In Brief
Appellants challenged a High Court order quashing criminal proceedings for alleged cheating and misappropriation in a property sale agreement. The respondent allegedly conspired to cheat them of Rs. 12.50 crores (later Rs. 5.40 crores) by promising performance while failing three contractual conditions and then illegally terminating the agreement. The Supreme Court held that allegations in the complaint disclose ingredients of Sections 406 and 420 IPC prima facie. The High Court erred in quashing proceedings merely because it involved a commercial transaction and arbitration was pending. The Court reaffirmed that arbitration cannot substitute criminal prosecution for alleged offences and that truth of allegations must be determined at trial, not at the quashing stage. The appeal was allowed, the High Court's judgment set aside, and the trial court directed to proceed expeditiously.
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