The Supreme Court has quashed criminal proceedings against a movie producer, citing the high-risk nature of the film industry.
A bench of justices PS Narasimha and Manoj Misra observed that mere failure to keep a promise cannot be the sole basis to presume a dishonest intention existed from the beginning.
Setting aside an order of the Madras High Court, the top court said it is necessary to show that a person had a fraudulent or dishonest intention at the time of making the promise.
The case involved V Ganesan, who was producing a movie and ran short of funds. He borrowed money from a complainant on the assurance that it would be returned by a share in profits.
However, the postdated cheques issued by Ganesan towards the return of the principal amount were returned unpaid due to insufficient funds in his account.
The Supreme Court ruled that the allegations only disclosed a civil cause of action and the High Court fell in error in not quashing the criminal proceedings.
