JUDGMENT Rajiv Sharma, Judge. Since common questions of law and facts are involved in all the petitions, the same were taken up together for hearing and are being disposed of by a common judgment. 2. These petitions, under section 482 of the Code of Criminal procedure, 1973, have been filed seeking quashing of FIR No.76 of 2013 dated 21.10.2013 registered at Police Station, Kala Amb, Tehsil Nahan, District Sirmaur under sections 405, 406, 415, 418, 420 and 425 read with section 120-B of the Indian Penal Code, 1860. 3. Pertinent facts necessary for the adjudication of these petitions are that complainant-company, i.e. JHS has entered into manufacturing arrangements for detergent with Procter and Gamble Home Products Limited (hereinafter referred to as “P&G” for brevity sake). It also entered into agreement for manufacturing arrangements for toothbrushes with Gillette Diversified Operations Limited and manufacturing arrangements for toothpaste with Gillette India Limited. According to the petitioner, agreements were entered into between the parties after extensive negotiations and discussion, that too, after exercising due diligence. The contract period was specifically provided in all the agreements. The disputes arose between the parties with regard to detergent agreement and the toothpaste agreement. The matters were ultimately referred to the Arbitrator. These matters are still pending before the learned Arbitrator. According to the petitioner, the alleged dispute between the parties is of commercial and civil nature which has arisen out of various agreements entered into between the parties. 4. FIR No. 76 of 2013 has been registered at the instance of Sh. Raj Pal Malik, representative of JHS Svendgaard Laboratories Limited, Trilokpur Road, Village Kheri, Kala Amb, Tehsil Nahan, District Sirmour. According to the averments contained in the FIR, the complainant-company is engaged in the business of manufacturing of various FMCG products, namely, oral hygiene products and detergent powders on contract basis for the past 16 years. The representatives of M/s Procter and Gamble Home Products Limited (hereinafter referred to as the “P&G” for brevity sake) through its representatives approached the complainant-company. They represented that if the complainant-company starts exclusively manufacturing detergent powder and later followed by oral care products for Procter and Gamble under their brands Tide and Oral-B, respectively, complainant-company would make big profits. The P&G wanted to take advantage of certain benefits accruing to the complainant-company by way of excise, sales tax and income tax exemption till the financial year 2020. The P&G wanted to take advantage of certain benefits accruing to the complainant-company by way of excise, sales tax and income tax exemption till the financial year 2020. Petitioner No. 1 Mr. Shantanu Maharaj Khosla through petitioner No. 4 Mr. Kumar Devarat and petitioner No. 3 Mr. Rajeev Saluja alongwith their senior petitioner No. 2 Mr. Harish Harlani made the following promises: a) “Promised to place orders in a span of seven years for 180 million toothbrush assuring JHS of business amounting to INR 1415.17 million; b) The cost of the investment made by JHS will be recovered within a short span and thereafter JHS shall be reaping profits; c) Mr. Harish Harlani represented to Mr. Nikhil Nanda that the principal policies and value system of P&G is very strong. We’re giving you idling cost since we have delayed our toothpaste launch plan, so we shall be fair to you and made us leave 50 million on investments as well as induced us to invest additional INR 150 million in the new toothpaste plant being set up for P&G d) Mr. Rajeev Saluja represented that if JHS does not take orders from alternate customers and only manufactures exclusively for P&G and design the plant as per P&G specifications in toothpaste, P&G will place huge orders to utilize the full capacity and JHS will make many fold profits that what it was doing as on that day.” 5. The complainant-company made the following investments: i) Amount of INR 264.30 million and 285 million to expand its ideal capacity and by phasing out present customers in toothbrushes; ii) Expanded its manufacturing capacity from 5000 tones P.A. to 21,600 tones P.A., i.e. five times more by investing an amount of 250 million, by investing an amount of INR 450 million and toothpaste. Attached is sanction letter for ICICI Bank amounting to INR 220 million and the email communication dated 22nd August 2011 verifying the investment made by P&G iii) Complainant company invested into high end resources by hiring superior, qualified, skilled personnel for manufacturing their products which amounted to INR 180 million as an additional cost annually; iv) Amount of Rs. Attached is sanction letter for ICICI Bank amounting to INR 220 million and the email communication dated 22nd August 2011 verifying the investment made by P&G iii) Complainant company invested into high end resources by hiring superior, qualified, skilled personnel for manufacturing their products which amounted to INR 180 million as an additional cost annually; iv) Amount of Rs. 240 million for settling up exclusive plant for manufacturing detergent with an annual capacity of 80,000 tones P.A. Attached is Oriental Bank of Commerce sanction letter in this respect; v) An amount of INR 300 million was invested by the promoters and from the internal accrual of the complainant company based on P&G fraudulent assurance. 6. It is further stated in the FIR that Mr. Harish Harlani dishonestly induced the complainant-company to indirectly transfer the tax benefits to P&G accruing to JHS. Mr. Harish Harlani and Mr. Rajeev Saluja at the behest of Mr. Shantanu Maharaj Khosla induced the complainant company to start producing exclusively for P&G. Mr. Harish Harlani also induced Mr. Nikhil Nanda to invest 450 million into high end technology which is not otherwise commercially viable for any alternative customers in the toothpaste business as well barred JHS from taking work from any competitor. P&G did not fulfill any of its promises held out to the complainant company either in the shape of business or commitments of giving the promised business volumes in all different segments and in fact duped the complainant company by falsely assuring that its investment would be adequately recovered. The gist of the dishonest and fraudulent act of the P&G, as spelt out in the FIR, is as under: i) Mr. Harish Harlani on specific instructions from Mr. Shantanu Khosla dishonestly influenced the 3rd party buyer, i.e. Mapeax investments to withdraw from the MOU by refusing to continue the contract beyond the