JUDGMENT 1. This Misc. Criminal Case under Section 482 of the Cr.P.C. has been preferred for quashing the FIR No. 0010/2021 dated 01.01.2021, registered at Police Station Bhalumada, district Anuppur for the offence punishable under Sections 409 and 420 of the I.P.C. 2. The factual background giving rise to present M.Cr.C. reveals that the complainant/respondent No.2 on 02.01.2021, filed a complaint before Police Station Bhalumada, district Anuppur alleging that in 1995, he and Samrendra Das jointly managed a cable network in the name and style of OM Cable Network. On 28.02.2004, an agreement was executed and four new partners including the present applicant were inducted, in the said firm. As per the agreement, Samrendra Das was managing the network, but later on present applicant started looking after the firm's work. It is alleged that he destroyed the cable network and started his own optical fiber network in the name and style of Raj Cable Network. Till October, 2015, he distributed the profit to the partners, however after November, 2015, stopped sharing any money/profit with the partners and also refused to give details of the accounts. On these submissions, it was stated that applicant failed to return the money invested by the complainant and also cheated the complainant. On the basis of these allegations, FIR under Section 409 and 420 of the I.P.C. was registered against the applicant. 3. Learned counsel for the applicant submitted that applicant has been falsely implicated. The allegation relates to violation of terms and conditions of the agreement dated 28.02.2004 and recovery of money and for rendition of account. It is submitted that agreement dated 28.02.2004 was for a period of seven years and enforceable upto 31.12.2010. It is submitted that the Government of India, Ministry of Telecommunication, New Delhi vide notification dated 23.12.2006 has cancelled all the cable network system and introduced a new system Digital Addressable System (DAS). It is submitted that on the face of it the applicant did not commit any offence, so as to attract the provisions of Sections 409 and 420 of I.P.C.. He has placed reliance on Indian Oil Corporation Vs. NEPC India Ltd. and others (2006) 6 SCC 736 , wherein the Supreme Court has held :- , 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. He has placed reliance on Indian Oil Corporation Vs. NEPC India Ltd. and others (2006) 6 SCC 736 , wherein the Supreme Court has held :- , 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 break down 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 though criminal prosecution should be deprecated and discouraged. 4. He has also relied on G. Sagar Suri and another vs State of U.P. and others (2000) 2 SCC 636 , wherein the Supreme Court has observed :- 8.......It is to be seen if a matter, which is essentially of 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 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. 5. Further reliance is placed on Vijayander Kumar and others Vs. State of Rajasthan and another (2014) 3 SCC 389 , where the Apex Court has held :- 8. On behalf of the appellants reliance has been placed upon judgments of this Court in the case of Thermax Limited and Others Vs. K.M.Johny and Others and in case of Dalip Kaur and Others vs. Jagnar Singh and another. State of Rajasthan and another (2014) 3 SCC 389 , where the Apex Court has held :- 8. On behalf of the appellants reliance has been placed upon judgments of this Court in the case of Thermax Limited and Others Vs. K.M.Johny and Others and in case of Dalip Kaur and Others vs. Jagnar Singh and another. There can be no dispute with the legal proposition laid down in the case of Anil Mahajan vs. Bhor Industries Limited which has been discussed in paragraph 31 in the case of Thermox Limited (supra) that if the complaint discloses only a simple case of civil dispute between the parties and there is an absolute absence of requisite averment to make out a case of cheating, the criminal proceeding can be quashed. 6. Per contra, Shri Shailendra Singh, learned counsel appearing for respondent No.2 has argued that respondent No.2 had invested Rs. 2 lacs in the year 2013 but the same has not been returned and misused by the applicant in his own Raj Cable Network. It is argued that the allegation in the FIR prima facie discloses a cognizable offence, hence interference at this stage is not warranted. He has placed reliance on Teeja Devi Vs. State of Rajasthan (2014) 15 SCC 221 , wherein the Supreme Court has held as under:- 5. It has been rightly submitted by the learned counsel for the appellant that ordinarily power under Section 482 CrPC should not be used to quash an FIR because that amounts to interfering with the statutory power of the police to investigate a cognizable offence in accordance with the provisions of CrPC. As per law settled by a catena of judgments, if the allegations made in the FIR prima facie disclose a cognizable offence, interference with the investigation is not proper and it can be done only in the rarest of rare cases where the court is satisfied that the prosecution is malicious and vexatious. 