ORDER : (Venkata Jyothirmai Pratapa, J.) The instant petition under Section 482 of the Code of Criminal Procedure, 1973,[in short ‘Cr.P.C.’] has been filed, by the Petitioners/Accused Nos.1, 3, 4, 5 & 7, seeking quashment of the proceedings against them in C.C.No.428 of 2018 on the file of the Court of Judicial Magistrate of First Class, Tadipatri, Ananthapuram District for the offences under Sections 420, 406 read with 34 of Indian Penal Code,[in short ‘IPC;]. 2. Initially, Respondent No.2/defacto complainant filed a private complaint under Section 200 and 156(1) of Cr.P.C. for offences under Sections 420, 406 read with 34 of I.P.C., against the petitioners herein and two others before the Judicial Magistrate of First Class, Tadipatri, Ananthapuram District on 15.03.2016. The Court forwarded the complaint to the S.H.O., Tadipatri Town P.S. under Section 156(3) Cr.P.C for registration of F.I.R., investigation and report. Thereafter, the Respondent No.1 herein has registered F.I.R.No.107 of 2016 on 31.03.2016 for the said offences. 3. Contents of the complaint in brief: a. The Respondent No.2/Defacto complainant is the sole proprietor of M/s. Sapthagiri Enterprises situated at Tadipatri Town and he is the distributor of Hindustan Coca-Cola Beverages Pvt. Ltd. since 1994. As per the conditions of the company, Respondent No.2 herein has engaged his work force to market the product through retailers and the Respondent No.2 signed a Distributor Agreement dt.08.09.2014. b. As per the agreement, the distributor should purchase beverages manufactured/marketed by the company and under its trade mark as a wholesale basis and /in throughout a primary services area. When the de facto complainant has failed to market the products, it has sent the termination letter, dt.30.06.2015 which was returned unserved with an endorsement ‘refused’. As such, the agreement was terminated and Accused No.7 was appointed as its distributor. Notices have been exchanged. When the de facto complainant has failed to market the products, it has sent the termination letter, dt.30.06.2015 which was returned unserved with an endorsement ‘refused’. As such, the agreement was terminated and Accused No.7 was appointed as its distributor. Notices have been exchanged. c. Thereafter, the defacto complainant has filed this complaint alleging offence of Sections 420, 406 r/w.34 of I.P.C. before the court which complaint was referred to the police of Tadipatri u/s.156(3) Cr.P.C. d. When the petitioners received the notices under Section 41-A Cr.P.C., they have approached the High Court on 27.04.2016 and sought quashing of Crime No.107 of 2016 of Tadipatri P.S. which petition was numbered as Crl.P.No.6879 of 2016, and the High Court having granted stay of all further proceedings of Crime No.107 of 2016 finally disposed of the same on 28.07.2016, directing the petitioners to appear before the investigating agency for investigation. e. After completion of investigation, police filed charge sheet on 30.10.2018 which was numbered as C.C.No.428 of 2018, wherein summons were issued to Accused Nos.1 to 7. Grounds Sought for Quashment 4. Aggrieved thereby, the petitioners filed the present petition seeking quashment of the case against them on the following grounds: a. When the de facto complainant failed to sell the products of the company, Petitioners rightly appointed the Accused No.7 as one of its distributor and it has right to terminate the distributor agreement dated 08.09.2014. b. The defacto complainant has roped in these petitioners in this criminal case with a malafide intention to extract money as they are the employees of the company. c. There are no specific allegations with regard to the role played by them for the commission of the offences charged in the charge sheet. d. The ingredients required for the commission of offence under Section 420 of I.P.C. is absence. The breach of contract would amount to cheating only, if intention to cheat was existing at the very inception e. The petitioners are only the employees of the company and the de facto complainant has not arrayed the company as an accused in the complaint filed before the Court on 15.03.2016. There is a dispute between the company and the de facto complainant. There is a dispute between the company and the de facto complainant. f. The allegation that the petitioner no.1/Accused No.1 has colluded with A2 to A7 and has terminated the distributor agreement is absolutely false and incorrect and Respondent No.2 herein has not produced any document to substantiate the same. g. The matter is purely of civil nature and the police ought not to have filed charge sheet against these petitioners and it is an abuse of process of law. h. To impose corporate criminal liability on the officers of the company, allegations and proof is necessary and in the absence of any specific allegation against the petitioners, who are only employees, the criminal liability is unsustainable. Arguments Advanced at the Bar 5. Heard Sri Leo Raj, learned counsel for the petitioners, Ms. D.Prasanna Lakshmi, learned Assistant Public Prosecutor representing the State/Respondent No.1 and Sri N.Chandra Sekhar Reddy, learned counsel for Respondent No.2. 