promised time period effecting the financial stability of JHS; ii) The complainant-company was cheated by believing that they were investing their money in business of P&G and that P&G will soon be placing big orders with them and the cost of investment would be recovered soon. However, even after the expiry of 4 years in detergent powder and 3 years in toothbrushes and 3 years in toothpaste, the amount has not been recovered. However, even after the expiry of 4 years in detergent powder and 3 years in toothbrushes and 3 years in toothpaste, the amount has not been recovered. The company has suffered net loss of 346 million on all the business for the first time after its inception; iii) Non-fulfillment of volumes commitment created financial instability in the company resulting into inability of JHS to pay off the bank loans worth 724.3 million; iv) Banking facilities of the company got turned into NPA. It effected company’s credit rating resulting into permanent dent for the eligibility to raise funds from the bank/financial institution. It resulted to market cap loss of almost INR 1000 million by turning down the business performance of the company by getting JHS over dependent on P&G business; v) The complainant company has to discontinue its business with one of its long continuing esteemed customer, i.e. Dabur India Limited. It incurred loss of Rs. 280 millions; vi) Livelihood of its employees and their family members were effected. The company almost became bankrupt; 7. The complainant company was given to understand that orders worth INR 500 millions annually would be placed with the complainant company. The complainant company made investment of Rs. 800 millions over three years in its manufacturing plant and also indirectly transferred the tax benefit in favour of P&G. Initially, the complainant company has suffered almost loss of Rs. 346 millions, as stated hereinabove. The profits of P&G doubled. The petitioners have conspired to cheat the complainant company with forged documents. 8. What emerges from the pleadings is that the complainant-company has entered into various agreements with the P&G for manufacturing oral hygiene products and detergent powders on contract. The complainant-company was made to understand that P&G would place orders in the span of seven years for 180 million toothbrushes. The investments would be recovered in a short span. The complainant company was called upon to design the plan as per the P&G specifications for toothpaste. The complainant company invested a sum of Rs. 264.30 million and 285 million to expand its ideal capacity. The complainant company expanded its manufacturing capacity from 5000 tones P.A. to 21,600 tones P.A., i.e. five times more by investing an amount of 250 million and INR 450 million and toothpaste. It hired qualified, skilled personnel for manufacturing their products and has to incur additional expenditure. 264.30 million and 285 million to expand its ideal capacity. The complainant company expanded its manufacturing capacity from 5000 tones P.A. to 21,600 tones P.A., i.e. five times more by investing an amount of 250 million and INR 450 million and toothpaste. It hired qualified, skilled personnel for manufacturing their products and has to incur additional expenditure. The company invested an amount of Rs. 240 million for setting up exclusive plant for manufacturing detergent powder with an annual capacity of 80,000 tones P.A. An amount of INR 300 million was invested by the promoters and from the internal accrual of the complainant company based on P&G fraudulent assurance. The P&G called upon the complainant- company to produce exclusively for P&G and dishonestly induced the complainant company. 9. The complainant company has entered into various agreements with P&G. The disputes have been referred to the learned Arbitrator. There was no reason for the complainant company to believe that it is investing money for the P&G. The company made investments by upgrading the plant on the basis of business understanding arrived at between the parties. The duration of the contract between the parties was specifically mentioned in the agreement. In case the complainant-company has failed to recover the investment made while manufacturing detergent powder, toothbrushes and toothpaste within the stipulated period, it will not make the transaction predominately criminal act. Even if the company made the investments and did not make profits, it would not make the transaction criminal act. The complainant company knew about the consequences and ramifications when it entered into agreement with the P&G. The breach of terms and conditions of the agreement would not make it criminal act. It was always open to the parties in such like circumstances to take remedy under civil law. It is not stated in the FIR that any undue influence or coercion was exercised on it while entering into various agreements. It may be true that the complainant-company has to make huge investments on the basis of agreement entered into between the parties and have also to raise loans from the financial institutions, but not to extend the period of agreement and not to place sufficient orders, will not make it a criminal act. It would fall within the domain of civil law. 10. It would fall within the domain of civil law. 10. It is stated by the respondent-State in its reply that since the investigation is at the initial stage, it cannot be contended that the matter is of civil nature. 11. It is not one of those cases where one party has taken advantage of its superior bargaining power. The parties are companies incorporated under the Companies Act and had the assistance of experts at the time of drafting and execution of agreements. 