In Brief
A retired bank employee was charged with cheating and criminal breach of trust after defaulting on a Rs. 27-lakh loan from a private money-lending company. The Supreme Court allowed his appeal and quashed the criminal proceedings. The Court held that a mere inability to repay a loan does not constitute cheating without evidence of fraudulent inducement at the transaction's inception. Since the lender knew the borrower's circumstances and had filed a civil suit for recovery, the dispute was fundamentally civil in nature. The Court emphasized that mens rea is essential for cheating, and criminal proceedings should not be weaponized to supplement civil remedies.
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