In Brief
The appellants, directors of a real estate company, were accused of criminal breach of trust and cheating for allegedly selling residential flats beyond their authorized share in a joint development project. The Supreme Court held that while both civil and criminal proceedings can exist separately, the criminal case must be quashed when its essential ingredients are absent. Here, the core requirement of dishonest or fraudulent intention—necessary for offences under Sections 406, 419, and 420 IPC—was not made out. The dispute involved a contractual disagreement between business partners regarding the extent of authorized sales, not deception at the transaction's inception. The Court disapproved the misuse of criminal prosecution to resolve commercial disputes and allowed the appeal, quashing the FIR and criminal proceedings.
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