6. Learned counsel for the Petitioner would submit that it is a private complaint filed before the learned Magistrate, wherein the Magistrate referred the complaint to the Police under Section 156(3) Cr.P.C for registration of the case and investigation of the offence. Accordingly, Police registered the case against the Petitioners for the alleged offences. Learned counsel further submits that, without arraying M/s.Hindustan Coca Cola Beverages (P) Ltd., the case has been lodged against the employees of the said Company, whereas the Respondent No.2 entered into a dealership agreement with the Company. Learned counsel would further submit that it is a non-exclusive contract and the matter is purely of civil nature. He would also submit that there are no specific overt acts attributed against the Petitioners to attract the offences alleged against them. 7. Learned counsel for Respondent No.2 and the learned Assistant Public Prosecutor, in unison, would submit that special allegations are levelled against the Petitioners and the statements of L.Ws.2 to 4 corroborate the statement of Respondent No.2/Complainant. It is also pointed out that amounts which are due to Respondent No.2 have been deposited in the account of Accused No.7. Therefore, the proceedings against the Petitioners cannot be quashed at this stage. Hence, prayed to dismiss the petition. 8. In reply, learned counsel for the Petitioners would submit that the Company has every right to appoint any number of Distributors since it is a non-exclusive contract. Point for Determination 9. Therefore, the proceedings against the Petitioners cannot be quashed at this stage. Hence, prayed to dismiss the petition. 8. In reply, learned counsel for the Petitioners would submit that the Company has every right to appoint any number of Distributors since it is a non-exclusive contract. Point for Determination 9. Having heard the submissions made by the learned counsel representing both parties and on perusal of the material available on record, the point for determination that arises in this case is as follows: Whether the case against the Petitioners/Accused Nos.1,3,4,5 & 7 in C.C.No.428 of 2018 on the file of the Court of Judicial Magistrate of First Class, Tadipatri, Ananthapuram District, is liable to be quashed by exercising jurisdiction under Section 482 of the Cr.P.C.? Determination by the Court 10. A bare perusal of Section 482 makes it clear that the Code envisages that inherent powers of the High Court are not limited or affected so as to make orders as may be necessary; (i) to give effect to any order under the Code or, (ii) to prevent abuse of the process of any Court or, otherwise (iii) to secure ends of justice. A court while sitting in Section 482 jurisdiction is not functioning as a court of appeal or a court of revision. It must exercise its powers to do real and substantial justice, depending on the facts and circumstances of the case. These powers must be invoked for compelling reasons of abuse of process of law or glaring injustice, which are against sound principles of criminal jurisprudence. It is a well settled principle of law that when a prosecution is sought to be intervened by quashment, the test to be applied is to see whether the uncontroverted allegations as made prima facie establish the offence alleged or not. 11. It is the case of Respondent No.2/Complainant that Accused No.1 in collusion with Accused Nos.2 to 7 fabricated the records and handed over the distribution to Accused No.2 and thereby cheated the Complainant. For better understanding, the complaint filed by the Complainant is extracted hereunder: “Criminal Complaint filed on behalf of complainant U/s. 420, 406 R/w 34 I.P.C., U/s. 200 and 156(1) Cr.P.C. 1. For better understanding, the complaint filed by the Complainant is extracted hereunder: “Criminal Complaint filed on behalf of complainant U/s. 420, 406 R/w 34 I.P.C., U/s. 200 and 156(1) Cr.P.C. 1. The complainant is proprietor concern and sole proprietor of M/s. Sapthagiri Enterprises, situated at Tadipatri town within the Jurisdiction of this Hon'ble court The complainant is an Authorized distributor of Hindustan Coca-Cola beverages Pvt. Ltd since 1994. 2. A 1 is working as Sales Team leader now at Zonal office at Moula-ali but as an the date of incident he is working at Guntakal, A2 as Sales Executive at Kadapa, A3 as Area Sales manager now working at Vijayawada, but as on the date of incident at Anantapuram, A4 is working as area sales manager at Kadapa and kept in-charge of Tadipatri and Guntakal after transfer of A3 to Vijayawada, A5 is working as sales manager Hindustan Coca-Cola beverages Pvt. Ltd, Kapugunneru village of Srikalahasthi Mandal of Chittoor district, A6 is working Zonal office Head, Moula-Ali, Hyderabad and A7 is Sunku Sucharitha Proprietrix of Sri Lakshmi Sai Agencies, at Tadipatri. 3. The complainant is distributor appointed by the company to various areas in Tadipatri town in the year 1994. He has to engage his work force to market the product through retailers. He has to take one godown to keep the stocks at his cost, and also he has to engage vehicles to transport the stocks in various areas through retailers to improve business at his costs. The complainant spent maximum money to improve the business and incurred huge amount on the said business and he has shown good progress in the business and he never be a defaulter in payments to the company. In the year 2014, the complainant entered into an agreement with the Hindustan Coca-Cola beverages Pvt. Ltd representing by Uma Maheswara Rao, finance manager, Vijayawada, as per the present rules, values, but strangely A1 who is not competent to initiate any proceedings against complainant, but an 28-11-2014 he issued notice to complainant is terminated from distribution by colluding with A2 to A7 with an intention to give this business to A7 fabricated the records, to give this business. Now this business is running by A7. 