Civil commercial dispute, not cheating or breach of trust, led to quashing of criminal proceedings.

A commercial supply dispute over rejected garments was held to be civil in nature, not a case of cheating or criminal breach of trust. The complaint did not show deception or fraudulent inducement at the inception of the transaction, and it also failed to allege entrustment in the manner required for criminal breach of trust. On the admitted facts, the allegations arose from contractual non-payment and product rejection, so criminal liability could not be fastened merely because the appellants held company positions. The criminal proceedings were therefore liable to be quashed and the summons set aside.

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Issues: Whether the allegations in the complaint disclosed the ingredients of the offences of cheating and criminal breach of trust, or merely a civil dispute arising out of a contract, so as to justify quashing of the criminal proceedings.

Analysis: The complaint and the accompanying documents showed that the parties had entered into a commercial arrangement for supply of garments and that the controversy arose from rejection of the goods by the foreign buyer on account of alleged defects and non-payment of the balance amount. The essential ingredients of cheating were not satisfied because there was no material to show deception or fraudulent inducement at the inception of the transaction. The ingredients of criminal breach of trust were also absent because the allegations did not disclose entrustment in the manner required by law. On the admitted facts, the dispute was contractual and civil in nature, and the material relied on could be examined to determine whether any cognizable offence was made out. The appellants could not be fastened with criminal liability merely by reason of their positions in the company.

Conclusion: The criminal proceedings were not maintainable on the facts disclosed, and the summons issued to the appellants were liable to be quashed.

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