JUDGMENT Hon’ble Vishnu Chandra Gupta, J. : Heard learned counsel for the petitioners, learned AGA and learned counsel for the opposite party no.2. 2. By means of the petition under section 482of Criminal Procedure Code (for short ‘Cr.P.C’), the petitioners have prayed for quashing the proceedings arising out of Complaint filed by opposite party no. 2 M/s Khushi Enterprises vide Complaint Case No. 634 of 2010 under sections 406 and 506 IPC pending in the court of Additional Chief Judicial Magistrate, Court No. 25, Lucknow as well as the order dated 12.8.2010, whereby the petitioners have been summoned to face the trial under section 406 and 506 IPC. 3. The facts, in brief, for deciding this petition are that opposite party no.2 is carrying on the business of ready-made garments in the name and style of M/s Khushi Enterprises Aliganj, Lucknow. An agreement was entered into in between the opposite party no.2 and the petitioners’ company known as Subhash Polytex Ltd, on 1.10.2008. The petitioners’ company is manufacturing and marketing their ready-made garments products “FREIBURG” and other products. This agreement was valid for 8 years from the date of opening of show-room with locking period of two years. The aforesaid agreement renewed and amended on 16.10.2009. The Memorandum of Understanding reduced in writing. Under this agreement, the petitioner’s company agreed to pay the maintenance expenses of show room called as MG ( minimum guarantee) at the rate of Rs. 35000/- per month and 10% commission on the sale of product of the company. 4. The dispute has arisen when Rs. 1,05000/- towards MG for period from October, 2009 to December, 2009 was not paid by the petitioners’ company to the opposite party no. 2. The petitioners have also stopped the supply of goods to the opposite party no. 2 and also withheld the commission on the sale of the products. It was alleged by the opposite party no.2 that the petitioners committed breach of conditions of the agreement. Opposite party no.2 further alleged that he gave the notice of demand of Rs. 1,05000/- and of commission due but the petitioners failed to pay the same. Hence the petitioners committed the breach of trust. Thereafter, opposite party no. 2 sent legal notice to the petitioners on 27.1.2010, but the petitioners have not responded the same and threatened the complainant (opposite party No.2) on telephone to face dire consequences. 1,05000/- and of commission due but the petitioners failed to pay the same. Hence the petitioners committed the breach of trust. Thereafter, opposite party no. 2 sent legal notice to the petitioners on 27.1.2010, but the petitioners have not responded the same and threatened the complainant (opposite party No.2) on telephone to face dire consequences. Complainant approached the local police at Lucknow for lodging the First Information Report against the petitioners, but no FIR has been lodged. The complainant moved an application to SSP,Lucknow to take necessary action against the petitioners but no action has been taken thereon. Thereafter, he filed a complaint bearing no. 634 of 2010 in the month of February, 2010 before the court of Additional Chief Judicial Magistrate, Lucknow. 5. It has been submitted by the learned counsel for the petitioners that under the agreement the O.P. no. 2 has not given proper information about stock available with him which was costing of Rs. 12,74,569/- and the goods of petitioners has been detained by the O.P. No.2. It is further submitted that the O.P. no 2 is bound to pay the amount with interest to the petitioners. It has been further submitted that the petitioners invoked arbitration clause by notice dated 3.4.2010 and appointed Smt. Shashi Saini, Advocate as sole Arbitrator and requested to O.P.No.2 to concur the appointment but no concurrence was given by opposite party no. 2. Thereafter an application under section 11 of Arbitration and Conciliation Act, 1976 was moved in District Ludhiyana. The court issued notice to the opposite party no.2. The oppoiste party No. 2 issued a cheque having no. 652920 dated 11.11.2010 for RS. 10 lacs drawn on Oriental Bank of Commerce,State Plaza, Sahara State, Jankipuram, Lucknow in favour of the petitioners with an assurance that there are sufficient funds in their account and the cheque would be encashed on presentation. When it was presented to the bank for encashment, it was returned unpaid on account of instructions issued by opposite party no.2 for ‘stop payment’. It is further submitted that the opposite party no. 2 failed to make the payment of cheque within the statutory period of 15 days from the date of receipt of notice dated 15.11.2010 and thus he has committed an offence punishable under section 138 of N.I. Act read with section 420 IPC. It is further submitted that the opposite party no. 2 failed to make the payment of cheque within the statutory period of 15 days from the date of receipt of notice dated 15.11.2010 and thus he has committed an offence punishable under section 138 of N.I. Act read with section 420 IPC. Under the aforesaid circumstances, a criminal complaint has been filed under section 138 of Negotiable and Instruments Act read with section 420 IPC at Ludhiyana by the petitioners against opposite party no.2. It has been further submitted by the learned counsel for the petitioners that petitioners deposited MG amount for the months of October, 2009 and November,2009. It is evident from the credit advice (Annexure No. 9). On the basis of aforesaid facts, it has been submitted by the learned counsel for the petitioners that this case is purely of civil nature as it is the case of breach of contract. No element of any criminal offence is present, thus the proceedings pending against the petitioners before the court of Additional Chief Judicial Magistrate, Lucknow are liable to be quashed. 6. It has been submitted by the counsel for opposite party No.2 that cheque which was presented to the bank for en-cashment was actually given by the opposite party no. 2 to the petitioners in security. The petitioners were not entitled to present the same for encashment. However, to harass the petitioners, the opposite party no. 2 managed to get endorsement of stop payment. 