Judgment 1. Petition filed by the petitioners under Sec.482 of the Code of Criminal Procedure, to quash the proceedings in Crime No. 1696/98 pending on the file of the first respondent, pursuant to the orders of learned Judicial Magistrate IV, Salem. 2. The case in brief for the disposal of the petition is as follows: The first petitioner placed certain orders for supply of fabric with the 2nd respondent. Between April, 1996 and May, 1996 invoices were raised by the 2nd respondent for supply made to him at its Unit at Bangalore. Invoices numbering in all 17 were raised by the 2nd respondent against the petitioners. In respect of the invoices raised, the first petitioner had been making payments which have been acknowledged by the 2nd respondent. The first petitioner had given nine post dated chequed on various dates drawn on Canara Bank, Mumbai and State Bank of India, Mumbai in all amounting to Rs.30,79,146.40 against the invoices raised by the 2nd respondent being the partial payment on the outstanding balance. They never intended to cheat the 2nd respondent of their rightful dues. It is a well known fact that a deep economic recession hit the country from the end of 1996 beginning 1997 and one of the industries to be hit very badly was the Garment Export Industry. The fabric supply by the 2nd respondent to the petitioner utilised by the first petitioner to manufacture garments which had then been exported. Monies were due to them from the foreign buyers. There were however, heavy defaults on account of which the first petitioners commitments to the 2nd respondent could not be met. 3. The 2nd respondent sent a legal notice dated 13.7.1997 and called upon the first petitioner to make payment on the cheque issued by them along with outstanding balance with penal interest. The first petitioner had responded by agreeing to honour two cheques for a sum of Rs.5 lakhs initially and thereafter to clear the balance. He was not able to raise the requisite amount to meet its commitments under the two cheques. The 2nd respondent issued a legal notice dated 22.7.1997 calling upon the first petitioner to make payment on the dishonoured cheques. After receiving the same, the first petitioner immediately issued demand draft for a sum of Rs.5 lakhs and by letter dated 5.9.1998 despatched the amount to the 2nd respondents Advocate. The 2nd respondent issued a legal notice dated 22.7.1997 calling upon the first petitioner to make payment on the dishonoured cheques. After receiving the same, the first petitioner immediately issued demand draft for a sum of Rs.5 lakhs and by letter dated 5.9.1998 despatched the amount to the 2nd respondents Advocate. The were received and acknowledged. The first petitioner also sent a letter dated 13.7.1996 issued by an advocate on behalf of R.R.Textiles requesting payment the cheques in the hands of an Advocate at Salem and directed him to prepare a reply. The advocate at Salem contrary to instructions, sent a reply denying any liability on the part of the first petitioner. While matters stood thus, the 2nd respondent seems to have preferred a complaint under Secs.403,406, 420, 421, 424 and 120(B), I.P.C., before Judicial Magistrate, Salem against the petitioners. The learned Magistrate by an order dated 16.11.1998 under Sec.156(3), Crl.P.C. referred the matter for investigation. On 27.11.1998 the first respondent registered a case in Crime No. 1696 of 1998 for an offence under Sec.420, I.P.C. On 29.12.1998, the first respondent with other police officials went to Mumbai and under the guise of investigation, entered the office of the first petitioner and threatened the company and its directors with dire consequences if the amounts are not settled expeditiously. The first petitioner acting through its director the 2nd petitioner, pointed out that there was no element of cheating or any other complaint. Dispute was purely of a civil nature. The first petitioner acting through its directors also informed the first respondent that it was a Public Limited Company, which had been in the business of garment exports for the last 31 years and they were not fly-by-night operators. They pleaded for some time and succeeded in convincing the first respondent that he would arrange for money by 12.00 Noon on the next day. The first respondent, however, insisted on some security and a letter of undertaking. The first respondent then coerced the 2nd petitioner to make out a cheque for Rs.41,56,106 in favour of the first respondent. The first respondent also directed the 2nd petitioner to give a letter of undertaking to be present on 30.12.1998 at the companys office. The police station, which has jurisdiction over the area, where its office is situated, is the Tardeo police station. However the warrants were not endorsed through the Executive Magistrate as required. The first respondent also directed the 2nd petitioner to give a letter of undertaking to be present on 30.12.1998 at the companys office. The police station, which has jurisdiction over the area, where its office is situated, is the Tardeo police station. However the warrants were not endorsed through the Executive Magistrate as required. The 2nd respondent is collusion with the first respondent is giving a colour of criminality, whereas the transaction between the parties is purely civil in nature. The companys directors have no history of any criminal charges. Petitioners 2 to 5 moved the High Court of Mumbai and they were granted interim bail also. The order of the Judicial Magistrate No. IV, Salem, directing the first respondent to investigate the alleged offence and the action of the first respondent in taking on file, the said complaint is illegal, invalid and unsustainable. 