The main legal point established is that breach of agreement does not per se give rise to a criminal offence, particularly of cheating under Section 420 of the IPC, as there must be an element of dishonest intention from inception of the transaction.

JUDGMENT

Maheshan Nagaprasanna, J. - The petitioners/accused Nos. 5 and 6 call in question proceedings in Crime No. 12 of 2022 registered for offences punishable under Sections 120B, 406, 420, 424 and 149 of the IPC pending before the IV Additional Chief Metropolitan Magistrate, Bangalore City.

2. Brief facts leading to the filing of the present petition, as borne out from the records, are as follows:-

The first petitioner M/s. Switz International Private Limited (for short 'the SIP') is in the business of finance, financing films in particular. The 3rd respondent-M/s. Mediente Films International Private Limited ('the Company' for short) is a film making company. The complainant is the Director of the said Company. The Company acquired remaking rights of Hindi movie 'Queen' into four Indian regional languages viz., Kannada, Telugu, Tamil and Malayalam. In order to complete the project the Company sought finance from the hands of SIP and the SIP and the Company entered into an agreement of financing the feature film on 6-11-2018. Rs. 25/- crores was taken as advance in terms of the said agreement and the repayment was to be made within 120 days. The Company failed to adhere to the agreement and again on mutually agreed terms it was extended on the condition that the SIP would acquire all the rights of production and distribution of the said film. After the agreement so entered into also, money was not paid. SIP caused a legal notice upon the Company cancelling all the agreements including the agreement as regards right of transfer of the movie on account of continuous breach of the agreement by the Company. This was replied to by the Company, after which, the Company registers a complaint against the petitioners before the jurisdictional Police contending that the petitioners have breached the agreement and the money that had to be paid to the Company is to be recovered.

3. Pursuant to registration of the said complaint, the Police registered a FIR against the petitioners and other accused for offences punishable under Sections 120B, 406, 420, 424 and 149 of the IPC. The petitioners are accused 5 and 6. Accused No. 6 is the SIP and accused No. 5 is the Director of the said company. Accused 1 to 4 are not before this Court in these proceedings. The moment the crime is registered against the petitioners, the petitioners knocked the doors of this Court in the subject petition seeking quashment of entire proceedings.

4. Heard Shri K. Aravind Kamath, learned senior counsel appearing for the petitioners, Smt. K.P. Yashodha, learned High Court Government Pleader for respondents 1 and 2 and Sri A.S. Ponnanna, learned senior counsel appearing for respondent No. 3.

5. The learned senior counsel representing the petitioners would vehemently argue and contend that the entire complaint was registered against the petitioners arising out of breach of agreement and alleged recovery of money from the hands of the petitioners. It is in fact the petitioners who have been cheated have to receive money from the hands of the Company. The 3rd respondent in order to arm-twist the petitioners has registered the complaint against the petitioners. The learned senior counsel would emphasize on the fact that the petitioners who had financed the film are yet to receive their funds back. Though these petitioners have been cheated, the complaint is registered against them for recovery of money that too alleging offences punishable under Sections 406 and 420 of the IPC, the ingredients of which cannot even be seen to be present in the case at hand and would submit that the proceedings be quashed which is purely civil in nature which arises out of a mutually agreed terms and conditions.

6. On the other hand, the learned senior counsel representing the complainant/Company while taking this Court through the documents appended to the petition as well as the applica