JUDGMENT : 1. The present petition has been filed for quashing the entire criminal proceeding in connection with Gua P.S Case No. 05 of 2014 (G.R. No. 63 of 2014) for the offences under Sections 406/420/34 IPC lodged against the petitioners, now pending in the Court of the Chief Judicial Magistrate, Chaibasa. 2. The learned counsel for the petitioner submits that a complaint case being Complaint Case No. 8 of 2014 was filed by Alok Kumar Chaudhary (O.P. No.2) alleging inter alia that it was agreed by the accused persons to supply iron ore (ROM) to the O.P. No.2 (complainant) through M/S Sunbeam Trading & Investments (P) Ltd. (accused No.2) from the Mines of M/S Rameshwara Jute Mills Limited, as the same was being operated by M/S Essel Mining Corporation Ltd. (accused No.1). The value of iron ore was taken from the complainant and the delivery orders were issued on 21.07.2010 for 2500 MT and on 04.09.2010 for 5000 MT @ Rs.850/- and Rs.500/- per MT respectively. However, out of 2500 MT of iron ore, 2153 MT was delivered and the rest quantity of 5347 MT is still to be delivered. The amount subsequently refunded through RTGS to the Bank a/c of the complainant was not agreeable to the complainant. The said complaint was referred under Section 156(3) Cr.P.C. for lodging an F.I.R and investigation of the same and thus Gua P.S Case No. 05 of 2014 was lodged against the petitioners. 3. It is further submitted that no offence under Sections 406/420/34 IPC is made out against the petitioners. The M/S Sunbeam Trading & Investments (P) Ltd. had agreed to supply the iron ore to the firm of the complainant and as such there is no inducement on the part of the accused persons. The rest quantity of iron ore was not supplied due to lack of statutory clearances, as the mining work was stopped. In the complaint itself it has been stated that the amount paid to the company has been refunded to the complainant through RTGS, but the same is not agreeable to the complainant which clearly goes to show that no ingredient of Section 406 IPC is attracted against the petitioners. On perusal of the entire complaint, it would be evident that there is a commercial dispute between the parties arising out of the aforesaid transaction. 4. On perusal of the entire complaint, it would be evident that there is a commercial dispute between the parties arising out of the aforesaid transaction. 4. The learned counsel for the O.P. No.2 submits that the accused persons with a common intention to commit fraud, received the money in advance. However, they did not supply the balance quantity of iron ore and after sometime, returned the advance money. The temporary remittance of money amounts to misappropriation and its utilization and conversion for one’s use amounts to criminal breach of trust. Since the FIR prima facie discloses the offence of cheating and criminal breach of trust, the criminal proceeding was initiated against the accused persons. Though the petitioners were not in the payroll of the accused company, yet they took part in all the affairs of the accused company. Thus, they cannot run away from the liabilities towards which they have exposed themselves by reasons of their wrongful acts. 5. Heard the learned counsel for the parties and perused the relevant materials available on record. The learned counsel for the petitioners has submitted that the ingredients for constituting the offences under Sections 406 & 420 IPC are not made out in the present case, rather the dispute raised by the O.P. No.2 is purely a commercial dispute for which he may take appropriate civil remedy. In support of his contentions, the learned counsel for the petitioners puts reliance on the judgments of the Hon’ble Supreme Court rendered in the cases of Indian Oil Corporation Vs. NEPC India Ltd. & Ors. reported in (2006) 6 SCC 736 and Rashmi Jain Vs. State of U.P & Anr. reported in (2014) 13 SCC 553. On the other hand, the learned counsel for the O.P. No.2 puts reliance on a judgment of the Hon’ble Supreme Court rendered in the case of V. Ravi Kumar Vs. State of Tamilnadu reported in 2018 SCC Online SC 2811. 6. Before going to the merit of the case of the parties, it would be appropriate to consider the judgments cited by the learned counsel for the parties. 7. The Hon’ble Supreme Court in the case of Indian Oil Corporation (Supra) has held as under:- “13. While on this issue, it is necessary to take notice of a growing tendency in business circles to convert purely civil disputes into criminal cases. 7. The Hon’ble Supreme Court in the case of Indian Oil Corporation (Supra) has held as under:- “13. While on this issue, it is necessary to take notice of a growing tendency in business circles to convert purely civil disputes into criminal cases. This is obviously on account of a prevalent impression that civil law remedies are time consuming and do not adequately protect the interests of lenders/creditors. Such a tendency is seen in several family disputes also, leading to irretrievable breakdown of marriages/families. There is also an impression that if a person could somehow be entangled in a criminal prosecution, there is a likelihood of imminent settlement. Any effort to settle civil disputes and claims, which do not involve any criminal offence, by applying pressure through criminal prosecution should be deprecated and discouraged. In G. Sagar Suri v. State of U.P. this Court observed: (SCC p. 643, para 8) “It is to be seen if a matter, which is essentially of a civil nature, has been given a cloak of criminal offence. Criminal proceedings are not a short cut of other remedies available in law. Before issuing process a criminal court has to exercise a great deal of caution. For the accused it is a serious matter. This Court has laid certain principles on the basis of which the High Court is to exercise its jurisdiction under Section 482 of the Code. Jurisdiction under this section has to be exercised to prevent abuse of the process of any court or otherwise to secure the ends of justice.” 