SATYAVIR SINGH ARYA vs U T OF J AND K TH INCHARGE POLICE STATION EOW CRIME BRANCH JAMMU AND OTHERS
- Court
- Jammu and Kashmir High Court
HIGH COURT OF JAMMU & KASHMIR AND LADAKH
AT JAMMU
Case No . CRM(M) No. 207/2024
Reserved on: 21.08.2026
Pronounced on: 29.08.2026
Uploaded on: 31.08.2026
Whether the operative part or
full judgment is pronounced : Full
Satyavir Singh Arya, aged 61 years,
R/o House No. 124, B-Block, Vijay Veer Awas,
Near Sector-12, Metro Station, Sector 18 A Dwaraka,
South West Delhi, Presently Jorhat, Assam.
…..Petitioner(s)
Through: Ms. Anshuja Tak, Sr. Advocate with
Mr. Habib Ur Rehman, Advocate
Vs
.…. Respondent(s)
1. U.T. of Jammu and Kashmir
Through Incharge Police Station,
EOW Crime Branch, Jammu.
2. Sh. Pranav Gandhotra,
S/o Sh. Romesh Gandhotra,
189-A, Sarwal Chowk,Jammu.
3. Smt. Shikha Malhotra,
W/o Sh. Romesh Gandhotra,
189-A, Sarwal Chowk,Jammu.
Through: Mr. Pawan Dev Singh, Dy. AG for R-1
Mr. Mandeep Singh, Advocate for R- 2 & 3
CORAM:
HON’BLE MR. JUSTICE WASIM SADIQ NARGAL, JUDGE
JUDGMENT
PRAYER:
01. The petitioner, through the medium of the instant petition filed under
Section 482 of the Code of Criminal Procedure, corresponding to Section
CRM(M) No. 207/2024 Page 2 of 39
528 of the Bharatiya Nagarik Suraksha Sanhita, has sought the following
reliefs:
“Quashing:
(i) FIR No. 07/2024 u/s 420, 120-B IPC registered at P/S EOW
Crime Branch, Jammu.
(ii) Notice under Section 160 Cr.PC dated 26.02.2024 issued by
Investigating Officer, EOW, Crime Branch, Jammu.”
Brief Facts:
02. The case set up by the petitioner is that in the second week of November,
2020, respondent No.2, Pranav Gandhotra, agreed to purchase half share
in a plot situated at Gurugram, Haryana, jointly with the petitioner, with
the proposed transaction to be reflected in the names of the petitioner's
wife, Rajpati and respondent No.3, Shikha Malhotra. It is stated that an
amount of ₹50 lakhs was deposited by respondent No.2 and his mother
towards the proposed purchase, whereas the petitioner paid an amount of
₹65 lakhs. An agreement to sell dated 30.10.2020 was thereafter executed
by the owner of the plot in favour of Rajpati and Shikha Malhotra.
03. According to the petitioner, in March, 2021, respondent No.2 deposited
an amount of ₹60 lakhs in the petitioner's account, out of which ₹45 lakhs
were transferred from the account of his mother and the remaining
amount from his own account. It is further stated that the original
documents relating to the petitioner's plot measuring 366 square yards
situated at Najafgarh, New Delhi, were handed over to respondent No.2
as security and have remained in his possession.
CRM(M) No. 207/2024 Page 3 of 39
04. It is the petitioner's case that the proposed transaction concerning the
Gurugram plot could not ultimately be completed and was mutually
cancelled by an agreement dated 24.09.2021. According to the petitioner,
upon cancellation of the transaction, the owner of the plot deducted an
amount towards damages and returned the remaining consideration. The
petitioner states that the amount so received was thereafter distributed
amongst the parties in accordance with the understanding between them.
05. The petitioner has referred to various payments made through banking
channels as well as in cash pursuant to the aforesaid settlement.
According to the calculation furnished by him, an aggregate amount of
₹61.59 lakhs was paid to respondent No.2 and respondent No. 3. The
petitioner has relied upon copies of the agreement dated 30.10.2020, the
subsequent agreement dated 24.09.2021 and the relevant bank
transactions in support of his version of the financial dealings.
06. The petitioner further states that the original documents relating to his
Najafgarh property, which had been handed over as security, have not
been returned. It is stated that, despite the monetary dealings having been
settled, the said documents continue to remain with respondent No.2.
07. The petitioner has also referred to an affidavit dated 03.03.2021 and other
documents forming part of the record and has set out the various
transactions between the parties. The case of the petitioner is that the
monetary dealings referred to in the documents relied upon by him relate
CRM(M) No. 207/2024 Page 4 of 39
to the aforesaid transactions concerning the Gurugram plot and the
subsequent settlement between the parties.
08. The petitioner states that FIR No. 07/2024 came to be registered against
him and co-accused Jagdish Nain on the complaint of respondent No.2
and that notice dated 26.02.2024 under Section 160 the Code of Criminal
Procedure. was thereafter issued by the Investigating Officer, Economic
Offences Wing, Crime Branch, Jammu. The petitioner has also placed on
record a representation dated 11.03.2024 submitted before the Senior
Superintendent of Police, Crime Branch, Jammu.
09. The petitioner has approached this Court with the aforesaid grievance and has
placed on record the documents relied upon by him, including the agreements
relating to the Gurugram plot, the bank transactions and the documents
concerning the Najafgarh property. The record reveals that in the instant
petition this Court vide order dated 27.03.2024 was pleased to issue notice to
the respondents and investigation in the impugned FIR was stayed in the
meanwhile.
Arguments on behalf of Petitioners:
10. Learned Senior counsel appearing for the petitioner submitted that the
impugned FIR is liable to be quashed as the allegations contained therein,
even if taken at their face value and accepted in their entirety, do not
disclose the commission of the offences punishable under Sections 420 and
120-B Indian Penal Code. It was argued that the registration of the FIR in
the facts and circumstances of the case amounts to an abuse of the process
CRM(M) No. 207/2024 Page 5 of 39
of law, particularly, when the dispute between the parties arises out of
financial and commercial dealings.
11. She further submitted that the transaction between the parties is essentially
civil in nature. It was contended that the parties had entered into financial
dealings in connection with the proposed purchase of a plot at Gurugram,
which ultimately could not be completed and was cancelled by mutual
agreement dated 24.09.2021. According to learned counsel, the subsequent
dispute concerning payment, repayment and adjustment of amounts
cannot, by itself, be converted into a criminal prosecution.
12. It was further submitted that the material placed on record demonstrates
that substantial amounts had already been returned to the complainant and
persons connected with him. The learned Senior counsel referred to the
various cash and banking transactions relied upon in the petition and
submitted that, according to the petitioner's calculation, an amount of
₹61.59 lakhs had already been returned, and an amount of ₹1.59 lakhs is
recoverable from the complainant. It was argued that these transactions
clearly demonstrate the financial nature of the dispute and negate the
allegation of dishonest intention.
13. Learned Senior counsel further submitted that the original documents
relating to the petitioner's Najafgarh property, which had been handed over
to the complainant as security, continue to remain in his possession despite
the alleged settlement of accounts. According to learned counsel, this
circumstance, coupled with the rival claims regarding the amounts paid
CRM(M) No. 207/2024 Page 6 of 39
and returned, demonstrates that the dispute concerns adjustment of
accounts and recovery of documents and is therefore amenable to civil
remedies.
