JUDGMENT : B.K. Behera, J. - The five Petitioners, figuring as the accused persons in a case u/s 420 of the Indian Penal Code, on the petition of complaint made by the opposite party, who is the proprietor of the South Indian Match Trading Company having business at Cuttack, in the Court of the Chief Judicial Magistrate, Cuttack, who, after having the complaint enquired into by a Magistrate of the second class, has taken cognisance of the offence on the basis of the report submitted by the Magistrate after examining the opposite party, and one witness, have made this application u/s 482 of the Code of Criminal Procedure ('the Code', for short) for quashing the criminal proceeding against them. Mr. R. Mohanty for the Petitioners has urged that the opposite party has alleged violation of contractual obligations and in the absence of prima facie materials making out an offence of cheating, no cognisance could be taken against the Petitioners who have falsely been implicated by the opposite party in his complaint filed as a counter blast to and for his defence in the suit instituted by the Petitioners against the opposite party arising out of the same contract. Mr. Tripathy, the learned Counsel appearing for the opposite party, has, however, submitted that after the enquiry, cognisance has been taken and it is not a fit case in which the inherent jurisdiction of this Court should be exercised u/s 482 of the Code. 2. The case of the complainant opposite party, as can be gathered from the petition of complaint and the statements of the opposite party and his witness examined during the enquiry u/s 202 of the Code and the documents on which reliance had been sought before cognisance of the offence was taken, is that the Petitioner No. 5, being the salesman of the Petitioner No. 1 M/s. Lord Match Industries of which the other three Petitioners are said to be partners, contacted the opposite party in March, 1981 for purchase of safety marches of 'Jolly' brand assuring that the safety matches supplied would be of the best variety and quality which were damp-proof and upto the norm and standard laid down by the Government and Central Excise Manual and an agreement was executed by the opposite party who placed orders for the supply of 600 bundles of 'Jolly' brand safety matches and banded over a cheque for Rs. 5,000/- on March 19, 1981 as advance, but the Petitioners supplied 600 bundles of 'Jolly' brand match boxes which were not damp-proof and were of substandard quality containing less than 50 sticks in violation of Rule 63 of the Central Excise Manual for which the opposite patty found difficulties in disposing of the stock and earned a bad reputation and lost the faith and goodwill of many of his customers because of complaints by the local dealers. The Petitioners, it is alleged, have not properly executed the contract and the safety matches supplied by them are not according to the specifications contained in the contract and after protracted correspondences with the Petitioners, the opposite party informed the Assistant Collector, Central Excise, Bhubaneswar, about this illegal and fiaudulent action on the part of the Petitioners and on verification, by the Superintendent (Preventive) Central Excise, Bhubaneswar, it was noticed that some match boxes contained less than 50 sticks. 3. It would be noticed from the report of enquiry that the Magistrate to whom the case had been referred has come to the abrupt conclusion that the opposite party had succeeded in making out a prima facie case without indicating as to how he came to find that the ingredients of an offence of cheating had been made out and the learned Chief Judicial Magistrate went legally wrong in taking cognisance of the offence on the basis of such a report without recording the grounds for his satisfaction that an offence had been made out and by merely stating that there was a prima facie case against the Petitioners. 4. For the reasons to follow, I would accept the contention raised on behalf of the Petitioners that the case is one of a mere breach of a contract without prima facie materials to make out an offence of cheating and no cognisance could legally be taken against the Petitioners. 5. The delivery of the match boxes had been made as far back as in April, 1981. The complaint has been made more than a year thereafter on May 22, 1982. The explanation offered by the opposite party that he had been making correspondences with the firm of the Petitioners and with the Excise officials for which there was delay in taking the complaint does not appear to be satisfactory. The complaint has been made more than a year thereafter on May 22, 1982. The explanation offered by the opposite party that he had been making correspondences with the firm of the Petitioners and with the Excise officials for which there was delay in taking the complaint does not appear to be satisfactory. It has been submitted before me on behalf of the Petitioners that the petition of complaint is a counter blast to the suit (O.S. No. 201 of 1981 in the Sub-Court at Srivilliputtur) which, as submitted at the Bar, has been instituted by the Petitioners for recovery of more than Rs. 40,000/- with interest from the opposite party in which written statement has been filed by the opposite party on March 22, 1982. It is not necessary for me to go into the question as to whether the petition of complaint has deliberately been made because of the institution of the civil suit against the opposite party, but the fact remains that the opposite party chose not to take any criminal proceeding against the Petitioners after the receipt of the goods. waited for more than a year and some time after the suit was instituted in which he (opposite party) filed