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2018 DIGILAW 106 (GUJ)

DIPAL JAYESH SHUKLA v. STATE OF GUJARAT

2018-01-12

J.B.PARDIWALA

body2018
JUDGMENT : 1 The respondent No.2, although served with the notice issued by this Court, yet has chosen not to remain present before this Court either in person or through an advocate and oppose this application. 2 By this application under Section 482 of the Code of Criminal Procedure, 1973, the applicants seek to invoke the inherent powers of this Court, praying for quashing of the First Information Report being C.R. No.I40 of 2015 registered with the Sola Police Station, Ahmedabad for the offence punishable under Sections 406, 420 and 120B read with 114 of the Indian Penal Code. The First Information Report lodged by the respondent No.2 reads as under: “DATE : 15/07/2015 My name is Kaushikbhai Kumudchandra Kapadia, aged 48 years, Occupation – Business, Add. 17, Sudarshan Society Vibhag – 2, Near Devendra Bus Stop, Naranpura, Ahmedabad City. Mobile No. 9825034578. I have personally come and declare the facts of my complaint that, I am residing at the above mentioned address with my family and I am carrying on the business of Building Construction and salespurchase of land. Through one of my acquaintance Suketu Talati before four years I came in contact with Jayesh Kanaiyalal Shukla residing at Thaltej in Royal Crystal, and this Jayesh Shukla had informed me that he was running factories of manufacturing medicines in Uttrakhand and Kalol, and this Jayesh Shukla had further informed me that himself and his family members and his wife Dipal and their daughter Rajvi have made one HUF deed under the Hindu Undivided Family Act. It is registered in the name of Jayesh Kanaiyalal Shukla HUF. And he was the Karta of the said HUF and his wife and his daughter were members of the HUF as informed by him. He informed me that all the members were jointly carrying on the financial transactions and I was frequently visiting the house of this Jayesh Kanaiyalal Shukla, so I had become acquainted with all these members of HUF. Due to this reason about four years ago I had gone to the house of this Jayesh Kanaiyalal Shukla at that time his family members his wife Ripal Jayesh Shukla and his daughter Rajvi Jayesh Shukla were present in his house, at that time, Jayesh Shukla had demanded Rs. Due to this reason about four years ago I had gone to the house of this Jayesh Kanaiyalal Shukla at that time his family members his wife Ripal Jayesh Shukla and his daughter Rajvi Jayesh Shukla were present in his house, at that time, Jayesh Shukla had demanded Rs. 2,00,00,000/- for their business, and told that amount would be in returned in short time, and all these members had informed me that they would give him compensation from the profit of their business. These persons had given me such luring so I was carried away in their talks and I had given Rs. 50,00,000/- on 02/03/2013 and Rs. 1,50,00,000/- on 18/03/2013 vide RTGS through Union Bank of India, Navrangpura Branch, the said amount is received by Jayesh Kanaiyalal Shukla and this Jayesh Shukla has also given me the copy of the account where the said amount was credited under his signature. And this Jayesh Shukla had given assurance to refund the amount taken, and one promissory note assuring the payment was also executed at his house in my favour. Thereafter in spite of passage of time I had demanded back the amount given by me in spite of this HUF members have not returned the amount and were making false excuses, and were whistling away time. Thereafter time and again I had demanded back my funds so Jayesh Kanaiyalal Shukla had issued me a cheque on 31/07/2014 under the signature of Jayesh Kanaiyalal Shukla from the Jayesh Kanaiyalal Shukla HUF account No. 04261008466 drawn on Dena Bank, Station Road, Kalol Branch being cheque No. 001108 for Rs.2,00,00,000/- amount in my favour with the consent of all members, and informed that on depositing this cheque you will get back your entire amount. Therefore I had trust on this Jayesh Shukla and on 04/08/2014 I had deposited the said cheque in my account in Union Bank of India, Darpan Six Roads Branch in account No. 44910 but this cheque was dishonored due to insufficient funds, at that time I had felt that I have been cheated and fraud was committed with me, therefore I had contacted all the members of HUF and Jayesh Kanaiyalal Shukla so he had informed me that there are no transactions done with you. And we do not know you, therefore all these members and Jayesh Shukla HUF had taken rupees two crores from me for business inspite of this the said amount was not repaid to me with mala fide intentions and although there was insufficient balance in their HUF account then also and with knowledge before hand then also they have issued me one cheque from the said account, the said cheque was returned and they have committed breach of trust and fraud with me, so I have come to lodge this complaint. Other than this the said Jayesh Shukla has lured and enticed many other about twelve persons and have collected funds wrongly and issued cheques which were also returned as I have come to know. Therefore, about four years ago Jayesh Kanaiyalal HUF and Jayesh Kanaiyalal himself and the above