Prima facie cheating in a business transaction justified refusal to quash proceedings under inherent jurisdiction.

A complaint alleging cheating in a business transaction was not quashed because it disclosed a prima facie cognizable offence: the accused allegedly received goods, made only partial payment, and issued a cheque that was dishonoured with a stop-payment endorsement. The HC held that, at the inherent jurisdiction stage, the court must only test whether the complaint discloses an offence and must not conduct a mini-trial or weigh evidence. The delayed objection about sub-standard goods, the later legal notice, and messages seeking payment supported an inference of dishonest intention at the inception. Authorities on prosecution of a company under the Negotiable Instruments Act were held inapplicable, as the case involved alleged cheating under the Penal Code.

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Issues: Whether the complaint and consequent investigation alleging cheating in a business transaction disclosed a prima facie offence warranting interference under the inherent jurisdiction, and whether the proceedings could be quashed on the grounds that the transaction was commercial and that the company was not arraigned as an accused.

Analysis: The complaint contained specific allegations that the petitioner received goods, made only partial payment, and issued a cheque that was dishonoured with a stop-payment endorsement. The Court held that, for exercise of inherent powers, it must examine only whether the complaint discloses a prima facie cognizable offence and should not enter into appreciation of evidence or conduct a mini-trial at the investigation stage. The absence of an immediate objection regarding alleged sub-standard goods, together with the delayed legal notice and the exchange of messages showing demand for payment, supported the allegation that dishonest intention existed at the inception of the transaction. The authorities relied upon by the petitioner relating to prosecution of a company under the Negotiable Instruments Act were held inapplicable because the present case was one of alleged cheating under the Penal Code and not a proceeding under Section 138 of the Negotiable Instruments Act.

Conclusion: The complaint disclosed a prima facie case of cheating, and the Court declined to quash the proceedings under Section 482 of the Code of Criminal Procedure, 1973.

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