7. He has also relied on Amit Kapoor Vs. Ramesh Chander (2012) 9 SCC 460 wherein the Supreme Court has held thus :- 27. Having discussed the scope of jurisdiction under these two provisions i.e. Section 397 and Section 482 of the Code and the fine line of jurisdictional distinction, now it will be appropriate for us to enlist the principles with reference to which the courts should exercise such jurisdiction. Having discussed the scope of jurisdiction under these two provisions i.e. Section 397 and Section 482 of the Code and the fine line of jurisdictional distinction, now it will be appropriate for us to enlist the principles with reference to which the courts should exercise such jurisdiction. However, it is not only difficult but is inherently impossible to state with precision such principles. At best and upon objective analysis of various judgments of this Court, we are able to cull out some of the principles to be considered for proper exercise of jurisdiction, particularly, with regard to quashing of charge either in exercise of jurisdiction under Section 397 or Section 482 of the Code or together, as the case may be: 27.1. 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. 27.2. 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. 27.3. 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. 27.4. 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 loath to interfere, at the threshold, to throttle the prosecution in exercise of its inherent powers. 27.5. 27.4. 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 loath to interfere, at the threshold, to throttle the prosecution in exercise of its inherent powers. 27.5. 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. 27.6. 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. 27.7. The process of the court cannot be permitted to be used for an oblique or ultimate/ulterior purpose. 27.8. 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. 27.9. 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 whetherthey will constitute an offence and, if so, is it an abuse of the process of court leading to injustice. 27.10. 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. 27.11. 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. 27.12. 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. 27.12. 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 therewith by the prosecution. 27.13. 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. 27.14. 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. 27.15. 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 the 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. [Ref. State of W.B. v. Swapan Kumar Guha Madhavrao Jiwajirao Scindia v. Sambhajirao Chandrojirao Angre; Janata Dal v. H.S. Chowdhary; Rupan Deol Bajaj v. Kanwar Pal Singh Gill; G. Sagar Suri v. State of U.P.; Ajay Mitra v. State of M.P.; Pepsi Foods Ltd. v. Special Judicial Magistrate; State of U.P. v. O.P. Sharma; Ganesh Narayan Hegde v. S. Bangarappa; Zandu Pharmaceutical Works Ltd. v. Mohd. Sharaful Haque; Medchl Chemicals & Pharma (P) Ltd. v. Biological E. Ltd.; Shakson Belthissor v. State of Kerala; V.V.S. Rama Sharma v. State of U.P.; Chunduru Siva Ram Krishna v. Peddi Ravindra Babu; Sheonandan Paswan v. State of Bihar; State of Bihar v. P.P. Sharma; Lalmuni Devi v. State of Bihar; M. Krishnan v. Vijay Singh; Savita v. State of Rajasthan and S.M. Datta v. State of Gujarat.] 27.16. These are the principles which individually and preferably cumulatively (one or more) be taken into consideration as precepts to exercise of extraordinary and wide plenitude and jurisdiction under Section 482 of the Code by the High Court. These are the principles which individually and preferably cumulatively (one or more) be taken into consideration as precepts to exercise of extraordinary and wide plenitude and jurisdiction under Section 482 of the Code by the High Court. 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. 28. At this stage, we may also notice that the principle stated by this Court in Madhavrao Jiwajirao Scindia was reconsidered and explained in two subsequent judgments of this Court in State of Bihar v. P.P. Sharma and M.N. Damani v. S.K. Sinha. In the subsequent judgment, the Court held that, that judgment did not declare a law of universal application and what was the principle relating to disputes involving cases of a predominantly civil nature with or without criminal intent. 8. Heard the learned counsel for the parties at length and perused the record. 9. Whether breach of terms and conditions of a partnership agreement/contract and not sharing profits and accounts details would constitute an offence under Sections 409 or 420 of the Penal Code, is the question involved herein. 