Independent cause of action under Section 138 NI Act prevents stay of criminal complaint despite pending civil or arbitral proceedings.

Proceedings under Section 138 of the Negotiable Instruments Act are not liable to be stayed merely because related civil or arbitral proceedings are pending. The criminal complaint rests on an independent cause of action, separate from recovery or arbitral claims arising from the same transaction. An award may provide a defence in the complaint, but its effect depends on the facts and circumstances of the case; mere pendency of objections to the award does not justify halting prosecution. The stay order was therefore unsustainable and was set aside, with the complaints directed to proceed in accordance with law.

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Issues: Whether proceedings under Section 138 of the Negotiable Instruments Act could be stayed pending civil or arbitral proceedings arising from the same transaction.

Analysis: The complaints under Section 138 were instituted before the award was made. Civil or arbitral proceedings for recovery and criminal proceedings under Section 138 rest on independent causes of action. The making of an award may furnish a defence in the criminal complaint, but its effect depends on the facts and circumstances of the case. Mere pendency of objections to the award does not justify stalling the criminal prosecution.

Conclusion: The order staying the complaint proceedings was unsustainable. The stay was set aside and the complaints were directed to proceed in accordance with law.

Final Conclusion: Pending civil or arbitral adjudication does not, by itself, warrant suspension of a prosecution under Section 138 of the Negotiable Instruments Act.

Ratio Decidendi: Proceedings under Section 138 of the Negotiable Instruments Act are not liable to be stayed merely because related civil or arbitral proceedings are pending, since the criminal complaint is based on an independent cause of action.

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