14. It was next contended that the essential ingredients of the offence of
cheating under Section 420 Indian Penal Code are conspicuously absent.
The further case of the petitioner is that the FIR does not disclose any
specific representation made by the petitioner, the date or place on which
such representation was allegedly made, or the circumstances in which the
complainant was induced to part with the alleged amount. It was argued
that there is also no material to suggest that the petitioner possessed any
dishonest or fraudulent intention at the inception of the transaction.
15. It is submitted that a mere subsequent failure to fulfill a promise or to
return money does not constitute cheating unless dishonest intention
existed from the very inception of the transaction. According to learned
counsel, the subsequent conduct of the parties, including the substantial
payments and repayments reflected in the documents placed on record, is
inconsistent with an allegation that the petitioner had intended to deceive
the complainant from the outset. It was, therefore, urged that the dispute,
even if accepted in its entirety, would at best give rise to a civil claim.
16. The petitioner has also challenged the allegation of criminal conspiracy
under Section 120-B Indian Penal Code. It was submitted that the FIR does
not disclose any material showing a prior agreement or meeting of minds
between the petitioner and the co-accused to commit an illegal act.
CRM(M) No. 207/2024 Page 7 of 39
According to learned counsel, the allegation of conspiracy has been made
in a general and mechanical manner and in the absence of the basic
ingredients of cheating, the allegation under Section 120-B Indian Penal
Code cannot independently sustain the prosecution.
17. Another limb of the submissions was that the Economic Offences Wing,
Crime Branch, Jammu had no jurisdiction to register or investigate the
impugned FIR. It is submitted that the dispute arises between private
individuals out of a private commercial transaction and does not fall within
the specialized jurisdiction conferred upon the Crime Branch/Economic
Offences Wing under the applicable Government notifications. It was
argued that the mere allegation of an offence under Section 420 Indian
Penal Code cannot, by itself, confer jurisdiction upon the Economic
Offences Wing in a matter which is essentially civil in character.
18. Learned Senior counsel further submitted that the petitioner had never
visited Jammu in connection with the transaction in question and that no
meeting, negotiation or transaction between the petitioner and the
complainant had taken place at Jammu. It was therefore contended that the
registration of the FIR by Crime Branch, Jammu and the issuance of notice
dated 26.02.2024 under Section 160 of the Code of Criminal Procedure.
were without lawful basis. Learned counsel submitted that the notice was
issued with the object of harassing and pressurising the petitioner rather
than for any legitimate investigative purpose.
CRM(M) No. 207/2024 Page 8 of 39
19. Relying upon the principles governing exercise of inherent jurisdiction
under Section 482 of the Code of Criminal Procedure, the learned counsel
submitted that continuation of the impugned criminal proceedings would
amount to abuse of the process of law and would defeat the ends of justice.
It was further contended that where the allegations, even if accepted in
their entirety, do not disclose the commission of the alleged offence, or
where the criminal proceeding is manifestly attended with mala fide , the
High Court is empowered to interdict such proceedings at the threshold. It
was accordingly prayed that FIR No. 07/2024, notice dated 26.02.2024 and
all consequential proceedings be quashed.
Arguments on behalf of Respondent No. 1
20. Learned counsel for respondent No.1 opposed the petition and submitted
that the FIR discloses commission of cognizable offences under Sections
420 and 120-B Indian Penal Code. It was submitted that the complainant
had alleged that the accused persons induced him to invest substantial
amounts on the promise of making him a partner in the road-maintenance
contract and thereafter failed to fulfill the assurance or return the amount
due.
21. Learned counsel submitted that the FIR was registered after the allegations
were examined by the investigating agency and that the investigation has
already resulted in collection of relevant material, including bank
statements, documents and statements of witnesses. It was contended that
the material collected during investigation prima facie supports the
CRM(M) No. 207/2024 Page 9 of 39
allegations of the complainant and therefore the investigation cannot be
said to be without foundation.
22. It was further submitted that the complainant had allegedly paid
approximately ₹77 lakhs, out of which only ₹17 lakhs were returned. Learned
counsel relied upon the affidavit dated 03.03.2021 and the transactions
between the parties to contend that the allegations of inducement and non-
payment require factual investigation. The petitioner's assertion that the entire
amount has been repaid was disputed, and it was contended that the matter
requires examination of the relevant financial records.
23. Learned counsel disputed the petitioner's contention that the matter is
purely civil or contractual in nature. It was submitted that the existence of
a commercial transaction does not bar criminal proceedings where the
allegations also disclose fraudulent or dishonest inducement. According to
the respondents, whether the petitioner possessed dishonest intention from
the inception and whether the complainant was induced by false
representations are matters which cannot be determined conclusively at the
stage of exercising jurisdiction under Section 482 of the Code of Criminal
Procedure.
24. On the question of jurisdiction, learned counsel submitted that the
Economic Offences Wing was competent to investigate the matter under
S.O.232 of 2022. It was contended that the case involves an amount
exceeding ₹20 lakhs and transactions having an inter-State character and
therefore falls within the jurisdiction of the Economic Offences Wing. The
CRM(M) No. 207/2024 Page 10 of 39
mere fact that the petitioner did not personally visit Jammu, according to
the respondents, does not oust the jurisdiction of the investigating agency.
25. Learned counsel further submitted that an FIR is not required to contain
every minute detail of the alleged offence. The FIR merely sets the
criminal law in motion, while the purpose of investigation is to collect
evidence and ascertain the truth of the allegations. Therefore, according to
the respondents, the petitioner's objection regarding absence of certain
particulars in the FIR cannot constitute a ground for quashing the
proceedings at the threshold.
26. It was further submitted that the petitioner is essentially seeking an
adjudication of disputed questions of fact on the basis of documents relied
upon by him. Such an exercise, according to the respondents, would
amount to conducting a mini-trial at the stage of investigation, which is
impermissible in proceedings under Section 482 of the Code of Criminal
Procedure. Reliance was accordingly placed upon the settled principle that
where the FIR discloses a cognizable offence, the investigating agency
must ordinarily be permitted to complete the investigation.
Arguments on behalf of Respondent 2&3
27. Learned counsel appearing on behalf of respondent Nos. 2 and 3 opposed
the petition and submitted that the petitioner seeks quashing of FIR No.
07/2024 registered at Police Station Economic Offences Wing, Crime
Branch, Jammu for offences under Sections 420 and 120-B IPC, as well as
the notice issued under Section 160 CrPC. It was argued that the
CRM(M) No. 207/2024 Page 11 of 39
allegations in the FIR disclose a cognizable offence and that the petitioner
is attempting to invite this Court to undertake an examination of contested
factual issues at the stage of investigation. According to the respondents,
the material collected and the allegations made by the complainant prima
facie disclose the commission of offences warranting investigation.
