Karnataka HC Quashes Forgery FIR Against HDFC MD, Allows Probe Against Two Others Over Allegedly Forged Loan Papers

Respondent No. 3 filed a private complaint alleging that bank officials forged his signatures, manipulated records and used forged documents in connection with a car loan and top-up loan.

The Magistrate referred the complaint for investigation under Section 156(3) Cr.P.C.

The petitioners—identified in the judgment as the bank’s branch manager and managing director—sought to quash the complaint and FIR under Section 482 Cr.P.C.

They argued, among other things, that the complaint lacked the affidavit required for a Section 156(3) referral and that the managing director was implicated without specific allegations.

The complainant relied on documents and a preliminary report said to indicate forgery.

Section 156(3) Cr.P.C. permits a Magistrate to refer a complaint for police investigation before taking cognizance; Priyanka Srivastava v. State of Uttar Pradesh, (2015) 6 SCC 287, requires an application invoking that power to be supported by an affidavit.

Under Dineshb​​hai Chandubhai Patel v. State of Gujarat, (2018) 3 SCC 104, the court considering a request to quash must examine whether the complaint’s contents disclose an offence and should not quash proceedings where they do.

The Court also considered the petitioners’ reliance on Sections 46A and 47 of the Banking Regulation Act, 1949, but held that the asserted protection did not prevent investigation into allegations of criminal forgery.

The Court found that the complaint was supported by a detailed affidavit and that the Magistrate’s Section 156(3) referral was a pre-cognizance order, so the petitioners’ affidavit objection and reliance on an earlier decision concerning cognizance did not warrant quashing.

The complaint specifically alleged forged signatures and manipulation of records, and the complainant had produced material said to provide prima facie support; the Court held that these allegations required investigation, rather than determination at the quashing stage.

By contrast, it found no specific allegations capable of sustaining criminal proceedings against the managing director, who was arraigned as accused No. 3.

The complaint and FIR in Crime No. 50/2021 were quashed insofar as they concerned accused No. 3, the managing director, for the alleged offences under Sections 418, 420, 468 and 477A read with Section 34 IPC.

The petition was dismissed as to accused Nos. 1 and 2, against whom the investigation was permitted to proceed.