Mere breach of a contract cannot give rise to a criminal proceeding. In the absence of materials indicating that the accused had any dishonest intention at the time the alleged promise or inducement was made, an offence of cheating cannot be said to have been established.

B. K. BEHERA, J.

( 1 ) THE petitioner seeks the inherent jurisdiction of this Court wider S. 482 of the Code of Criminal Procedure (for short, 'the Code') to quash a criminal proceeding initiated against him by the opposite party (complainant ) on the basis of a petition of complaint made by the latter. Cognisance has been taken with regard to commission of offences punishable under Ss. 420 and 423 of the Indian Penal Code (for short, 'the Penal Code' ).

( 2 ) AS averred in the petition of complaint and stated by the opposite party before the Chief Judicial Magistrate, Cuttack, the petitioner, having taken two trucks belonging to the opposite party on hire and being liable to pay Rs. 28,000/- (38,000/-?) therefore, issued three cheques for Rs. 20,000/-, Rs. 15,000/- and Rs. 3,000/- for encashment, but the cheques were dishonoured with a note 'stop Payment" in respect of two cheques and with a note "payment stopped by the Drawer" on another. These acts have constituted commission of the offences by the petitioner, as alleged.

( 3 ) INHERENT jurisdiction of the High Court under S. 482 of the Code to quash a criminal proceeding is to be exercised in appropriate case to prevent an abuse of the process of the court or to secure the ends of justice. The criminal proceeding instituted against an accused person shall ordinarily be proceeded with in accordance with law. As held by this Court in ILR (1973) Cuttack 1327, D. Surya Rao v. Liaquat Ali Khan, the allegation must be assumed to be correct until the trial has begun. Where, however, the allegation made in the first information report or in the complaint, even on their face value and if accepted in their entirety, do not constitute an offence or the impugned order clearly brings about a situation which is an abuse of the process of the Court or for the purpose of securing the ends of justice, interference by the High Court is absolutely necessary, the High Court may exercise its power under S. 482 of the Code. Reference has been made to some of the reported cases in Dr. Radhanath Rath v. Balakrishna Swain, (1985) 59 Cut LT 226 : (1985) 2 Crimes 139.

( 4 ) THE case is one in which three cheques issued by the petitioner were returned with the endorsements noted above. There is no material that the petitioner had made any endorsement or had issued any instruction to the Bank before issue of the cheques. As would appear from the statement made by the opposite party under S. 200 of the Code, after the cheques were returned, the petitioner neither paid the dues nor deposited the money in the bank for encashment. This would show that the petitioner did not have money in the bank for encashment of the three cheques. Would this amount to cheating punishable under S. 420 of the Penal Code ? With reference to the principles laid down by this Court in (1971) 37 Cut LT 643 Duryodhan Khutia v. Ali Ahamed, (1978) 46 Cut LT 560, G. Anji v. Sunanda Kar and (1985) 60 Cut LT 51, G. Laxminarayan Naidu v. Chitibaina Yerraiah, the answer would be found in the negative. In order to hold a person guilty of cheating, the intention of the person must be dishonest and there must be mens rea. It has to be shown that his intention was dishonest at the time of making the promise. Dishonest intention cannot be inferred from the mere fact that he could not subsequently fulfil the promise. The distinction between mere breach of a contract and cheating would depend upon the intention of the accused at the time of the alleged inducement which may be judged by his subsequent act, bull of which the subsequent act is not the sole criterion. Mere breach of a contract cannot give rise to a criminal proceeding. In the absence of materials indicating that the accused had any dishonest intention at the time the alleged promise or inducement was made, an offence of cheating cannot be said to have been established.

( 5 ) THERE is no material to show that at the time of issue of the cheques, the petitioner had made any re