V. GANESAN versus STATE REP BY THE SUB INSPECTOR OF POLICE & ANR.

Citation: [2026] 4 S.C.R. 239 · Decided: 19-03-2026 · Supreme Court of India · Bench: PAMIDIGHANTAM SRI NARASIMHA · Disposal: Appeal(s) allowed

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Judgment (excerpt)

[2026] 4 S.C.R. 239 : 2026 INSC 265
V. Ganesan 
v. 
State Rep by the Sub Inspector of Police & Anr.
(Criminal Appeal No. 1470 of 2026)
19 March 2026
[Pamidighantam Sri Narasimha and Manoj Misra,* JJ.]
Issue for Consideration
Issue arose whether the High Court was justified in declining to 
quash proceedings u/s.420 IPC.
Headnotes†
Penal Code, 1860 – s.420 – Offence of cheating – Appellant-
movie producer borrowed money from the complainant on 
assurance that it would be returned by a share in profits – 
Appellant issued two post-dated cheques towards return of 
the principal amount – Cheques dishonoured for insufficient 
funds in the account – Complaint for the offence of cheating 
and criminal breach of trust – Petition for quashing of report 
and consequential proceedings on the ground that it was a 
civil cause of action given a colour of criminal offence – High 
Court quashed the indictment of an offence punishable u/s.406 
but declined to quash proceedings qua the offence of cheating 
punishable u/s.420 – Correctness:
Held: Where the transaction between the parties is such that 
fulfilment of the promise is not entirely in the control of the promisor, 
or there is an inherent risk in fulfilment of the promise, the High Court 
may, in exercise of its inherent powers under the Code, or u/Art.226 
of the Constitution, as the case may be, upon consideration of the 
attending circumstances, take a decision whether the dishonest 
intention existed or not at the time of making the promise – And, if 
it comes to the conclusion that the alleged conduct of the parties 
does not reflect a dishonest intention of the accused from the very 
beginning, it may quash the criminal complaint/proceedings and 
relegate the aggrieved party to civil remedies – On facts, the initial 
payment of money by the complainant to the appellant was for a 
* Author
240
[2026] 4 S.C.R.
Supreme Court Reports
movie project on promise of a share in profits – Additional money 
was paid later for its completion under a promise of an enhanced 
share in the profits – No denial about the completion of the movie 
and its ultimate release, thus, the promise to make a movie not 
false, as also no dishonest intention of the appellant in making the 
promise which remained unfulfilled – Nature of transaction between 
the parties was a crucial factor in determining whether the investor 
party should be allowed to bring in a criminal action or pursue civil 
remedies – High Court overlooked the same – Post-dated cheques 
were not by way inducement to lend money or invest money in 
the proposed movie – Dishonour of those cheques, would not 
ipso facto amount to an offence of cheating – Thus, dishonour of 
a post-dated cheque by itself not sufficient to presume existence 
of a dishonest intention on part of its drawer – Thus, in absence 
of allegations that movie made profits, the complaint and the 
supporting materials failed to indicate that the appellant harboured 
a dishonest intention from inception – Allegations only disclosed 
a civil cause of action and the High Court erred in not quashing 
the criminal proceedings – Impugned judgment and order of the 
High Court set aside to the extent it declined quashing of the 
proceedings u/s.420 – Impugned criminal proceedings u/s.420 
quashed. [Paras 15, 17, 18, 20, 21]
Penal Code, 1860 – s.420 – Cheating – Necessary ingredients 
to constitute an offence of cheating:
Held: In order to constitute an offence of cheating the intention to 
deceive should be in existence when the inducement was made – 
It is necessary to show that a person had fraudulent or dishonest 
intention at the time of making the promise – Mere failure to keep 
the promise subsequently cannot be the sole basis to presume 
that dishonest intention existed from the very beginning. [Para 13]
Case Law Cited
Iridium India Telecom Ltd. v. Motorola Inc. [2010] 14 SCR 591 : 
(2011) 1 SCC 74; Vesa Holdings Private Limited and Another v. 
State of Kerala and Others [2015] 4 SCR 27 : (2015) 8 SCC 
293 – referred to.
List of Acts
Penal Code, 1860; Constitution of India; Code of Criminal 
Procedure, 1973; Negotiable Instruments Act, 1881.
[2026] 4 S.C.R. 
241
V. Ganesan v. State Rep by the Sub Inspector of Police & Anr.
List of Keywords
Cheating; Criminal breach of trust; Fraudulent; Dishonest intention; 
Civil cause of action; Quashing of the criminal proceedings; 
Dishonour of cheque; Criminal action; Promise of a share in profits; 
False promise; Dishonest

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