The existence of an arbitration clause in a civil agreement does not preclude criminal proceedings when there is an element of criminal intention from the start.

1. Through the instant petition filed under Section 561-A of the Code of Criminal Procedure (hereinafter for short, Cr.P.C.), petitioners seek quashing of criminal proceedings arising out of P.V. No. 61/2017, being inquired by the respondents against the petitioners.

2. The factual matrix of the case are that the petitioners and three other persons started a Company under the name and style of M/S SERA Cue Labs Pvt. Ltd, which is a registered Company under the Companies Act with the Registrar of Companies, Chandigarh, and had been issued a certificate of incorporation in its favour by the said authority. The petitioner No.1 was appointed as the Chief Operating Officer (C.O.O.) reporting to Mr. Dilpreet Sahi, Chief Executive Officer (C.E.O.). It is stated that petitioner No.2 was Director of the said Company amongst three others, namely Col. Arvinder Singh, Arun Bhardwaj and Ritu Sahi. It is submitted each of them are individually 25% stake-holders in the Company as per the Registrar of Companies Records. The Company at that time was in the process of expansion and had spread its Laboratories all over India, thus, one Gurdeep Singh Bali, R/o House No 90, Rolki Bakshi Nagar, Jammu approached petitioner No.1 in the month of March, 2016 showing keen interest in investing capital into opening on branch of M/s SERA Cue Labs Pvt. Ltd. in Jammu. It is stated that the petitioner No.1, was Chief Operating Officer (COO) of M/s SERA Cue Labs Pvt. Ltd. and in his capacity as COO of the Company, under bona fide faith entered into agreement dated 01.10.2016 with Naman Singh Bali, S/o Gurdeep Singh Bali, R/o House No. 90, Rolki Bakshi Nagar Jammu to engage into business of M/s SERA Cue Labs Pvt. Ltd. A bare perusal of the agreement dated 01.10.2016 will reveal that the parties to the same out of their own free will and consent mutually entered upon terms and conditions which stipulates an Arbitration Clause. It envisages that in the event of any dispute between the parties to this agreement the same shall be settled by way of arbitration by sole arbitrator. Both parties will mutually decide the arbitrator in event of any dispute arising between the parties to this agreement. It is stated that owing to the huge fall in the drug industry, the Company started running in financial losses. The venue of arbitration shall be at New Delhi. That after fully knowing about the operation of above stated clause, Naman Singh Bali, with a view to extract money from the petitioners served a legal notice upon the Directors of the SERA Cue Labs. Pvt. Ltd., though the same was not duly served upon the petitioners, but somehow a copy of the same was procured by them. In the said notice the petitioners and other persons were given a week’s time to make payment to the tune of Rs.1,07,50,000/- (rupees one crore seven lacs fifty thousand only).It is stated that the said Naman Singh Bali, after failing in his attempts to extract money from the petitioners, using his influence & managed to get initiated a preliminary verification in terms of P.V. No. 61/2017 at the behest of respondents. It is submitted that notwithstanding the fact that the only legal remedy available to Mr. Naman Singh Ball is the invocation of Arbitration Clause, which is purely civil in nature and no complaint of preliminary verification is maintainable in the eyes of law. It is further stated that in view of the Arbitration Clause between the parties, no question of any complaint or preliminary verification is required. If any liability arises out of the agreement dated 01.10.2016 towards the petitioners and particularly petitioner No.2 as Director SERA Cue Labs Pvt. Ltd, the same is civil in nature, which can be adjudicated upon by the Arbitrator while conducting the Arbitration. It is stated that the Company has acted in terms of the agreement and in a bona fide manner which does not amount to any breach of any law, It is further submitted that the Company through petitioner no.1 with