named members of HUF have under preplanned conspiracy, called me to their house frequently and abetted each other and gained my confidence and trust and lured me to give good compensation from their business and on 02/03/2013 and on 18/03/2013 they have taken Rs. 2,00,00,000/- by RTGS transfer for their business on loan, and thereafter with the mala fide intention of not repaying my funds they have issued me a cheque for rupees two crores in spite of the knowledge beforehand that they do not have sufficient funds in their account and the said cheque was returned and my amount is not repaid and thus committed breach of trust and fraud with me and therefore this is my complaint against Karta and members of HUF which requires investigation. My witness is Suketu Talati who had introduced me to all of them and those that may be found in the investigations. These are my facts and as narrated by me are true and correct.” 3 The plain reading of the First Information Report would indicate that the applicants herein are the wife and daughter respectively of the 'Karta' of the H.U.F. namely Jayesh Kanaiyalal Shukla. The allegations levelled in the F.I.R. are that the first informant came in contact with the Jayesh Kanaiyalal Shukla – original accused No.1 and in the course of time, they started knowing each other very well. The allegations levelled in the F.I.R. are that the first informant came in contact with the Jayesh Kanaiyalal Shukla – original accused No.1 and in the course of time, they started knowing each other very well. It is submitted in the F.I.R. that Jayesh Kanaiyalal Shukla represented before the first informant that he had registered as 'H.U.F.' and he was the 'Karta' of the H.U.F. His wife and daughter i.e. the applicants herein are the members of the 'H.U.F.' It is further alleged that Jayesh Kanaiyalal Shukla requested the first informant to lend him Rupees Two Crore for the purpose of his business. Having regard to the relations, the first informant is said to have lended Rupees Two Crore in favour of the H.U.F. 4 It is further alleged that later, the amount was not paid by the accused persons i.e. the original accused No.1 and the applicants herein. In such circumstances, the F.I.R. came to be lodged. 5 Mr. Bharat Naik, the learned senior counsel appearing for the applicants submitted that the daughter and the wife of the main accused have nothing to do with the alleged transaction entered into between Jayesh Kanaiyalal Shukla and the first informant. The learned senior counsel submitted that, assuming for the moment that the applicants are the members of the H.U.F., that by itself is not sufficient to fasten any criminal liability. It is submitted that only with a view to exert pressure upon the main accused, the wife and the daughter of the main accused have been arraigned as the accused. It is pointed out that the daughter is an M.B.B.S. student and has nothing to do with the business of his father. The applicant No.1 namely Dipal Jayesh Shukla is a housewife. Mr. Naik further pointed out that the original accused No.1 Jayesh Kanaiyalal Shukla issued cheques in favour of the first informant towards the amount borrowed by him, which is the subject matter of the present F.I.R. Those cheques were dishonoured and in connection with the same, the first informant filed complaints under Section 138 of the Negotiable Instruments Act. Those complaints are pending before the Court concerned. The proceedings have been stayed by this Court. Those complaints are pending before the Court concerned. The proceedings have been stayed by this Court. The learned senior counsel further pointed out that after filing of the complaints under Section 138 of the N.I. Act, a civil suit was filed for recovery of money being the Special Civil Suit No.191 of 2014, which is pending, as on date, in the Court of the Senior Civil Judge, Ahmedabad (Rural). 6 In such circumstances referred to above, Mr. Naik, the learned senior counsel appearing for the applicants prays that there being merit in this application, the same be allowed and the F.I.R. be quashed so far as the applicants herein are concerned. 7 Mr. Dharmesh Devnani, the learned Additional Public Prosecutor appearing for the State submitted that the only allegations against the applicants herein are that they happen to be the daughter and wife respectively of the main accused namely Jayesh Kanaiyalal Shukla and they being the members of the H.U.F. are also responsible for the alleged offence. 8 Having heard the learned counsel appearing for the parties and having considered the materials on record, the only question that falls for my consideration is whether the F.I.R. should be quashed so far as the two applicants herein are concerned. 