Quashing of criminal proceedings refused where complaint prima facie disclosed cheating, trust breach and conspiracy despite a commercial backdrop.

Inherent powers to quash criminal proceedings were declined because the complaint and charge-sheet, read as a whole, prima facie disclosed cheating, criminal breach of trust and conspiracy. Applying settled quashing principles, the Court found that allegations of false assurances on share allotment and an IPO exit route, if taken at face value, amounted to cognizable offences and raised issues requiring evidence. The commercial nature of the transaction did not, by itself, negate criminality where wilful misrepresentation and dishonest inducement were pleaded. The cognizance order was left undisturbed and the prosecution was permitted to continue.

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Issues: Whether the criminal proceedings arising out of the complaint and charge-sheet disclosed a prima facie case of cheating, criminal breach of trust and conspiracy so as to warrant exercise of inherent powers for quashing.

Analysis: The petition invoked the inherent jurisdiction under Section 482 read with Section 401 of the Code of Criminal Procedure to quash the proceedings. The materials in the complaint and FIR alleged that the accused induced the complainant to invest in the company by false assurances regarding allotment of shares and an exit route through an IPO, and that the assurances were not honoured. The Court applied the settled principles governing quashing, including the categories where interference is permissible to prevent abuse of process, and held that the allegations, taken at face value, disclosed cognizable offences. The Court further held that the fact that the dispute arose in the course of a commercial transaction did not by itself negate criminality where wilful misrepresentation and dishonest inducement were pleaded. The question whether the allegations would ultimately be proved required appreciation of evidence and could not be decided at the quashing stage.

Conclusion: The request to quash the criminal proceedings and set aside the cognizance order was rejected.

Final Conclusion: Continuance of the prosecution was held not to be an abuse of process, and the trial court was left to proceed with the complaint in accordance with law.

Ratio Decidendi: Inherent powers under Section 482 of the Code of Criminal Procedure are not to be exercised where the complaint or FIR, read as a whole, prima facie discloses cognizable offences, even if the dispute also has a commercial backdrop.

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