28. Learned counsel further submitted that the petitioner's contention that the
FIR does not disclose the date, time or complete particulars of the
transaction is misconceived. It was contended that an FIR is not an
encyclopedia which is required to contain every fact and detail relating to
the alleged offence. The purpose of an FIR is to set the criminal law in
motion, whereafter it is the duty of the investigating agency to collect the
necessary evidence and ascertain the true facts. Therefore, according to the
respondents, absence of minute particulars in the FIR cannot constitute a
ground for quashing the investigation at its inception.
29. It was further submitted that the petitioner is deliberately attempting to mix
up two entirely separate transactions in order to create an impression that
the dispute is purely civil in nature. According to the respondents, the
subject matter of the impugned FIR concerns the alleged inducement of
respondent No.2 to invest money in the Government contract obtained by
the petitioner and his partner Jagdish Nain for road maintenance of NH-40
(Kadappa to Kurmool section) in Andhra Pradesh. The respondents
asserted that respondent No.2 was induced to invest a substantial amount
on the assurance that he would be made a 10% partner in the said contract
and that the petitioner also furnished his property documents as security.
CRM(M) No. 207/2024 Page 12 of 39
30. Learned counsel submitted that, according to the complainant's case,
respondent No.2 had invested approximately ₹77 lakhs in the said
transaction, out of which only ₹17 lakhs were subsequently returned,
leaving an amount of approximately ₹60 lakhs unpaid. It was contended
that the petitioner and his partner neither made respondent No.2 a 10%
partner in the road-maintenance contract nor executed any partnership
document in his favour. The respondents further relied upon the affidavit
dated 03.03.2021, whereby, according to them, the accused had assured
repayment of the borrowed amount along with profit by 30.04.2021. It was
submitted that these circumstances prima facie demonstrate dishonest
inducement and subsequent failure to honour the representation made to
the complainant.
31. Learned counsel specifically disputed the petitioner's reliance upon the
transactions concerning the purchase of a plot at Gurugram. It was
submitted that the transaction relating to the proposed purchase of the plot
from M/s Akash Ganga Infrasolutions LLP was entirely distinct from the
transaction forming the subject matter of the impugned FIR. According to
the respondents, the Gurugram transaction was subsequently cancelled and
the money paid towards that transaction was returned by the concerned
company in accordance with the agreement dated 24.09.2021. The
respondents therefore contended that the petitioner cannot rely upon the
repayment of amounts in the separate Gurugram transaction to contend that
the amount involved in the NH-40 transaction had also been repaid.
CRM(M) No. 207/2024 Page 13 of 39
32. It was further submitted that the petitioner has sought to create a web of
transactions by relying upon bank statements and payments made by
persons other than the respondents. According to the respondents, several
of the transactions relied upon by the petitioner were either payments made
by the other accused, namely Jagdish Nain, or transactions involving M/s
Akash Ganga Infrasolutions LLP and other entities and did not constitute
repayment of the amount allegedly invested by respondent No.2 in the NH-
40 contract. It was therefore argued that the petitioner's assertion that
₹61,59,000/- had been repaid was disputed and could not be accepted by
this Court at the stage of proceedings under Section 482 of the Code of
Criminal Procedure.
33. Learned counsel also submitted that there is no contractual dispute pending
between the petitioner and respondent Nos. 2 and 3 before any Court at
Delhi in relation to the NH-40 contract, as asserted by the petitioner.
According to the respondents, any proceedings pending at Delhi are
between the petitioner and his co-accused Jagdish Nain and have no
connection with respondent Nos. 2 and 3. It was therefore contended that
the petitioner's attempt to portray the present criminal proceedings as
arising out of an existing contractual dispute with the respondents is
factually incorrect and intended to mislead the Court.
34. On the question of jurisdiction, learned counsel submitted that the
Economic Offences Wing, Crime Branch, Jammu is competent to
investigate the present FIR. It was contended that since the FIR was
registered on 11.01.2024, the applicable notification is S.O. 232 dated
CRM(M) No. 207/2024 Page 14 of 39
09.05.2022 and not the earlier notifications relied upon by the petitioner.
According to the respondents, the said notification confers jurisdiction
upon the Economic Offences Wing to investigate cases of fraud and
cheating of a peculiar nature having ramifications beyond one District and
involving an amount of ₹20 lakhs and above. Since the alleged amount
involved is ₹60 lakhs and the parties and transactions extend beyond the
territorial limits of one State, the respondents submitted that the
jurisdictional requirements are satisfied.
35. Learned counsel further submitted that the fact that the petitioner did not
personally visit Jammu or that certain documents were executed at Delhi does
not oust the jurisdiction of the investigating agency. According to the
respondents, the initial inducement and subsequent financial transactions are
alleged to have consequences within the jurisdiction of Jammu and the
complainant is based there. It was therefore contended that where an offence
is committed partly in different jurisdictions or its consequences ensue in
another jurisdiction, the competent authorities of such jurisdiction can
investigate the offence.
36. Learned counsel strongly disputed the petitioner's contention that the
allegations constitute merely a breach of contract. It was submitted that the
existence of a commercial transaction or availability of a civil remedy does
not, by itself, bar criminal proceedings where the allegations also disclose
the ingredients of a criminal offence. According to the respondents, the
present case involves allegations of dishonest inducement from the
inception, investment of substantial money on the basis of false assurances,
CRM(M) No. 207/2024 Page 15 of 39
execution of an affidavit and failure to make respondent No.2 a partner as
promised.
37. It was further submitted that the ingredients of Section 420 read with
Section 415 IPC are prima facie satisfied. According to the respondents,
the petitioner and his partner induced respondent No.2 to invest Rs.77
lakhs in the NH-40 contract by assuring him that he would be made a 10%
partner and by furnishing the petitioner's Najafgarh property documents to
gain his confidence. The respondents contended that the subsequent failure
to make respondent No.2 a partner, coupled with the non-refund of
approximately ₹60 lakhs, demonstrates that the dishonest intention existed
from the inception. The respondents therefore maintained that the
allegations disclose more than a mere subsequent breach of contractual
obligation.
38. Lastly, learned counsel submitted that the petition raises disputed questions
of fact which cannot appropriately be adjudicated in proceedings under
Section 482 of the Code of Criminal Procedure. It was argued that the
correctness of the rival claims regarding repayment, the identity of the
transactions, the bank transfers, the alleged inducement and the existence
of dishonest intention are matters which require investigation and
collection of evidence. It was accordingly prayed that the petition be
dismissed and the investigation in FIR No. 07/2024 be permitted to
proceed in accordance with law.
Legal Analysis:
CRM(M) No. 207/2024 Page 16 of 39
39. Heard learned Senior counsel for the petitioner at length and also learned
counsel appearing for respondent Nos. 2 and 3 as well as learned Deputy
Advocate General appearing for respondent No.1 and perused the record.
40. Upon consideration of the pleadings, the material placed on record and the
rival submissions advanced at the Bar, the following questions arise for
determination:
“1. Whether the allegations contained in the FIR prima facie disclose
the commission of any cognizable offence?
2. Whether the facts and circumstances of the present case are such as
to warrant interference by this Court in exercise of its inherent
jurisdiction under Section 482 Cr.P.C?
Question No. 1- Whether the allegations contained in the FIR prima facie disclose the
commission of any cognizable offence?