10. In the case of Dalip Kuar and others Vs. Jagnar Singh and another (2009) 14 SCC 696 , while allowing the appeal the Supreme Court has held :- 'An offence of cheating would be constituted when the accused has fraudulent or dishonest intention at the time of making promise or representation. A pure and simple breach of contract does not constitute an offence of cheating. The High Court, therefore, should have posed a question as to whether any act of inducement on the part of the appellant has been raised by the second respondent and whether the appellant had an intention to cheat him from the very inception. If the dispute between the parties was essentially a civil dispute resulting from a breach of contract on the part of the appellants by non-refunding the amount of advance the same would not constitute an offence of cheating. Similar is the legal position in respect of an offence of criminal breach of trust having regard to its definition contained in Section 405 of the Penal Code.' 11. Similar is the legal position in respect of an offence of criminal breach of trust having regard to its definition contained in Section 405 of the Penal Code.' 11. In the case of Hridaya Ranjan Prasad Verma and others Vs. State of Bihar and another (2000) 4 SCC 168 the Apex Court has held that if a criminal prosecution was to take place arising out of breach of contract, then the dishonest intention was to be shown at the beginning of the transaction, i.e., at the time of making a promise. The relevant portion of the judgment reads 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. 12. The ingredients of Section 409 of I.P.C. are :- (i) accused person was working in the capacity of public servant, baker, merchant or agent; (ii) Such person was entrusted with the property, the beneficial interest in which was vested in some person other than the accused; (iii) Such person has misappropriated it or converted it to his own use 13. The ingredients of Section 420 of I.P.C. are :- (i) Deception by any person; (ii) fraudulently or dishonestly inducing any person to deliver any property; or (iii) to consent that any person shall retain any property and finally intentionally inducing that person to do or omit to do anything which he would not do or omit. 14. The ingredients of Section 420 of I.P.C. are :- (i) Deception by any person; (ii) fraudulently or dishonestly inducing any person to deliver any property; or (iii) to consent that any person shall retain any property and finally intentionally inducing that person to do or omit to do anything which he would not do or omit. 14. Therefore, to hold a person guilty under Sections 409 and 420 of I.PC, it is necessary to show ownership of the property remains with the transferor, whereas the person being entrusted with the property is a public servant, banker or merchant and that he had fraudulent intentions at the time of making the promise. In the present case, the complainant/respondent No.2 entered into a partnership with the applicant in the year 2004 and as per complaint's own admission till October, 2015, the firm was regularly managed and profits etc. were distributed/shared between the parties as per their share entitlement and it is only after November, 2015, the dispute arose when the applicant refused to share profits and give the details of the account. Hence, it cannot be inferred that the applicant had the intention to cheat the complainant/respondent No.2 at the time of entering into the partnership. Judged on the touchstone of the principles noted above, in the present case,the ingredients of the offence of cheating punishable under Section 420 of I.P.C. are therefore not made out. So far as offence under Section 409 of I.P.C. is concerned, the applicant is a business man/partner in the firm, he is not a public servant, Banker, Merchant or any agent, hence the said provision is not applicable against the applicant. 15. The above undisputed facts predominantly give rise and constitute a civil wrong. The allegations on the basis of which FIR has been registered under Sections 409 and 420 of I.P.C. does not satisfy the basic ingredients of a criminal offence and is a clear abuse of the process of law. 16. The dispute between the parties is essentially a civil dispute resulting from breach of contract on the part of applicant for not returning the amount invested by the respondent No.2 in accordance with the terms of contract and by not giving the details of account for which the respondent No.2 has a civil remedy for filing a suit for breach of contract and rendition of accounts. 17. 17. In the recent years, there is a growing tendency of complainants attempting to give the cloak of a criminal offence to matters which are essentially and purely civil in nature, either to apply pressure on the accused to settle a civil dispute or out of enmity towards the accused, or to subject the accused to harassment. 18. The present case seems to be of such nature only. In the view of facts and law aforediscussed, the present MCrC is allowed. Impugned FIR No. 0010/2021 dated 01.01.2021 is quashed and set aside.