FIR quashing limits preserved investigation into alleged forged loan-security documents despite pending insolvency proceedings and indoor management claims.

Allegations of forgery, fabrication of loan-security documents, falsification of accounts and use of fabricated records in insolvency proceedings require investigation where document authenticity, alterations and signatures are disputed. At the FIR-quashing stage, allegations must be accepted at face value; the court cannot test their truthfulness, reliability or evidentiary value or conduct a mini trial. Pendency of insolvency proceedings and claimed protection under the Insolvency and Bankruptcy Code do not bar investigation into alleged criminal acts by individuals. The doctrine of indoor management does not apply to allegations involving forgery, irregularity and collusion. The FIR prima facie disclosed cognizable offences and was not quashed.

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Issues: Whether the FIR alleging forgery, fabrication of loan-security documents and falsification of accounts should be quashed in exercise of inherent jurisdiction.

Analysis: The allegations concerned disputed authenticity of the deeds of personal guarantee and hypothecation, alleged alterations in loan documentation and asset schedules, and use of allegedly fabricated records to assert liability in insolvency proceedings. These matters involved disputed facts and required investigation, including examination of the questioned documents and signatures. At the quashing stage, the allegations must be taken at face value and the Court cannot assess their truthfulness, reliability or evidentiary value, or conduct a mini trial. The pendency of insolvency proceedings and the claimed protection under the Insolvency and Bankruptcy Code did not bar investigation of the alleged criminal acts, particularly against individuals whose alleged role required investigation. The doctrine of indoor management was also unavailable where the allegations concerned forgery, irregularity and collusion.

Conclusion: The FIR prima facie disclosed cognizable offences and was not liable to be quashed; the issue was decided against the petitioners.

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