Karnataka HC Refuses To Quash FIR Over Alleged ₹2.95-Crore Business And Site Investments, Says Probe Must Continue

In brief

The question

1. Whether the complaint and material then available disclosed a prima facie case for the alleged offences under Sections 403, 405, 406, 420 and 506 read with Section 34 IPC, warranting continuation of the investigation.

The court held

The High Court held that the FIR did not warrant interference at that stage and dismissed the criminal petition for lack of merit.

It also directed

The proceedings in Crime No. 72/2024 were therefore not quashed.

01Facts

Respondent No. 2 alleged that petitioner No. 2 introduced him to the other petitioners and encouraged him to invest in businesses.

pp. 2–4

He claimed to have paid the petitioners ₹2,24,78,000 through banking channels and cash, and alleged that they repaid ₹20,29,990 towards profits but failed to return the remaining principal or profits.

pp. 2–4

He also alleged that the petitioners retained his Audi EQ5 car and threatened him when he demanded repayment and its return; a further ₹70,00,000 was allegedly paid towards the purchase of a site.

pp. 2–4

The police registered Crime No. 72/2024 for offences under Sections 403, 405, 406, 420 and 506 read with Section 34 IPC.

pp. 2–4

The petitioners sought to quash the proceedings under Section 482 CrPC; the investigation was at a nascent stage when the petition was considered.

pp. 5–6

02Issues

i.1. Whether the complaint and material then available disclosed a prima facie case for the alleged offences under Sections 403, 405, 406, 420 and 506 read with Section 34 IPC, warranting continuation of the investigation.

pp. 4–7

ii.2. Whether the High Court should exercise its inherent jurisdiction under Section 482 CrPC to quash the FIR at that stage, in light of the petitioners’ contention that the dispute was commercial and their defence that they had made repayments.

pp. 4–7

03Law Applied

The petition invoked Section 482 CrPC, which preserves the High Court’s inherent power to prevent abuse of the process of court and secure the ends of justice.

p. 1

The alleged offences were under Sections 403, 405, 406, 420 and 506 IPC, read with Section 34 IPC.

pp. 1, 6–7

The Court applied the principle that, where a complaint and the material available prima facie disclose cognizable offences and investigation remains at an early stage, the FIR should not be quashed merely on the basis of an unsubstantiated defence or before relevant evidence has been collected.

pp. 6–7

Provisions in the judgment · 7 · Linked ones open on LawLens

Code of Criminal Procedure, 1973 Section 482

Indian Penal Code, 1860 Section 403 Section 405 Section 406 Section 420 Section 506 Section 34

04Reasoning

The Court noted that the payment of ₹2,24,78,000 and repayment of ₹20,29,990 towards profits were admitted, while the complaint alleged further unpaid sums, retention of the car and threats.

pp. 6–7

It considered that the complaint contained serious allegations which required investigation.

pp. 6–7

Because the investigation had not progressed beyond preliminary steps and relevant evidence remained to be collected, the Court declined to assess the petitioners’ defence or determine the outcome of the allegations at the quashing stage.

pp. 6–7

It concluded that the complaint and material then available prima facie disclosed cognizable offences.

pp. 6–7