12. The police can take cognizance in the matter, if on the basis of averments made in the complaint it discloses commission of cognizable offence. The Court has gone through the averments contained in the FIR and is of the prima facie view that the dispute is primarily of civil nature and the registration of the FIR and further investigation is misuse of process of law. The registration of FIR against the P&G is to coerce the company to renew the period of agreements. When the allegations contained in the FIR are read in totality, it does not disclose commission of offence under sections 405, 406, 415, 418, 420, 425 read with section 120-B of the Indian Penal Code. 13. Their Lordships of the Hon’ble Supreme Court in Madhavrao Jiwajirao Scindia and others vs. Sambhajirao Chandrojirao Angre and others, (1988) 1 SCC 692 have held that when a prosecution at the initial stage is asked to be quashed, the test to be applied by the court is as to whether the uncontroverted allegations as made prima facie establish the offence. Their Lordships have further held that though a case of breach of trust may be both a civil wrong and a criminal offence but there would be certain situations where it would predominantly be a civil wrong and may or may not amount to a criminal offence. Their Lordships have held as under: “7. The legal position is well-settled that when a prosecution at the initial stage is asked to be quashed, the test to be applied by the court is as to whether the uncontroverted allegations as made prima facie establish the offence. It is also for the court to take into consideration any special features which appear in a particular case to consider whether it is expedient and in the interest of justice to permit a prosecution to continue. It is also for the court to take into consideration any special features which appear in a particular case to consider whether it is expedient and in the interest of justice to permit a prosecution to continue. This is so on the basis that the court cannot be utilised for any oblique purpose and where in the opinion of the court chances of an ultimate conviction is bleak and, therefore, no useful purpose is likely to be served by allowing a criminal prosecution to continue, the court may while taking into consideration the special facts of a case also quash the proceeding even though it may be at a preliminary stage. 8. Mr. Jethmalani has submitted, as we have already noted, that a case of breach of trust is both a civil wrong and a criminal offence. There would be certain situations where it would predominantly be a civil wrong and may or may not amount to a criminal offence. We are of the view that this case is one of that type where, if at all, the facts may constitute a civil wrong and the ingredients of the criminal offences are wanting. Several decisions were cited before us in support of the respective stands taken by counsel for the parties. It is unnecessary to refer to them. In course of hearing of the appeals, Dr. Singhvi made it clear that Madhavi does not claim any interest in the tenancy. In the setting of the matter we are inclined to hold that the criminal case should not be continued.” 14. Their Lordships of the Hon’ble Supreme Court in Hridaya Ranjan Prasad Verma and others vs. State of Bihar and another, (2000) 4 SCC 168 have held that mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, that is the time when the offence is said to have been committed. It is the intention which is the gist of the offence. To hold a person guilty of cheating it is necessary to show that he had fraudulent or dishonest intention at the time of making the promise. From his mere failure to keep up promise subsequently such a culpable intention right at the beginning that is when he made the promise cannot be presumed. Their Lordships have held as under: “15. To hold a person guilty of cheating it is necessary to show that he had fraudulent or dishonest intention at the time of making the promise. From his mere failure to keep up promise subsequently such a culpable intention right at the beginning that is when he made the promise cannot be presumed. Their Lordships have held as under: “15. In determining the question it has to be kept in mind that the distinction between mere breach of contract and the offence of cheating is a fine one. It depends upon the intention of the accused at the time to inducement which may be judged by his subsequent conduct but for this subsequent conduct is not the sole test. Mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, that is the time when the offence is said to have been committed. Therefore it is the intention which is the gist of the offence. To hold a person guilty of cheating it is necessary to show that he had fraudulent or dishonest intention at the time of making the promise. From his mere failure to keep up promise subsequently such a culpable intention right at the beginning, that is, when he made the promise cannot be presumed. 16. Judged on the touchstone of the principles noted above, the present case, in our considered view warrants interference inasmuch as the ingredients of the offence of cheating punishable under section 420 IPC and its allied offences under sections 418 and 423 has not been made out. So far as the offences under sections 469, 504 and 120B are concerned even the basic allegations making out a case thereunder are not contained in the complaint. That being the position the case comes within the first category of cases enumerated in State of Haryana and others vs. Bhajan Lal and others (supra) and as such warrants interference by the Court. Reading the averments in the complaint in entirety and accepting the allegations to be true, the ingredients of intentional deception on the part of the accused right at the beginning of the negotiations for the transaction has neither been expressly stated nor indirectly suggested in complaint. Reading the averments in the complaint in entirety and accepting the allegations to be true, the ingredients of intentional deception on the part of the accused right at the beginning of the negotiations for the transaction has neither been expressly stated nor indirectly suggested in complaint. All that the respondent No. 2 has alleged against the appellants is that they did not disclose to him that one of their brothers had filed a partition suit which was pending. The requirement that the information was not disclosed by the appellants intentionally in order to make the respondent No. 2 part with property is not alleged expressly or even impliedly in the complaint. Therefore the core postulate of dishonest intention in order to deceive the complainant respondent no.2 is not made out even accepting all the averments in the complaint on their face value. In such a situation continuing the criminal proceeding against the accused will be, in our considered view, an abuse of process of the court. The High Court was not right in declining to quash the complaint and the proceeding initiated on the basis of the same.” 15. There is no material to suggest even remotely that P&G had fraudulent intention at the time of entering into agreements with the complainant company. 