4. The first respondent Inspector of Police filed counter-affidavit, denying the various allegations. He never threatened the directors. In exercise of his duty of investigation at Mumbai on 29.12.1998 at the office of the first petitioner when they wanted to arrest the 2nd petitioner stating the facts of the complaint and that a case has been registered against him, the 2nd petitioner had summoned his advocate and he had requested time for enquiry till next day. Thereupon, the 2nd petitioner voluntarily of his own, given a letter of security for appearance along with a cheque in his favour as bond for his appearance on the next day for enquiry, all in the presence of the advocate, who had also identified and attested the security. 5. The case registered against the petitioners is under Sec.420, I.P.C. which is cognisable and non-bailable, which empowers the police officers to exercise his vested duty of the investigation by arrest under due provisions of Criminal Procedure Code, for which no warrant of arrest is necessary as to comply under Secs.78 and 79 of Crl.P.C. Moreover, as per the order of the High Court of Mumbai, the petitioners were to execute the bail bond with sureties, but they have not done so. He had sent summons to the petitioners to be presence for enquiry, but there was no information till date about their execution of bail bond before the Mumbai Jurisdiction Court. He had sent summons to the petitioners to be presence for enquiry, but there was no information till date about their execution of bail bond before the Mumbai Jurisdiction Court. The act of the petitioners in noncompliance of the execution of the bail bond and abstinence from enquiry amounts to contempt of court. The case is in mid-way stage of investigation and it is only possible to complete the investigation after the arrest of the petitioners and taking them into police custody for custodial interrogation, which shall bring out all the relevant true facts. The act of the petitioners from the perusal of the contents of the complaint and the documents annexed to it, reveals the mala fide intention and the dishonest and fraudulent acts of the petitioners to defraud the 2nd respondent is clearly evident and a prima facie case is made out. 6. The 2nd respondent also opposed the petition of the ground that there is prima facie material to proceed further in the investigation and, as such, the investigation cannot be stalled. 7. Heard the learned counsel on both sides. 8. The first petitioner is an export company, dealing in garments and the other petitioners are said to be directors. There was business transaction between the petitioners and the 2nd respondent and some amount is due and payable by the petitioners. The 2nd respondent gave a complaint under Secs.403, 406, 420, 421, 424 and 120-B, I.P.C. before the Judicial Magistrate IV, Salem and the same was referred for investigation under Sec. 156(3), Crl.P.C. The first respondent registered a case in Crime No.1696 of 1998 for an offence under Sec.420, I.P.C. On 29.12.1998, the Inspector of Police with other officials, went to Mumbai and the 2nd petitioner is said to have given a cheque for Rs.41,56,106 in the name of the Inspector of Police and the 2nd petitioner also gave a letter of undertaking to he present on 30.12.1998 at the companys office. 9. The learned counsel for the petitioners mainly contended that the complaint was a clear abuse of process of court. The allegations even if they are taken at the face value and accepted in their entirety do not prima facie constitute any offence. The proceedings are maliciously instituted with an ulterior motive of coercing the petitioners. 9. The learned counsel for the petitioners mainly contended that the complaint was a clear abuse of process of court. The allegations even if they are taken at the face value and accepted in their entirety do not prima facie constitute any offence. The proceedings are maliciously instituted with an ulterior motive of coercing the petitioners. All cases of alleged breach of promise would not fall under Sec.420; I.P.C. In order to sustain a complaint under Sec.420, I.P.C, it has to be shown that at the initial stage of the transaction, these accused had a design of cheating the complainant. Merely because a person is not able to keep up his promise, it would not amount to an offence under Sec.420, I.P.C. Before referring for investigation, the learned Magistrate ought to have examined the nature of the allegation made in the complaint and should be satisfied at least prima facie evidence to support the charge. Even in the notice dated 13.7.1998 only, a civil dispute has been made out and even the Advocate had stated that if the amounts were not paid, a civil suit would be filed. Subsequent to the reply also, payment to the extent of Rs.5 lakhs has been made and it was accepted and acknowledged by the 2nd respondent. The act of the first respondent cannot be supported on any known principles of law. The present complaint and the first information report are an abuse of process of court and the same have to be quashed. 