This article is written by Abhijith Christopher, pursuing a Certificate Course in Advanced Civil Litigation: Practice, Procedure and Drafting from LawSikho.

Introduction to Civil Disputes

A Civil Dispute in general, pertains to a dispute initiated by one party against another to lay claim over a certain value of money. According to the Black’s Law Dictionary, it relates “to private rights and remedies that are sought by action or suit, as distinct from criminal proceedings”. As can be made out from the aforementioned definition, such disputes are restricted to rights and remedies of a private nature. 

The meaning of such remedies was rightfully settled by the Hon’ble Supreme Court in the case of LIC v. Escorts India Ltd. whereby the Constitutional Bench opined that, until and unless there is a public law character associated with the action of the state with respect to the contractual obligations arising out of a tort, the court will not examine it. According to the Oxford Dictionary, public law comprises criminal law, administrative law, tax law, administrative law, and the whole of procedural law. The laws that pertain to regulating and adjudicating the relationships between individuals come within the ambit of private law. Civil disputes in essence, hence come within private law in this regard.

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Difference between Civil and Criminal Disputes

Civil disputes are mostly of a commercial nature, but it is not possible to precisely draw a line with respect to which disputes are civil and which disputes are criminal because the circumstances can differ from case to case. The difference between civil and criminal disputes can be made out from the following points:

  1. One essential difference that is commonly known in this regard is that civil disputes are instituted to claim damages, while one institutes a criminal dispute with the sole intention of punishing and imprisoning the other party. 
  2. Civil disputes mostly involve private disputes between different organizations and individuals. A criminal dispute on the contrary, involves instituting an action aimed towards the curbing of something that may prove to be harmful to the society in its entirety. This is one reason why such cases come within the jurisdiction of the prosecution, and are known as offences against the state.
  3. As stated earlier, civil disputes are restricted to the seeking of rights and remedies of a private nature, while criminal disputes fall within the public realm in this regard.

But irrespective of these differences, these disputes cross over to one another in some circumstances. For instance, in a situation where someone is charged with the criminal offence of homicide may also be sued for the civil wrong of wrongful death, which is a tort in essence. In a case where a person is faced with a civil suit for intentionally having committed the torts of assault or battery, can also be arrested and charged for committing the crimes of assault or battery. 

The road to vexatious litigation: the wrongful institution of criminal disputes

The Alberta Court of Appeal in the case of Jonsson v. Lymer held that the term vexatious litigant is a term used to refer to those individuals who wrongfully file and initiate cases of a frivolous nature without merit. Such practices are termed as wrongful because these criminal cases are initiated as a ruse to threaten and pressurize the accused to enter into a settlement. It can be seen in many instances nowadays that, in case of a transaction of a civil nature, parties wrongfully institute criminal cases. As held by the Apex Court in Md. Ibrahim v. State of Bihar, civil cases in these instances are given criminal outlines, primarily with the object of hastening the compensation recovery mechanism in civil suits or to pressurize and harass the accused.

In the case of C. Parthasarathy v. Bulls and Bears (Stock Brokers) Ltd., Mr. Parthasarathy failed to transfer 2500 shares to Bulls and Bears Ltd. and there was a belated transfer of shares worth Rs. 37,700/- as well. But Bulls and Bears Ltd., instead of instituting a civil suit against the former, went on to institute a criminal case citing wrongful loss, cheating and forgery. 

The Hon’ble High Court of Punjab and Haryana went on to note in the aforementioned case that the offences for which Mr. Parthasarathy was summoned did not satisfy any of the requirements of the offences. It was eventually held by the court that complaint so filed in this instance for the alleged offences committed under Sections 420, 406, 468, and 471 of the IPC amounted to a gross abuse of the process of law, and thus the complaint is filed by Bulls and Bears Ltd. against Mr. Parthasarathy was quashed.

Similarly, in K. Venkatakrishnan v. Sub Inspector of Police, in a case involving allegations of cheating and a criminal breach of trust, the Hon’ble High Court of Madras noted that the required precondition necessary to constitute cheating under Section 415 of the Indian Penal Code, whereby there had to be dishonest inducement on the part of the accused, did not exist, as could be made out from the facts and circumstances. 

