You should file a petition before the High Court under section 482 Cr.P.C. because no offences of criminal breach of trust (Section 406 IPC) & Cheating (Section 420 IPC)are made out against you. It is a civil dispute hence, he cannot seek a remedy in the criminal proceeding.
He initiated the criminal proceeding with the intention of causing you unnecessary harassment. You can file above-mentioned quashing petition if the investigation is pending and investigating officer is about to file charge sheet before the court.
If charge sheet has filed then you should file a discharge petition before the trial court. If material or evidence collected by investigating officer is insufficient or do not infer that alleged offence is committed then accused is discharged by the trial court.
For the offence of criminal breach of trust, the money or property must be entrusted in accused. If accused does misappropriate the said property he commits the offence of criminal breach of trust.
In your case it was purely a commercial transaction and money was borrowed on certain terms and condition and both lender and borrower were partners of the firm. G. Sagar Suri vs State of U.P. AIR 2000 SC; the commercial transaction does not come under the purview of entrusting, it is a breach of contract instead of breach of trust.
Section 420: Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.
No offence under section 420 is made out because at the time of contract there was no dishonest and fraudulent intention of accused to breach of contract.
It is purely a civil nature case but he initiated a criminal proceeding. He should have filed a civil suit for the proper remedy. A criminal case shall not be sustained in your case, therefore, the High Court may quash this criminal proceeding.