Judgment :- The petitioner herein seeks to call for the records relating to the proceedings pending against him in C.C. No.262 of 2005 on the file of Judicial Magistrate No.1, Pondicherry, and quash the same. 2. In a business transaction, the petitioner purchased steel rods worth Rs.11,64,937-68 between 210. 2002 and 011. 2002. A sum of Rs.3,97,833/-was paid, leaving a balance of Rs.7,67,055/-. Cheques were issued for payment of the balance amount and on presentation, the same were dishonoured with the endorsement insufficient funds. Subsequently, an agreement was entered into between the complainant and the petitioner. The petitioner did not honour his part of obligation and failed to settle the outstanding, resulting in filing of a private complaint and the learned Magistrate directed the first respondent-police to register the case and investigate into the matter. After conclusion of the investigation, the first respondent filed final report under Section 420 IPC. 3. Learned counsel for the petitioner submits that, on a close perusal of the First Information Report and the final report filed, it is clear that the dispute is purely of civil nature; that being so, the learned Magistrate has erroneously taken cognizance in the matter against the petitioner for an offence punishable under Section 420 IPC and therefore, seeks to quash the same. 4. Per contra, learned counsel for the second respondent submits that though the petitioner had promised to settle the outstanding viz., Rs.7,67,055/-, he failed to honour the commitment and therefore, dishonest intention on his part is quite apparent. He points out that several witnesses have been examined and documentary materials produced to substantiate that the offence under Section 420 IPC. is made out; and submits that it is not a fit case to quash the proceedings. 5. Learned counsel appearing on behalf of the Public Prosecutor, Puducherry, states that investigation was taken up by the police as per the direction of the learned Magistrate and on conclusion of the investigation, the name of the second accused who stood as a Mediator had been deleted and only as against the petitioner, final report has been filed for the offence under Section 420 IPC. He fairly submits that there is no material available to constitute the offence under Section 506(ii) IPC. 6. I have perused the materials available on record and considered the submissions made on either side. He fairly submits that there is no material available to constitute the offence under Section 506(ii) IPC. 6. I have perused the materials available on record and considered the submissions made on either side. After part-payment of the liability, in order to clear the balance outstanding, cheques were issued and subsequently, on presentation, those cheques were dishonoured. Admittedly, proceedings under Section 138 of the Negotiable Instruments Act were not initiated, however, an agreement has been entered into between the petitioner and the complainant-R2 wherein it has been stated as follows:- "Whereas the first party is a manufacturer and supplier of Iron & Steel materials and the Second party is a dealer in Iron & Steel materials. From the transactions between first party and the Second party an amount of Rs.7.67 lakhs is due to the first party by the second party on account of Iron and steel materials supplied by the first party. Whereas the second party is undergoing through severe financial crisis due to fund blockage in another partnership business and conciliation is under process to set right the dispute. It is expected that the conciliation process will be over the second half of the August 2003 or first half of the September 2003. If so, from the month of the November, 2003, part of the blocked funds may get start coming. The party of second part agrees to repay the said amount of Rs.7.67 lakhs to the party of the first party by 8 to 10 monthly instalments. Whereas the second party possess a landed property with a residential building as per the schedule annexed its market value is estimated at Rs.40 lakhs presently, the documents are mortgaged or deposited with Life Insurance Corporation of India to avail the Housing Finance Loan Rs.15 Lakhs and it has second change in favour of the first party. Whereas in case the above proposal fails in time, on the occasion of disposal of the above said property, in order to liquidate the liability, hereby the second party agree to repay the due amount from its sale consideration. Whereas the first party is holding two cheques for an amount of Rs.1,00,411.00 and Rs.1,00,000.00 respectively, already bounced by the Bank, bearing Nos.399883 dated 212. 2002 and 399884 dated 212. 2002 of the Federal bank Ltd., Angadippuram, issued by the second party in favour of first party. Whereas the first party is holding two cheques for an amount of Rs.1,00,411.00 and Rs.1,00,000.00 respectively, already bounced by the Bank, bearing Nos.399883 dated 212. 2002 and 399884 dated 212. 2002 of the Federal bank Ltd., Angadippuram, issued by the second party in favour of first party. On clearing the entire balance of Rs.7.67 lakhs the first party will give back those two cheques to the second party without any further claim. " From the above agreement, it is seen that a landed property with residential building worth Rs.40 lakhs has been furnished as security to clear the balance due. Since the petitioner could not comply with the terms of the agreement, a private complaint was preferred before the learned Magistrate. The cheques issued though got bounced and were kept in the custody of the complainant, there was an understanding that those cheques would be returned only after payment of the liability to the complainant. On a perusal of the allegations in the complaint, it glaringly appears that the dispute is in respect of the business transaction between the parties and that dishonest intention at the inception could not be inferred. Initial payment has been made and subsequently, there was default, whereupon, cheques were issued. Even after bouncing of the cheques, the complainant did not resort to invoke the provisions of the Negotiable Instruments Act, but, a charge has been created on the properties of the petitioner; in such circumstances, it is quite apparent that the dispute is purely of civil nature. Without invoking the civil remedies available, the complainant hasten to prefer the private complaint and it is not a fit case to order investigation under Section 156 (3) Cr.P.C. Both the Magistrate as well as the Investigating Officer proceeded on an erroneous footing that an offence under Section 420 is made out. Since the dispute is purely of civil nature, allowing the proceedings to continue will be an abuse of process of court. In such circumstances, I am of the considered opinion that the proceedings pending against the petitioner are liable to be quashed. 7. In the result, petition is allowed and the proceedings against the petitioner in C.C. No.262 of 2005 pending on the file of Judicial Magistrate No.1, Pondicherry, are quashed. Connected Miscellaneous Petition is closed.