14. While no one with a legitimate cause or grievance should be prevented from seeking remedies available in criminal law, a complainant who initiates or persists with a prosecution, being fully aware that the criminal proceedings are unwarranted and his remedy lies only in civil law, should himself be made accountable, at the end of such misconceived criminal proceedings, in accordance with law. One positive step that can be taken by the courts, to curb unnecessary prosecutions and harassment of innocent parties, is to exercise their power under Section 250 Cr.P.C. more frequently, where they discern malice or frivolousness or ulterior motives on the part of the complainant. Be that as it may.” 8. The Hon’ble Supreme Court in the case of Rashmi Jain (Supra) has held as under:- “9. Be that as it may.” 8. The Hon’ble Supreme Court in the case of Rashmi Jain (Supra) has held as under:- “9. In S.W. Palanitkar v. State of Bihar, this Court again observed as follows: (SCC pp. 246-47 & 250, paras 8, 11 & 21) “8. Before examining respective contentions on their relative merits, we think it is appropriate to notice the legal position. Every breach of trust may not result in a penal offence of criminal breach of trust unless there is evidence of a mental act of fraudulent misappropriation. An act of breach of trust involves a civil wrong in respect of which the person wronged may seek his redress for damages in a civil court but a breach of trust with mensrea gives rise to a criminal prosecution as well. * * * 11. One of us (D.P. Mohapatra, J.), speaking for the Bench, in HridayaRanjan Prasad Verma v. State of Bihar on facts of that case, has expressed thus: (SCC p. 177, para 15) ‘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.’ * * * 21. It is clear from the allegations made in the complaint and the sworn statements that Appellant 1 Company entered into an agreement with Respondent 2 on certain terms and conditions. It is alleged that Appellant 7 went to Patna and contacted Respondent 2 and induced him to enter into an agreement assuring him of huge profit. It is clear from the allegations made in the complaint and the sworn statements that Appellant 1 Company entered into an agreement with Respondent 2 on certain terms and conditions. It is alleged that Appellant 7 went to Patna and contacted Respondent 2 and induced him to enter into an agreement assuring him of huge profit. At the time of arriving at such an agreement, none of the other appellants either met Respondent 2 or induced him to enter into any agreement with a view to cheat him. The agreement was further renewed for a period of one year. It is not the case that there was no supply of goods at all as it has come on record that there was supply of 400 tons of fertilizer, maybe it was far less than the required quantity. The allegations made against the appellants other than Appellant 7 are very vague and bald. From the material that was placed before the Magistrate, even prima facie, it cannot be said that there was conspiracy or connivance between the other appellants and Appellant 7. If the appellants have committed breach of agreement, it is open to Respondent 2 to seek redressal in a competent court or forum to recover damages, if permissible in law in case he had sustained any loss. 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. A mere failure to keep up promise subsequently cannot be presumed as an act leading to cheating.” 9. The Hon’ble Supreme Court in the case of V. Ravi Kumar (Supra) has held as under:- “29. There can no doubt that a mere breach of contract is not in itself a criminal offence, and gives rise to the civil liability of damages. However, as held by this Court in Mridaya Ranjan Prasad Verma & Ors. Vs. State of Bihar & Anr., the distinction between mere breach of contract and cheating, which is a criminal offence is a fine one. While breach of contract cannot give rise to criminal prosecution for cheating, fraudulent or dishonest intention is the basis of the offence of cheating. Vs. State of Bihar & Anr., the distinction between mere breach of contract and cheating, which is a criminal offence is a fine one. While breach of contract cannot give rise to criminal prosecution for cheating, fraudulent or dishonest intention is the basis of the offence of cheating. In this case, in the FIR, there were allegations of fraudulent and dishonest intention including allegations of fabrication of documents, the correctness or otherwise whereof can be determined only during trial when evidence is adduced.” 10. The Hon’ble Supreme Court in the case of International Advanced Research Centre for Powder Metallurgy and New Materials (ARCI) & Ors. Vs. Nimra Cerglass Technics (P) Ltd. & Anr. reported in (2016) 1 SCC 348 has held as under:- “13. 