document whereby he dishonestly and wrongfully "transferred all the assets of the Company to himself and started a bogus company to facilitate his misappropriation" which is said to total a sum of rupees one lakh or thereabout. On these allega tions the above‑named Manager of the Company lodged on 20‑1‑59 a complaint before the Sub‑Divisional Magistrate, Dacca, whereon the accused opposite‑party was summoned under section 282 (A) of the Companies Act and section 403 of the Pakistan Penal Code. On 2‑2‑60 the accused opposite‑party appears to have filed his written statement in the aforesaid civil suit. The gist of his defence therein appears to be that the so‑called Company was a mere paper transaction and never actually func tioned as such, that its incorporation was a mere cloak for the family arrangement for carrying on the joint family business of the members of the family, that no property was in fact transferred or made over to the Company, and that the members of the family continued all throughout to conduct the business as a joint family business as before. It was, therefore, that he successfully moved the learned Magistrate before whom the criminal case was pending for staying all further proceedings therein till the disposal of the civil suit.

2. This within a short compass is the background of the impugned order, which has already been cited above.

3. Mr. Promode Chandra Bose, Advocate, has appeared on behalf of the complainant‑petitioner while the accused opposite‑party has been represented by Mr. Asaduzzaman Khan Advocate.

4. Mr. Bose has contended that the criminal case was started on 20‑1‑EO complaining of misdeeds and misappropriation during the period from 14‑2‑59, i.e., the date on which the resolution removing accused opposite‑party from Directorship was passed, and should not have as such, been stayed pending disposal of the suit between the parties which was filed on 28‑7‑59 and must necessarily, therefore, be based on allegations rela ting to the period prior to that date. This contention, in my opinion, has no substance at all for the simple reason apart from others that the plaintiff in the civil suit has asked, inter alia, for accounts and, as such, the alleged transactions, whereon the criminal case was founded, must also come within the scope of the said relief. This is however, not the sole nor even the strongest nexus between the two actions commenced before two different forms. A question of far greater importance touching the very root of the controversies between the parties also appears to arise in both, and that relates as is clear from the state ment of facts already set out above, to the very foundation of the claim laid on behalf of the Company concerned. Thus the crux of the prosecution launched against the accused opposite‑party is that as Director he has misappropriated the company's fund and other properties and falsified its accounts; while the main theme of his defence in the civil suit is that the so‑called Company never existed except on paper and is not entitled at all to the properties in dispute, which continue to belong to, and to be managed by the members of the family by right of inheritance as their joint family properties and concerti. Necessarily the alleged criminal liability of the accused opposite‑party will hinge upon the determination of the question whether the assets and properties involved were, in fact, transferred to the Com pany and whether the Company being vested with those assets and properties, actually function‑: d or operated as an active concern or remained a Company In name on paper only; and that exactly is the basis issue in the civil suit as well. In other words, it appears that it shall be necessary to see in both whether the disputed assets are the properties of the Company or the properties of the joint family of which the accused opposite- party is admittedly a co‑sharer in possession. So the most crucial issue in both the actions is substantially identical and Mr. Bose, too, eventually found it difficult to dispute this. He has, however, contended that the mere pendency of a civil suit having one or more of its issues identical or substantially iden tical with a point at issue in a criminal case between the parties, is no ground for staying the latter pending the disposal of the former. In support of this contention, he has cited the cases of UTha Zan v. Upyant (37 Cr. L J 261) and Jehangir Pestonji Wadia v. Framji Rustomji Wadir (29 Cr. L J 1052). The relevant position laid down in the first mentioned case is: "No doubt there are many cases in which it is undesirable that a criminal prosecution connected with a civil suit should be proceeded with until the civil case is decided; but such cases are usually those where the criminal prosecutions arise directly out of the proceedings in the Civil Court, such as for instance prosecutions for perjury or forgery in relation to docu ments put in evidence in the Civil Court. It would be un reasonable and speculative to order stay of the proceedings in the criminal Court on the off chance that there might be some decision in the Civil Court which have some hearing on the criminal prosecution." It is, however, important to note that this related to a case in which the criminal liability of the accused could be established regardless of the result of the civil suit and it is in that view of the matter that the prayer for stay of the criminal proceedings appears to have been declined. Even then it appears to be clearly recognised therein that where, as in the present case before me, the decision in the civil suit is likely to have a direct and vital bearing upon the alleged guilt or otherwise of the accused in the criminal case or render his prosecution, for all practical purposes, infructuous, the proper course is to keep the criminal case stayed. Similarly, in the other case referred to above, the learned Judge, while observing that the mere pendency of a civil suit or appeal is not in itself a sufficient ground for staying criminal proceedings, has expressly made it clear that ` if the object of the criminal proceedings in a private prosecution is to prejudice the trial of the civil suit or to use as a lever to coerce the accused into a compromise of the civil suit, the crimi nal proceedings can be stayed till the decision of the civil suit.