41. The case of the complainant, as reflected in the FIR and the status report, is
that the petitioner and co-accused Jagdish Nain, pursuant to an alleged
conspiracy, induced the complainant to part with money on the
representation connected with the NH-40 road-maintenance contract. The
complainant alleges that an aggregate amount of ₹77 lakhs was paid,
including ₹17 lakhs in the account of Jagdish Nain and ₹60 lakhs in the
account of Nain Enterprises, and that only ₹17 lakhs were subsequently
returned.
42. The allegations, therefore, are not confined to a mere failure to fulfill a
contractual obligation or discharge a financial liability arising out of a
transaction between the parties. The case of the prosecution is that the
complainant was induced to part with money on the basis of a particular
CRM(M) No. 207/2024 Page 17 of 39
representation and that such inducement was allegedly part of a concerted
design involving the petitioner and the co-accused. Whether the material
ultimately substantiates these allegations is a matter to be examined on the
basis of the evidence collected during the course of investigation. At the
present stage, however, the Court is only required to consider whether the
allegations in the FIR, taken at their face value, disclose the prima facie
commission of a cognizable offence.
43. The petitioner has sought to meet the aforesaid allegations by placing
reliance upon the agreement to sell dated 30.10.2020 concerning the
Gurugram property, the subsequent agreement dated 24.09.2021, the bank
transactions and the alleged repayment of amounts. The petitioner asserts
that these documents demonstrate that the parties had entered into a
separate transaction concerning the Gurugram property and that the
amount payable in relation thereto was subsequently settled. Respondent
Nos. 2 and 3, however, dispute the petitioner's description of the
transactions and contend that the Gurugram transaction is wholly distinct
from the NH-40 transaction forming the subject matter of the FIR.
44. Thus, the Court is confronted with two competing factual versions. The
petitioner seeks acceptance of his version on the strength of the documents
relied upon by him, whereas the complainant disputes the relevance and
character of those documents and attributes the payments to an altogether
different transaction. To determine which of these competing versions is
correct would require examination of the underlying transactions, bank
records, agreements, the affidavit dated 03.03.2021 and the circumstances
CRM(M) No. 207/2024 Page 18 of 39
in which the amounts were paid and allegedly returned. Such an exercise
would necessarily involve appreciation of contemporaneous official
record, which is not the scope and ambit of proceedings invoked through
the medium of instant petition filed under Section 482 of the Code of
Criminal Procedure.
45. The Hon‟ble Supreme Court in the celebrated judgment titled „ State of
Haryana v. Bhajan Lal’, 1992 Supp (1) SCC 335 , while examining the
scope of the extraordinary jurisdiction of the High Court under Article 226
of the Constitution and its inherent jurisdiction under Section 482 of the
Code of Criminal Procedure, illustrated the categories of cases in which
such jurisdiction may be exercised. It was held as under:
“102. In the backdrop of the interpretation of the various relevant
provisions of the Code under Chapter XIV and of the principles of law
enunciated by this Court in a series of decisions relating to the exercise
of the extra-ordinary power under Article 226 or the inherent powers
Under Section 482 of the Code which we have extracted and
reproduced above, we give the following categories of cases by way of
illustration wherein such power could be exercised either to prevent
abuse of the process of any Court or otherwise to secure the ends of
justice, though it may not be possible to lay down any precise, clearly
defined and sufficiently channelised and inflexible guidelines or rigid
formulae and to give an exhaustive list of myriad kinds of cases
wherein such power should be exercised.
1. Where the allegations made in the First Information Report or the
complaint, even if they are taken at their face value and accepted in
their entirety do not prima-facie constitute any offence or make out a
case against the accused.
2. Where the allegations in the First Information Report and other
materials, if any, accompanying the F.I.R. do not disclose a
cognizable offence, justifying an investigation by police officers
CRM(M) No. 207/2024 Page 19 of 39
Under Section 156(1) of the Code except under an order of a
Magistrate within the purview of Section 155(2) of the Code.
3. Where the uncontroverted allegations made in the FIR or
complaint and the evidence collected in support of the same do not
disclose the commission of any offence and make out a case against
the accused.
4. Where, the allegations in the F.I.R. do not constitute a cognizable
offence but constitute only a non-cognizable offence, no
investigation is permitted by a police officer without an order of a
Magistrate as contemplated Under Section 155(2) of the Code.
5. Where the allegations made in the FIR or complaint are so absurd
and inherently improbable on the basis of which no prudent person
can ever reach a just conclusion that there is sufficient ground for
proceeding against the accused.
6. Where there is an express legal bar engrafted in any of the
provisions of the Code or the concerned Act (under which a criminal
proceeding is instituted) to the institution and continuance of the
proceedings and/or where there is a specific provision in the Code or
the concerned Act, providing efficacious redress for the grievance of
the aggrieved party.
7. Where a criminal proceeding is manifestly attended with mala fide
and/or where the proceeding is maliciously instituted with an
ulterior motive for wreaking vengeance on the accused and with a
view to spite him due to private and personal grudge.”
46. The principles enunciated in Bhajan Lal (supra) make it clear that the first
and foremost enquiry, at the stage of considering a prayer for quashing, is
whether the allegations contained in the FIR, if taken at their face value and
accepted in their entirety, disclose the commission of an offence. If the
allegations do disclose a cognizable offence, the Court is ordinarily not
required to examine the correctness of those allegations or undertake an
assessment of the material relied upon by the respective sides. The question at
this stage is one of disclosure of an offence and not proof of the offence.
CRM(M) No. 207/2024 Page 20 of 39
47. Tested on the aforesaid parameter, the allegations in the present FIR cannot
be said to be bereft of the essential factual foundation of the offences alleged.
The complainant has specifically alleged that money was parted with
pursuant to a representation concerning the NH-40 road-maintenance
contract, that the petitioner and the co-accused were allegedly involved in the
transaction, that the complainant was allegedly to be made a 10% partner in
the said contract and that, despite the alleged representation, the promised
arrangement did not materialise and the amount allegedly remained unpaid.
These allegations, if taken at their face value, are sufficient to require an
investigation into the circumstances in which the money was obtained, the
representations allegedly made and the role attributed to the accused.
48. The petitioner has also alleged that the criminal proceedings have been
initiated to pressurize and harass him and to compel him to accede to an
alleged monetary demand. However, at this stage, such allegation of mala
fide cannot be examined in isolation from the factual controversy between the
parties. The mere existence of previous financial dealings, competing claims
regarding repayment or the availability of civil remedies does not, by itself,
establish that the FIR is actuated by an ulterior motive. Whether the
allegations are false or motivated would itself require examination of the
underlying facts and material.
49. The Hon‟ble Supreme Court in „ Dineshbhai Chandubhai Patel v. State of
Gujarat’, (2018) 3 SCC 104 , while considering the scope of interference
with an FIR at the stage of investigation, reiterated the limited nature of the
enquiry to be undertaken by the High Court. The Court held as under:
CRM(M) No. 207/2024 Page 21 of 39
“ 29. The High Court, in our view, failed to see the extent of its
jurisdiction, which it possesses to exercise while examining the legality of
any FIR complaining commission of several cognizable offences by the
accused persons. In order to examine as to whether the factual contents
of the FIR disclose any prima facie cognizable offences or not, the High
Court cannot act like an investigating agency and nor can exercise the
powers like an appellate court. The question, in our opinion, was
required to be examined keeping in view the contents of the FIR and
prima facie material, if any, requiring no proof.
