The judgment establishes that the substance of the complaint and the intention at the beginning of the transaction are crucial in determining criminal prosecution for cheating under Section 420 IPC.

In this petition, filed under Section 482 Cr.P.C., the petitioners pray for quashing the First Informant Report in connection with Govindpur P.S. Case no. 116 of 2015 dated 20.3.2015, corresponding to G.R. No. 1321 of 2015 registered for commission of offence under Sections 406, 420, 120-B and 34 of the Indian Penal Code.

2. The First Informant Report, at the instance of the informant, has been lodged alleging therein that the informant is the partner of Raj Coke and Coal Processing, Works at Tundi Road, Govindpur, Dhanbad. These petitioners along with other co-accused came to the office of the informant and introduced themselves as Directors of Maa Sherawali Ispat Private Limited and requested him to supply coal on credit against purchase order. The informant first hesitated to supply coal, but later on, he agreed to supply coal on credit. It is alleged that from August 2013 to November, 2013, the informant supplied coal valued at Rs.75,70,946/- on credit against different purchase orders. It is also alleged that after demands and pressure, the petitioners, out of Rs.75,70,946/-, paid a sum of Rs.47,54,177/- to the complainant. Thus Rs.28,16,769/- is still lying with the petitioners. On repeated request, a cheque of Rs.28,16,769/- was issued on 24.6.2014, but the same was dishonoured with endorsement “payment stopped by the drawer”. On this cause of action, an FIR under Sections 406, 420, 120-B and 34 IPC was lodged.

3. The counsel for the petitioners submits that even taking the allegation against the petitioners in the FIR to be true, no offence under Sections 406, 420, 120-B and 34 IPC is made out. He further submits that from perusal of the FIR, it is quite clear that there was a business relationship between the parties and the materials, were given on credit. He also submits that some amount fell due for which, a criminal proceeding cannot be initiated. He lastly submits that the registration of the FIR and investigation of the same, amounts to an abuse of the process of court.

4. Learned State counsel assisted by the counsel appearing for informant, submits that from perusal of the FIR, the offence under Sections 406, 420, 120-B and 34 IPC is made out and the FIR cannot be quashed at very initial stage. It is further submitted that the case has to be investigated and only thereafter, it can be said whether the accused has committed the offence or not.

5. I have heard the learned counsel appearing for the petitioners, State and the informant and perused the case record.

6. The quashing of the FIR at initial stage amounts to quashing the investigation. FIR is quashed in the rarest of the rare case. The Hon’ble Supreme Court in the case of Manik Taneja and Another Vs. State of Karnataka and Another reported in (2015) 7 SCC 423 has held as under;

“That when a prosecution at the initial state is asked to be quashed, the test to be applied by the court is as to whether the uncontroverted allegations as made, prima facie, establish the offence. It is also for the court to take into consideration any special features which appears in a particular case to consider whether it is expedient and in the interest of justice to permit the prosecution to continue. Where, in the opinion of the court, the chances of ultimate conviction are bleak, and no useful purpose is likely to be served by allowing a criminal prosecution to continue, the court may quash the proceeding even though it may be at a preliminary stage.”

The Hon’ble Supreme Court in the case of Anil Mahajan Vs. Bhor Industries Ltd. and Another reported in (2005) 10 SCC 228 has held that mere failure to keep a promise at a subsequent stage, an offence of cheating cannot be made out and the same will not amount to commission of offence under Section 420 IPC. The Hon’ble Supreme Court has also held that the substance of the complaint is to be seen. Mere use of the expression “cheating” in the complaint is of no consequence. It has also been held that mere breach of contract ca