Punjab-Haryana High Court
Santosh Mahalingam vs State Of Haryana And Others on 2 April, 2026
CRM-M-28636--2021 (O&M)
CRM-M-32624--2021 (O&M)
CRM-M-32887--2021 (O&M) 1
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
CRM-M-28636-2021 (O&M)
CRM-M-32624-2021
2021 (O&M)
CRM-M-32887-2021
2021 (O&M)
Reserved on : 30.01.2026
Pronounced on : 02.04.2026
Uploaded on : 02.04.2026
6
1. CRM-M--28636-2021 (O&M)
P. PARAMASIVAM MAHALINGAM AND ANR. ... Petitioners
Versus
STATE OFHARYANA
HARYANA AND ORS. ...Respondents
2. CRM-M-32624
32624-2021 (O&M)
SHARMILA ANAND ...Petitioner
Versus
STATE OF HARYANA AND ORS. ...Respondents
3. CRM-M-32887
32887-2021 (O&M)
SANTOSH MAHALINGAM ...Petitioner
Versus
STATE OF HARYANA AND ORS. ...Respondents
CORAM: HON'BLE MRS. JUSTICE MANISHA BATRA
Present: Mr. R.S. Cheema, Senior Advocate with
Ms. Tanu Bedi, Advocate,
Mr. Atul Sharma, Advocate,
Mr. Anand Sathiyaseelan, Advocate,
Mr. Abhishek Aggarwal, Advocate,
Mr. Gurpreet Singh, Advocate,
AMIT SHARMA
2026.04.02 14:14
I attest to the accuracy and
integrity of this order/judgment.
CRM-M-28636--2021 (O&M)
CRM-M-32624--2021 (O&M)
CRM-M-32887--2021 (O&M) 2
Mr. Vibhu Agnihotri, Advocate,
Mr. Satish Sharma, Advocate and
Ms. Samma Singh, Advocate for the petitioners
Mr. Deepak Sabherwal, Addl. Advocate General, Haryana for
respondent No.1 to 3
Mr. Ashok Aggarwal, Senior
S Advocate with
Mr. Hitesh Bhardwaj, Advocate,
Mr. Prateek Gupta, Advocate,
Mr. Vishal Verma, Advocate,
Ms. Vanshika, Advocate,
Mr. Ayush Ginwar, Advocate and
Mr. Shivik Jain, Advocate for responde
respondent No.4
****
MANISHA BATRA, J. (ORAL)
1. This
is common order shall dispose of the aforementioned three
petitions, all filed under Section 482 of the Code of Criminal Procedure
(Cr.P.C.) which is pari materia with Section 528 of Bharatiya Nagarik Suraksa
Sanhita, 2023, in matters arising out of FIR No.
No.0175
0175 dated 17.07.2021
registered under Sections 120B, 34, 406, 420, 467, 468, 471 and 506 of IPC at
Police Station DLF Phase III Gurugram.
Gurugram. Prayer in the first tw
two petitions hass
been made for quashing of FIR whereas in the third petition bearing No. CRM–
M-32887-2021,
2021, prayer has been made for transfer of investigation of the case to
Central Bureau of Investigation (CBI) or some other independent agency.
2. The aforementioned
aforementioned FIR has been registered on the basis of a
written complaint filed by the respondent No.4-M/s.
No.4 M/s. PM Fincap Ltd. which is a
non-banking
king financial company (hereinafter
( to be referred as complainant
company),, by alleging that it was previously known as M/s. Tripund Motors
AMIT SHARMA
2026.04.02 14:14
I attest to the accuracy and
integrity of this order/judgment.
CRM-M-28636–2021 (O&M)
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and General Finance Limited and changed its name to M/s. PM Fincap Ltd in
February, 2018. The complainant company is a part of limited group of
companies, having its corporate office at Gurugram. It has been alleged in the
FIR, that the petitioners,
petitioners who were trustees of, and were responsible for day
day-to–
day conducting of business including financial transactions of two trusts namely
Maharaji Educational Trust (for short “MET”)
” “) and Santosh Trust (for short
“ST”),, had approached the
the complainant for securing loan of Rs.35 crores for the
purpose of expanding the business of dental and medical colleges operated by
both the Trusts.. They induced the complainant to lend the aforementioned
amount by representing that they had properties to secure repayment of the loan.
