Criminal process cannot continue for a mere contractual payment dispute when cheating or breach of trust ingredients are absent.

Criminal proceedings for offences under Sections 406 and 420 read with Section 34 IPC were quashed because the allegations, even if accepted, disclosed only a contractual dispute over non-payment under an agreement. Mere breach of contract or failure to pay dues does not amount to cheating or criminal breach of trust unless dishonest intention and the essential ingredients of the offences are shown. As the dispute was essentially civil and the complaint did not disclose the alleged offences, continuation of the prosecution would have been an abuse of process, and the inherent power under Section 482 CrPC was properly exercised.

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Issues: Whether the criminal proceedings for offences under Sections 406 and 420 read with Section 34 of the Indian Penal Code were liable to be quashed under Section 482 of the Code of Criminal Procedure, 1973 on the ground that the dispute was essentially civil in nature and the ingredients of the alleged offences were not disclosed.

Analysis: The allegations, even if taken at face value, disclosed a contractual dispute arising from non-payment of amounts allegedly due under an agreement. Mere breach of contractual obligations or non-payment of dues does not by itself constitute cheating or criminal breach of trust unless the requisite dishonest intention or other essential ingredients of the offences are made out. The dispute was at its core civil, and the continuation of criminal proceedings on such facts would amount to an abuse of the process of law. The inherent jurisdiction under Section 482 of the Code of Criminal Procedure, 1973 was therefore rightly exercised to prevent misuse of the criminal process.

Conclusion: The quashing of the criminal proceedings was proper, and the complaint did not disclose the offences alleged.

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