16. Their Lordships of the Hon’ble Supreme Court in Lalmuni Devi (Smt) vs. State of Bihar and others, (2001) 2 SCC 17 have held that if the complaint does not make out an offence it can be quashed. However, it is also settled law that facts may give rise to a civil claim and also amount to an offence. Their Lordships have held as under: “8. There could be no dispute to the proposition that if the complaint does not make out an offence it can be quashed. However, it is also settled law that facts may give rise to a civil claim and also amount to an offence. Merely because a civil claim is maintainable does not mean that the criminal complaint cannot be maintained. In this case, on the facts, it cannot be stated, at this prima facie stage, that this is a frivolous complaint. The High Court does not state that on facts no offence is made out. If that be so, then merely on the ground that it was a civil wrong the criminal prosecution could not have been quashed.” 17. In this case, on the facts, it cannot be stated, at this prima facie stage, that this is a frivolous complaint. The High Court does not state that on facts no offence is made out. If that be so, then merely on the ground that it was a civil wrong the criminal prosecution could not have been quashed.” 17. Their Lordships of the Hon’ble Supreme in Alpic Finance Limited vs. P. Sadasivan and another, (2001) 3 SCC 513 have held that when somebody suffers injury to his person, property or reputation, he may have remedies both under civil and criminal law. The injury alleged may form the basis of civil claim and may also constitute the ingredients of some crime punishable under criminal law. When there is dispute between the parties arising out of a transaction involving passing of valuable properties between them, the aggrieved person may have a right to sue for damages or compensation and at the same time law permits the victim to proceed against the wrongdoer for having committed an offence of criminal breach of trust or cheating. In the instant case, the main offence alleged by the appellant is that the respondents committed the offence under section 420 of the Indian Penal Code and the case of the appellant is that the respondents have cheated him and thereby dishonestly induced him to deliver property. Their Lordships have further held that to deceive is to induce a man to believe that a thing is true which is false and which the person practicing the deceit knows or believes to be false. It must also be shown that there existed a fraudulent and dishonest intention at the time of commission of the offence. Even in the case before the Hon’ble Supreme Court, the case of the appellant was that the respondents had failed to discharge their contractual obligations. Their Lordships have held as under: “11. Moreover, the appellant has no case that the respondents obtained the article by any fraudulent inducement or by willful misrepresentation. We are told that respondents, though committed default in paying some installments, have paid substantial amount towards the consideration. 12. Their Lordships have held as under: “11. Moreover, the appellant has no case that the respondents obtained the article by any fraudulent inducement or by willful misrepresentation. We are told that respondents, though committed default in paying some installments, have paid substantial amount towards the consideration. 12. Having regard to the facts and circumstances, it is difficult to discern an element of deception in the whole transaction, whereas it is palpably evident that the appellant had an oblique motive of causing harassment to the respondents by seizing the entire articles through magisterial proceedings. We are of the view that the learned judge was perfectly justified in quashing the proceedings and we are disinclined to interfere in such matters.” 18. Their Lordships of the Hon’ble Supreme Court in Ajay Mitra vs. State of M.P. and others, (2003) 3 SCC 11 have held that mens rea at the time of inducing the person deceived to deliver any property to any person is essential to constitute offence. In this case A-1 entered into an agreement with complainant authorizing the latter to manufacture and sell certain specified beverages under trademark owned by the former for five years, where-after either party could terminate the agreement by giving 12 months’ notice to the other party, but subsequently, another company having purchased the trademarks form A-1, the agreement with the complainant was assigned to that company under information to the complainant. Their Lordships have further held that when that company gave 12 months notice to the complainant before expiry of the period of five years to terminate the agreement, offence under section 420 of the Indian Penal Code not made out in absence of mens rea. Their Lordships have held as under: “16. A guilty intention is an essential ingredient of the offence of cheating. In other words 'mens rea' on the part of the accused must be established before he can be convicted of an offence of cheating. (See Jeswantrai Manilal Akhaney v. The State of Bombay AIR 1956 SC 575 ). Their Lordships have held as under: “16. A guilty intention is an essential ingredient of the offence of cheating. In other words 'mens rea' on the part of the accused must be established before he can be convicted of an offence of cheating. (See Jeswantrai Manilal Akhaney v. The State of Bombay AIR 1956 SC 575 ). In Mahadeo Prasad v. State of West Bengal AIR 1954 SC 724 , it was held as follows : "Where the charge against the accused is under S.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. But if on the other hand he had no intention whatsoever to pay but merely said that he would do so in order to induce the complainant to part with the goods then a case of cheating would be established." 17. In Hari Prasad Chamaria v. Bishun Kumar Surekha & Ors. AIR 1974 SC 301 it was held that unless the complaint showed that the accused had dishonest or fraudulent intention at the time the complainant parted with the money it would not amount to an offence under Section 420 IPC and it may only amount to breach of contract. In G.V. Rao v. L.H.V. Prasad & Ors. 2000 (3) SCC 693 , it was reiterated that guilty intention is an essential ingredient of the offence of cheating and, therefore, to secure conviction 'mens rea' on the part of the accused must be established. It has been further held that in order to constitute the offence of cheating the intention to deceive should be in existence at the time when the inducement was offered. 