ORDER To quash the F.I.R. in Crime No. 159 of 2006 dated 11-03-2006 of III Town police station, L&O, Visakhapatnam, the present Criminal - ion is filed. 2. The brief facts that are necessary for al of this Criminal Petition may be as follows: A private complaint is lodged stating that the complainant was attending repairs and sales of Xerox machines, computers and fax machines. To expand his business, he decided to put up Chip Level Repair Project at Visakhapatnam. In that connection, they visited one of the I.T. exhibitions held at Calcutta. After going through the project report and verbal personal commitments of the accused company representatives, the complainant requested to appoint them as Franchisee to the Visakhapatnam territory. The accused demand Rs. 5.00 lakhs to appoint them. After verifying the market sources, the complainant paid Rs. 4.50 lakhs and entered into a Memorandum of Understanding (MoU) on 10-03-2004, under which the accused have to provide tools and spares for providing onsite services and repairing of computer parts beyond training programme to the persons who would be appointed by the complainant, and it was decided to share profit at 60:40 ratio after deducting spares and project cost, and also agreed that duration of the MoU as two years from the date of execution. But, after receiving the amount, the accused changed the attitude towards the complainant and breached the terms and conditions of the MoU. It is further alleged that the complainant invested Rs. 2.00 lakhs towards office set up, news paper advertisements, and appointed few persons as Computer Hardware Engineers and Work Controller as per the terms and conditions of MoU. But, the accused failed to supply spares and tools to the complainant. He immediately contacted the accused and explained the grievance and sent number of letters, and at last, they called for a conference at Calcutta on 07-06-2004 and promised to set up lab facility within a few days. But, they sent only a few of agreed tools required to the laboratory which are spurious and less priced. It is further stated that as per the MoU, he put up infrastructure by spending Rs. 20,000/- per month as salaries and rent, etc. for establishment. But, they sent only a few of agreed tools required to the laboratory which are spurious and less priced. It is further stated that as per the MoU, he put up infrastructure by spending Rs. 20,000/- per month as salaries and rent, etc. for establishment. Basing on the reputation and hard work, they procured some business in and around Visakhapatnam and also completed the said work to the spurious and less priced tools which were provided by the accused. After lot of pain, the complainant felt that they could not continue with tools and the spares and requested the accused to send useful equipment without any delay, but it was of no avail. Fed up with the attitude, the complainant sent a letter dated 06-07-2004 to the accused asking to cancel the Franchisee and return the amount with immediate action, but the accused neither cancelled the Franchisee nor ratified the mistakes and commitment. Thus, the accused collected the money and used it for their own use and committed criminal breach of trust and cheated the complainant. Hence, the complainant. The private complaint was referred to police under Section 156(3) Cr. P .C. for investigation. Police registered the same as the crime for the offences under Sections 405, 417, 418, 423, 426,427 and 5061PC. 3. The learned counsel for the petitioners contended that the parties are bound by the terms and conditions of MoU and that as per one of the clauses of the MoU, the amount paid by the complainant is not refundable; that there is no cheating or dishonest conversion of property by the petitioners; that at best, it may amount to breach of agreement; hence, continuation of proceedings against the petitioners is nothing but abuse of process of Court. Hence, he prayed to quash the impugned proceedings. 4. On the other hand, the learned counsel for the first respondent contended that the parties are bound by the terms and conditions of MoU; that as pert he MoU, the accused sent the required tools to laboratory, but they are ( found to be spurious and less priced; that when the complainant requested to send useful equipment, the accused did not do so; that there are no grounds to quash the proceedings. Hence, he prayed to dismiss the Criminal Petition. 5. Hence, he prayed to dismiss the Criminal Petition. 5. There can not be any dispute that inherent powers under Section 482 Cr.P.C. can be exercised to quash a criminal proceeding when the allegations made in the F.I.R. if taken at their face value as true and correct do not make out a case. The powers can be exercised to prevent abuse of process of Court or otherwise secure ends of justice. 6. The learned counsel for the first respondent relied on a decision in Union of India v. Prakash P. Hinduja and another1 wherein it is held as follows: "Section 482 Cr.P.C. saves the inherent powers of the High Court and such a power can be exercised to prevent abuse of process of any Court or otherwise to secure ends of justice. The power can therefore be exercised to quash the criminal proceedings." The learned counsel also relied on a decision in Rajesh Bajaj v. State NCT of Delhi and otherS wherein it is held as follows: "…If factual foundation for the offence has been laid in the complaint the Court should not hasten to quash criminal proceedings during investigation stage merely on the premise that one or two ingredients have not been stated with details. For quashing an FIR (a step which is permitted only in extremely rare cases) the information in the complaint must be so bereft of even the basic facts which are absolutely necessary for making out the offence." 7. In another decision relied on by the learned counsel for the first respondent in Medchl Chemicals and Pharma Private Limited v. Biological E. Limited it is held that exercise of jurisdiction under the inherent power as envisaged in Section 482 of the Code to have the complaint or the charge-sheet quashed is an exception rather a rule and the case for quashing at the initial stage must have to be treated as rarest of rare so as not to scuttle the prosecution. The learned counsel also relied on a decision in M/s. Jayant Vitamins Ltd. v. Chaitanyakumar and another wherein it is held that investigation into an offence is a statutory function of the police and the superintendence thereof is vested in the State Government and the Court is not justified without any compelling and justifiable reason to interfere with the investigation. 8. 