9 The offences of criminal breach of trust (Section 406 IPC) and cheating (Section 420 IPC) have specific ingredients. In order to constitute a criminal breach of trust (Section 406 IPC). (1) There must be entrustment with person for property or dominion over the property, and (2) The person entrusted : (a) dishonestly misappropriated or converted property to his own use, or (b) dishonestly used or disposed of the property or willfully suffers any other person so to do in violation (i) any direction of law prescribing the method in which the trust is discharged and (ii) of legal contract touching the discharge of trust (see: S.W.P. Palanitkar v. State of Bihar, (2002)1 SCC 241 ) : ( AIR 2001 SC 2960 ). Similarly, in respect of an offence under section 420 IPC, the essential ingredients are : (1) deception of any person, either by making a false or misleading representation or by other action or by omission; (2) fraudulently or dishonestly inducing any person to deliver any property, or (3) the consent that any persons shall retain any property and finally intentionally inducing that person to do or omit to do anything which he would not do or omit (see: Harmanpeet Singh Ahluwalia v. State of Punjab, (2009)7 SCC 712 : (2009) Cr.L.J. 3462 (SC) ) 10 Further, in both sections, mens rea i.e. intention to defraud or the dishonest intention must be present from the very beginning or inception without which either of these sections cannot be invoked. 11 I may only say with a view to clear a serious misconception of law in the mind of the police as well as the courts below that if it is a case of the complainant that offence of criminal breach of trust as defined under Section 405 of IPC, punishable under Section 406 of IPC, is committed by the accused, then in the same breath it could not be said that the accused has also committed the offence of cheating as defined and explained in Section 415 of the IPC, punishable under Section 420 of the IPC. 12 Every act of breach of trust may not be resulted in a penal offence of criminal breach of trust unless there is evidence of manipulating act of fraudulent misappropriation. An act of breach of trust involves a civil wrong in respect of which the person may seek his remedy for damages in civil courts but any breach of trust with a mens rea gives rise to a criminal prosecution as well. It has been held in Hart Prasad Chamaria v. B.K. Surekha and others, reported in 1973(2) SCC 823 as under : We have heard Mr. Maheshwari on behalf of the appellant and are of the opinion that no case has been made out against the respondents under Section 420 Indian Penal Code. For the purpose of the present appeal, we would assume that the various allegations of fact which have been made in the complaint by the appellant are correct. Maheshwari on behalf of the appellant and are of the opinion that no case has been made out against the respondents under Section 420 Indian Penal Code. For the purpose of the present appeal, we would assume that the various allegations of fact which have been made in the complaint by the appellant are correct. Even after making that allowance, we find that the complaint does riot disclose the commission of any offence on the part of the respondents under Section 420 Indian Penal Code. There is nothing in the complaint to show that the respondents had dishonest or fraudulent intention at the time the appellant parted with Rs. 35.000/- There is also nothing to indicate that the respondents induced the appellant to pay them Rs. 35.000/- by deceiving him. It is further not the case of the appellant that a representation was made, the respondents knew the same to be false. The fact that the respondents subsequently did not abide by their commitment that they would show the appellant to be the proprietor of Drang Transport Corporation and would also render accounts to him in the month of December might create civil liability on the respondents for the offence of cheating. 13 To put it in other words, in the case of cheating the dishonest intention starts with the very inception of the transaction. But in the case of criminal breach of trust, the person who comes into possession of the movable property receives it legally, but illegally retains it or converts it to his own use against the terms of the contract. Then the question is, in a case like this, whether the retention is with dishonest intention or not. Whether the retention involves criminal breach of trust or only a civil liability would depend upon the facts of each case. 14 The distinction between mere breach of contract and the offence of criminal breach of trust and cheating are fine one. Then the question is, in a case like this, whether the retention is with dishonest intention or not. Whether the retention involves criminal breach of trust or only a civil liability would depend upon the facts of each case. 14 The distinction between mere breach of contract and the offence of criminal breach of trust and cheating are fine one. In case of cheating, it depends upon the intention of the accused at the time of inducement, which may be judged by a subsequent conduct but for this the subsequent conduct is not the sole test but mere breach of contract which cannot give rise to a criminal prosecution for cheating unless fraudulent or dishonest intention is shown right from the beginning of the transaction i.e. the time when the offence is said to have been committed. Therefore, it is his intention, which is the gist of the offence. Whereas, for the criminal breach of trust, the property must have been entrusted to the accused or he must have dominion over it. The property in respect of which the offence after breach of trust has been committed must be either the property of some person other than the accused or the beneficial