18. So far as the present appellants are concerned, they came into picture much later in July 1999, when various trademarks and brands of A-1 were purchased by A-6. The appellants were not at all in picture at the time when the complainant claims to have spent money in improvement of its bottling plant on the basis of the agreement executed with Cadbury Schweppes Beverages India Pvt. Ltd. (A-1). The appellants were not at all in picture at the time when the complainant claims to have spent money in improvement of its bottling plant on the basis of the agreement executed with Cadbury Schweppes Beverages India Pvt. Ltd. (A-1). Since the appellants were not in picture at all at the time when the complainant alleges to have spent money in improving the bottling plant, neither any guilty intention can be attributed to them nor there can possibly be any intention on their part to deceive the complainant. No offence of cheating can, therefore, be said to have been committed by the appellants on account of the fact that a notice was given to the complainant that the bottling agreements will not be renewed any further after expiry of the initial term. Thus, even if the allegations made in the complaint are accepted to be absolutely true and correct, the appellants cannot be said to have committed any offence of cheating as provided in Section 420 IPC. 19. The High Court has held that the Petitions filed by the appellants for quashing the complaint and the FIRs registered against them are pre-mature. The question which arises is that where the complaint or the FIR does not disclose commission of a cognizable offence, whether the same can be quashed at the initial stage ? This question was examined by this Court in State of West Bengal & Ors. V. Swapan Kumar Guha & Ors. AIR 1982 SC 949 and it was held that the First Information Report which does not allege or disclose that the essential requirements of the penal provision are prima facie satisfied, cannot form the foundation or constitute the starting point of a lawful investigation. It is surely not within the province of the police to investigate into a Report (FIR) which does not disclose the commission of a cognizable offence and the Code does not impose upon them the duty of inquiry in such cases. It was further held that an investigation can be quashed if no cognizable offence is disclosed by the FIR. The same question has been considered in State of Haryana & Ors. V. Ch. Bhajan Lal & Ors. It was further held that an investigation can be quashed if no cognizable offence is disclosed by the FIR. The same question has been considered in State of Haryana & Ors. V. Ch. Bhajan Lal & Ors. AIR 1992 SC 604 and after considering all the earlier decisions, the category of cases, in which the Court can exercise its extra-ordinary power under Article 226 of the Constitution or the inherent power under Section 482 Cr.P.C. either to prevent abuse of the process of any Court or to secure the ends of justice, were sumarised in para 108 of the Report and subparas 1 to 3 thereof are being reproduced herein below : "1. Where the allegations made in the First Information Report 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 in the First Information Report and other materials, if any, accompanying the F.I.R. do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code. 3. Where the uncontroverted allegations made in the FIR 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." 20. As mentioned earlier, the allegations made in the complaint, even if they are taken at their face value and accepted in their entirety, do not constitute any offence as against the appellants. Therefore, the complaint filed by the respondent and the FIRs registered in pursuance thereof are liable to be quashed. Trisuns Chemical Industry v. Rajesh Agarwal & Ors 1999(8) SCC 686 cited by learned counsel for the complainant is clearly distinguishable as in the said case the allegation in the complaint was that the complainant had paid in advance a price higher than the market price for purchasing "toasted soyabean extracts" but the accused sent the commodity which was of most inferior and substandard quality due to which the complainant suffered a loss of Rs.17 lakhs. In view of the allegations made in the complaint, the matter required investigation and the proceedings could not have been quashed on the ground that the dispute was of a civil nature.” 19. In the instant case also, the averments made in the FIR, if taken at their face value, do not constitute an offence against the petitioners. 20. Their Lordships of the Hon’ble Supreme Court in Anil Mahajan vs. Bhor Industries Limited and another, (2005) 10 SCC 228 have held that in order to constitute an offence under sections 415, 418 and 420 of the Indian Penal Code, fraudulent and dishonest intention must be shown to be existing from the very beginning of the transaction. Their Lordships have further held that mere failure to keep the promise at a subsequent stage, offence of cheating cannot be made out. Their Lordships have further held that distinction between offence of cheating and mere breach of contract should be kept in mind. Mere use of words cheating in the complaint would not be sufficient. Substance of the complaint has to be seen. Their Lordships have held as under: “6. The order of the Magistrate was challenged before the Court of Session. The learned Additional Sessions Judge, Pune, by order dated 19-10-2001 has set aside the order of the Magistrate issuing process. It has been stated by the learned Additional Sessions Judge in the order that: “In this case there is no allegation that the accused made unlawful representation. Even, according to the complaint, they entered into memorandum of understanding. Grievance seems to be that the accused failed to discharge obligations under the MOU. In the complaint, there was no allegation that there was fraud or dishonest inducement on the part of the applicant and thereby the opponent parted with the property. 8. The substance of the complaint is to be seen. Mere use of the expression “cheating” in the complaint is of consequence. Except mention of the words ‘deceive” and “cheat” in the complaint filed before the Magistrate and “cheating” in the complaint filed before the police, there is no averment about the deceit, cheating or fraudulent intention of the accused at the time of entering into MOU wherefrom it can be inferred that the accused had the intention to deceive the complainant to pay. According to the complainant, a sum of Rs.3,05,39,086 out of the total amount fo Rs.3,38,62,860 was paid leaving balance of Rs.33,23,774. We need not go into the question of the difference of the amounts mentioned in the complaint which is much more than what is mentioned in the notice and also the defence of the accused and the stand taken in reply to notice because the complainant’s own case is that over rupees three crores was paid and for balance, the accused was giving reasons as above-noticed. The additional reason for not going into these aspects is that a civil suit is pending inter se the parties for the amounts in question. 