30. At this stage, the High Court could not appreciate the evidence nor
could draw its own inferences from the contents of the FIR and the
material relied on. It was more so when the material relied on was
disputed by the complainants and vice versa. In such a situation, it
becomes the job of the investigating authority at such stage to probe and
then of the court to examine the questions once the charge-sheet is filed
along with such material as to how far and to what extent reliance can be
placed on such material.
31. In our considered opinion, once the court finds that the FIR does
disclose prima facie commission of any cognizable offence, it should stay
its hand and allow the investigating machinery to step in to initiate the
probe to unearth the crime in accordance with the procedure prescribed
in the Code.”
50. The aforesaid judgment is of direct relevance to the present case. Once the
FIR discloses allegations requiring investigation, this Court cannot, at the
threshold, undertake its own assessment of the material or draw conclusions
in place of the investigating agency. The matters raised by the petitioner,
therefore, cannot be conclusively examined by evaluating the evidentiary
worth of the material relied upon by the respective parties at this stage.
51. Applying the aforesaid principle to the facts of the present case, the petitioner
relies upon the Gurugram agreements and various financial transactions to
contend that the amounts referred to by the complainant pertain to a different
CRM(M) No. 207/2024 Page 22 of 39
transaction and stood substantially settled. The complainant, on the other
han1d, disputes the very character and relevance of those transactions and
maintains that the amount alleged in the FIR relates to the NH-40 contract.
The Court cannot, at this stage, determine the correctness of either version by
undertaking a comparative examination of the documents or by drawing
inferences from the bank transactions. That exercise falls within the domain
of investigation.
52. The contention that the dispute is essentially civil or commercial in nature
also does not, at this stage, furnish a ground for holding that no cognizable
offence is disclosed. A transaction may have civil consequences and yet,
depending upon the allegations and the circumstances in which the
transaction was entered into, may also disclose the ingredients of a criminal
offence as well. The relevant consideration, therefore, is not merely the nature
of the underlying transaction, but whether the allegations disclose the
ingredients of the offence alleged.
53. In the present case, the allegations of inducement, payment of substantial
amounts pursuant thereto, the representation regarding the complainant's
proposed participation in the NH-40 contract, the alleged involvement of the
petitioner and co-accused and the subsequent non-payment of the amount
claimed by the complainant, taken cumulatively, do disclose a prima facie
case warranting investigation. Whether the representation was in fact made,
whether the complainant was induced thereby, whether the petitioner
possessed the requisite dishonest intention and whether the amounts allegedly
CRM(M) No. 207/2024 Page 23 of 39
paid were subsequently returned are all matters which require factual
determination on the basis of evidence.
54. The petitioner's reliance upon the Gurugram transaction does not alter the
position. The respondents have specifically disputed the petitioner's assertion
that the payments relied upon by him constituted repayment of the amount
involved in the NH-40 transaction. The question as to whether the two sets of
transactions are connected or entirely distinct, and whether the amounts
reflected in the documents relied upon by the petitioner constitute repayment
of the amount alleged in the FIR, cannot be conclusively determined in the
present proceedings without undertaking an examination of the competing
versions and the evidentiary material relied upon by the parties.
55. Likewise, the petitioner's objection regarding the jurisdiction of the
Economic Offences Wing, Crime Branch, Jammu cannot, in the facts of
the present case, be determined merely on the basis of his assertion that he
did not personally visit Jammu. The respondents have placed a different
factual position before the Court, while the status report refers to the
transactions and material which, according to the investigating agency,
form part of the investigation. Whether the requisite territorial or statutory
nexus is ultimately established is a matter which can be examined in
accordance with law on the basis of the material collected during
investigation. At this stage, the jurisdictional issues arising from the rival
factual assertions cannot be conclusively determined on the basis of the
pleadings alone.
CRM(M) No. 207/2024 Page 24 of 39
56. It is also significant that the investigation had already commenced and as
reflected in the status report, the relevant record pertaining to the complaint
had been taken into possession and examined, bank statements had been
analyzed, statements of the complainant and witnesses had been recorded and
notices under Section 160 Cr.P.C. had been issued. The investigation
thereafter remained stayed pursuant to the interim order passed by this Court.
In these circumstances, permitting the investigating agency to examine the
competing versions would not amount to permitting an investigation into an
allegation which is ex facie non-criminal; rather, it would enable the
investigating agency to ascertain the factual position underlying the
allegations made in the FIR and if the investigation is allowed to
commence/proceed, only then the truth will come out with regard to the rival
claims of both the parties.
57. Viewed in the aforesaid perspective, the present case does not fall within
the category where the allegations, even if accepted at their face value, fail
to disclose any cognizable offence. Nor can the allegations be
characterized as so absurd or inherently improbable that no investigation
would be warranted. The petitioner's defence rests upon documents whose
relevance and bearing on the transaction in question are contested, as well
as a competing interpretation of the financial transactions.
58. The Court is, therefore, not required at this stage to determine whether the
complainant's allegations are ultimately true, whether the petitioner possessed
dishonest intention from the inception, whether the amount of Rs.77 lakhs
was in fact paid for the NH-40 transaction, or whether the amounts relied
CRM(M) No. 207/2024 Page 25 of 39
upon by the petitioner constitute repayment. Those questions necessarily
require examination of evidence. The limited conclusion which can be
reached at this stage is that the allegations, taken at their face value, disclose a
cognizable offence and warrant investigation in accordance with law.
59. Accordingly, this Court is of the considered view that the impugned FIR
discloses a prima facie factual foundation constituting cognizable offences
and cannot, at this stage, be quashed on the ground that no offence is made
out.
Question No.1 is, accordingly, answered against the petitioner.
Question No. 2 - Whether the facts and circumstances of the present case are
such as to warrant interference by this Court in exercise of its inherent
jurisdiction under Section 482 Cr.P.C?
60. Having concluded that the FIR discloses allegations requiring investigation, the
next question is whether the factual controversies raised by the petitioner can
nevertheless be adjudicated by this Court in exercise of its inherent jurisdiction.
61. There can be no quarrel with the proposition that the inherent jurisdiction
of the High Court to prevent abuse of the process of law and to secure the
ends of justice, is wide. However, at the same time, such power is required
to be exercised sparingly, with circumspection and only in appropriate
cases particularly, where the investigation is at its nascent stage. At the
stage of considering a prayer for quashing of an FIR, the Court is not
required to determine whether the allegations would ultimately be proved,
whether the material collected by the investigating agency would sustain a
charge or whether the accused would ultimately be entitled to acquittal.
CRM(M) No. 207/2024 Page 26 of 39
The limited enquiry is whether, on a plain reading of the FIR and the
material accompanying it, the allegations disclose a cognizable offence
requiring investigation.
