FIR quashing at investigation stage remains barred where allegations disclose cheating, forgery, and conspiracy despite parallel civil disputes.

At the investigation stage, the High Court will not quash an FIR where the allegations disclose a prima facie cognizable offence and the accused rely on disputed documents. The existence of agreements to sell or parallel company-law proceedings does not by itself make the dispute purely civil or bar criminal prosecution. Territorial jurisdiction may lie where part of the offence is alleged to have occurred, including where payment was made and accounts were opened. On the pleaded facts, allegations of dishonest inducement, fabrication of documents, concealment of material facts, and criminal conspiracy were held sufficient to justify continuation of the criminal proceedings.

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Issues: (i) Whether the FIR could be quashed at the investigation stage under the inherent jurisdiction of the Court. (ii) Whether the dispute was purely civil so as to bar criminal proceedings. (iii) Whether the police at Khanna had territorial jurisdiction to register and investigate the FIR. (iv) Whether the allegations disclosed a prima facie cognizable offence of cheating, forgery and criminal conspiracy against the petitioners.

Issue (i): Whether the FIR could be quashed at the investigation stage under the inherent jurisdiction of the Court.

Analysis: The petitions were filed immediately after registration of the FIR, notices had been issued to the petitioners for joining investigation, and they had not joined the inquiry or sought anticipatory or regular bail. The allegations were disputed and the documents relied upon by the petitioners were not of unimpeachable character. In such circumstances, and applying the settled principles governing interference at the investigation stage, the FIR could not be scuttled under the inherent jurisdiction.

Conclusion: The request for quashing at this stage was rejected and the petitioners were not entitled to interference in their favour.

Issue (ii): Whether the dispute was purely civil so as to bar criminal proceedings.

Analysis: The existence of agreements to sell and proceedings before the National Company Law Tribunal did not by itself make the matter purely civil. The allegations were that the petitioners concealed material facts, induced payment, and thereafter used forged and fabricated documents to frustrate the complainant's rights. The criminal allegations stood independently of the civil and company-law disputes.

Conclusion: The dispute was not treated as purely civil, and criminal prosecution was held maintainable.

Issue (iii): Whether the police at Khanna had territorial jurisdiction to register and investigate the FIR.

Analysis: The complainant's money was stated to have been paid in Punjab and the bank accounts were opened there. Territorial jurisdiction in criminal law depends on the place where the offence or part of it was committed, not merely on the location of the companies' registered offices. On the complainant's version, part of the offence occurred within the jurisdiction of Khanna Police Station.

Conclusion: The objection to territorial jurisdiction was rejected.

Issue (iv): Whether the allegations disclosed a prima facie cognizable offence of cheating, forgery and criminal conspiracy against the petitioners.

Analysis: The FIR contained detailed allegations of dishonest inducement, concealment of material facts, fabrication of documents, freezing of bank accounts through allegedly false communications, and coordinated conduct among the accused. The Court held that these assertions, if taken at face value, disclosed cognizable offences and raised matters for investigation rather than quashing.

Conclusion: A prima facie case of cognizable offences was found to exist against the petitioners.

Final Conclusion: The criminal proceedings were permitted to continue and the petitions for quashing were found meritless.

Ratio Decidendi: Where the FIR contains detailed allegations disclosing a prima facie cognizable offence and the accused rely on disputed documents, the High Court will not quash the proceedings at the investigation stage merely because civil or company-law remedies also exist.

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