Investment-fraud allegations warrant investigation; an FIR cannot be quashed as a purely civil dispute at this stage.

Respondent No. 2 alleged that the petitioners induced him to invest in a petrochemical business, and that he paid a total of ₹1,65,00,383, comprising bank transfers and an alleged cash payment of ₹25,54,500.

He stated that ₹82,90,000 had been returned, leaving ₹82,10,383 outstanding, apart from claimed profits.

The police registered Crime No. 48/2023 under Sections 120B, 406, 420 and 506(B), read with Section 34 of the IPC.

The petitioners sought to quash the FIR, arguing that a similar complaint had earlier been made to the City Crime Branch and that the dispute was civil in nature.

Whether the FIR should be quashed on the ground that the dispute was purely civil in nature and had been given a criminal colour.

Whether the allegations and material at the FIR stage disclosed a matter requiring investigation into possible criminality, including fraud at the inception.

The petition was brought under Articles 226 and 227 of the Constitution and Section 482 of the Code of Criminal Procedure, invoking the High Court’s jurisdiction to quash the FIR.

The alleged offences were under Sections 120B, 406, 420 and 506(B), read with Section 34 of the IPC.

The Court applied the principle that, where the allegations and available material leave the existence of criminality to be investigated, it is premature at the FIR stage to conclude that the matter is purely civil; the investigating agency should investigate and submit an appropriate report under Section 173 Cr.P.C.

The Court noted that bank documents supported the alleged payment of ₹1,39,45,883, while the claimed cash payment of ₹25,54,500 was disputed and unsupported by documentary evidence.

The complainant also alleged that the petitioners had failed to return the outstanding amount and had attributed the business’s failure to losses.

In these circumstances, whether the arrangement involved fraud from the outset or instead resulted in a business loss could not be determined without investigation.

The Court therefore declined to treat the matter as purely civil or to conclude, at that stage, that no criminality was involved.

It left all available defences and explanations open to the petitioners to raise before the Investigating Officer or the competent court in accordance with law.