The Court hence quashed the case filed against the petitioner, K. Venkatakrishnan, by stating that, “An attempt has been made by the second respondent to cloak a civil dispute with a criminal nature despite the absence of the ingredients necessary to constitute a criminal offence. The complaint filed by the second respondent against the petitioners constitutes an abuse of process of court and is liable to be quashed.”

The atypical instance of FIR’s being filed in matters involving a civil dispute: safeguards

It was stated by the Hon’ble Punjab HC in the case of Manjit Kaur v. State of Punjab that, “It is being noticed that in a number of cases involving pure and simple money recovery, specific performance issues or such matters, FIRs are being registered by the police authorities. In order to avoid harassment in the matters involving civil disputes, it is the need of the hour that the police department at the appropriate level looks into the process of registering FIRs, especially in matters having tone of a civil dispute.”. It was also observed in the aforementioned case that such cases are initiated because such action is considered to shortcut to reduce the effort and time taken in civil litigation.

Recently, the Hon’ble Apex Court, in the case of M. Jayanti v. K.R. Meenakshi while hearing a Criminal Appeal went on to hold that, while invoking its power under Section 482 of the Code of Criminal Procedure, the court shall not initially enquire into the validity of the available evidence but rather look into:

  1. Whether the allegations so mentioned in complaint form the basis for the necessary requirements so as to constitute certain offences that are complained of,
  2. Whether required preconditions for taking cognizance with respect to the concerned matter have been complied with accordingly or not,
  3. Whether the allegations mentioned in the complaint would not constitute the alleged offence even if entirely accepted.

The Apex Court in the case of State of Haryana v. Bhajan Lal laid down certain categories of cases where the High Court must exercise its inherent powers under Section 482 of the CrPC and its extraordinary power under Article 226 of the Constitution to obstruct the abuse of due process in law, and to ensure the rightful dissemination of justice in the society. The aforementioned categories can be seen summarized as follows:

  1. Where it can be seen that the allegations made in the complaint or the FIR do set out a case against the accused or constitute an offence against the former. This category is applicable even when such allegations are taken at their face value.
  2. Where the allegations mentioned in the FIR do not clearly disclose a cognizable offence.
  3. Where the unconverted allegations are made in the complaint or FIR, and in the evidence collected so as to support the same do not make out a prima facie case against the accused, nor make a clear disclosure of the commission of any offence against the former.
  4. Where the allegations contained in the FIR constitute a non-cognizable offence instead of a cognizable offence.
  5. Where the said allegations in the FIR are highly inconclusive whereby there are insufficient grounds to be proceeded upon against the accused.
  6. Where the concerned code or act (in accordance with which the case is instituted) in question contains an express legal bar inherent in its provisions which provides the aggrieved party to the wrongfully instituted criminal suit with an effective redressal.
  7. Where it can be seen that the proceedings have been initiated in a mala fide manner and with an ulterior intention or motive of wreaking distress upon and causing distress to the accused as a result of an inherent personal or a private grudge.

The aforementioned requirements are one of the many instances where the Supreme Court has laid down safeguards against the wrongful institution of criminal cases in instances where civil cases are to be filed instead.

Conclusion: the need for guidelines to curb the present situation 

A question comes up at this point as to whether a legal machinery exists which prevents the filing of a FIR in case of a civil dispute. The Hon’ble Apex Court in this regard, in the case of Lalita Kumari v. Govt. of UP and Ors., directed that. “If the information received does not disclose a cognizable offence but indicates the necessity for an inquiry, a preliminary inquiry may be conducted only to ascertain whether a cognizable offence is disclosed or not.”. Furthermore, it can be seen in the ninth chapter Central Bureau of Investigation Manual, 2015, that it calls for the necessary conducting of a preliminary enquiry before starting with registering a particular case. But an issue arises at this point where the above-mentioned chapter treats this particular situation as a rare occurrence, which it is not, in reality. So as to conclude, it can be implied from a bare perusal of the aforementioned reasoning and case laws that: the rampant and wrongful institution of criminal cases by parties as a shortcut to expedite the civil recovery mechanism and to pressurize and oppress their adversaries can have a widespread pernicious effect on the way in which our economic system functions. And thus, it is necessary that the courts undertake relevant safeguards to curtail the spread of such vexatious litigation.

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