Disproportionate-assets allegations supported by preliminary verification warrant investigation, not quashing at the FIR stage.

The petitioner, a Deputy Controller in the Legal Metrology Department, challenged the registration of Crime No.31/2024 by the Karnataka Lokayukta Police for offences under Sections 13(1)(b) read with 13(2) of the Prevention of Corruption Act, 1988 (“PC Act”).

A source report dated 1 June 2024 alleged that the petitioner possessed assets disproportionate to his known sources of income. Pursuant to the report, a preliminary enquiry was conducted and submitted on 10 July 2024; the competent authority thereafter recorded satisfaction that a cognizable offence was prima facie disclosed and directed registration of the FIR on 18 July 2024.

An Investigating Officer was appointed under Section 17 of the PC Act on 18 July 2024, and the petitioner’s residence was searched on 19 July 2024.

The Lokayukta alleged that the search disclosed substantial discrepancies between the petitioner’s annual property returns and the assets found, including gold, diamonds, silver, and cash.

The proceedings had earlier been stayed by an interim order dated 19 March 2025.

Whether the FIR registered for offences under Sections 13(1)(b) read with 13(2) of the PC Act was liable to be quashed under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, on the ground that the preliminary enquiry was defective or a mere formality?

Whether the alleged discrepancies between the petitioner’s declared assets and the assets discovered during search disclosed sufficient circumstances warranting investigation, or whether the Court should examine the petitioner’s explanations at the stage of quashing?

Whether the investigation should be interdicted at the FIR stage when the allegations involved disputed questions of fact concerning ownership, source, and acquisition of the assets?

The Court applied Section 528 of the BNSS, which preserves the High Court’s inherent jurisdiction to prevent abuse of process and secure the ends of justice, and Sections 13(1)(b) and 13(2) of the PC Act concerning possession of pecuniary resources or property disproportionate to known sources of income by a public servant and the punishment for such conduct.

Section 17 of the PC Act was relevant to the authorisation and appointment of the Investigating Officer.

The Court recognised that, at the stage of considering quashing, it must determine only whether the materials disclose circumstances warranting investigation and must not conduct a mini-trial or adjudicate disputed questions of fact.

The governing principle was that investigation cannot be quashed merely because the accused offers a possible explanation for incriminating circumstances; questions of ownership, lawful source, and actual possession must ordinarily be investigated and, where necessary, tested at trial.

The Court considered the petitioner’s reliance on Salib alias Shalu alias Salim v. State of Uttar Pradesh, (2023) 20 SCC 194, and Nirankar Nath Pandey v. State of U.P., Criminal Appeal No.5009 of 2024, decided on 4 December 2024, but held that those authorities were factually distinguishable.

The Court found that the source information had not automatically resulted in registration of the FIR: it had been reduced into a report, subjected to preliminary verification, placed before the competent authority, and followed by a recorded satisfaction that a cognizable offence was prima facie disclosed.

The subsequent search allegedly revealed 4 kilograms and 109 grams of gold, 303 grams of diamonds, 4 kilograms and 631 grams of silver, and cash of approximately ₹25,13,500, whereas the petitioner’s annual returns declared substantially lower quantities and cash holdings.

These were substantial discrepancies capable of supporting investigation into disproportionate assets.

The petitioner’s explanation that the jewellery and cash belonged to relatives required factual verification regarding who brought the articles, their quantity, ownership, and the circumstances of their presence in the house; such matters could not be conclusively determined under Section 528 BNSS.

Similarly, the allegations concerning the wife’s property and rents received by the petitioner’s daughters raised questions requiring investigation rather than judicial speculation at the threshold.

The Court therefore held that quashing the FIR would improperly require proof of the offence before permitting investigation and would amount to conducting a premature audit or mini-trial.

The explanations regarding the jewellery, cash, property, and rental income involved disputed questions of fact that could not be adjudicated in a petition for quashing.

Finding no merit in the petition, the Court dismissed Criminal Petition No.12652/2024 and permitted the investigation in Crime No.31/2024 to proceed in accordance with law.

It expressly clarified that its observations were confined to the request for interference at the FIR stage and would not constitute findings on the petitioner’s guilt or influence the Investigating Officer, trial court, or any other forum.