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Issues Involved:
1. Legality of High Court's quashing of the Magistrate's order taking cognizance u/s 406 and 420 IPC. 2. Examination of whether the allegations constituted criminal offenses or were purely civil in nature. 3. Analysis of the High Court's exercise of extraordinary jurisdiction under Articles 226 and 227 of the Constitution. Issue-wise Comprehensive Details: 1. Legality of High Court's Quashing of the Magistrate's Order: The Supreme Court examined the High Court's decision to quash the Magistrate's order taking cognizance under Sections 406 and 420 of the Indian Penal Code (IPC). The High Court had quashed the order against the wife (Respondent No. 2) on the grounds that there was no entrustment of any property by the complainant to her and no privity of contract existed. The Supreme Court found that the High Court had erred in its conclusion, noting that the allegations against the wife included her involvement in the negotiation and acceptance of money, which prima facie constituted a criminal offense. 2. Examination of Whether the Allegations Constituted Criminal Offenses: The Supreme Court analyzed the nature of the allegations made in the FIR, protest petition, and the investigation records. The Court noted that both the Magistrate and the Sessions Judge had found prima facie evidence of criminal culpability, including fraudulent and dishonest intention from the beginning of the negotiation. The Court emphasized that civil disputes can also contain elements of criminal offenses, and if such elements are present, criminal proceedings should be allowed to continue. 3. Analysis of the High Court's Exercise of Extraordinary Jurisdiction: The Supreme Court criticized the High Court for exercising its extraordinary jurisdiction to quash the cognizance order without proper consideration of the allegations and material on record. The Court highlighted that the High Court should adopt a cautious approach and not interfere with legitimate prosecutions unless the complaint is found to be mala fide, frivolous, or vexatious. The Supreme Court concluded that the High Court had not adhered to sound legal principles and had prematurely quashed the proceedings against the wife. Conclusion: The Supreme Court allowed the appeal, set aside the High Court's order, and directed the Magistrate to proceed in accordance with the law. The Court clarified that its observations were limited to the order taking cognizance and did not reflect any opinion on the merits of the case. The Magistrate was instructed to decide the case on its own merits without being influenced by the Supreme Court's observations.
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