Specific cheating allegations require investigation despite the dispute’s contractual character.

The complainant’s company entered into a subcontract with VDB Projects Private Limited for storm-water drain works.

The complainant alleged that, although approximately ₹107 crore had been received for completed work, ₹40 crore remained payable; the petitioners maintained that the dispute concerned contractual payments and that substantial sums had already been paid.

The parties did not dispute that ₹17 crore had been paid by the date of the complaint, but disputed the amount remaining due and the contractual deduction to which VDB was entitled.

The complainant’s allegations led to registration of Crime No. 289/2018 under Section 420 IPC. The petitioners sought quashing of the FIR under Section 482 CrPC, contending that the dispute was civil in nature.

Whether the FIR alleging cheating under Section 420 IPC should be quashed under Section 482 CrPC on the ground that the dispute arose from a contractual payment dispute.

Whether the allegations required investigation into whether dishonest intention existed at the inception of the transaction.

The petitions were brought under Section 482 of the Code of Criminal Procedure, seeking to quash an FIR alleging an offence under Section 420 of the Indian Penal Code.

The Court relied on Dineshbhai Chandubhai Patel v. State of Gujarat, holding that where a complaint discloses allegations of an offence, the High Court should not obstruct investigation.

It also referred to Sau Kamal Shivaji Pokarnekar v. State of Maharashtra, for the principle that proceedings should not be quashed at the initial stage merely because the allegations appear civil in nature.

The petitioners relied on State of Haryana v. Bhajan Lal and other authorities concerning abuse of criminal process in essentially civil disputes; the complainant relied on authorities supporting investigation where the complaint alleges criminal conduct.

For cheating, the relevant question identified by the Court was whether there was an intention to cheat at the inception of the transaction.

The Court noted that the existence of the contract, the work performed, and receipt of approximately ₹107 crore were not disputed; the parties instead contested the amount payable and the effect of the contractual deduction.

Although ₹17 crore had been paid by the date of the complaint, the complainant alleged that a substantial balance remained due and that the petitioners had cheated it.

In light of those specific allegations and the competing accounts of payment, the Court declined to decide at the quashing stage whether the matter was purely civil or involved cheating.

It held that the Investigating Officer should investigate whether dishonest intention existed at the inception and determine whether the allegations disclosed an offence or a payment-recovery dispute.

Both criminal petitions were dismissed, leaving it to the Investigating Officer to investigate the allegations and decide whether the case warranted a charge sheet or an ‘A’ or ‘B’ report.