Threshold quashing of FIR refused where allegations of secured asset misuse required completion of investigation.

An FIR alleging criminal misconduct in the disposal of secured property and related waiver of interest was not quashed while investigation was still in progress. The Madras HC held that, despite some inaccurate factual particulars in the FIR, the core allegations concerning the sale process, SIDCO's interests, and a possible criminal design between bank officials and the purchaser required completion of investigation. The Court declined to treat the petitioners as innocent bona fide purchasers or to rule out criminality at the threshold, since such conclusions could not safely be reached before the inquiry was completed. The criminal proceedings were therefore left undisturbed and the investigation continued.

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Issues: Whether the FIR was liable to be quashed at the stage of ongoing investigation despite the petitioners' challenge to the allegations and the sale of secured assets by private negotiation.

Analysis: The FIR alleged criminal misconduct in the disposal of secured property and related waiver of interest, while the investigation agency stated that the inquiry was still in progress. The Court noted that some factual particulars in the FIR were inaccurate, but held that the core allegations raised questions about the sale process, the interests of SIDCO, and the possibility of a criminal design between bank officials and the purchaser. In these circumstances, the Court declined to conclude that the petitioners were innocent bona fide purchasers or that no offence was made out, since such conclusions required completion of investigation.

Conclusion: The FIR was not quashed.

Final Conclusion: The petition was rejected, leaving the investigation to continue and the criminal proceedings undisturbed.

Ratio Decidendi: An FIR should not be quashed at the threshold where the allegations disclose matters requiring investigation and the court cannot safely conclude on innocence or absence of criminality before the inquiry is completed.

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