10. We have examined the complaint and it is clear from its substance that present is a simple case of civil disputes between the parties. Requisite averments so as to make out a case of cheating are absolutely absent. The principles laid down in Alpic Finance Ltd. case were rightly applied by learned Additional Sessions Judge and it can not be said that the ratio of the said decision was wrongly applied. On due consideration, the learned Additional Sessions Judge has rightly set aside the order of the Magistrate issuing process to the appellant. 21. Their Lordships of the Hon'ble Supreme Court in B. Suresh Yadav v. Sharifa Bee and Anr. AIR 2008 SC 210 have held that for the purpose of establishing the offence of cheating, the complainant is required to show that the accused had fraudulent or dishonest intention at the time of making promise or representation. Their Lordships have further held that it is permissible in law to consider the stand taken by a party in a pending litigation. Their Lordships have held as under: “13. For the purpose of establishing the offence of cheating, the complainant is required to show that the accused had fraudulent or dishonest intention at the time of making promise or representation. In a case of this nature, it is permissible in law to consider the stand taken by a party in a pending civil litigation. We do not, however, mean to lay down a law that the liability of a person cannot be both civil and criminal at the same time. In a case of this nature, it is permissible in law to consider the stand taken by a party in a pending civil litigation. We do not, however, mean to lay down a law that the liability of a person cannot be both civil and criminal at the same time. But when a stand has been taken in a complaint petition which is contrary to or inconsistent with the stand taken by him in a civil suit, it assumes significance. Had the fact as purported to have been represented before us that the appellant herein got the said two rooms demolished and concealed the said fact at the time of execution of the deed of sale, the matter might have been different. As the deed of sale was executed on 30.9.2005 and the purported demolition took place on 29.9.2005, it was expected that the complainant/first respondent would come out with her real grievance in the written statement filed by her in the aforementioned suit. She, for reasons best known to her, did not choose to do so.” 22. Their Lordships of the Hon'ble Supreme Court in All Cargo Movers (I) Pvt. Ltd. v. Dhanesh Badarmal Jain and another, AIR 2008 SC 247 have held that breach of contract simpliciter does not constitute offence. Their Lordships have held as under: “14. A bare perusal of the complaint petition would show that it did not contain any averment in regard to the ingredients of the offence under Sections 406 and 420 of the Indian Penal Code. There is no allegation that it was the petitioner who had delivered the goods. 17. We are of the opinion that the allegations made in the complaint petition, even if given face value and taken to be correct in its entirety, do not disclose an offence. For the said purpose, This Court may not only take into consideration the admitted facts but it is also permissible to look into the pleadings of the plaintiff-respondent No.1 in the suit. No allegation whatsoever was made against the appellants herein in the notice. What was contended was negligence and/or breach of contract on the part of the carriers and their agent. Breach of contract simplicitor does not constitute an offence. For the said purpose, allegations in the complaint petition must disclose the necessary ingredients therefor. No allegation whatsoever was made against the appellants herein in the notice. What was contended was negligence and/or breach of contract on the part of the carriers and their agent. Breach of contract simplicitor does not constitute an offence. For the said purpose, allegations in the complaint petition must disclose the necessary ingredients therefor. Where a civil suit is pending and the complaint petition has been filed one year after filing of the civil suit, we may for the purpose of finding out as to whether the said allegations are prima facie cannot notice the correspondences exchanged by the parties and other admitted documents. It is one thing to say that the Court at this juncture would not consider the defence of the accused but it is another thing to say that for exercising the inherent jurisdiction of this Court, it is impermissible also to look to the admitted documents. Criminal proceedings should not be encouraged, when it is found to be mala fide or otherwise an abuse of the process of the Court. Superior Courts while exercising this power should also strive to serve the ends of justice. 22. For the reasons aforementioned, the impugned judgment cannot be sustained. It is set aside accordingly. Appeal is allowed and the order taking cognizance against the appellant is set aside.” 23. Their Lordships of the Hon'ble Supreme Court in State of Maharashtra and others vs. Arun Gulab Gawali and others, (2010) 9 SCC 701 have held that while exercising powers under section 482 of the Code of Criminal Procedure, the court has to act cautiously before proceeding to quash a prosecution in respect of an offence which hits and affects the society at large. Their Lordships have further held that there cannot be a general proposition of law, so as to fit in as a straitjacket formula for the exercise of such power. Their Lordships have held as under: “29. Thus, while exercising such power the court has to act cautiously before proceeding to quash a prosecution in respect of an offence which hits and affects the society at large. It should be a case where no other view is possible nor any investigation or inquiry is further required. There cannot be a general proposition of law, so as to fit in as a straitjacket formula for the exercise of such power. It should be a case where no other view is possible nor any investigation or inquiry is further required. There cannot be a general proposition of law, so as to fit in as a straitjacket formula for the exercise of such power. Each case will have to be judged on its own merit and the facts warranting exercise of such power. More so, it was not a case of civil nature where there could be a possibility of compromise or involving an offence which may be compoundable under Section 320 Cr.P.C., where the Court could apply the ratio of the case in Madhavrao Jiwaji Rao Scindia (supra).” 