Natural justice challenge to fraud declaration led to stay on FIR registration, investigation and arrest pending further hearing.

A challenge to the declaration of a loan account as fraud raised a natural justice objection, with the petitioner apprehending coercive action on that basis. Interim protection was considered appropriate pending further hearing, and stay was granted against all further proceedings, including registration of the FIR, investigation and arrest, until further orders.

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Issues: Whether, pending further hearing, further proceedings including registration of the FIR, investigation and arrest should be stayed in view of the challenge to the declaration of the loan account as fraud on the ground of violation of natural justice.

Analysis: The petition raised a contention that the fraud declaration was made without following natural justice and that coercive steps were apprehended on the basis of that declaration. The matter was directed to be heard on notice, and interim protection was considered appropriate till the next date of hearing.

Outcome: Stay was granted against all further proceedings, including registration of the FIR, investigation and arrest, until further orders.

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