4. The complainant her business in the year April 2014 to Sept. 2014 as per scheme the amount accrued is Rs. Now this business is running by A7. 4. The complainant her business in the year April 2014 to Sept. 2014 as per scheme the amount accrued is Rs. 1,45,907/- for October, November, December under some scheme for the both Railway canteen and Vijayalakshmi theaters amount accrued Rs. 59,070/- total amount is Rs. 2,40,000/- (approximately) AS colluding with A7, through A7 is appointed January 2015 and amount was credited to the account of A7, there by A1 and A7 he credited the amount of complainant to A7 through she is not competent to receive the amount thereby they misappropriated the amount of complainant. 5. The act of accused is arbitrary and illegal, without giving any notice to the complainant but, a notice was given by unconcerned officer is dealership was terminated without giving any show cause notice. The attitude of the accused caused much mental agony and monitory loss and thrown in to economical crises. Now the complainant is without money and searching for livelihood. 6. The accused with common intention by colluding all and spoiled reputation of the complainant by not giving to stock, and the accused punished u/sec.420, 406 R/w 34 IPC.” 12. It is a case where the Complainant is a Distributor of M/s.Hindustan Coca Cola Beverages Pvt. Ltd., in which Petitioners After entering into a Distribution Agreement on 08.09.2014 with the said Company, Respondent No.1 could not show any progress. Hence, as per the terms of the said Agreement, the Company got issued a notice Dt.30.06.2015 for the termination of the distribution-ship, but the same notice was returned as refused. Learned counsel for the Petitioners mainly relied on Clause No.42 of the said Agreement, which is extracted hereunder. “42. Without prejudice to the right of the Company to terminate the Agreement forthwith as provided in Clause 41 above, either party may terminate the Agreement without assigning any reason by giving to the other party 30 days notice in writing.” 13. As per the above Clause, either of the parties can terminate the Agreement by one month notice in advance. As mentioned above, a notice to that effect was also issued by the Company. Thereafter, the said Agreement was terminated since it is a non-exclusive contract and distribution was given to Accused No.7. As per the above Clause, either of the parties can terminate the Agreement by one month notice in advance. As mentioned above, a notice to that effect was also issued by the Company. Thereafter, the said Agreement was terminated since it is a non-exclusive contract and distribution was given to Accused No.7. In support of his contentions, learned counsel has placed reliance on the judgment of the Hon’ble Apex Court in V.P.Shrivastava v. Indian Explosives Limited and Others, (2010) 10 SCC 361 , wherein, it was held as follows: “It is plain from a bare reading of the Section that to hold a person guilty of cheating, as defined in Section 415 of the IPC, it is necessary to show that at the time of making the promise he had fraudulent or dishonest intention to retain the property or to induce the person so deceived to do something which he would not otherwise do. In our view, a mere mention of the words "defraud" and "cheat" in para 12 of the complaint, in the setting that these have been used, is not sufficient to infer that the appellants had dishonest intention right at the beginning when, demonstrably, after due deliberations a tripartite agreement was signed, which, under the given circumstances at that juncture, was considered to be in the interest of all the three parties to the agreement. In this regard, it would be useful to advert to the following observations made by this Court in Anil Mahajan Vs. Bhor Industries Ltd. & Anr: "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." Having come to the conclusion that no prima facie case had been made out against the appellants in respect of the alleged offences under Sections 420 and 406 IPC, the question of alleged conspiracy between the appellants does not arise. Nevertheless, in order to bring home the charge of conspiracy within the ambit of Section 120B of the IPC, it is necessary to establish that there was an agreement between the appellants for doing an unlawful act. The complaint lacks any such substance. (emphasis supplied) 14. Learned counsel for the Petitioners also relied on Joseph Salvaraj v. State of Gujarat and others, (2011) 7 SCC 59 , wherein, Hon’ble Apex Court held as follows: “In the instant case, we have to first examine whether any of the ingredients under Section 406, 420 or 506 (1) of the IPC have been made out to enable the Court to take cognizance thereof against the appellant or not. Bare perusal of the FIR lodged by the complainant, would indicate that he had got in touch with the appellant so as to extend the benefit of Appellant's Channel "GOD TV" to his other brethren residing at