- ORDER : 1. The petitioners are seeking quash of CC.No.156 of 2024 on the file of IV Additional Chief Metropolitan Magistrate, Vijayawada. The petitioners are facing trial for alleged offences under Sections 420, 406, 506 read with 120-B of IPC. The petitioners are arraigned as accused Nos. 1 to 7. On the strength of the complaint filed by the 2nd respondent the police have registered a crime and completed investigation and filed a charge sheet. 2. Sri.Y.V.Ravi Prasad, learned senior counsel appearing on behalf of the petitioners submits that the petitioners are alleged to have committed the offences by entering into memorandum of understanding dated 29.10.2011 with the 2nd respondent through their company Geomax Mines and Minerals Private Limited (GMMPL). 3. It is alleged in the complaint that the petitioners approached the 2nd respondent and proposed to get allotted certain Bauxite Mines in Jharkhand State and that the 2nd respondent can generate good profit by operating those mines. It is also alleged in the complaint that when the 2nd respondent refused the offer of the petitioners, the 2nd respondent was requested to invest an amount of Rs.2,95,00,000/- as investment and that the mines would be allotted on the name of the 2nd respondent, which would be operated by the petitioners through their known sources. On such projections, the 2nd respondent transferred an amount of Rs.2,95,00,000/- on various dates to the account of Geomax Mines and Minerals Private Limited. 4. It is further submitted that the petitioners are no way connected with the company and there is no allegation in the complaint as to how each of the accused can be alleged to have committed the offences under Sections 420, 406, 506 read with 120-B of IPC. It is submitted that without assigning the role of the accused in commission of the said offence, the complaint as filed and the charge sheet as prepared and filed would have to be quashed. 5. It is also submitted that the event of transfer of amounts admittedly took place in the year 2011 and the complaint is filed in the year 2023. The agreement and arrangement between the Geomax Mines and Minerals Private Limited (herein after referred as “GMMPL”) is purely a commercial agreement and the 2nd respondent was to invest an amount of Rs.9.5 Crores and the share of profit of the GMMPL and the 2nd respondent was agreed at 50:50 ratio. The agreement and arrangement between the Geomax Mines and Minerals Private Limited (herein after referred as “GMMPL”) is purely a commercial agreement and the 2nd respondent was to invest an amount of Rs.9.5 Crores and the share of profit of the GMMPL and the 2nd respondent was agreed at 50:50 ratio. Thereafter, on 27.04.2016 another MOD was entered between the GMMPL and 2nd respondent and MOU dated 29.11.2011 was revoked. It is also submitted that another MOD dated 10.03.2017 was entered between GMMPL and 2nd respondent and it was agreed that the share of the 2nd respondent would be 16.8% as he had invested only Rs.2.3 crores. 6. It is also submitted that the 2nd respondent has filed a false complaint while roping in the petitioners who are neither connected with the transaction nor were party to the Memorandum of Understandings. All the MOUs were signed by the 1st petitioner on behalf of the company GMMPL. 7. It is also submitted that the amounts which were transferred by the 2nd respondent were transferred to the account of the GMMPL and none of the amounts were transferred to any of the petitioners’ accounts. As such, the petitioners cannot be accused of committing the alleged offences. It is also submitted that the GMMPL is not arraigned as an accused and the vicarious liability if any of the GMMPL cannot be passed on to the Officers of GMMPL. 8. The learned senior counsel further submits that the 1st petitioner is the Founder Director from the beginning. The 2nd petitioner was the Director from 02.05.2014 to 06.03.2020. The 3rd petitioner was the Director from 02.05.2014 to 20.02.2020. The 4th petitioner was the Director from 21.07.2010 to 20.09.2010. The 5th petitioner was never a Director at any point of time. The petitioners 6 and 7 were Directors during 12.07.2017 to 15.03.2018. 