Criminal investigation requires a real factual basis; prior statutory approvals cannot be collaterally attacked on suspicion alone.

A criminal investigation cannot be directed on mere suspicion or conjecture unless the material discloses a reasonable basis to indicate commission of an offence. The Supreme Court found that the project had already undergone multiple governmental and statutory scrutiny stages, including approvals and techno-economic clearance, and that the promoters' financial and technical capability had been considered by the competent authorities. On that material, the High Court's direction for registration of an FIR and CBI investigation was unjustified, as the challenge amounted to a collateral attack on prior approvals without sufficient grounds for criminal inquiry. The direction for investigation was therefore set aside, and the State's appeals succeeded.

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Issues: Whether the direction for registration of an FIR and CBI investigation was justified on the material placed before the High Court, and whether the impugned order could stand in the face of the approvals and scrutiny already accorded by the competent authorities.

Analysis: The material relied upon was examined as a whole and was found to rest on suspicion rather than on facts disclosing a reasonable basis for criminal investigation. The project had passed through multiple governmental and statutory scrutiny stages, including approvals and techno-economic clearance under the Electricity (Supply) Act, 1948, and the financial and technical capability of the promoters had also been considered by the competent authorities. The challenge sought to question, collaterally, decisions and approvals already taken at the highest administrative level without showing circumstances that would justify criminal inquiry. Mere conjecture, surmise, or apprehension was held insufficient to warrant an FIR or investigation by a criminal agency.

Conclusion: The direction for CBI investigation was not justified and was set aside.

Final Conclusion: The State's appeals succeeded, and the order directing investigation was vacated, while the connected challenge filed by the other side failed.

Ratio Decidendi: A criminal investigation cannot be ordered on mere suspicion or conjecture unless the material discloses a reasonable basis indicating commission of an offence; prior statutory and governmental approvals cannot be collaterally impeached without such basis.

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