Fact of the case :

The complainant is the director of a money lending company by the name of Dharshan Fiscal Pvt. Ltd. The appellant, who is a retired bank employee, approached the complainant's company in the month of January 2008 for a loan of Rs. 27,00,000/-. Accordingly, complainant transferred the funds as a loan, which was to be repaid by the appellant within a year with interest. 

Thereafter, the appellant has not repaid the amount back to the complainant. Further, complainant alleged that when he approached the appellant, he was threatened by the appellant with dire consequences. Thereafter, the respondent no.2 filed a complaint based on which the FIR bearing I/C.R. No. 22/2012, dated 25.01.2012, was filed before the Kagdapith Police Station. the appellant was enlarged on bail by the High Court after being arrested on 29.01.2012. The appellant preferred an application under Section 482 of the Cr.P.C for the quashing of the FIR bearing I/C.R No. 22/2012.

 Held : “The Supreme Court observed that inability of a person to return the loan amount cannot give rise to a criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction”.