62. The aforesaid principle finds its early expression in the decision of the
Privy Council „ Emperor v. Khwaja Nazir Ahmad’, AIR 1945 PC 18 ,
wherein the Privy Council emphasized the distinction between functions of
the investigating agency and those of the Court and recognized that where
information discloses a cognizable offence the police ordinarily have the
statutory right and the duty to investigate the same. It was held as under:
“ In India, as has been shown, there is a statutory right on the part of the
police to investigate the circumstances of an alleged cognizable crime
without requiring any authority from the judicial authorities, and it
would, as their Lordships think, be an unfortunate result if it should be
held possible to interfere with those statutory rights by an exercise of the
inherent jurisdiction of the Court. The functions of the judiciary and the
police are complementary, not overlapping, and the combination of
individual liberty with a due observance of law and order is only to be
obtained by leaving each to exercise its own function, always of course
subject to the right of the Court to intervene in an appropriate case when
moved under Section 491 of the Criminal Procedure Code to give
directions in the nature of habeas corpus. In such a case as the present,
however, the Court's functions begin when a charge is preferred before
it and not until then. It has sometimes been thought that Section 561A
has given increased powers to the Court which it did not possess before
that section was enacted. But this is not so. The section gives no new
powers, it only provides that those which the Court already inherently
possess shall be preserved and is inserted, as their Lordships think, lest it
should be considered that the only powers possessed by the Court are
those expressly conferred by the Criminal Procedure Code and that no
inherent power had survived the passing of that Act.”
CRM(M) No. 207/2024 Page 27 of 39
63. The Hon‟ble Supreme Court, in ‘R.P. Kapur v. State of Punjab’, AIR
1960 SC 866 , while delineating the nature and scope of the inherent
jurisdiction of the High Court under Section 561-A of the erstwhile Code
of Criminal Procedure, held as under:
“6. Before dealing with the merits of the appeal, it is necessary to
consider the nature and scope of the inherent power of the High
Court under s. 561-A of the Code. The said section saves the inherent
power of the High Court to make such orders as may be necessary to
give effect to any order under this Code or to prevent abuse of the
process of any court or otherwise to secure the ends of justice.
….In exercising its jurisdiction under s. 561-A the High Court would
not embark upon an enquiry as to whether the evidence in question is
reliable or not. That is the function of the trial magistrate, and
ordinarily it would not be open to any party to invoke the High
Court's inherent jurisdiction and contend that on a reasonable
appreciation of the evidence the accusation made against the accused
would not be sustained. Broadly stated that is the nature and scope of
the inherent jurisdiction of the High Court under s. 561-A in the
matter of quashing criminal proceedings, and that is the effect of the
judicial decisions on the point.”
64. From the law laid down by Hon‟ble Supreme Court, it can safely be held that
the inherent jurisdiction of the High Court may be exercised in appropriate
cases to prevent abuse of the process of the Court or otherwise to secure the
ends of justice. At the same time, the Court identified the limited categories in
which such interference may be justified, including cases, where there is a legal
bar to the institution or continuance of the proceedings, where the allegations
do not disclose the offence alleged, or where the material collected is
manifestly incapable of supporting the charge. The Court also cautioned
against embarking upon an enquiry into the reliability of evidence at that stage.
CRM(M) No. 207/2024 Page 28 of 39
65. The Hon‟ble Supreme Court in ‘State of Orissa v. Saroj Kumar Sahoo’,
(2005) 13 SCC 540 , reiterated that the inherent jurisdiction under Section
482 of the Code of Criminal Procedure is to be exercised sparingly,
carefully and with caution. It was held as under:
“8. Exercise of power under Section 482 CrPC in a case of this nature is the
exception and not the rule. The section does not confer any new powers on
the High Court. It only saves the inherent power which the Court possessed
before the enactment of CrPC. It envisages three circumstances under which
the inherent jurisdiction may be exercised, namely, (i) to give d effect to an
order under CrPC, (ii) to prevent abuse of the process of coun, and (iii) to
otherwise secure the ends of justice. It is neither possible nor desirable to lay
down any inflexible rule which would govern the exercise of inherent
jurisdiction. No legislative enactment dealing with procedure can provide for
all cases that may possibly arise. The courts, therefore, have inherent powers
apart from express provisions of law which are necessary for proper
discharge of functions and duties imposed upon them by law. That is the
doctrine which finds expression in the section which merely recognises and
preserves inherent powers of the High Courts. All courts, whether civil or
criminal possess, in the absence of any express provision, as inherent in their
constitution, all such powers as are necessary to do the right and to undo a
wrong in the course of administration of justice on the principle of "quando
lex aliquid alicui concedit, concedere videtur id sine quo res ipsa esse non
potest" (when the law gives a person anything, it gives him that without which
it cannot exist). While exercising the powers under the section, the court does
not function as a court of appeal or revision. Inherent jurisdiction under the
section, though wide, has to be exercised sparingly, carefully and with caution
and only when such exercise is justified by the tests specifically laid down in
the section itself. It is to be exercised ex debito justitiae to do real and
substantial justice for the administration of which alone the courts exist.
Authority of the court exists for advancement of justice and if any attempt is
made to abuse that authority so as to produce injustice, the court has the
power to prevent abuse. It would be an abuse of process of the court to allow
any action which would result in injustice and prevent promotion of justice.
In exercise of the powers the court would be justified to quash any proceeding
if it finds that initiation/continuance of it amounts to abuse of the process of
CRM(M) No. 207/2024 Page 29 of 39
court or quashing of these proceedings would otherwise serve the ends of
justice. When no offence is disclosed by the report, the court may examine the
question of fact. When a report is sought to be quashed, it is a permissible to
look into the materials to assess what the report has alleged and whether any
offence is made out even if the allegations are accepted in toto.”
66. The principles reiterated in Saroj Kumar Sahoo (supra) operate as a restraint
against converting proceedings under the extraordinary jurisdiction of this
Court into a preliminary trial concerning the truth or falsity of the allegations.
The said principle is attracted with considerable force to the present case. If
this Court were to determine, at this stage, whether the documents relied upon
by the petitioner establish the correctness of their version or whether the
complainant's allegation of concealment is false, the Court would necessarily
be required to undertake an assessment of matters requiring examination of
the competing factual versions. Such an exercise is neither warranted nor
permissible at this stage.
67. The aforesaid judgments, read together, establish that the investigation of a
cognizable offence falls primarily within the statutory domain of the police
and that the inherent jurisdiction of the High Court is to be exercised only
in appropriate cases to prevent abuse of process or secure the ends of
justice. While exercising such jurisdiction, the Court cannot assume the
role of an investigating agency, appellate Court or revisional Court, or
undertake an enquiry into the reliability of disputed evidence. The power
under Section 482 of the Code of Criminal Procedure, though wide, is
required to be exercised sparingly, carefully and with caution. Where the
allegations disclose a cognizable offence and their truthfulness or
CRM(M) No. 207/2024 Page 30 of 39
evidentiary worth remains to be examined, the Court ought not to interdict
the investigation or adjudicate upon the rival factual versions at the
threshold.
