Quashing of criminal proceedings for cheque dishonour claims was refused where cheating and breach of trust were prima facie disclosed.

A criminal proceeding alleging cheating and criminal breach of trust arising from a loan transaction and dishonoured cheque was not liable to be quashed under the High Court's inherent powers. The complaint disclosed a prima facie case, and the explanation for the altered signature and non-payment could not be accepted at the quashing stage. The Court reiterated that quashing is justified only where no offence is disclosed, the case is inherently improbable, or the complaint is manifestly mala fide. A pending proceeding under Section 138 of the Negotiable Instruments Act did not, by itself, bar prosecution where the IPC ingredients were independently made out and the issue of mens rea required trial.

---

---

Issues: Whether the criminal proceeding under Sections 420 and 406 of the Indian Penal Code was liable to be quashed under Section 482 of the Code of Criminal Procedure, 1973 notwithstanding the pending proceeding under Section 138 of the Negotiable Instruments Act.

Analysis: The complaint disclosed that the petitioner had obtained a loan, issued a cheque towards repayment, and the cheque was dishonoured with the signature differing. The materials indicated that the statutory notice was not met with payment and the explanation for the altered signature and non-payment could not be accepted at the stage of quashing. The principles governing exercise of inherent power require restraint and quashing is warranted only where the complaint does not disclose any offence, is inherently improbable, or is manifestly mala fide. The existence of a parallel proceeding under Section 138 of the Negotiable Instruments Act did not bar criminal prosecution where the ingredients of the alleged IPC offences were independently disclosed and mens rea required trial.

Conclusion: The proceeding was not liable to be quashed and the challenge failed.

Final Conclusion: The criminal revisional application was dismissed and the prosecution was permitted to proceed in accordance with law.

Ratio Decidendi: Where the complaint discloses a prima facie case of cheating or criminal breach of trust arising from a loan transaction and cheque dishonour, the existence of a pending Section 138 proceeding does not by itself justify quashing under the inherent powers of the High Court.

---