Distinct allegations of entrusted-fund misappropriation and deceptive invoices warrant investigation for breach of trust and cheating.

The petitioners, Accused Nos. 1 and 2, sought to quash Crime No. 45 of 2025, registered for offences under Sections 316(1), 316(4), 316(5), 318(3) and 351(2) of the Bharatiya Nyaya Sanhita, 2023 (BNS).

The complainant alleged that A1, the company’s Commercial and Operational Manager, and A2, its Accountant, diverted company funds through false or inflated invoices and other transactions, causing an alleged loss of approximately ₹2 crore; a separate allegation concerned death threats.

The petitioners disputed the allegations and sought quashing, contending, among other things, that the ingredients of breach of trust and cheating were absent and that no preliminary enquiry had been conducted.

The High Court considered the petition while the investigation was ongoing and dismissed it.

Whether the FIR, taken at face value, disclosed cognizable offences of criminal breach of trust, cheating and criminal intimidation warranting investigation.

Whether the alleged overlap between criminal breach of trust and cheating, or the absence of a preliminary enquiry, justified quashing the FIR.

Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS), confers the High Court’s power to quash proceedings; at the FIR stage, disputed factual defences ordinarily are not adjudicated where the allegations, taken at face value, disclose cognizable offences.

The Court considered Sections 316(1), 316(4), 316(5), 318(3) and 351(2) of the BNS in assessing the alleged breach of trust, cheating and criminal intimidation.

It also considered Section 173(3) of the BNSS, holding that a preliminary enquiry is discretionary and applies only to the specified category of cognizable offences punishable with imprisonment of three years or more but less than seven years; the offences under Sections 316(4) and 316(5) fell outside that category.

Distinguishing Delhi Race Club (1940) Ltd. v. State of Uttar Pradesh, 2024 SCC OnLine SC 2248, the Court observed that the case before it involved alleged misappropriation of entrusted funds as well as deception through fabricated invoices, unlike a dispute arising from non-payment of a sale price.

The Court found that the FIR alleged A1 had dominion over company purchases and funds, A2 maintained the accounts, and company money was diverted to the petitioners through allegedly fictitious or inflated bills; the allegations therefore disclosed, on their face, criminal breach of trust and cheating.

The separate allegation of death threats also disclosed an offence under Section 351(2) BNS.

The Court held that Delhi Race Club did not assist the petitioners because the allegations here extended beyond non-payment for goods to entrusted funds and allegedly fabricated invoices; whether the evidence ultimately supported one offence or both was for investigation.

The preliminary-enquiry objection failed because such an enquiry was discretionary and the specified offences under Sections 316(4) and 316(5) were outside the relevant category.

The petitioners’ remaining contentions raised disputed questions of fact, while the investigation into the alleged money trail was at an early stage.

The criminal original petition was dismissed, and the connected miscellaneous petition was closed.