interest in or ownership of it must be of some other person. The accused must hold that property on trust of such other person. But the offence, i.e. the offence of breach of trust and cheating involve dishonest intention but they are mutually exclusive and different in basic concept. There is a distinction between criminal breach of trust and cheating. For cheating, criminal intention is necessary at the time of entrustment. In criminal breach of trust, mere proof of entrustment is sufficient. Thus, in case of criminal breach of trust, the offender is lawfully entrusted with the property and he dishonestly misappropriated the same. Whereas, in case of cheating, the offender practices fraudulent or dishonest to induce with another person to deliver the property. In such situation, both the offences cannot coexist simultaneously. 15 I may quote with profit a decision of the Supreme Court in the case of Nageshwar Prasad Singh alias Sinha v. Narayan Singh, AIR 1999 SC 1480 . Whereas, in case of cheating, the offender practices fraudulent or dishonest to induce with another person to deliver the property. In such situation, both the offences cannot coexist simultaneously. 15 I may quote with profit a decision of the Supreme Court in the case of Nageshwar Prasad Singh alias Sinha v. Narayan Singh, AIR 1999 SC 1480 . In the said case, the allegation of the prosecution was that an agreement was signed between the complainant respondent and the appellant whereby some land was agreed to be sold by the appellant to the complainants on a consideration, and allegedly a part thereof was paid as earnest money, the balance being payable in the manner indicated in the deed. The most important term in the deed was that possession of the plot would stand transferred to the complainants and possession in fact was delivered to the complainants over which they made certain constructions. The complaint was laid on the basis that the appellant had cheated the complainants of the sum of money they had paid as earnest money as his subsequent conduct reflected that he was not willing to complete the bargain for which the complainants had to file a suit for specific performance which was pending in the civil court. Held, that latter part of illustration (g) to Section 415, I.P.C. illustrates that at the time when agreement for sell was executed, it could have, in no event, been termed dishonestly so as to hold that the complainants were cheated of the earnest money, which they passed to the appellant as part consideration and possession of the total amount involved in the bargain was passed over to the complainant/respondent and which remained in their possession. Now it is left to imagine who would be interested for dealing the matter for completing the bargain when admittedly the complainants have not performed their part in making full payment. The matter was, therefore, before the civil court in this respect. The liability, if any, arising out by breaching thereof was civil in nature and not criminal. Accordingly, the appeal was allowed and complaint proceedings were quashed. 16 It was further held by the Supreme Court in the case of Hridaya Ranjan Prasad Verma v. State of Bihar, AIR 2000 SC 2341 at Pp. 234546 of para 16) as below : "15. Accordingly, the appeal was allowed and complaint proceedings were quashed. 16 It was further held by the Supreme Court in the case of Hridaya Ranjan Prasad Verma v. State of Bihar, AIR 2000 SC 2341 at Pp. 234546 of para 16) as below : "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 of 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." 17 In All Cargo Movers (I) Pvt. Ltd. & others v. Dhanesh Badarmal Jain & another, JT 2007 (12) SC 345, the Apex Court quashed a criminal proceeding on the premise that the allegations contained in complaint were wholly inconsistent with the pleadings in a collateral civil proceeding. It held as follows : "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." 18 In K.L.E. Society & others v. Siddalingesh, (2008) 4 SCC 541 , on a similar issue, the Supreme Court quashed a criminal proceeding labeling it to be an abuse of process of Court as the allegations contained in the complaint ran contrary to the averments made in the petition filed under the Industrial Disputes Act. The Apex Court held as follows : "7. One thing is clear on reading of High Court's reasoning that the High Court came to the conclusion that deductions were made without any rhyme and reason and without any basis. That was not the case of the complainant. On the other hand, it tried to make out a case that the deduction was made with an object. That obviously, was the foundation to substantiate claim of entrustment. On a close reading of the complaint it is clear that the ingredients of Sections 403, 405 and 415 do not exist. That was not the case of the complainant. On the other hand, it tried to make out a case that the deduction was made with an object. That obviously, was the foundation to substantiate claim of entrustment. On a close reading of the complaint it is clear that the ingredients of Sections 403, 405 and 415 do not exist. The statement made in the complaint runs contrary to the averments made in the petition in terms of Section 33(C) (2)." 