Quashing of FIR for vague cheating allegations where no prima facie entrustment, misappropriation, or dishonest intention was shown.

Allegations in the FIR did not disclose the ingredients of cheating, criminal breach of trust, or dishonest misappropriation because they lacked specific averments of fraudulent intention at inception, entrustment, diversion, or dishonest use of property. The Gujarat HC found the accusations to be vague and general, with no identified false statement, breached promise, or individual role attributed to each accused, and no material showing that public funds were diverted back to the applicants. The Court held that criminal investigation cannot be used as a fishing inquiry to an offence and that no prima facie Penal Code case was made out on the face of the FIR; the FIR was therefore liable to be quashed.

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Issues: Whether the first information report disclosed the ingredients of the alleged offences so as to justify continuation of criminal proceedings and whether the FIR deserved to be quashed under the inherent jurisdiction.

Analysis: The allegations in the FIR were examined against the settled principles that cheating requires fraudulent or dishonest intention at the inception, and that criminal breach of trust and dishonest misappropriation require specific averments showing entrustment, misappropriation, or dishonest use of property. The Court found that the FIR contained only vague and general accusations of misappropriation and false promises in the prospectus, without identifying any specific false statement, the particular promise breached, or the individual role of each accused. It was also found that the material did not show that the funds collected from the public had been diverted back to the applicants or that the advances made by the company were shown to be unauthorized in the manner alleged. The Court held that investigation cannot be used as a fishing inquiry to discover whether an offence exists in the first place, and that a prima facie case for the Penal Code offences was not made out on the face of the FIR.

Conclusion: The FIR did not disclose offences under the Penal Code and was liable to be quashed.

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