Criminal prosecution from an inter-corporate deposit dispute was allowed to continue despite civil remedies and parallel proceedings.

A criminal proceeding arising from an inter-corporate deposit was not quashed where the complaint and materials prima facie disclosed dishonest inducement and possible cheating or criminal breach of trust. The Court held that, at the investigation stage, it was premature to conclude that fraudulent intention was absent from the inception of the transaction. The existence of a civil remedy, or a parallel proceeding under negotiable instruments law, did not by itself bar criminal prosecution when the allegations on their face disclosed criminal ingredients. The materials required further investigation, so the inherent power was not used to terminate the prosecution.

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Issues: Whether the criminal proceeding arising out of the inter-corporate deposit transaction was liable to be quashed under the inherent jurisdiction on the ground that the dispute was purely civil and did not disclose the ingredients of cheating or criminal breach of trust.

Analysis: The complaint disclosed that a substantial sum was advanced as an inter-corporate deposit, credited to the company account, and on the same day transferred out to another account maintained by the petitioner. The record also showed dishonour of the cheque and a separate prosecution under the negotiable instruments law. In a petition for quashing, the decisive consideration was whether the allegations, taken at their face value, disclosed a criminal offence. At the investigation stage, the Court found it premature to conclude that fraudulent or dishonest intention was absent from the inception of the transaction. The existence of a civil remedy, or even a parallel proceeding under the negotiable instruments law, did not bar criminal prosecution where the ingredients of the alleged offences were prima facie made out. The materials required further investigation and were not sufficient to warrant termination of the proceeding at that stage.

Conclusion: The request to quash the criminal proceeding was rejected, and the prosecution was permitted to continue.

Ratio Decidendi: A criminal proceeding will not be quashed at the investigation stage merely because the dispute also has civil features, if the complaint and accompanying materials prima facie disclose dishonest inducement or other criminal ingredients; the inherent power is to be exercised sparingly and not to short-circuit a prosecution.

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