A Section 156(3) referral made without the mandatory affidavit must be quashed.

Respondents 2–4, members of Mangalore Catholic Co-operative Bank Ltd., filed a private complaint alleging that the petitioners, including the Bank’s Chairman, a Director and its General Manager, had facilitated loans and diverted portions of the proceeds for personal or business purposes.

The complaint alleged offences under Sections 403, 405, 409, 418, 120B read with Section 34 of the IPC, as well as contraventions of the Karnataka Co-operative Societies Act, 1959 (KCS Act).

On 1 September 2022, the Magistrate directed the CEN Police to register an FIR and investigate; Crime No. 88/2022 was registered accordingly.

The petitioners sought quashing, contending, among other things, that the complainants had not filed the affidavit required by Priyanka Srivastava, that prior police remedies had not been exhausted, that Section 111(2) of the KCS Act barred prosecution without sanction, and that the complaint did not disclose the alleged offences’ ingredients.

1. Whether the Magistrate’s order referring the complaint for investigation, and the resulting FIR and investigation, could stand when the complainants had not filed the affidavit required by Priyanka Srivastava before the order was made.

2. Whether the complaint was liable to be terminated on the petitioners’ other grounds, including the alleged bar under Section 111(2) of the KCS Act and the asserted absence of material allegations disclosing the offences.

Under Priyanka Srivastava v. State of Uttar Pradesh, (2015) 6 SCC 287, an application seeking a direction for investigation under Section 156(3) of the Code of Criminal Procedure, 1973 must be supported by an affidavit; the applicant must also disclose prior recourse under Sections 154(1) and 154(3) CrPC.

As clarified in S.N. Vijayalakshmi v. State of Karnataka, 2025 SCC OnLine SC 1575, the affidavit requirement is mandatory, but non-compliance is curable only if remedied before the Magistrate passes a substantive order; an order made without the affidavit, and consequential proceedings, may be quashed on that ground.

The Court also considered the petitioners’ reliance on Section 111(2) of the KCS Act, which was said to require prior sanction for prosecution in specified matters, but did not decide its application at this stage.

The complainants had not filed the supporting affidavit before the Magistrate directed the police to register an FIR and investigate; that non-compliance was undisputed.

Applying S.N. Vijayalakshmi, the Court held that the Magistrate’s referral order and the resulting FIR and investigation could not stand.

It did not determine whether the complaint’s allegations established the elements of the IPC offences or whether Section 111(2) of the KCS Act required prior sanction. Instead, it left those matters for the Magistrate to consider when deciding the complaint.

The Court quashed the Magistrate’s order dated 1 September 2022 directing registration of an FIR and investigation, FIR No. 88/2022, and the investigation conducted pursuant to it.

The complaint itself was not quashed; the Magistrate was directed to decide it in accordance with law, including by considering the petitioners’ contentions regarding the sufficiency of the allegations and the requirement of prior sanction.