24. Their Lordships of the Hon'ble Supreme Court in Thermax Limited and others vs. K.M. Johny and others, (2011) 13 SCC 412 have held that the essential ingredient of offence for an offence under section 420 of the Indian Penal Code, is that there has to be dishonest intention to deceive another person. The relevant allegations in the complaint and perusal of the same clearly shows that no such dishonest intention can be seen or even inferred inasmuch as the entire dispute pertains to contractual obligations between the parties. Their Lordships have further held that even if allegations in the complaint do make out a dispute, still it ought to be considered that the same is merely a breach of contract and the same cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right from the beginning of the transaction. Their Lordships have held as under: “37. It is settled law that the essential ingredients for an offence under Section 420, which we have already extracted, is that there has to be dishonest intention to deceive another person. We have already quoted the relevant allegations in the complaint and perusal of the same clearly shows that no such dishonest intention can be seen or even inferred inasmuch as the entire dispute pertains to contractual obligations between the parties. Since the very ingredients of Section 420 are not attracted, the prosecution initiated is wholly untenable. We have already quoted the relevant allegations in the complaint and perusal of the same clearly shows that no such dishonest intention can be seen or even inferred inasmuch as the entire dispute pertains to contractual obligations between the parties. Since the very ingredients of Section 420 are not attracted, the prosecution initiated is wholly untenable. Even if we admit that allegations in the complaint do make out a dispute, still it ought to be considered that the same is merely a breach of contract and the same cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right from the beginning of the transaction. Inasmuch as there are number of documents to show that appellant-Company had acted in terms of the agreement and in a bona fide manner, it cannot be said that the act of the appellant-Company amounts to a breach of contract.” 25. Their Lordships of the Hon'ble Supreme Court in Amit Kapoor vs. Ramesh Chander and another, (2012) 9 SCC 460 have culled out the following principles for quashing proceedings under section 482 of the Code of Criminal Procedure: “(1) Though there are no limits of the powers of the Court under Section 482 of the Code but the more the power, the more due care and caution is to be exercised in invoking these powers. The power of quashing criminal proceedings, particularly, the charge framed in terms of Section 228 of the Code should be exercised very sparingly and with circumspection and that too in the rarest of rare cases. (2) The Court should apply the test as to whether the uncontroverted allegations as made from the record of the case and the documents submitted therewith prima facie establish the offence or not. If the allegations are so patently absurd and inherently improbable that no prudent person can ever reach such a conclusion and where the basic ingredients of a criminal offence are not satisfied then the Court may interfere. (3) Where the factual foundation for an offence has been laid down, the courts should be reluctant and should not hasten to quash the proceedings even on the premise that one or two ingredients have not been stated or do not appear to be satisfied if there is substantial compliance with the requirements of the offence. (4) The High Court should not unduly interfere. (4) The High Court should not unduly interfere. No meticulous examination of the evidence is needed for considering whether the case would end in conviction or not at the stage of framing of charge or quashing of charge. (5) Where the exercise of such power is absolutely essential to prevent patent miscarriage of justice and for correcting some grave error that might be committed by the subordinate courts even in such cases, the High Court should be loathe to interfere, at the threshold, to throttle the prosecution in exercise of its inherent powers. (6) Where there is an express legal bar enacted in any of the provisions of the Code or any specific law in force to the very initiation or institution and continuance of such criminal proceedings, such a bar is intended to provide specific protection to an accused. (7) The Court has a duty to balance the freedom of a person and the right of the complainant or prosecution to investigate and prosecute the offender. (8) The process of the Court cannot be permitted to be used for an oblique or ultimate/ulterior purpose. (9) Where the allegations made and as they appeared from the record and documents annexed therewith to predominantly give rise and constitute a 'civil wrong' with no 'element of criminality' and does not satisfy the basic ingredients of a criminal offence, the Court may be justified in quashing the charge. Even in such cases, the Court would not embark upon the critical analysis of the evidence. (10) Another very significant caution that the courts have to observe is that it cannot examine the facts, evidence and materials on record to determine whether there is sufficient material on the basis of which the case would end in a conviction, the Court is concerned primarily with the allegations taken as a whole whether they will constitute an offence and, if so, is it an abuse of the process of court leading to injustice. (11) It is neither necessary nor is the court called upon to hold a full- fledged enquiry or to appreciate evidence collected by the investigating agencies to find out whether it is a case of acquittal or conviction. (12) Where allegations give rise to a civil claim and also amount to an offence, merely because a civil claim is maintainable, does not mean that a criminal complaint cannot be maintained. (12) Where allegations give rise to a civil claim and also amount to an offence, merely because a civil claim is maintainable, does not mean that a criminal complaint cannot be maintained. (13) In exercise of its jurisdiction under Section 228 and/or under Section 482, the Court cannot take into consideration external materials given by an accused for reaching the conclusion that no offence was disclosed or that there was possibility of his acquittal. The Court has to consider the record and documents annexed with by the prosecution. (14) Quashing of a charge is an exception to the rule of continuous prosecution. Where the offence is even broadly satisfied, the Court should be more inclined to permit continuation of prosecution rather than its quashing at that initial stage. The Court is not expected to marshal the records with a view to decide admissibility and reliability of the documents or records but is an opinion formed prima facie. (15) Where the charge-sheet, report under Section 173(2) of the Code, suffers from fundamental legal defects, the Court may be well within its jurisdiction to frame a charge. (16) Coupled with any or all of the above, where the Court finds that it would amount to abuse of process of the Code or that interest of justice favours, otherwise it may quash the charge. The power is to be exercised ex debito justitiae, i.e. to do real and substantial justice for administration of which alone, the courts exist.” 