Ahmedabad. For the said purposes, he had met the owner of Siti Cable, Bapi Nagar in Ahmedabad and negotiated a settlement for a sum of Rs. 10 lacs on behalf of the Appellant's Company as the fee to be paid to Siti cable by Appellant for telecast of channel "God TV" in Ahmedabad. Further grievance of the Complainant was that despite the telecast of "GOD TV", the Appellant, as promised, failed to pay a sum of Rs. 10 lacs to the owners of Siti cables. This is what has been mentioned in nutshell in the complainant's FIR. We have grave doubt, in our mind whether on such averments and allegations, even a prima facie case of the aforesaid offences could be made out against the present appellant. Criminal breach of trust is defined under Section 405 of the IPC and 406 thereof deals with punishment to be awarded to the accused, if found guilty for commission of the said offence i.e. with imprisonment for a term which may extend to three years, or with fine, or with both. Section 420 of the IPC deals with cheating and dishonestly inducing delivery of property. Cheating has been defined under Section 415 of the IPC to constitute an offence. Under the aforesaid section, it is inbuilt that there has to be a dishonest intention from the very beginning, which is sine qua non to hold the accused guilty for commission of the said offence. Cheating has been defined under Section 415 of the IPC to constitute an offence. Under the aforesaid section, it is inbuilt that there has to be a dishonest intention from the very beginning, which is sine qua non to hold the accused guilty for commission of the said offence. Categorical and microscopic examination of the FIR certainly does not reflect any such dishonest intention ab initio on the part of the appellant. Section 506 of the IPC deals with punishment for criminal intimidation. Criminal intimidation, insult and annoyance have been defined in Section 503 of the IPC but the FIR lodged by complainant does not show or reflect that any such threat to cause injury to person or of property was ever given by the Appellant to the Complainant. Thus, from the general conspectus of the various sections under which the Appellant is being charged and is to be prosecuted would show that the same are not made out even prima facie from the Complainant's FIR. Even if the charge sheet had been filed, the learned Single Judge could have still examined whether the offences alleged to have been committed by the Appellant were prima facie made out from the complainant's FIR, charge sheet, documents etc. or not. In our opinion, the matter appears to be purely civil in nature. There appears to be no cheating or a dishonest inducement for the delivery of property or breach of trust by the Appellant. The present FIR is an abuse of process of law. The purely civil dispute, is sought to be given a colour of a criminal offence to wreak vengeance against the Appellant. It does not meet the strict standard of proof required to sustain a criminal accusation. In such type of cases, it is necessary to draw a distinction between civil wrong and criminal wrong as has been succinctly held by this Court in Devendra Vs. State of U.P., 2009 (7) SCC 495 , relevant part thereof is reproduced hereinbelow: "A distinction must be made between a civil wrong and a criminal wrong. In such type of cases, it is necessary to draw a distinction between civil wrong and criminal wrong as has been succinctly held by this Court in Devendra Vs. State of U.P., 2009 (7) SCC 495 , relevant part thereof is reproduced hereinbelow: "A distinction must be made between a civil wrong and a criminal wrong. When dispute between the parties constitute only a civil wrong and not a criminal wrong, the courts would not permit a person to be harassed although no case for taking cognizance of the offence has been made out." In fact, all these questions have been elaborately discussed by this Court in the most oft quoted judgment reported in 1992 (Suppl) 1 SCC 335 State of Haryana Vs. Bhajan Lal, where seven cardinal principles have been carved out before cognizance of offences, said to have been committed, by the accused is taken. The case in hand unfortunately does not fall in that category where cognizance of the offence could have been taken by the court, at least after having gone through the F.I.R., which discloses only a civil dispute.” (emphasis supplied) 15. Learned counsel for the Petitioners also placed reliance on the judgment of the Hon’ble Apex Court in Vesa Holdings Private Limited & Another v. State of Kerala & Others, (2015) 8 SCC 293 , wherein, it was held as follows: “It is true that a given set of facts may make out a civil wrong as also a criminal offence and only because a civil remedy may be available to the complainant that itself cannot be a ground to quash a criminal proceeding. The real test is whether the allegations in the complaint disclose the criminal offence of cheating or not. In the present case there is nothing to show that at the very inception there was any intention on behalf of the accused persons to cheat which is a condition precedent for an offence under Section 420 IPC. In our view the complaint does not disclose any criminal offence at all. Criminal proceedings should not be encouraged when it is found to be malafide or otherwise an abuse of the process of the court. The Superior courts while exercising this