ORDER : V.G.ARUN, J. Petitioners are the accused in Crime No.449 of 2024 registered at the Maradu Police Station for offences punishable under Sections 120B, 406, 420 and 468 read with Section 34 of the IPC. The crime was registered based on a complaint filed by the 2 nd respondent before the Judicial First Class Magistrate Court - VIII, Ernakulam and forwarded to the Police under Section 156(3) Cr.P.C. The allegations in the complaint are to the following effect; The accused approached the complainant, representing themselves to be the active partners of M/s.Parava Films LLP and requested him to invest in the production of a cinematographic film under the name and title “Manjummal Boys”. Based on the assurances and promises made by the accused, the complainant entered into Annexure-A3 Investment Agreement dated 30.11.2022 with M/s.Parava Films LLP represented by the 1 st accused. While entering into the agreement, the accused had made the complainant believe that the total cost of production of the movie is Rs.22 crores and the accused will be investing the balance amount. In terms of the agreement, the complainant invested Rs.7 crores, out of which Rs.5.99 crores was given by way of bank transfer to the account of M/s.Parava Films LLP, Rs.50 lakhs transferred to the account of the 1 st accused and the balance Rs.51 lakhs handed over in cash. As per the terms of the agreement, the complainant is entitled to 40% of the producer's net profit, which includes the gross receipts from world theatrical rights of the original film, satellite rights, OTT rights, music rights, dubbing rights etc. After investing in the project, the complainant got information that the accused had taken Rs.8 crores funding from a third party named 'Listen Stephen' and a further amount of Rs.11 crores as loan from Dream Big Films Ltd. The complainant also came to know that the accused had received Rs.2 crores from Pharse Films, Rs.1,15,00,000/- from Think Music and Rs.2 crores from Mythri Movie Makers. The said transactions were undertaken without the knowledge and consent of the complainant. The project culminated with the release of an enormously successful film, which grossed collection of Rs.150 cores from theatres across India and Rs.75 crores from overseas. From the sale of the film's OTT rights, the accused received an amount of Rs.20 crores. The said transactions were undertaken without the knowledge and consent of the complainant. The project culminated with the release of an enormously successful film, which grossed collection of Rs.150 cores from theatres across India and Rs.75 crores from overseas. From the sale of the film's OTT rights, the accused received an amount of Rs.20 crores. Thus, the total revenue from the project is nearly Rs.250,15,00,000/- and after deducting the cost of production, the net profit would be around Rs.100 crores. The complainant is therefore entitled to Rs.40 crores, being 40% of the producer's share. But, contrary to the promises and assurances given, the accused failed to disburse the amount due to the complainant and even after repeated demands paid only Rs.50,00,000/-. It thus became evident that the accused had no intention of keeping their promise while taking money from the complainant and having utilised the profit for personal purposes, are guilty of cheating and breach of trust. 2. Senior Counsel S.Sreekumar appearing for the petitioners made the following forceful submissions; The dispute between the parties is purely civil in nature and as per Clause 15.1 of Annexure-A3 Investment Agreement dated 30.11.2022, any dispute or difference arising out of or pertaining to the agreement should first be resolved through negotiation and in case negotiation fails, through arbitration. The criminal complaint is filed after initiating arbitration proceedings by filing a petition under Section 9 of the Arbitration and Conciliation Act, 1996 and obtaining an order of attachment. Having thus invoked the proper remedy, the de facto complainant cannot seek to criminally prosecute the petitioners based on the same allegations. A breach of contract by itself will not give rise to cause of action for initiating criminal prosecution for cheating, unless fraudulent or dishonest intention is shown right at the beginning of the transaction. The petitioners having repaid the amount invested by the 2 nd respondent and the exact amount of profit not yet fixed, there is reason to allege cheating and breach of trust. The 2 nd respondent failed to make the investment of Rs.7 crores in accordance with the schedule in Clause 2.4 of Annexure-A3 agreement, compelling the petitioners to raise funds for the project from other sources at exorbitant interest. Having himself committed breach