9. It is also submitted by the learned senior counsel that mere breach of contract cannot amount to cheating and that the complaint is hopelessly barred by limitation. The learned senior counsel places reliance on Randheer Singh Vs. State of U.P. 2021 (14) SCC 626 the Hon'ble Supreme Court held that the Courts must ensure the criminal prosecution is not used as an instrument of harassment or for seeking private vendetta or with an ulterior motive pressurize the accused. The learned senior counsel places reliance on Randheer Singh Vs. State of U.P. 2021 (14) SCC 626 the Hon'ble Supreme Court held that the Courts must ensure the criminal prosecution is not used as an instrument of harassment or for seeking private vendetta or with an ulterior motive pressurize the accused. On the facts of any case, if the FIR or charge sheet does not disclose a criminal offence, the same deserves to be quashed. The learned senior counsel places reliance on Naresh Kumar and another Vs. State of Karnataka, 2024 INSC 196 the Hon’ble Supreme Court held that the High Court must not hesitate in quashing criminal proceedings which are essentially civil in nature and when the dispute between the parties relates to a breach of contract, the same would not give rise to the offence of cheating. The learned senior counsel further places reliance on Anitha Hada Vs. Godfather Tours and Travels Pvt. Ltd. 2012 (5) SCC 661 , B.R. Naidu and another Vs. State of Andhra Pradesh, CRLP No. 3004 of 2011, Ghansham Lai Agarwal Vs. State of Andhra Pradesh, 2022 SCC Online AP 2177. The Hon’ble Supreme Court had held that vicarious liability of the Company cannot be passed on to the Officers of the Company without arraigning the Company as an accused. When the offences are allegedly committed by the Company a criminal complaint cannot be maintained without arraigning as an accused. 10. Sri.Posani Venkateswarlu, learned senior counsel appearing for the 2nd respondent submits that the petitioners have approached this Court without filing a discharge petition and that an effective and alternative remedy of filing a discharge petition was not invoked by the petitioners and straight away they have approached this Court by filing a quash petition. It is also submitted that the case has so far not come up for enquiry before the trial Court. As such, it is premature to approach this Court and seek quash of the criminal case. It is submitted that specific allegations are made out against the accused and these allegations cannot be simply brushed aside on technicality and that the matter would require consideration on merits by the trial Court. 11. Heard the learned senior counsel for the petitioners, learned Assistant Public Prosecutor for the state and the learned senior counsel for the 2nd respondent. Perused the material on record. 12. 11. Heard the learned senior counsel for the petitioners, learned Assistant Public Prosecutor for the state and the learned senior counsel for the 2nd respondent. Perused the material on record. 12. The Memorandum of Understanding is entered by GMMPL with the 2nd respondent. An amount of Rs.2,95,00,000/- was transferred to the account of GMMPL on various dates. Thus, there is a contractual obligation established between the company GMMPL and the 2nd respondent. 13. In order to attribute the offences to the petitioners, the company GMMPL would have to be arraigned as co-accused. In the matter of Sunil Bharati Mittal Vs. CBI, (2015) 4 SCC 609 the Hon'ble Supreme Court dealt with the Circumstances when Director/Person in charge of the affairs of the company can also be prosecuted, when the company is an accused person. It was held that, no doubt, a corporate entity Is an artificial person which acts through its officers, directors, managing director, chairman etc. If such a company commits an offence involving mensrea, it would normally be the intent and action of that individual who would act on behalfof the company. It would be more so, when the criminal act is that of conspiracy. However, at the same time it is the  cardinal principle of criminal jurisprudence that there is no vicarious liability unless the statute specifically provides so: 43. Thus, an individual who has perpetrated the commission of an offence on behalf of a company can be made accused, along with the company, if there is sufficient evidence of his active role coupled with criminal intent. Second situation in which he can be implicated is in those cases where the statutory regime itselfattracts the doctrine of vicarious liability, by specifically incorporating such a provision. When the company is the offender, vicarious liability of the Directors cannot be imputed automatically, in the absence of any statutory provision to this effect. 14. On the facts of this case, the Company GMMPL is not arraigned as a co-accused, that apart petitioner No.2 to 7 were never Directors during the relevant period time when the 2nd respondent is alleged to have invested the amounts in the year 2011. It is also pertinent to mention that the charge sheet is equally silent on the role of the petitioners individually or collectively in committing any of the alleged offences. It is also pertinent to mention that the charge sheet is equally silent on the role of the petitioners individually or collectively in committing any of the alleged offences. Except for blanket statement against the accused that they deceived the 2nd respondent no details are mentioned as to when and in what manner and how each of the petitioners can be held responsible or guilty for the alleged offences. 