A division bench of the Apex Court held as follows,

From Para 11,

11.The Appellant, thereafter, was constrained to file the petition under Section 482 of the Code in the High Court of Gujarat at Ahmedabad, with a prayer for quashing of the FIR bearing C.R. No. I-371/2006 registered with Odhav Police Station and to stay further investigation in the case. The said
application came to be considered before the learned Single Judge on 11.1.2007. By that time, charge sheet was already filed before the Competent Criminal Court. Thus, learned Single Judge, was of the opinion that it was not a fit case to be entertained and refused to hear the petition on merits, even though the appellant was given liberty to file an application for his discharge before the Trial Court. It may be noted that even in its impugned order the learned Single Judge has emphasized that he had not considered the case on merits. Thus the Appellant’s petition was dismissed and interim order granted in his favour was vacated.

From Paras 15 and 16,

15. The allegations in the F.I.R. clearly discloses a civil dispute between the parties and the FIR seems to have been filed only with an intention to harass and humiliate the Appellant. This was a pre-emptive move by the Complainant.
16. A summary Civil Suit under Order 37 Rule II of Code of Civil Procedure (hereinafter to be referred as ‘CPC’) has already been filed by Dharmendra P. Rami @ Laläbhai against the Appellant and the Respondent No.4, Complainant herein, before the City Civil Court, Ahmedabad claiming a sum of Rs. 10 lacs together with interest thereon. In the said suit an unconditional leave to defend has already been granted to the Appellant and the matter is still pending. In the light of the aforesaid submissions, it was contended that it is a fit case where the FIR deserves to be quashed otherwise the same would amount to abuse of the process of law.

From Paras 21-23,

21. Criminal breach of trust is defined under Section 405 of the IPC and 406 thereof deals with punishment to be awarded to the accused, if found guilty for commission of the said offence i.e. with imprisonment for a term which may extend to three years, or with fine, or with both.
22. Section 420 of the IPC deals with cheating and dishonestly inducing delivery of property. Cheating has been defined under Section 415 of the IPC to constitute an offence. Under the aforesaid section, it is inbuilt that there has to be a dishonest intention from the very beginning, which is sine qua non to hold the accused guilty for commission of the said offence. Categorical and microscopic examination of the FIR certainly does not reflect any such dishonest intention ab initio on the part of the appellant.
23. Section 506 of the IPC deals with punishment for criminal intimidation. Criminal intimidation, insult and annoyance have been defined in Section 503 of the IPC but the FIR lodged by complainant does not show or reflect that any such threat to cause injury to person or of property was ever given by the Appellant to the Complainant.
24. Thus, from the general conspectus of the various sections under which the Appellant is being charged and is to be prosecuted would show that the same are not made out even prima facie from the Complainant’s FIR. Even if the charge sheet had been filed, the learned Single Judge could have still examinedwhether the offences alleged to have been committed by the Appellant were prima facie made out from the complainant’s FIR, charge sheet, documents etc. ornot.
25. In our opinion, the matter appears to be purely civil in nature. There appears to be no cheating or a dishonest inducement for the delivery of propertyor breach of trust by the Appellant. The present FIR is an abuse of process of law. The purely civil dispute, is sought to be given a colour of a criminal offence to wreak vengeance against theAppellant. It does not meet the strict standard of proof required to sustain a criminal accusation.

From Para 27,

27. In fact, all these questions have been elaborately discussed by this Court in the most oft quoted judgment reported in 1992 (Suppl) 1 SCC 335 State of Haryana Vs. Bhajan Lal, where seven cardinal principles have been carved out before cognizance of offences, said to have been committed, by the accused is taken. The case in hand unfortunately does not fall in that category where cognizance of the offence could have been taken by the court, at least after having gone through the F.I.R., which discloses only a civil dispute.

Index of Quash judgments is here.