High Court Cannot Quash FIR at Investigation Stage Merely Because Dispute Appears Civil: Supreme Court Restores Fraud and Forgery Case

Held: The Supreme Court held that the High Court erred in quashing criminal proceedings at the threshold under Section 482 CrPC merely on the ground that the dispute appeared to be civil in nature. It was held that where the complaint discloses prima facie allegations of cognizable offences such as fraud, forgery, cheating and conspiracy, the existence of parallel civil remedies does not bar criminal investigation, and courts must refrain from evaluating defence material or disputed facts at the stage of directing investigation under Section 156(3) CrPC.

Summary: The case arose from allegations by NRI plot purchasers that their properties in a Bengaluru layout were fraudulently usurped through forged documents, fabricated powers of attorney, and collusive transactions. The complainant alleged that signatures were obtained under misrepresentation and used to execute confirmation deeds, enabling illegal transfer of her property. The Magistrate directed investigation under Section 156(3) CrPC, leading to registration of FIRs for multiple offences including forgery and conspiracy. The High Court quashed the proceedings, holding that the dispute involved competing title claims requiring adjudication in civil proceedings and that registered sale deeds could not be questioned without cancellation under the Specific Relief Act. Before the Supreme Court, it was argued that the High Court prematurely assessed disputed facts and improperly relied on defence documents. The Court noted that similar quashing orders in connected matters had already been set aside and emphasized that at the investigation stage, courts must only assess whether the complaint discloses a cognizable offence. It found that the High Court exceeded its jurisdiction by conducting a mini-trial and treating civil aspects as determinative, thereby stifling investigation.

Decision: The Supreme Court allowed the appeals, set aside the High Court’s quashing order, restored the FIRs and investigation proceedings, and directed that the matter proceed in accordance with law while leaving all contentions open to be raised during investigation and trial.