of the agreement, the 2 nd respondent has no right to seek criminal action against the petitioners. The 2 nd respondent failed to make the investment of Rs.7 crores in accordance with the schedule in Clause 2.4 of Annexure-A3 agreement, compelling the petitioners to raise funds for the project from other sources at exorbitant interest. Having himself committed breach of the agreement, the 2 nd respondent has no right to seek criminal action against the petitioners. The initiation and continuation of the criminal prosecution is therefore nothing but an abuse of process and is hence liable to be quashed, by invoking the inherent power vested with the High Court as per Section 482 of the Code of Criminal Procedure. 3. The following decisions of the Apex Court are cited to bolster the contention that, when disputes which are essentially civil in nature are seen converted as criminal proceedings, the courts have a duty to check the abuse of process; B.Suresh Yadav v. Sharifa Bee and Another [ (2007) 13 SCC 107 ] and Mohammed Ibrahim and Others v. State of Bihar and Another [ (2009) 8 SCC 751 ]. 4. In support of the proposition that mere allegation or failure to keep a promise is not enough to initiate criminal proceedings in the absence of an intention to cheat, the decisions of the Apex Court in Vesa Holdings Private Limited and Another v. State of Kerala and Others [ (2015) 8 SCC 293 ] and Sarabjit Kaur v. State of Punjab and Another [ (2023) 5 SCC 360 ] were cited. 5. Responding to the contentions with equal vehemence, Adv Saiby Jose Kidangoor put forth the following submissions on behalf of the 2 nd respondent; The very fact that the jurisdictional Magistrate had forwarded the 2 nd respondent’s complaint to the police for investigation lends credibility to the allegations. Even otherwise, scope for interference at the investigation stage is extremely limited. Merely because the complainant had resorted to a civil remedy, the accused will not be absolved of their criminal acts. The 2 nd respondent was compelled to resort to the remedy under the Arbitration and Conciliation Act in order to prevent the petitioners from diverting the revenue received from the project. In the petition filed before the commercial court, it was clearly stated that the 2 nd respondent is reserving his right to initiate criminal proceedings before the appropriate forum for the fraudulent acts committed by the petitioners. In the petition filed before the commercial court, it was clearly stated that the 2 nd respondent is reserving his right to initiate criminal proceedings before the appropriate forum for the fraudulent acts committed by the petitioners. As a matter of fact, by reason of the attachment of the petitioners' accounts by the commercial court, they paid back portion of the amount invested by him. The intention to cheat is evident from the petitioners' failure to use the entire amount invested for the project by the 2 nd respondent, and diversion of that amount for other purposes. The 2 nd respondent was lured by making him believe that, once he invests Rs.7 crores, the balance amount required for the project will be invested by the petitioners. Later on it came to light that the petitioners had not invested even a single rupee and had generated the balance funds from other sources, by way of loans and investment. After release, the movie became an unprecedented success, generating revenue of more than Rs.250 crores. Their subsequent refusal to share the profit and utilisation of the revenue for personal purposes amounts to breach of trust. As these aspects can be brought to light only through proper investigation, no interference is warranted at this stage. 6. To buttress the arguments, learned counsel placed reliance on the following decisions; ? K.Jagadish v. Udaya Kumar G.S and Others [ AIR 2020 SC 936 ] ? Priti Saraf and Others v.State of NCT of Delhi and Others [ AIR 2021 SC 1531 ] ? Somjeet Mallick v. State of Jharkhand and Others [ AIR 2024 SC 5310 ] ? Hari Shankar Modi v. The State of Jharkhand and Others [MANU/JH/0230/2024] ? Durga Lal Verma v. State of Rajasthan [MANU/RH/0476/2024]. 7. Learned Public Prosecutor submitted that the investigation conducted so far has revealed elements of cheating and breach of trust and hence, the police may be permitted to complete the investigation. 