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 uncontroverted allegations as made in the complaint establish the offence. The High Court being superior court of the State should refrain from analysing the materials which are yet to be adduced and seen in their true perspective. The inherent jurisdiction of the High Court under Section 482 Cr.P.C. should not be exercised to stifle a legitimate prosecution. The power under Section 482 Cr.P.C. is to be used sparingly only in rare cases. In a catena of cases, this Court reiterated that the powers of quashing criminal proceedings should be exercised very sparingly and quashing a complaint in criminal proceedings would depend upon the facts and circumstances of each case. (Vide State of Haryana v. BhajanLal, State of T.N. v. ThirukkuralPerumal and CBI v. Ravi Shankar Srivastava.) 14. In the light of the well-settled principles, it is to be seen whether the allegations made in the complaint filed against ARCI and its officers for the alleged failure to develop extruded ceramic honeycomb as per specifications disclose offences punishable under Sections 419 and 420 IPC. It is to be seen that whether the averments in the complaint make out a case to constitute an offence of cheating. 15. It is to be seen that whether the averments in the complaint make out a case to constitute an offence of cheating. 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) mensrea 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. The 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 is 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 v. State of Bihar, this Court held as under: (SCC p. 250, para 21) “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. … 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. A mere failure to keep up promise subsequently cannot be presumed as an act leading to cheating.” The above view of S. W. Palanitkar’s case was referred to and followed by the Hon’ble Supreme Court in the case of Rashmi Jain Vs. State of U.P. “22. By an analysis of the terms and conditions of the agreement between the parties, the dispute between the parties appears to be purely of civil nature. It is a settled legal proposition that criminal liability should not be imposed in disputes of civil nature. In Anil Mahajan v. Bhor Industries Ltd., this Court held as under: (SCC p. 231, paras 6-7) “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. * * * 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 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.” 25. The above decisions reiterate the well-settled 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. The High Court’s 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.” 11. In the present case, admittedly, there was contract between the accused No.2 and the O.P. No.2 for supply of 2500 MT of iron ore vide delivery order dated 21.07.2010 and for 5000 MT of iron ore vide delivery order dated 04.09.2010 and the advance payment for the same was also received by the accused No.2. However, only 2153 MT iron ore, out of 2500 MT iron ore was delivered to the O.P. No.2 on the ground that in absence of necessary statutory clearances, the mining work was stopped and thereafter the rest amount was refunded through RTGS to the O.P.No.2. 12. In the case of ARCI (Supra), the Hon’ble Supreme Court has held that if it is established that the intention of the accused was dishonest at the very time when he had made a promise and had entered into a transaction with the complainant inducing him to part with his property or money, the same would be a criminal offence and the accused would be guilty of the offence of cheating. However, if it is established that a promise 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.13. Here, it is not the case of the O.P. No.2 that the supply was not made to him at all. It may be true that there was shortfall in supply to some extent. However, it cannot be a cogent ground for alleging offences of “cheating” and “criminal misappropriation” against the petitioners. Here, it is not the case of the O.P. No.2 that the supply was not made to him at all. It may be true that there was shortfall in supply to some extent. However, it cannot be a cogent ground for alleging offences of “cheating” and “criminal misappropriation” against the petitioners. Moreover, no specific allegation has been made against the petitioners in the complaint, rather the same is vague and omnibus in nature. It is a settled principle of law that the jurisdiction under Section 482 Cr.P.C may be exercised by the High Court to prevent abuse of the process of Court or otherwise to secure the ends of justice. Any case of civil nature cannot be given cloak of a criminal proceeding so as to get speedy remedy. Even if the uncontroverted allegations made in the present FIR are taken to be true, the fraudulent intention of the petitioners is missing in the same so as to hold the petitioners liable for criminal consequence. 14. Under the aforesaid facts and circumstances, the present petition is allowed. The entire criminal proceeding in connection with Gua P.S Case No. 05 of 2014 (G.R. No. 63 of 2014) lodged for the offences under Sections 406/420/34 IPC as against the petitioners is hereby quashed. However, the O.P. No.2 is at liberty to take recourse of civil remedy in accordance with law, if so advised.