Supreme Court news: Drawing a sharp line between commercial risk and criminal liability, the Supreme Court on Friday quashed cheating charges against a film producer, ruling that failure to generate profits from a movie project cannot, by itself, amount to cheating.

A bench of Justices Pamidighantam Sri Narasimha and Manoj Misra was hearing a criminal appeal by filmmaker V Ganesan against the Madras High Court’s April 6, 2023 order, which had allowed cheating charges (Section 420 IPC) to proceed despite quashing breach of trust allegations.

“No one can be sure whether a movie would earn profits or would be a flop. If one agrees to share profits in lieu of his investment in a movie, he takes the risk of a possible zero return,” the court said on March 19 outlining that investments in films are inherently speculative.

The court said criminal law cannot be used to penalise business failure in such uncertain ventures.