Recently, I was engaged as counsel in a complex white-collar crime case. The dispute arose between two directors of a company, and it quickly escalated into multiple litigations – both civil and criminal.
As I navigated the matter, I revisited a range of judicial precedents. Some judgments clearly recognized that civil and criminal proceedings can run simultaneously, while others leaned against such parallel actions, stressing the potential misuse of criminal law in what is essentially a civil or commercial dispute.
This divergence in judicial opinion reflects the larger tension in our legal system:
- On one hand – Courts acknowledge that fraud, misappropriation, and breach of trust often involve both contractual and criminal wrongs.
- On the other hand – They caution against using criminal complaints merely as a pressure tactic in corporate or contractual disputes.
The key question that arises is: Where should the line be drawn?
Disputes between directors, shareholders, or business partners frequently involve overlapping remedies. For example:
- Civil remedies – breach of contract, shareholder disputes, specific performance, damages, injunctions.
- Criminal remedies – cheating, criminal breach of trust, forgery , conspiracy, and offences under special statutes such as the Companies Act, PMLA, or IT Act.
The Supreme Court has consistently held that merely because a civil remedy exists does not automatically bar criminal proceedings if the allegations disclose a criminal offence. At the same time, courts have been equally clear that if the “criminal colour” is artificially given to a pure civil dispute, the FIR can be quashed.
Courts have repeatedly clarified, criminal law is not a tool for bargaining – it is a serious mechanism meant to punish genuine offences
For counsel, the challenge lies in drawing that fine line:
- Ensuring that real instances of fraud or dishonesty are prosecuted, while
- Protecting individuals from being dragged into criminal courts for what is essentially a commercial disagreement.
Each case turns on its facts. In the director dispute I handled, balancing both civil and criminal proceedings required deep research into precedent and careful strategy. It was intellectually stimulating to see how the law has evolved and how judges across forums interpret this intersection differently.
Finally while filing cases against each other the parties must bear these lines by Bashir Badr in their minds:
दुश्मनी जम कर करो लेकिन ये गुंजाइश रहे
जब कभी हम दोस्त हो जाएँ तो शर्मिंदा न हों
…(बशीर बद्र)