26. In a recent judgment, Their Lordships of the Hon'ble Supreme Court in Vijayander Kumar and others vs. State of Rajasthan and another, (2014) 3 SCC 389 have held that a given set of facts may make out a civil wrong as also a criminal offence and only because a civil remedy may also be available to informant/complainant that itself cannot be a ground to quash a criminal proceedings. The real test is whether allegations in complaint disclose a criminal offence or not. Their Lordships have held as under: “10. Contra the submission advanced on behalf of the appellants, learned counsel for the respondent no.2 has submitted that there is no merit in the contention advanced on behalf of the appellants that the FIR discloses only a civil case or that there is no allegation or averment making out a criminal offence. Their Lordships have held as under: “10. Contra the submission advanced on behalf of the appellants, learned counsel for the respondent no.2 has submitted that there is no merit in the contention advanced on behalf of the appellants that the FIR discloses only a civil case or that there is no allegation or averment making out a criminal offence. For that purpose he relied upon judgment of the High Court rendered in the facts of this very case reported in 1999 Criminal Law Journal, 1849, already noted earlier. 12. Learned counsel for the respondents is correct in contending that a given set of facts may make out a civil wrong as also a criminal offence and only because a civil remedy may also be available to the informant/complainant that itself cannot be a ground to quash a criminal proceeding. The real test is whether the allegations in the complaint discloses a criminal offence or not. This proposition is supported by several judgments of this Court as noted in paragraph 16 of judgment in the case of Ravindra Kumar Madhanlal Goenka and another vs. Rugmini Ram Raghav Spinners Private Limited.” 27. It is settled law that criminal breach of trust necessarily involves the following facts: a) entrustment of the property; b) a dishonest misappropriation or conversion of the property by the agent to his own use; c) dishonest use or disposal of the property in violation of mandate of the law prescribing the mode in which the entrustment is to be discharged; and d) dishonest use or disposal of the property in violation of the terms or any legal contract either express or implied regarding the discharge of the entrustment or willfully allowing some other person to do so; and in order to prove cheating the following facts are sine qua non: a) practice of deception by the offender; b) on account of deception, there must be fraudulent or dishonest inducement so as to make the person deceived to deliver any property or to do something or omit to do something; and c) by reason of the delivery of the property or the doing of a thing or the omission to do a thing, there must be causing or likelihood of causing of damage or harm to the person deceived in body, mind, reputation or property. 28. Every offence of criminal breach of trust definitely would also be a civil wrong. 28. Every offence of criminal breach of trust definitely would also be a civil wrong. However, in every breach of trust in absence of mens rea or criminal intention, criminal proceedings cannot be launched. 29. In the instant case, it is not made out from the averments in the FIR that the alleged inducement was fraudulent or dishonest in order to deceive the complainant-company. It is also not their case that the petitioners has misled or misrepresented or deceived the complainant-company. According to the complainant company, P&G has not honoured its commitments, as per the agreements. It will not amount to cheating since it is not made out from the facts that there was dishonest intention in the beginning when the agreements were signed between the parties. Dishonest intention could not be inferred from the subsequent alleged breach of promise. 30. Now, as far as section 425 of the Indian Penal Code is concerned, every act in order to fall under the ambit of definition of mischief is not criminal unless there is element of “mens rea”. Mischief definitely involves a mental act with a destructive animus. 31. Even though the complainant-company may have suffered net loss of 346 millions in all the business for the first time from its inception, it will not amount to cheating by the petitioners. Merely, failure to keep up the alleged promise with regard to placing of orders will not amount to fraudulent act. The agreements have been entered into between the parties on various dates voluntarily. It cannot be gathered from the facts that the petitioners have cheated the complainant-company and dishonestly induced the company to invest money. The offence, as alleged in the FIR under section 420 of the Indian Penal Code, is not made out in the absence of mens rea. Mere breach of contract would not amount to an offence. The alleged dispute pertains to contractual obligations arising out of various agreements entered into between the parties voluntarily. 32. In order to prove criminal conspiracy, the following ingredients are required to be proved: a) there must be an agreement between the persons who are alleged to conspire; b) that the agreement should be i) for doing of an illegal act, or ii) for doing by illegal means an act which may not itself be illegal. Intention to commit an offence is not conspiracy. Intention to commit an offence is not conspiracy. There has to be direct or circumstantial proof that there was an agreement between two or more persons to commit an offence. 32. Accordingly, no offence is made out after reading the contents of FIR under sections 405, 406, 415, 418, 420 and 425 read with section 120-B of the Indian Penal Code. The registration of FIR amounts to gross misuse of process of law and is liable to be set aside. 33. Consequently, in view of analysis and discussion made hereinabove, all the petitions are allowed. FIR No. 76 of 2013 dated 21.10.2013 registered at Police Station, Kala Amb, Tehsil Nahan, District Sirmaur for offences under sections 405, 406, 415, 418, 420 and 425 read with section 120-B of the Indian Penal Code is quashed. Pending application(s), if any, also stand disposed of.