68. The law governing interference with an ongoing investigation has been
authoritatively settled by the Hon‟ble Supreme Court in „ M/s Neeharika
Infrastructure Pvt. Ltd. v. State of Maharashtra’, (2021) 19 SCC 401 ,
wherein the Court reiterated that investigation into a cognizable offence
should not ordinarily be thwarted and that an interim stay of investigation
cannot be granted routinely, casually or mechanically. It was held as under:
“23. In view of the above and for the reasons stated above, our final
conclusions on the principal/core issue, whether the High Court would
be justified in passing an interim order of stay of investigation and/or
"no coercive steps to be adopted", during the pendency of the quashing
petition Under Section 482 Code of Criminal Procedure and/or Under
Article 226 of the Constitution of India and in what circumstances and
whether the High Court would be justified in passing the order of not to
arrest the Accused or "no coercive steps to be adopted" during the
investigation or till the final report/chargesheet is filed Under Section
173 Code of Criminal Procedure, while dismissing/disposing of/not
entertaining/not quashing the criminal proceedings/complaint/FIR in
exercise of powers Under Section 482 Code of Criminal Procedure
and/or Under Article 226 of the Constitution of India, our final
conclusions are as under:
i) Police has the statutory right and duty under the relevant provisions of
the Code of Criminal Procedure contained in Chapter XIV of the Code
to investigate into a cognizable offence;
ii) Courts would not thwart any investigation into the cognizable
offences;
iii) It is only in cases where no cognizable offence or offence of any kind
is disclosed in the first information report that the Court will not permit
an investigation to go on;
CRM(M) No. 207/2024 Page 31 of 39
iv) The power of quashing should be exercised sparingly with
circumspection, as it has been observed, in the 'rarest of rare cases (not
to be confused with the formation in the context of death penalty).
v) While examining an FIR/complaint, quashing of which is sought, the
court cannot embark upon an enquiry as to the reliability or
genuineness or otherwise of the allegations made in the FIR/complaint;
vi) Criminal proceedings ought not to be scuttled at the initial stage;
vii) Quashing of a complaint/FIR should be an exception rather than an
ordinary rule;
viii) Ordinarily, the courts are barred from usurping the jurisdiction of
the police, since the two organs of the State operate in two specific
spheres of activities and one ought not to tread over the other sphere;
ix) The functions of the judiciary and the police are complementary, not
overlapping;
x) Save in exceptional cases where non-interference would result in
miscarriage of justice, the Court and the judicial process should not
interfere at the stage of investigation of offences;
xi) Extraordinary and inherent powers of the Court do not confer an
arbitrary jurisdiction on the Court to act according to its whims or
caprice;
xii) The first information report is not an encyclopedia which must
disclose all facts and details relating to the offence reported. Therefore,
when the investigation by the police is in progress, the court should not
go into the merits of the allegations in the FIR. Police must be permitted
to complete the investigation. It would be premature to pronounce the
conclusion based on hazy facts that the complaint/FIR does not deserve
to be investigated or that it amounts to abuse of process of law. After
investigation, if the investigating officer finds that there is no substance
in the application made by the complainant, the investigating officer
may file an appropriate report/summary before the learned Magistrate
which may be considered by the learned Magistrate in accordance with
the known procedure;
xiii) The power under Section 482 Cr.P.C. is very wide, but conferment
of wide power requires the court to be more cautious. It casts an onerous
and more diligent duty on the court;
CRM(M) No. 207/2024 Page 32 of 39
xiv) However, at the same time, the court, if it thinks fit, regard being
had to the parameters of quashing and the self-restraint imposed by law,
more particularly the parameters laid down by this Court in the cases of
R.P. Kapur (supra) and Bhajan Lal (supra), has the jurisdiction to
quash the FIR/complaint;
xv) When a prayer for quashing the FIR is made by the alleged accused
and the court when it exercises the power under Section 482 Cr.P.C.,
only has to consider whether the allegations in the FIR disclose
commission of a cognizable offence or not. The court is not required to
consider on merits whether or not the merits of the allegations make out
a cognizable offence and the court has to permit the investigating
agency/police to investigate the allegations in the FIR;
xvi) The aforesaid parameters would be applicable and/or the aforesaid
aspects are required to be considered by the High Court while passing
an interim order in a quashing petition in exercise of powers
under Section 482 Cr.P.C. and/or under Article 226 of the Constitution
of India. However, an interim order of stay of investigation during the
pendency of the quashing petition can be passed with circumspection.
Such an interim order should not require to be passed routinely,
casually and/or mechanically.”
69. The Hon‟ble Supreme Court, in „ Siddharth Mukesh Bhandari v. State of
Gujarat’, Criminal Appeal No. 1044 of 2022, decided on 02.08.2022 ,
reiterated the principles laid down in M/s. Neeharika Infrastructure Pvt.
Ltd. , holding that the Investigating Agency has the right to investigate and
that stay of investigation under Section 482 of the Code of Criminal
Procedure can be granted only in the rarest of rarecases. The Hon‟ble
Supreme Court held as under:
“6. …..The High Court has not properly appreciated the principles
and the law laid down by this Court in the case of M/s. Neeharika
Infrastructure Pvt. Ltd. (supra). What is emphasized by this Court in
the case of M/s. Neeharika Infrastructure Pvt. Ltd. (supra) is that
grant of any stay of investigation and/or any interim relief while
CRM(M) No. 207/2024 Page 33 of 39
exercising powers under Section 482 Cr.P.C. would be only in the
rarest of rare cases.”
70. The position is further clarified by the principles laid down by the Hon‟ble
Supreme Court in „ State of Odisha v. Pratima Mohanty & Ors.’,
Criminal Appeal Nos. 1455–1456 of 2021, decided on 11.12.2021 ,
wherein the Court reiterated that the power under Section 482 of the Code
of Criminal Procedure must be exercised sparingly and in rare cases. The
High Court cannot, at this stage, assess the reliability or genuineness of the
prosecution material or conduct a mini-trial. The Hon‟ble Supreme Court
held as under:
“6.2 It is trite that the power of quashing should be exercised
sparingly and with circumspection and in rare cases. As per settled
proposition of law while examining an FIR/complaint quashing of
which is sought, the court cannot embark upon any enquiry as to the
reliability or genuineness of allegations made in the FIR/complaint.
Quashing of a complaint/FIR should be an exception rather than any
ordinary rule. Normally the criminal proceedings should not be
quashed in exercise of powers under Section 482 Cr.P.C. when after
a thorough investigation the charge sheet has been filed. At the stage
of discharge and/or considering the application under Section
482 Cr.P.C. the courts are not required to go into the merits of the
allegations and/or evidence in detail as if conducing the mini trial. As
held by this Court the powers under Section 482 Cr.P.C. is very wide,
but conferment of wide power requires the court to be more cautious.
It casts an onerous and more diligent duty on the Court.”
71. The expression “mini-trial” , employed by the Supreme Court in Pratima
Mohanty (supra), aptly captures what this Court has been urged to undertake
in the present proceedings. The petitioner‟s case would require the Court to
examine the nature and interrelationship of the transactions relied upon by the
CRM(M) No. 207/2024 Page 34 of 39
respective parties, compare the agreements and financial records, and
determine whether the payments relied upon by the petitioner relate to the
transaction forming the subject matter of the FIR or to an altogether separate
arrangement. Such an exercise would necessarily entail an assessment of the
evidentiary significance of the material relied upon by the parties and the
drawing of conclusions from competing versions of the transactions. This, in
substance, would travel beyond the limited scrutiny permissible under Section
482 of the Code of Criminal Procedure and amount to a preliminary
adjudication on matters which are required to be examined in the course of
investigation. The Court, therefore, cannot undertake such an exercise at this
stage.