10. Learned counsel for the petitioners relied upon a decision in Chandrapal Singh v. Maharaj Singh Chandrapal Singh v. Maharaj Singh, A.I.R. 1982 S.C. 1238wherein it is observed that, “in the complaint filed under Sec.201, there was not a single word to what existing evidence was destroyed by the accused individually or conjointly in respect of an offence which was already committed with the intention of screening the offender. Therefore, on the averments of the complainant himself in the complaint no court could have taken cognisance of an offence. The complaint, therefore, in respect of an offence under Sec.201, I.P.C, is liable to be quashed on the ground that there is not even the slightest allegation to constitute an offence except mentioning number of the sections of the Penal Code.” There is no dispute about this principle, but it has no application to the facts on hand. 11. The complaint, therefore, in respect of an offence under Sec.201, I.P.C, is liable to be quashed on the ground that there is not even the slightest allegation to constitute an offence except mentioning number of the sections of the Penal Code.” There is no dispute about this principle, but it has no application to the facts on hand. 11. Learned counsel for the petitioners also relied on Mahadeo Prasad v. State of West Bengal Mahadeo Prasad v. State of West Bengal, A.I.R. 1954 S.C. 724 wherein it is observed that where, the charge against the accused is under Sec.420 in that he induced the complainant to part with his goods, on the understanding that the accused would pay for the same on delivery but did not pay, if the accused had at the time he promised to pay cash against delivery an intention to do so, the fact that he did not pay would not convert the transaction into one of cheating. This decision is also not applicable since this is an appeal by special leave relating to a conviction of the accused under Sec.420, I.P.C. 12. Learned counsel for the petitioners also relied on State of Kerala v. A.P.Pillai State of Kerala v. A.P.Pillai, A.I.R. 1973 S.C. 326 whereinit is observed as follows: “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 intending cannot be inferred from the mere fact that he could not subsequently fulfil the promise”. This case also is not with reference to quashing and, as such, it cannot be made applicable. 13. Another decision relied on is Bal Kishan Das v. P.C.Naya Bal Kishan Das v. P.C. Naya, A.I.R. 1991 S.C 1531 relating to criminal breach of trust. There was breach of arbitration agreement and the arbitration proceedings went on for more than 17 years and under such circumstances only, it was held that the matter purely civil in nature, prosecution under Sec.406, I.P.C. is not maintainable. This decision is also not applicable since the facts completely differ. There was breach of arbitration agreement and the arbitration proceedings went on for more than 17 years and under such circumstances only, it was held that the matter purely civil in nature, prosecution under Sec.406, I.P.C. is not maintainable. This decision is also not applicable since the facts completely differ. They also relied on Madhavrao v. Sambhajirao Madhavrao v. Sambhajirao, A.I.R. 1988 S.C. 709 relating to a trust created with one of the trustees member office bearers for offences under Secs.406 and 467, I.P.C. Criminal proceedings quashed against two persons for alleged breach of trust constituting only civil wrong. This also has no application. They also relied on State of W.B. v. Swapan Kumar State of W.B. v. Swapan Kumar, A.I.R. 1982 S.C. 949 wherein it is observed as follows: “Whether an offence has been disclosed or not must necessarily depend on the facts and circumstances of each particular case. If on a consideration of the relevant materials, the court is satisfied that an offence is disclosed, the court will normally not interfere with the investigation into the offence and will generally allow the investigation in the offence to be completed for collecting materials for proving the offence. /.Their right of inquiry is conditioned by the existence of reason to suspect the commission of a cognizable offence and they cannot, reasonably, have reason so to suspect unless the F.I.R. prima facie,discloses the commission of such offence. If that condition is satisfied, the investigation must go on. The court has then no power to stop the investigation for to do so would be to trench upon the lawful power of the police to investigate into cognizable offences.” These principles are more in support of the case of the respondents. 14. Learned counsel for the respondents relied on State of Bihar v. Rajendra Agrawalla State of Bihar v. Rajendra Agrawalla, 1996 S.C.C. (Crl.) 628 wherein it is observed that the inherent power of the court under Sec.482, Crl.P.C. should be very sparingly and cautiously used only when the court comes to the conclusion that there would be abuse of the process of the court. 15. The respondents also relied on Laiq Ram v. State of Himachal Pradesh Laiq Ram v. State of Himachal Pradesh, 1990 Crl. 15. The respondents also relied on Laiq Ram v. State of Himachal Pradesh Laiq Ram v. State of Himachal Pradesh, 1990 Crl. L.J. 1350 wherein it is observed that the stage of case was such that it could not be said that there was no case at all against petitioner/president of Gram panchayat and only investigations could reveal the degree of culpability of President in matter; Sec.482, Crl.P.C. cannot be invoked. 16. Learned counsel for the 2nd respondent also relied upon another decision of the Apex Court in State of Haryana v. Bhajan Lal State of Haryana v. Bhajan Lal, A.I.R. 1992 S.C. 604wherein it is observed as follows: “In following categories of cases, the High Court may in exercise of powers under Art.226 or under Sec.428 of Crl.P.C. may interfere in proceedings relating to cognizable offences to prevent abuse of the process of any court or otherwise to secure the ends of justice, However, power should be exercised sparingly and that too, in the rarest of rare cases. (1) There the allegations made in the F.I.R. “or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused. (2) Where the allegations, is the F.I.R. and other materials, if any, accompanying the F.I.R. do not disclose a cognizable offence justifying an investigation by police officers under Sec. 156(1) of the Code except under an order of a Magistrate within the purview of Sec.l55(2) of the