8. The learned counsel also relied on a decision in Trisuns Chemical Industry v. Rajesh Agarwaf wherein it is held as follows: ".. .. .Arbitration is a remedy for affording reliefs to the party affected by breach of the agreement but the arbitrator cannot conduct a trial of any act which amounted to an offence albeit the same act may be connected with the discharge of any function under the agreement. Hence, those are not good reasons for the High Court to and down the complaint at the threshold itself. The investigating agency should have had the freedom to go into the whole gamut of the allegations and to reach a conclusion of its own. Preemption of such investigation would be justified only in very extreme cases as indicated in State of Haryana v. Bhajaj Lal ( AIR 1992 SC 604 )." In another decision relied on by the learned counsel for the first respondent in T.S. Rajamoni v. Randip Baura6, it is held as follows: "The law is well settled that a complaint case can be quashed only when the complaint petition does not disclose commission of any criminal offence or the facts mentioned in the complaint petition do not constitute ingredients of the offence. In the present case there is specified allegation that the accused company made representation that the machineries are ready for delivery and also submitted proforma bills against which the complainant-company released payments. But when the complainant-company went to inspect and take delivery of the goods, they found that the machineries have been shifted and sold out to some other persons. The above allegations no doubt constitute an offence under Section 420 IPC." 9. The essential ingredients to constitute an offence of criminal breach of trust as defined Section 405 IPC are that the accused must have been entrusted with some property or with any other dominion or power over it; that the accused must have misappropriation or conversion to his own use or dishonest use or disposal of the property in violation of any direction of law or of any legal contract is necessary to constitute the offence. 10. 10. Coming to the offence under Section I. P. C., to establish the offence of cheating, the complainant must show not only that he was induced to do or not to do something, but that this induced act or omission or his part caused or was likely to cause him some harm or damage in body, mind, reputation or property. Therefore, there must be dishonesty or fraud in obtaining delivery of the property and an intentional inducement of complainant to do or omit to do some act. The essence of charge of cheating is that the complainant should have been deceived. 11. In the case on hand, admittedly, there is an agreement between the parties. MoU was executed on 10-03-2004. There is no dispute about its execution. One of the conditions, inter alia, is that the complainant agreed to pay advance of Rs. 5.00 lakhs (non-refundable) which would be used to provide tools and spares for providing onsite services and repairing of computer parts. Therefore, when there is mutual agreement between the parties, the complainant cannot now turn around and say that there is an inducement or demand for payment of Rs. 5.00 lakhs. The allegation in the complaint is that the accused sent only a few of agreed tools required to the laboratory which are spurious and less priced. It is not in dispute that the accused sent certain materials. All the materials were sent in the year 2004. Those materials were checked and verified by the complainant for about one year, and thereafter he keptquiet.Now, he turned around and saying that the material sent by the accused are spurious and less priced. It is not the case of the complainant that the accused entertained dishonest intention to cheat him at the time of execution of MoU. There is no entrustment of property to the accused or that the accused converted the same to their own use in violation of any contract. 12. The learned counsel for the petitioners relied on decision in M/s. Indian Oil Corporation v. M/s. NEPC India Ltd. and others? Where in it is held as follows: (para 10) "While on this issue, it is necessary to take notice of a growing tendency in business circles to convert purely civil disputes into criminal cases. 12. The learned counsel for the petitioners relied on decision in M/s. Indian Oil Corporation v. M/s. NEPC India Ltd. and others? Where in it is held as follows: (para 10) "While on this issue, it is necessary to take notice of a growing tendency in business circles to convert purely civil disputes into criminal cases. This is obviously on account of a prevalent impression that civil law remedies are time consuming and do not adequately protect the interests of lenders/creditors. Such a tendency is seen in several family disputes also, leading to irretrievable break down of marriages/ families. There is also an impression that if a person could somehow be entangled in a criminal prosecution, there is a likelihood of imminent settlement. Any effort to settle civil disputes and claims, which do not involve any criminal offence, by applying pressure though criminal prosecution should be deprecated and discouraged. In G. Sagar Suriv. State of U.P. ((2000) 2 SCC636), this Court observed: 'It is to be seen if a matter, which is essentially of civil nature, has been given a cloak of criminal offence. Criminal proceedings are not a short cut of other remedies available in law. Before issuing process a criminal court has to exercise a great deal of caution. For the accused it is a serious matter. This Court has laid certain principles on the basis of which High Court is to exercise its jurisdiction under Section 482 of the Code. Jurisdiction under this Section 482 of the Code. Jurisdiction under this Section has to be exercised to prevent abuse of the process of any court or otherwise to secure the ends of justice.' While no one with a legitimate cause or grievance should be prevented from seeking remedies available in criminal law, a complainant who initiates or persists with a prosecution, being fully aware that the criminal proceedings are unwarranted and his remedy lies only in civil law, should himself be made accountable, at the end of such misconceived criminal proceedings, in accordance with law. One positive step that can be taken by the courts, to curb unnecessary prosecutions and harassment of innocent parties, is to exercise their power under Section 250 Cr.P.C. more frequently, where they discern malice or frivolousness or ulterior motives on the part of the complainant. Be that as it may." 13. Mens rea is the crux of the offence of cheating. Be that as it may." 13. Mens rea is the crux of the offence of cheating. There is no allegation that the accused entertained idea of cheating the complainant from the inception. The only grievance of the complainant is that some spurious parts were sent to him and cost of those parts are less. Having accepted the same, now he cannot turn 3.round and say that spurious parts have been sent by the accused. So, the ingredients for the offence of cheating or criminal breach of trust are not at all attracted even if the allegations in the complaint are taken as true and correct at this stage. Therefore, continuation of the proceedings against the accused is nothing but abuse of process of Court. 14. The Criminal Petition is, accordingly, allowed quashing the F.I.R. in crime No. 159 of 2006 dated 11-03-2006 of III Town police station, L & 0, Visakhpatnam.