FIR alleging cheating and criminal breach of trust can proceed despite an alternative NI Act remedy.

An FIR alleging cheating and criminal breach of trust in relation to hypothecated vehicle property was treated as disclosing cognizable offences under Sections 420 and 406 of the Indian Penal Code. The allegations were viewed as prima facie misappropriation of hypothecated property, not a mere loan-recovery dispute, so the availability of a remedy under Section 138 of the Negotiable Instruments Act did not justify quashing the criminal case or staying arrest. Interference at the investigation stage was therefore considered unwarranted where the FIR itself disclosed a cognizable offence.

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Issues: Whether the FIR alleging cheating and criminal breach of trust in relation to hypothecated vehicle property was liable to be quashed, and whether the arrest of the petitioner deserved to be stayed on the ground that the finance company had an alternative remedy under Section 138 of the Negotiable Instruments Act, 1881.

Analysis: The allegations in the FIR were treated as relating to misappropriation of hypothecated property and not as a mere loan-recovery dispute. On a prima facie reading, the FIR disclosed cognizable offences under Sections 420 and 406 of the Indian Penal Code, 1860. The existence of a possible remedy under Section 138 of the Negotiable Instruments Act, 1881 did not, on these facts, warrant quashing of the criminal proceedings or protection from arrest. Interference at the investigation stage was therefore found to be unwarranted where a cognizable offence was discernible from the allegations.

Conclusion: The prayer for quashing the FIR and for staying the arrest was rejected.

Ratio Decidendi: Where the FIR, on its face, discloses a cognizable offence of cheating or criminal breach of trust, it cannot be quashed or investigation arrested merely because an alternative remedy under the Negotiable Instruments Act is also available.

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