72. The petitioner maintains that the transactions relied upon by him were
genuine and related to the contractual arrangement in question. The
complainant, however, contends that those transactions pertain to another
contract and have been relied upon to conceal the true nature of the
dealings. The correctness of these rival versions, and the true relevance of
the transactions relied upon by the petitioner, cannot be conclusively
determined in the present proceedings and require examination in the
course of investigation.
73. The same principle was reiterated by the Hon‟ble High Court in
Khursheed Ahmad Mahajan & Anr. v. Government of J&K & Ors.,
CRM(M) No. 115/2022, decided on 20.03.2025 , wherein the Court
declined to quash the FIR under Sections 420 and 120-B IPC, holding that
disputed questions of fact and evidentiary issues requiring a full-fledged
CRM(M) No. 207/2024 Page 35 of 39
trial cannot be examined in proceedings under Section 482 of the Code of
Criminal Procedure. The Court further held that where the FIR discloses a
prima facie cognizable offence, the High Court cannot undertake an
appellate or trial-like assessment of the material. The Court held as under:
“24.When the instant petition and the contents contained therein are
read in the context of the final report, the matter requires and
demands full dress trial and examination of facts by this Court as if
this Court is in appeal and acting as an appellate court and to draw
its own conclusion in relation to the impugned FIR, complaint and
proceedings emanating therefrom. This is not the aim and objective
of the provisions of Section 482 Cr. P.C. particularly when the
petition on hand does not unveil any ground muchless cogent or
material one, to indicate that the inherent powers are to be exercised
to prevent the abuse of process of law and to secure the ends of
justice. In that view of the matter, the impugned FIR does not call for
any interference and as a result whereof, the instant petition is liable
to be dismissed.
25.For the reasons discussed above, the instant petition is without any
merit and is, accordingly, dismissed with connected CM(s). Interim
direction, if any, shall stand vacated”
74. In view of the principles laid down, the present case cannot be regarded as
one of the “ rarest of rare ” cases warranting interference under Section 482
of the Code of Criminal Procedure, as the FIR discloses prima facie
cognizable offences and its allegations require investigation, appreciation
of evidence and examination of witnesses. The factual assertions advanced
by the petitioner in support of his defence cannot be adjudicated at this
preliminary stage, nor can the High Court conduct a mini-trial or assess the
probability of conviction. Since no exceptional circumstance
demonstrating manifest abuse of process or complete absence of offence
CRM(M) No. 207/2024 Page 36 of 39
has been established, continuation of the FIR is necessary in the interests
of justice. Consequently, the interim stay of investigation/FIR cannot be
continued and is liable to be vacated, as staying the proceedings in such
circumstances would improperly obstruct a legitimate investigation.
75. In the present matter, acceptance of the petitioner's case at this stage would
necessarily require this Court to determine whether the documents relied
upon by the petitioner correctly explain the transactions forming the subject
matter of the FIR and whether the complainant's allegation of concealment is
false. This Court cannot undertake such an exercise at the stage of
investigation. The fact that the dispute has a contractual background does not
alter the position. The Court is not required to determine at this stage whether
the dispute will ultimately be established as criminal or civil. That
determination must await the result of the investigation and, if warranted, the
subsequent proceedings in accordance with law.
76. The present case, therefore, does not fall within that narrow class of cases
where the continuation of investigation would itself amount to an abuse of
the process of law. Rather, the circumstances indicate that the
investigation has to be permitted to proceed so that the competing versions
of the parties may be examined on the basis of the relevant material.
77. It is also significant that the complainant alleges substantial financial
investment and consequential loss. Whether the allegations are ultimately
established or not is not a matter for determination at this stage. What is
relevant is that the allegations are capable of factual verification through
investigation. The Court must consequently maintain the distinction
CRM(M) No. 207/2024 Page 37 of 39
between a case where the allegations do not disclose any offence at all and
a case where the allegations disclose matters requiring investigation,
notwithstanding the contrary version put forward by the accused. The
present case falls in the latter category.
78. Viewed cumulatively, the authorities discussed above speak in one voice
on three interlocking propositions:
(i) that investigation is the statutory domain of the police and
not of the Court;
(ii) that the inherent jurisdiction under Section 482 of the Code
of Criminal Procedure is confined to a prima facie
examination of the FIR and does not extend to weighing
rival documents or assessing probabilities;
(iii) that an interim stay of investigation is an extraordinary
measure to be granted only in the rarest of rare cases, and
never as a matter of course .
Tested against this settled body of precedent, the petitioner's case rests
entirely on a factual dispute over the accuracy of the underlying
transactions. Consequently, the case set up by the petitioner does not
warrant the continuation of the interim stay.
Question No.2 is, accordingly, answered against the petitioner
and in favour of the respondents as the case does not fall under the
rarest of the rare case.
Conclusion:
79. Upon consideration of the FIR, the material placed on record, the rival
submissions and the principles governing the exercise of jurisdiction under
Section 482 of the Code of Criminal Procedure, this Court is of the
CRM(M) No. 207/2024 Page 38 of 39
considered view that the allegations contained in the FIR disclose a
cognizable offence and involve factual matters requiring examination in
accordance with law.
80. The defence set up by the petitioner rests upon his interpretation of the
agreements, transactions, bank records and alleged repayments.
Determination of the correctness of that defence would require an
evaluative examination of the documents and transactions relied upon by
the respective parties, which this Court cannot undertake in exercise of its
inherent jurisdiction, particularly at the stage when the investigation is still
in progress.
81. The petitioner has failed to demonstrate that the present case falls within
any of the exceptional categories warranting interference under Section
482 of the Code of Criminal Procedure. No circumstance has been shown
which would render the continuation of the investigation an abuse of the
process of law or make interference necessary to secure the ends of justice.
82. On the contrary, the allegations require the investigating agency to examine
the competing versions of the parties and the material relevant thereto.
There is, therefore, no justification for permitting the interim order to
continue and thereby obstructing the investigation from proceeding in
accordance with law.
83. Accordingly, the present petition is dismissed. The interim order dated
27.03.2024, whereby further investigation in FIR No. 07/2024 registered at
Police Station, Economic Offences Wing, Crime Branch, Jammu, was
stayed, shall stand vacated. The investigating agency shall be at liberty to
CRM(M) No. 207/2024 Page 39 of 39
proceed with and conclude the investigation in accordance with law
expeditiously.
84. It is, however, made clear that the observations made herein are confined
strictly to the consideration of the petition under Section 482 of the Code
of Criminal Procedure and shall not be construed as an expression of
opinion on the merits of the allegations, the defence of the petitioner, or the
evidentiary value of the material relied upon by either side. The
investigating agency shall undertake the investigation independently, fairly
and strictly in accordance with law.
( Wasim Sadiq Nargal)
Judge
Jammu:
29.08.2026
Vijay
Whether order is speaking: Yes
Whether order is reportable: Yes