Cheque for pre-existing debt did not amount to cheating or criminal breach of trust; criminal proceedings were quashed.

Where goods had already been supplied and cheques were issued only to discharge an existing liability, dishonour of those cheques did not disclose cheating or criminal breach of trust. The court treated the case as one involving a cheque towards a pre-existing debt, not a cheque obtained to induce delivery of goods, and held that the allegations amounted at most to breach of promise giving rise to civil liability. On that basis, no offence was made out under Sections 406 or 420 of the Indian Penal Code, and the complaint, FIR, and related proceedings were quashed.

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Issues: Whether the complaint, FIR, and consequent proceedings disclosed any criminal offence under Sections 406 and 420 of the Indian Penal Code, or were liable to be quashed under Section 482 of the Code of Criminal Procedure.

Analysis: The allegations showed that goods had already been supplied and that the cheques were issued only towards an existing liability. On those facts, dishonour of the cheques did not disclose cheating or criminal breach of trust. The distinction between a cheque issued to obtain delivery of goods and a cheque issued to discharge a pre-existing debt was material; on the facts pleaded, the case fell in the latter category and amounted at most to breach of promise giving rise to civil liability.

Conclusion: No criminal offence was made out under Sections 406 or 420 of the Indian Penal Code, and the complaint, FIR, and related proceedings were quashed in favour of the petitioner.

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