The court ruled that allegations of cheating require a trial, even if the parties assert a civil dispute, as the allegations disclose a cognizable offence.

ORAL ORDER

The captioned petition is filed seeking quashing of the proceedings pending in C.C.No.3637/2018 for the offence punishable under Section 420 of IPC on the file of the I Additional Civil Judge and JMFC Court, Mysore.

2. The respondent No.2 has lodged a complaint alleging that, upon noticing an advertisement published in the newspaper wherein one Nimish Wealth Management Private Limited, owned by R. Jayaram, was offering financial advice pertaining to savings and investment matters, she came into contact with the said company and its representatives. Pursuant to the advice and upon receiving instructions, respondent No.2 claims to have initially invested a sum of Rs.2,00,000/- in the company, on the assurance that she would receive a 5% return on investment per month. It is further alleged that in the year 2015, the accused once again persuaded respondent No.2 to make an additional investment. Acting upon such representations, respondent No.2 asserts that she invested a further sum of Rs.10,00,000/- in cash, which was generated by selling property owned by her daughter.

3. It is the specific allegation of the complainant that despite investing a considerable amount, she did not receive any returns. Upon repeated visits to the office of the accused and persistent demands for repayment, the petitioner/accused is said to have issued a cheque towards repayment of the invested amount. However, the said cheque, when presented for encashment, was dishonoured with the endorsement "insufficient funds." Based on these allegations, respondent No.2 lodged a complaint before the jurisdictional Police Station, which led to the registration of a case in Crime No.78/2016 for the offence punishable under Section 420 of the Indian Penal Code.

4. The petitioner has approached this Court seeking quashing of the proceedings in C.C. No.3637/2018, primarily on the ground that the dispute, being civil in nature, is amenable to resolution before a competent Civil Court. It is contended that respondent No.2 has an efficacious remedy for recovery of the amount allegedly invested. Further, the petitioner submits that parallel proceedings cannot be maintained for the same cause of action, especially when proceedings under the Negotiable Instruments Act have also been initiated in respect of the dishonoured cheque. On these grounds, the petitioner seeks quashing of the criminal proceedings initiated pursuant to the registration of FIR.

5. This Court, having heard the learned counsel on record, had granted an interim order on 05.08.2024, thereby staying the proclamation order. However, upon a more detailed consideration of the records, it emerges that the interim order was secured by the petitioner on the premise that the proclamation order had been issued against him. Significantly, in the present petition, the petitioner has not challenged the proclamation order per se, but instead seeks quashing of the criminal proceedings pending in C.C.No.3637/2018 on the ground that the dispute raised by respondent No.2 is of a purely civil nature and therefore does not warrant criminal prosecution.

6. On perusal of the records, learned counsel for the petitioner has fairly conceded that respondent No.2 has not initiated any proceedings under the Negotiable Instruments Act, 1881. In particular, no private complaint has been filed under Section 138 read with Section 141 of the N.I. Act, even though the cheque allegedly issued by the petitioner was dishonoured for insufficiency of funds.

7. In the backdrop of these admitted facts, this Court finds it appropriate to examine the nature of the grounds urged in the petition. A careful reading of paragraph 8 of the petition reveals that the petitioner has t