19 In State of Orissa v. Debendra Nath Padhi, (2005) SCC (Cri.) 415, the Supreme Court held that the High Court could take into account materials of "unimpeachable character of sterling quality" while exercising its inherent powers to quash a criminal proceeding and observed as follows :- "29. Regarding the argument of accused having to face the trial despite being in a position to produce material of unimpeachable character of sterling quality, the width of the powers of the High Court under Section 482 of the Code and Article 226 of Constitution is unlimited whereunder in the interests of justice the High Court can make such orders as may be necessary to prevent abuse of the process of any Court or otherwise to secure the ends of justice within the parameters laid down in Bhajan Lals case. 20 In Vijaya Rao v. State of Rajasthan & another (2005) SCC (Cri.) 1600, the Supreme Court held that merely using expressions like "fraudulent representation" and "malafide intention" does not give rise to an inference that the complaint discloses the ingredients of the offence of cheating. 21 In Hridaya Ranjan Prasad Verma & others v. State of Bihar & another (2000) SCC (Cri.) 786, the Supreme Court succinctly laid down the distinction between breach of contract in one hand and the offence of cheating in the other. "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. "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." 22 In Anil Kumar Bose v. State of Bihar, (1974) SCC (Cri.) 652, the Supreme Court held that mere failure to perform a duty or observe rules of procedure may be an administrative lapse or any error of judgement but cannot be equated with dishonest intention or cheating. 23 Criticizing the institution of malicious and frivolous criminal proceeding against individuals, the Supreme Court in PEPSI Foods Ltd. & another v. Special Judicial Magistrate & Ors., (1998) SCC (Cri.) 1400, held as follows : "28. Summoning of an accused in a criminal case is a serious matter. Criminal law cannot be set into motion as a matter of course. it is not that the complainant has to bring only two witnesses to support his allegations in the complaint to have the criminal law set into motion. The order of the magistrate summoning the accused must reflect that he has applied his mind to the facts of the case and the law applicable thereto. He has to examine the nature of allegations made in the complaint and the evidence both oral and documentary in support thereof and would that be sufficient for the complainant to succeed in bringing charge home to the accused. It is not that the Magistrate is a silent spectator at the time of recording of preliminary evidence before summoning of the accused. It is not that the Magistrate is a silent spectator at the time of recording of preliminary evidence before summoning of the accused. Magistrate has to carefully scrutinise the evidence brought on record and may even himself put questions to the complainant and his witnesses to elicit answers to find out the truthfulness of the allegations or otherwise and then examine if any offence is prima facie committed by all or any of the accused." 24 In B.Suresh Yadav v. Sharifa Bee & another, JT (2007) 12 SC 341, the Supreme Court again highlighted the distinction between a mere breach of contract and the offence of cheating. 25 In Inder Mohan Goswami & another v. State of Uttaranchal & others, (2007) 12 SCC 1 , the Supreme Court analysed inherent powers of the High Court under Section 482 as follows : "23. This court in a number of cases has laid down the scope and ambit of courts' powers under section 482 Cr.P.C. Every High Court has inherent power to act ex debito justitiae to do real and substantial justice, for the administration of which alone it exists, or to prevent abuse of the process of the court. Inherent power under section 482 Cr.P.C. can be exercised: (i) to give effect to an order under the Code; (ii) to prevent abuse of the process of court, and (iii) to otherwise secure the ends of justice. 24. Inherent powers under section 482 Cr.P.C. though wide have to be exercised sparingly, carefully and with great caution and only when such exercise is justified by the tests specifically laid down in this section itself. Authority of the court exists for the advancement of justice. If any abuse of the process leading to injustice is brought to the notice of the court, then the Court would be justified in preventing injustice by invoking inherent powers in absence of specific provisions in the Statute." 26 In one of the recent pronouncement of the Supreme Court in the case of International Advanced Research Centre for Powder Metallurgy and New Materials (ARCT) & Ors. vs. Nimra Cerglass Technics Private Limited & Anr., (2016) 1 SCC 348 , the court has explained what would constitute cheating within the meaning of section 425 of the Indian Penal Code. I may quote the relevant observations as under: “15. vs. Nimra Cerglass Technics Private Limited & Anr., (2016) 1 SCC 348 , the court has explained what would constitute cheating within the meaning of section 425 of the Indian Penal Code. I may quote the relevant observations as under: “15. The essential ingredients to attract Section 420 IPC are: (i) cheating; (ii) dishonest inducement to deliver property or to make, alter or destroy any valuable security or anything which is sealed or signed or is capable of being converted into a valuable security and (iii) mens rea of the accused at the time of making the inducement. The making of a false representation is one of the essential ingredients to constitute the offence of cheating under Section 420 IPC. In order to bring a case for the offence of cheating, it is not merely sufficient to prove that a false representation had been made, but, it is further necessary to prove that the representation was false to the knowledge of the accused and was made in order to deceive the complainant. 