7. In support of his contentions the learned counsel for the petitioners cited a judgment of Hon’ble Supreme Court reported in (2006) 6 SCC 7669 Ram Biraji Devi and others Vs. Umesh Kumar Singh and others. The apex court in this case has held that case is based on oral agreement on sale of a plot and there is breach of contract. The Apex Court also found that necessary ingredients of offence are not available in the allegation made in the complaint. 8. Opposite party no. 2 filed counter affidavit alleging therein that the petitioners have committed the criminal breach of the trust by not making the payment of the agreed MG and commission despite the repeated requests and reminder issued by opposite party no. 2. It is also stated therein that at the time of entering into the contract with the opposite party no. 2 the petitioners had given the cheque bearing nos. 2. It is also stated therein that at the time of entering into the contract with the opposite party no. 2 the petitioners had given the cheque bearing nos. 652920 and 652921 dated 27.1.2009 as guarantee cheques during the existence of the contract between the parties and these cheques were not at all presented by the opposite party no. 2. On the basis thereof learned counsel for the opposite party no. 2 has submitted that petitioners managed to get endorsement of stopped payment, on the basis of which, the petitioners have filed the false and fabricated complaint under section 138 of N.I.Act in counter blast of the complaint filed by the opposite party no. 2 against petitioners. It is further submitted that proceedings of arbitration initiated by the petitioners is not at all relevant for continuation of complaint case. It is further submitted that mere pendency of arbitration proceedings will not be sufficient to quash the proceedings because in this case criminal offence is made out on the basis of the allegation made in the complaint though the case is based on breach of agreement. 9. I have carefully considered the submissions of the learned counsel for the parties and the case law cited at Bar, I am of the firm opinion that this petition is liable to be allowed for the reasons recorded herein below: -. 1. Opposite party no. 2 himself pleaded in the complaint that the petitioners committed breach of contract and breach of trust. 2. It is mentioned in the complaint filed by the opposite party no. 2 that legal notice has been given to the petitioners by the opposite party no.2 but instead of giving reply of legal notice the petitioners threatened on telephone to the opposite party no. 2 to face dire consequences. The act of extending threats on telephone from Ludhiyana by the petitioners even if taken to be true the cause of action accrues at Ludhiyana. The telephone/mobile number, time and date of extending threats has not been given either in complaint or statement under section 200 Cr.P.C. There is no allegation of criminal assault or causing harm in the complaint filed by the opposite party no. 2. 3. It is not in dispute that franchisee worked continuously for two years, so it cannot be said that the petitioners have any intention to commit fraud or they misrepresented the opposite party no. 2. 3. It is not in dispute that franchisee worked continuously for two years, so it cannot be said that the petitioners have any intention to commit fraud or they misrepresented the opposite party no. 2. Thus, no criminal act has been done by the petitioners. 4. The dispute on account of breach of contract proceeds in civil side by invoking arbitration clause, so on the basis of allegation made in the complaint , it is clear that there is dispute in respect of agreement to run franchisee of petitioners. Even if the allegations made in the complaint are accepted to be true as correct, the petitioners cannot said to have been committed the offence of criminal breach of trust. No guilty intention has been attributed to the petitioners at the time of execution of contract nor there is allegation of deceiving the opposite party no. 2 by misrepresentation or fraud while entering into agreement/contract. Moreover, the petitioners have given under the contract the commission basis on sale to the opposite party no. 2 for about two years, so, it cannot be presumed that the petitioners have committed breach of trust. 5. There is one more important fact to be noticed that it has been stated by the learned counsel for the petitioners that cheque which was given as security was used by the petitioners for en-cashment of amount of Rs. 10 lacs. This statement appears to be false. From the perusal of the memorandum of understanding ,the correctness of which has not been disputed by the opposite party no. 2 and also filed counter affidavit, the cheque of Rs. 12 lacs having no. 652906 of OBC Bank has been given to the opposite party no. 2 as security. The cheque which was presented in the bank and dishonoured and the subject matter of the proceedings under section 138 NI Act was having no. 652920 of dated 11.11.2010 of Rs. 10 lacs of Oriental Bank of Commerce, State Plaza, Sahara Estate Jankipuram, Lucknow. Hence the allegations made in the counter affidavit filed by the opposite party no.2 are not correct that cheque having no. 652920 was given by opposite party no. as security. 6. The proceedings launched against the petitioners appear to be abuse of process of law and are liable to be quashed as the dispute on which the complaint is based, is purely of civil nature. 7. 652920 was given by opposite party no. as security. 6. The proceedings launched against the petitioners appear to be abuse of process of law and are liable to be quashed as the dispute on which the complaint is based, is purely of civil nature. 7. Section 506 IPC has been added in the pure civil act to give colour of criminal nature and that too on vague allegations. No ingredients of section 406 IPC are made out either from complaint or from the statement recorded under section 200 Cr.P.C and other material placed before the learned Magistrate. Hence the criminal prosecution launched against the petitioners is an abuse of process of law. 10. Consequently the petition is allowed. The proceedings of Complaint Case No. 634 of 2010 under sections 406 and 506 IPC pending in the court of Additional Chief Judicial Magistrate, Court No. 25, Lucknow as well as the order dated 12.8.2010, whereby the petitioners have been summoned to face the trial under section 406 and 506 IPC are hereby quashed.