8. The legal position that courts should prevent initiation of criminal proceedings for settling scores or pressurising parties to settle civil disputes is well settled. It is also the settled position that breach of contract does not give rise to criminal prosecution for cheating, in the absence of fraudulent or dishonest intention right at the beginning of the transaction. Mere allegation of failure in keeping the promise is not sufficient to initiate prosecution. It is also the settled position that breach of contract does not give rise to criminal prosecution for cheating, in the absence of fraudulent or dishonest intention right at the beginning of the transaction. Mere allegation of failure in keeping the promise is not sufficient to initiate prosecution. On the other hand, there is no absolute rule prohibiting criminal action merely for reason of the complainant having resorted to civil action. As held in Mohammed Ibrahim and Others (supra), civil disputes in some cases may also contain ingredients of criminal offences. Therefore, the fact that the 2 nd respondent had filed the petition for attachment under Section 9 of the Arbitration and Conciliation Act, cannot, by itself, be the reason for quashing the criminal proceedings. Here, it is pertinent to note that in the petition filed before the commercial court, the 2 nd respondent had reserved his right to initiate criminal proceedings against the petitioners. In Trisuns Chemical Industry v.Rajesh Agarwal and Others [ (1999) 8 SCC 686 ], the Apex Court has held that, merely because an act has a civil profile, it does not denude action against its criminal outfit. Therefore, the provision in the agreement for referring disputes to arbitration is not an effective substitute for criminal prosecution, if the disputed act is an offence. 9. In the preamble to the agreement, it is stated that the 2 nd respondent had agreed to provide necessary financial contributions for the production of the film, relying upon the representations and warranties of the petitioners. The manner in which the revenue is to be collected and appropriated is stated in Clause 5 and sharing of the profits is dealt with in Clause 6 of the agreement. Being contextually relevant, Clauses 5 and 6 are extracted below; “5.REVENUE 5.1. The Parties hereto agree that any and all incomes received and receivable by the Producer from distribution of the Film, (less applicable taxes including entertainment tax or any other statutory deductions, any indirect taxes and shares of the exhibitors, distributor, financer refunds (including the cost of investment) and sub-distributor, sales agents (if applicable), commissions payable to the distributor and sub-distributor but including any tax withheld or deducted at source from such amounts collected) (" Revenue ") shall be collected by the Producer and shall be appropriated in the following manner. 5.1.1.All outstanding expenses, distribution costs, and third-party obligations including loans and/or investments related to the production and distribution of the specified movie. 5.1.2.Repayment of the Investment made by the parties in the ratio of their investment 5.1.3. The distribution of the profit based on the profit-sharing ratio as per Clause 6. 5.2. The Producer shall take all necessary steps to apply for and obtain any and all tax credits, incentives or rebates for which the Film would qualify or any portion thereof is received by or credited to the Producer, Producer agrees to immediately pay 25% to the Second Party. 6.PROFITS 6.1. If the film generates a net profit, the second party will be entitled 40 percentage of Producer's net profit. 6.2. The term "Producer's net profit" as used herein shall be defined as gross receipts received by the Project from World Theatrical Rights of original film, Satellite Rights, OTT Rights & Music Rights, Dubbing Rights etc., less the aggregate of all costs, charges, fees, and expenses of the Project, including, but not limited to Artist remuneration, Technicians remuneration, Art, Costume, Makeup, Location Expenses, Bata and rent, Other Daily Expenses, post production expenses, publicity expenses, Distribution Expenses including Distribution commission, Sales Commission, Line production Charges, Interest cost, third party gross or net profit participations etc.” 10. It is alleged that contrary to the promise and terms of the agreement, the entire amount invested was not utilised for the project and revenue generated from the project was diverted and misappropriated. In Annexure R2(a) objection to the bail application, the Investigating Officer has stated that only Rs.18,65,38,780/- was expended for the project and out of the amount invested by the 2 nd respondent, some portion was diverted to the personal accounts of the accused. Taking the above factors into consideration, I am of the opinion that the prayer for quashing the proceedings at the investigation stage cannot be allowed, since the only consideration at this stage should be whether the allegations in the FIR disclose the commission of a cognisable offence or not. For the aforementioned reasons, the Crl.M.Cs are dismissed.