Civil loan dispute cannot sustain cheating or breach of trust charges when fraudulent intent and entrustment are absent.

A loan dispute that had already led to civil proceedings was treated as essentially civil in nature, because the complaint did not show entrustment for criminal breach of trust or fraudulent intention at the inception of the transaction for cheating. The allegations were also inconsistent with the civil pleadings, and there were no specific facts supporting conspiracy or a genuine case of criminal intimidation. On that basis, the FIR was found to be an abuse of criminal process and was quashed.

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Issues: Whether an FIR arising out of a loan transaction, where the dispute was already the subject of civil proceedings, disclosed the ingredients of offences of cheating, criminal breach of trust, criminal intimidation and conspiracy, or whether it deserved to be quashed as an abuse of criminal process.

Analysis: The transaction was admitted to be a commercial loan advanced in 2008 and the complaint was lodged only in 2015. The pleadings and materials showed that the parties and their family members had already resorted to civil proceedings based on the demand promissory notes. The allegations in the criminal complaint and the civil suits were inconsistent, and the complaint did not disclose any entrustment necessary for criminal breach of trust. There was also no material to show fraudulent or dishonest intention at the inception of the transaction, which is essential for cheating. In the absence of specific averments supporting conspiracy or a real criminal intimidation case, the dispute was found to be essentially civil in nature and the criminal case was treated as a means to recover money.

Conclusion: The FIR was held to be unsustainable and was quashed in favour of the petitioner.

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