Code. (3) Where the uncontroverted allegations made in the F.I.R. or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused; (4) Where the allegations in the F.I.R. do not constitute cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Sec. 155(2) of the Code. (5) Where the allegations made in the F.I.R. or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceedings against the accused. (5) Where the allegations made in the F.I.R. or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceedings against the accused. (6) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party. (7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge. Where allegations in the complaint did constitute a cognizable offence justifying registration of a case and investigation thereon and did not fall in any of the categories of cases enumerated above, calling for exercise of extraordinary powers or inherent powers quashing of F.I.R. was not justified.” This decision is exactly applicable to the case in all fours. 17. Learned counsel for the petitioners mainly contended that the transaction between the parties is purely civil in nature and there is no criminal action and under the circumstance, the proceedings are liable to be quashed. Even the petitioners admitted that they have issued certain post dated cheques and some of the cheques were dishonoured and part payment of Rs.5 lakhs has been subsequently made. Even on their own admission, they have not paid the entire dues. No doubt, in one of the notices sent by the 2nd respondent, it is stated that a civil suit will be filed for recovery of the amount with penal interest. Simply because there is no reference that criminal action would be taken, it cannot be said that the 2nd respondent would be barred from giving a complaint in the court of law. Moreover, the petitioners them selves have sent a reply, denying the liability and now they attempted to explain that they never denied the liability and on the other hand, they have made some part payment also. The question whether there was cheating on the part of the petitioners or not is a matter to be considered after full-fledged investigation. Moreover, the petitioners them selves have sent a reply, denying the liability and now they attempted to explain that they never denied the liability and on the other hand, they have made some part payment also. The question whether there was cheating on the part of the petitioners or not is a matter to be considered after full-fledged investigation. This being so, there is prima facie material to proceed further against the petitioners. The available materials are not sufficient to quash the proceedings. The case of the petitioners does not fall in any of the categories specified in, A.I.R. 1992 S.C. 604. 18. However, the action of the first respondent to a certain extent is not proper andcorrect. The first respondent is the Inspector of Police of a particular police station. No doubt, when the private complaint was referred for investigation, a case has been registered for a cognizable offence and it is a non-bailable offence. The first respondent went to Mumbai and met the petitioners and he ought to have discharged his duty as a police officer, but unfortunately, he had not contacted any of the nearest police station of the petitioners company, but directly went to the company. It is quite probable that the first respondent ought to have taken either the 2nd respondent or his representative for the purpose of identifying the petitioners. Otherwise, the Inspector of Police may not be able to identify the petitioners. Under what provision of law, the Inspector of Police has received a cheque for Rs.41,56,106 in his name. Now, the Inspector of Police has attempted to explain in his counter that only by way of security. Cheques were taken in his name. The conduct of the Inspector of Police throws about the manner of investigation. It appears that he had joined hands with the 2nd respondent and had gone to the extent of taking a cheque for such an amount when the cheque has been received. Cheques were taken in his name. The conduct of the Inspector of Police throws about the manner of investigation. It appears that he had joined hands with the 2nd respondent and had gone to the extent of taking a cheque for such an amount when the cheque has been received. There is nothing further to be investigated and it only probabilise that the Inspector of Police has exceeded his powers in joining with the complainant and, as such, it is just and recessary that departmental proceedings have to be initiated against him by an impartial agency in order to find out whether he had gone to Mumbai, with whom, and under what authority, and why he had not contacted the nearest police station at Mumbai and what necessitated him to get a cheque for more than Rs.41 lakhs in his name. Unless it is done, there is every possibility for the Police Officers to misuse their official position and as such, I am of the view that in the interest of justice, it is just and necessary that the Director General of Police, Chennai has to be directed to depute an officer in the rank of a Deputy Commissioner to enquire about the conduct and work of the first respondent viz., Inspector of Police and taken appropriate action departmentally, according to law. 19. For the reasons stated above, there is prima facie case to proceed further in the matter and, as such, the proceedings in Crime No.1698 of 1998 cannot be quashed. Hence, the petition is dismissed. Consequently, Crl.M.P.No.1027 of 1999 is also dismissed. A copy of this order may be sent to Director General of Police, Chennai to initiate departmental action against the first respondent police and pass appropriate orders in accordance with law.