Mandatory Section 202 inquiry and prima facie criminal ingredients are required before summons in complaints arising from civil disputes.

Where accused persons reside beyond the Magistrate's territorial jurisdiction, the amended Section 202 CrPC requires postponement of process and an inquiry or investigation before summons is issued. The text also states that a complaint arising from a business dispute over TDS deduction and non-deposit must disclose the essential ingredients of cheating, criminal breach of trust, or criminal conspiracy; absent deception from inception, dishonest inducement, or entrustment, criminal prosecution is not justified. The operative point is that non-compliance with Section 202 and absence of a prima facie criminal case make continuation of the proceeding unsustainable and amount to abuse of process.

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Issues: (i) Whether the Magistrate was required to conduct an inquiry under Section 202 of the Code of Criminal Procedure before issuing process against accused persons residing beyond the territorial jurisdiction of the Court. (ii) Whether the complaint disclosed the ingredients of offences under Sections 120B, 420 and 406 of the Indian Penal Code so as to justify continuation of the criminal proceeding.

Issue (i): Whether the Magistrate was required to conduct an inquiry under Section 202 of the Code of Criminal Procedure before issuing process against accused persons residing beyond the territorial jurisdiction of the Court.

Analysis: The accused persons were shown to be residing outside the jurisdiction of the Magistrate. In such a situation, the amended language of Section 202 makes postponement of process and an inquiry or direction for investigation mandatory before summons can be issued. The order issuing process reflected only examination of the complainant and a prima facie view, without the requisite inquiry contemplated by Section 202. The summoning order therefore did not satisfy the statutory requirement or the standard of application of mind.

Conclusion: The requirement under Section 202 was not complied with and the summoning order was unsustainable.

Issue (ii): Whether the complaint disclosed the ingredients of offences under Sections 120B, 420 and 406 of the Indian Penal Code so as to justify continuation of the criminal proceeding.

Analysis: The dispute arose out of a business transaction concerning deduction and alleged non-deposit of TDS, which was essentially civil and fiscal in character. The materials did not show deception from inception, dishonest inducement, entrustment, or the essential ingredients necessary to constitute cheating, criminal breach of trust, or criminal conspiracy. The court found no prima facie criminal case and held that the proper remedy lay elsewhere, not in criminal prosecution.

Conclusion: The complaint did not disclose the alleged offences and continuation of the proceeding would amount to abuse of the process of law.

Final Conclusion: The criminal revision succeeded, and the complaint proceeding was quashed for want of compliance with Section 202 and for absence of a prima facie criminal case.

Ratio Decidendi: When accused persons reside beyond the territorial jurisdiction of the Magistrate, inquiry under the amended Section 202 is mandatory before process is issued, and a criminal complaint arising from a primarily civil dispute must disclose the essential ingredients of the alleged offences to justify summons.

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