16. Distinction between mere breach of contract and the cheating would depend upon the intention of the accused at the time of alleged inducement. If it is established that the intention of the accused was dishonest at the very time when he made a promise and entered into a transaction with the complainant to part with his property or money, then the liability is criminal and the accused is guilty of the offence of cheating. On the other hand, if all that is established that a representation made by the accused has subsequently not been kept, criminal liability cannot be foisted on the accused and the only right which the complainant acquires is the remedy for breach of contract in a civil court. Mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown at the beginning of the transaction. In S.W. Palanitkar & Ors. vs. State of Bihar & Anr. (2002) 1 SCC 241 , this Court held as under: 21 ...In order to constitute an offence of cheating, the intention to deceive should be in existence at the time when the inducement was made. It is necessary to show that a person had fraudulent or dishonest intention at the time of making the promise, to say that he committed an act of cheating. It is necessary to show that a person had fraudulent or dishonest intention at the time of making the promise, to say that he committed an act of cheating. A mere failure to keep up promise subsequently cannot be presumed as an act leading to cheating. The above view in Palanitkars case was referred to and followed in Rashmi Jain vs. State of Uttar Pradesh & Anr. (2014) 13 SCC 553. 22. By analysis of terms and conditions of the agreement between the parties, the dispute between the parties appears to be purely of civil nature. It is settled legal proposition that criminal liability should not be imposed in disputes of civil nature. In Anil Mahajan vs. Bhor Industries Ltd. & Anr. (2005) 10 SCC 228 , this Court held as under; 6. ..A distinction has to be kept in mind between mere breach of contract and the offence of cheating. It depends upon the intention of the accused at the time of inducement. The subsequent conduct is not the sole test. Mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent, dishonest intention is shown at the beginning of the transaction. 7. &.. 8. The substance of the complaint is to be seen. Mere use of the expression cheating in the complaint is of no 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&. 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 complainants 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. 25. 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. 25. The above decisions reiterate the wellsettled principles that while exercising inherent jurisdiction under Section 482 Cr.P.C., it is not for the High Court to appreciate the evidence and its truthfulness or sufficiency inasmuch as it is the function of the trial court. High Courts inherent powers, be it, civil or criminal matters, is designed to achieve a salutary public purpose and that a court proceeding ought not to be permitted to degenerate into a weapon of harassment or persecution. If the averments in the complaint do not constitute an offence, the court would be justified in quashing the proceedings in the interest of justice.” 27 Mr. Naik, the learned counsel is right in his submission that only with a view to exert pressure on the main accused, his wife and daughter have been arraigned as accused. As noted above, the daughter is an M.B.B.S. student and as such, has nothing to do with the affairs of the H.U.F. The applicant No.1 is a housewife. Just because they happen to be the members of the H.U.F., that by itself would not be sufficient to fasten any criminal liability. Even otherwise, no vicarious liability can be fastened for the offence under the I.P.C. Even otherwise, there are no specific allegations against the two applicants herein of any false representation, etc. Further, as noted above, it is only after the filing of the complaints under Section 138 of the N.I. Act and the civil suit for recovery of the amount, the respondent No.2 thought fit to file the F.I.R. 28 For the foregoing reasons, this application succeeds and is hereby allowed so far as the applicants herein are concerned. The First Information Report being C.R. No.I40 of 2015 registered with the Sola Police Station, Ahmedabad is hereby quashed so far as the applicants herein are concerned. Rule is made absolute to the aforesaid extent. Direct service is permitted. 29 The investigation shall proceed further in accordance with law, if not yet completed so far as the original accused No.1 is concerned.