15. It is also trite to mention that the complaint is hopelessly barred by limitation. The Hon’ble Supreme Court in the matter of State of Punjab Vs. Swaran Singh, 1981 (3) SCC 34 dealt with an issue relating to offences allegedly committed under Section 408 and 406 of IPC. The Hon’ble Supreme Court held that on the facts of that case bar of limitation contained in Section 468 (2) (c) of IPC would apply. On the facts of the present case also, the investment made by the 2nd respondent to the account of the company GMMPL was in the year 2011 and a complaint came to the filed in the year 2023. The complaint has to be considered as hopelessly barred by limitation on the face of it. 16. The criminal petition deserves to be allowed on the ground that the company GMMPL is not arraigned as co-accused and criminal liability cannot be fastened to the petitioners for the acts of the company. The petition also deserves consideration on the ground that non-compliance of the contractual obligations by the company GMMPL or its officers cannot give rise to a cause of action for filing a complaint alleging offences under Section 420, 406 and 506 of IPC. That apart, there is no role assigned to each of the petitioners as to how they are individually responsible for commission of any of the alleged offences or even collectively responsible for commission of the alleged offences. Charging them for offence under Section 120-B of IPC would not ipso-facto make the petitioners vicariously liable for the alleged offences committed by the company GMMPL. 17. At any rate, the averments of the complaint would reveal that commercial transactions and disputes relating to the same are given a criminal hue. The Hon’ble Supreme Court in Delhi Race Club (1940) Ltd. and others Vs. State of U.P. and another, 2024 (10) SCC 690 exhaustively held as to what would constitute criminal breach of trust and cheating. 17. At any rate, the averments of the complaint would reveal that commercial transactions and disputes relating to the same are given a criminal hue. The Hon’ble Supreme Court in Delhi Race Club (1940) Ltd. and others Vs. State of U.P. and another, 2024 (10) SCC 690 exhaustively held as to what would constitute criminal breach of trust and cheating. At para 30 the Hon’ble Supreme Court held as follows: 30. The distinction between mere breach of contract and the offence of criminal breach of trust and cheating is a fine one. In case of cheating, the Intention of the accused at the time of inducement should be looked Into which may be judged by a subsequent conduct, but for this, , [offence. Whereas, for the criminal breach of trust, the] subsequent conduct is not the sole test. Mere breach of contract 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 this intention, which is the gist of the property must have been entrusted to the accused or he must have dominion over It. The property In respect of which the offence of 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. Although the offence, i.e. the offence of breach of trust and cheating involve dishonest intention, yet 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 making a false or misleading representation i.e. since inception. 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 fraudulently or dishonestly Induces a person by deceiving him to deliver any property. In such a situation, both the offences cannot co-exist simultaneously. 18. On the facts of this case, the averments of the complaint or the charge sheet cannot imply offences under Section 406 of IPC. Whereas, in case of cheating, the offender fraudulently or dishonestly Induces a person by deceiving him to deliver any property. In such a situation, both the offences cannot co-exist simultaneously. 18. On the facts of this case, the averments of the complaint or the charge sheet cannot imply offences under Section 406 of IPC. It is a case of a commercial transaction wherein the 2nd respondent invested in the business and such disputes arose on account of the business activity. 19. On these grounds, the criminal petition is allowed and accordingly CC.No.156 of 2024 on the file of IV Additional Chief Metropolitan Magistrate, Vijayawada is hereby quashed. As a sequel, miscellaneous petitions pending, if any, shall stand closed.