5. Mr. Asaduzzaman appearing on behalf of the opposite- party concedes that an order staying a criminal case cannot be justified simply on the ground that the point at issue failing to be determined therein is exactly or substantially identical with an issue or issues raised in a pending civil suit between the parties, and that besides such identity, it must also be shown to the end that the accused is likely to be prejudiced in the crimi nal case or victimised in regard to the civil suit in case both were allowed to proceed simultaneously. Accordingly, he has tried to support the impugned order on the ground of prejudice and undue pressure both. He has thus argued that if the criminal case were allowed to proceed that is likely to cause two‑fold prejudice to his clients in the first place, the criminal Court is not likely to go into the complicated facts as thoroughly and exhaustively as the Civil Court and, accordingly, there would be if the process is reversed; secondly, if the criminal case were allowed to proceed and ended against his client and in case his client's defence were thereafter upheld in the civil suit, the unnecessary loss, suffering and indignity, to which he might in the meantime be subjected, may be even irreparable at least in certain respects. As to undue pressure, his contention is that having failed to secure injunction at all and also attachment before judgment to the extent prayed for, the petitioner engi neered the present prosecution mainly for the purpose of coercing the accused opposite‑party to submission vis‑a‑vis the subject- matter of the civil suit. He has, further, contended that there is also the likelihood of a conflict of decisions between the two Tribunals, which also, in accordance with the principle laid down under the established authorities, should be avoided by staying the criminal case, particularly where the civil suit has be come ripe for hearing. There is no dispute that the civil suit. In this instance has already been fixed for positive hearing on 3‑4‑

61. In these circumstances according to him, the learned Magistrate exercised his discretion judicially and properly in staying the criminal proceedings, as he has done, and this Court, too should not interfere in revision with the order passed by him. In this behalf he appears to be fully supported by the authority of J. M. Lucas v. Official Assignee of Bengal (A I R 1920 Cal. 624) wherein it has been held: - "Though no invariable rule can be laid down, it is ordinarily undesirable to Institute criminal proceedings until the deter mination of civil proceedings in which the same issues are involved. Criminal proceedings lends themselves to the unscru pulous application of improper pressure with a view to influ encing the course of the civil proceedings, and beyond that there is the mischief of criminal proceedings being instituted with an imperfect appreciation of the facts where they have not been ascertained in the more searching investigation of a Civil Court." Following this it has similarly been laid down in the case of Srikisson Beriwalla and another v. Emperor (37 Cr. L J 187). "Where the issues in a criminal case are likely to be included in the issues in Civil Court which is ripe for hearing and there is a risk of a conflict of jurisdiction, it is better that the criminal proceedings are stayed." Having regard to the facts and circumstances disclosed, I an, of opinion that, even apart from the question of improper pressure which, too, can by no means be definitely ruled out, there is also the chance of prejudice to the accused if the cri minal case against him were allowed to proceed and be disposed of before the civil suit, and should the case thus and unfavourably to him, that adverse decision is likely to prejudice him in his defence in the civil suit as well. In these circumstances and also keeping in view the fact, civil suit has become ripe and has already been set down for positive hearing, I cannot see my way to interfere with the impugned order of stay which, on the other hand, appears to me to be fully justified. In the result, the rule is discharged. K. B. A.????? Rule discharged.