power should also strive to serve the ends of justice. In our view the complaint does not disclose any criminal offence at all. Criminal proceedings should not be encouraged when it is found to be malafide or otherwise an abuse of the process of the court. The Superior courts while exercising this power should also strive to serve the ends of justice. In our opinion, in view of these facts allowing the police investigation to continue would amount to an abuse of the process of court and the High Court committed an error in refusing to exercise the power under Section 482 Criminal Procedure Code to quash the proceedings.” (emphasis supplied) 16. Learned counsel further relied on the judgment of the Hon’ble Supreme Court of India in Medmeme, LLC and Others v. IHORSE BPO Solutions Private Limited, (2018) 13 SCC 374 , wherein, it was held as follows: “After going through the allegations contained in the complaint and the material on record, we are of firm conclusion that the matter entirely pertains to civil jurisdiction and not even a prima facie case is made out for offences under Sections 420, 406, 409 read with Section 120B of IPC even if the allegations contained in the complaint are to be taken on their face value. The complaint gives a clear impression that it was primarily a case where the respondent had alleged breach of contract on the part of the appellants in not making the entire payments for the services rendered to the appellants. On the other hand, it is not in dispute that substantial amounts have been paid by the appellants to the respondent-company for the services rendered. Reason for non-payment of the balance amount as given by the appellants is that the services rendered by the respondent-company were not in terms of the agreement entered into between the parties and were deficient in nature. For this reason, even the appellants have filed claims against the respondent-company alleging that appellant suffered losses because of the defective services provided by the respondent. On the basis of it, we find that it cannot be said that at the time of entering into the agreement, either the first agreement or even the second agreement, there was any intention on the part of the appellants to cheat the respondent. No suspicion of any nature was shown or even alleged. On the basis of it, we find that it cannot be said that at the time of entering into the agreement, either the first agreement or even the second agreement, there was any intention on the part of the appellants to cheat the respondent. No suspicion of any nature was shown or even alleged. It is also not the allegation of the respondent in the complaint that the agreement was entered into with fraudulent or dishonest intention on the part of the appellants in inducing the respondent to enter into such a contract. At best, the dispute between the parties is of a civil nature, proceedings in respect of which are pending before the learned Arbitrator. We, thus, allow this appeal, set aside the judgment of the High Court and thereby allow the petition filed by the appellants in the High Court under Section 482 of Code of Criminal Procedure…..” (emphasis supplied) 17. As stated above, since Respondent No.2 has failed to sell the products of the Company as expected, it has appointed Accused No.7 as one of its Distributor by cancelling the Agreement with Respondent No.2 after giving one month notice as per Clause No.42 of the said Agreement, since it is not an exclusive contract. There are no specific allegations with regard to the role played by the Petitioners, who are the employees of the Company. In such circumstances, it can be said that the ingredients of Section 420 IPC are absent. As the intention to cheat Respondent No.2 was absent, breach of contract is also not attracted against the Petitioners. Further, charge sheet does not disclose the existence of any pre-arranged plan whereby the Petitioners had in collusion with the others decided to commit the offences alleged. Moreover, the present complaint has been filed without arraying the Company of the Petitioners as an Accused. The Petitioners, who are the employees of the Company, keeping the interest of the Company in view, have rightly terminated the Distributor Agreement and had appointed Accused No.7 as a distributor. The judgments relied on by the learned counsel for the Petitioners are squarely applicable to the present facts of the case. 18. The Petitioners, who are the employees of the Company, keeping the interest of the Company in view, have rightly terminated the Distributor Agreement and had appointed Accused No.7 as a distributor. The judgments relied on by the learned counsel for the Petitioners are squarely applicable to the present facts of the case. 18. In view of the above discussion, it can safely be held that in absence of any specific allegations against the Petitioners, the criminal liability cannot be fastened on the Petitioners and continuation of such proceedings against them is an abuse of process of the Court. 19. Accordingly, the Criminal Petition is allowed by quashing the proceedings against Petitioners/Accused Nos.1, 3, 4, 5 & 7 in C.C.No.428 of 2018 on the file of the Court of Judicial Magistrate of First Class, Tadipatri, Ananthapuram District for the offences under Sections 406 and 420 read with 34 IPC. Pending applications, if any, shall stand closed.