his written statement, which did not contain facts constituting an offence of cheating, made a belated complaint in the court of law. 6. The opposite party, accepting the offer made by the Petitioner No. 5 on behalf of the Petitioner No. 1, had addressed the letter containing the agreement in the following terms on March 19, 1981: With reference to the visit paid by your Representative mentioned and in continuation of the discussions had with him, in this regard, the following agreement has been reached and an order for 600 Bdls. of Jolly Brand Safety Matches placed with your good-selves. (1) An initial order for 600 Bdls. is placed. (2) The rate of Rs. 71.00 plus 2% M.S.T.F.O.R. Sivakasi has been fixed. (3) Insurance charges shall be borne by us. (4) Goods shall be despatched through M/s. Muguran Illam Lorry Service; Sattur - Ph. No. 405. (5) Bank Documents for goods despatched shall be sent for collection through your Banker's to our Bankers M/s. State Bank of India, Cuttack City Branch, Cuttack. 71.00 plus 2% M.S.T.F.O.R. Sivakasi has been fixed. (3) Insurance charges shall be borne by us. (4) Goods shall be despatched through M/s. Muguran Illam Lorry Service; Sattur - Ph. No. 405. (5) Bank Documents for goods despatched shall be sent for collection through your Banker's to our Bankers M/s. State Bank of India, Cuttack City Branch, Cuttack. (6) Initially, for a period of 30 days, till the period of Clearance of Hundies, Interest shall not be collected from the purchaser, for a period of 3 months. After 3 months interest at Bank Rates shall be paid after 15 days of Bill presentation. (7) All Hundies drawn shall be for the value of 200 Bdls. to facilitate easy Retirement. (8) Advertisements in Local News Paper, slides and wall Posters to be arranged within 2 months after reviewing sales. (9) If this agreement is confirmed, the advance cheque of. the S.B.I. for Rs. 5,000.00 enclosed here in, may be encashed, and intimated to us. xx xx xx If the Petitioner-firm had violated the Central Excise Manual, appropriate action could be taken against it under that law, but merely because some of the terms of a contract have not been complied with by a party to if, which can be enforced in a court of law, no offence of cheating can be said to have been established. 7. As has been laid down in State of Kerala Vs. A. Pareed Pillai and Another, : To hold a person guilty of the offence of cheating it has to be shown that his intention was dishonest at the time of making the promise. Such a dishonest intention cannot be inferred from the mere fact that he could not subsequently fulfil the promise. Judged in the light of the aforesaid principles, it would be found that in the instant case, the ingredients of the offence of cheating were conspicuous by their a absence and the dispute seems to be purely of a civil nature. 8. The distinction between mere breach of contract and cheating would depend upon the intention of the accused at the time of the alleged inducement which may be judged by his subliequent act, but of which the subsequent act is not the sole criterion. Mere breach of a contract cannot give rise to a criminal prosecution. 8. The distinction between mere breach of contract and cheating would depend upon the intention of the accused at the time of the alleged inducement which may be judged by his subliequent act, but of which the subsequent act is not the sole criterion. Mere breach of a contract cannot give rise to a criminal prosecution. Where a charge of cheating rests upon a representation, which is impugned as false and which relates not to an existing fact but to a future event, it has to be shown that the representation was false to the knowledge of the accused at the time when it was made. It is but little to the purpose to show that in fact, t he representation has turned out to be untrue. An essential ingredient of the offence of cheating is the damage or harm caused or likely to be caused to the victim in body, mind, reputation property Generally speaking; a criminal offence consists of an act done by the accused with a specific criminal intent or state of mind constituting men rea. It has been laid down by this Court in S.B. Goenka Vs. Rajendra Prasad Agarwalla, that every breach of contract does not constitute an act of cheating. Dishonest intention cannot be inferred from the mere fact that the accused person did not subsequently fulfil the promise. In the absence of materials for the satisfaction of the Magistrate that the accused person had any dishonest intention at the time the alleged promise or inducement was made, an offence of cheating cannot be said to have been established. In such cases, the dispute would be purely of a civil nature and the proceeding initiated in the criminal court would be an abuse of the process of the court. 9. The jurisdiction of the High Court u/s 482 of the Code is to be exercised sparingly and in exceptional circumstances. Ordinarily a criminal proceeding against an accused person is to be tried under the provisions of the Code, but where the allegations in the complaint, even if accepted in their entirety, do not constitute the alleged offence, the inherent jurisdiction of this Court to quash a criminal proceeding can and should be exercised. It has been laid down by the Supreme Court in Trilok Singh and Ors. It has been laid down by the Supreme Court in Trilok Singh and Ors. v. Satya Deo Tripathi, that, when the dispute raised is purely of a civil nature, as in the instant case, the initiation of a criminal proceeding is an abuse of the process of the court and deserves to be quashed. 10. For the reasons aforesaid, I would allow the application and quash the criminal proceeding against the Petitioners. Final Result : Allowed