Civil dispute disguised as criminal complaint cannot sustain cheating or breach of trust charges absent initial dishonest intent.

A commercial supply dispute involving part payment and unpaid balance was treated as civil in character because the materials did not show deception or dishonest inducement at the inception of the transaction. In the absence of allegations or evidence of fraudulent intent from the beginning, mere non-payment of the balance price could not sustain charges of cheating or criminal breach of trust under Sections 420 and 406 IPC. The Court also reiterated that inherent power under Section 482 CrPC may be used to prevent abuse of process and secure the ends of justice where a civil dispute is dressed up as a criminal complaint. The criminal proceedings were therefore quashed.

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Issues: Whether the criminal proceeding arising out of the complaint should be quashed under Section 482 of the Code of Criminal Procedure on the ground that the dispute was essentially civil in nature and did not disclose the ingredients of cheating or criminal breach of trust.

Analysis: The dispute arose from a commercial transaction for supply of goods, against which part payment had been made and the balance remained unpaid. The Court noted that the materials did not show any deception or dishonest inducement at the inception of the transaction. In the absence of allegations or evidence of fraudulent or dishonest intention from the beginning, mere non-payment of the balance price could not be converted into an offence under Sections 420 and 406 of the Indian Penal Code. The Court also applied the settled principle that the inherent power under Section 482 of the Code may be used to prevent abuse of process and secure the ends of justice, especially where the allegations reveal a civil dispute disguised as a criminal case.

Conclusion: The proceedings were held liable to be quashed, as the dispute was civil in character and the criminal case did not disclose the essential ingredients of the alleged offences.

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