A written agreement was executed on 18.03.2015. As per the terms of the
agreement, the loan was to be repaid alongwith interest by 30.09.2015
30.09.2015. By
y way
of security, the petitioners
petitioner created second charge over 63.45 acres of agricultural
land owned by the Trusts, the first charge being with Housing and Urban
Development Corporation Limited (HUDCO).
( ). They also created hypothecation
on specified bank accounts and undertook that the revenue generated from the
income of both the Trusts would be deposited in those accounts by the
petitioners and the said amount deposited therein, will be transferred to the bank
account of the complainant for repayment of loan. An undertaking was also
given by the petitioners that no other bank account would be opened in the name
of the Trusts.
3. As per the allegations,
allegations the intention of the petitioners at the time of
availing of aforementioned loan was dishonest and they intended to criminally
AMIT SHARMA
2026.04.02 14:14
I attest to the accuracy and
integrity of this order/judgment.
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misappropriate the amount of loan. They concealed the fact that an agreement
to sell had already been executed by them in favour of one SGS Constructions
and Developers Private Limited (for short “SGS Constructions”) in respect of
SGS Constructions
21 acres of land which was part of 62.45 acres of land, qua which second charge
was created in favour of the complainant. Only an amount of Rs.8,66,00,000/
Rs.8,66,00,000/–
was repaid by the petitioners and they commi
committed
tted default in payment of the
remaining amount alongwith interest accrued thereon. They kept on avoiding
payment of the same on one pretext or the other. Some cheques issued by the
petitioners in favour of the complainant had been dishonoured during the period
from November, 2015 till March, 2016. Another cheque for an amount of Rs.2
crores as given by the petitioners had also been dishonoured in November, 2018.
4. The complainant
complainant further alleged that there was litigation between
the petitioners and HUDCO,
HU who was having first charge over the immoveable
properties of the Trusts and the Hon’ble Supreme Court
Court, vide order dated
08.05.2017 held that HUDCO,
HUDCO could sell 42.845 acres of land out of 63.45 acres
of land owned by the Trusts for recovering loan. A
Ass a consequence thereof, the
respondent No.4 became first charge-holder
charge holder qua the remaining 20.60
20.605 acres of
land. However, in a clandestine manner and by suppressing that the
complainant had first charge over the said land, the petitioners sold the same to
SGS
GS Constructions Developers Private Limited in April, 2018 and the money
received by the said sale was misappropriate
misappropriated by themselves. Before the
Hon’ble Supreme Court the fact that the complainant was having charge over
the said land had been concealed.
AMIT SHARMA
2026.04.02 14:14
I attest to the accuracy and
integrity of this order/judgment.
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5. As per the further allegations, the respondent No.4 also came to
know that the specific bank accounts over which the petitioners had created first
and exclusive charge, had negligible bank balance thereby defeating the security
interest of the complainant. Not even this, the petitioners had in a clandestine
manner, opened new bank accounts and the revenue received therein w
was
as
diverted from the reach of the complainant in violation of the undertakings given
by the petitioners. By further alleging that the conversations with regard to the
repayment of the loan amount and the negotiations qua the grant of the same had
taken place at the corporate office of the complainant company at Gurugram and
it was there that the petitioners had kept on assuring the complainant that they
would repay the money, the respondent No.4 prayed for taking action in the
matter.
6. It is argued by learned Senior counsel for the petitioner that the
allegations
ons in the FIR do not make out any case for commission of the off
offences
ences
of cheating, forgery or use of forged documents by the petitioners.. The
availment of the loan to the tune of Rs.35 Crores by the Trusts was not a new
transaction since previously,
previously the petitioners
etitioners in order to fulfil the objectives of the
Trusts, had availed loan to the tune of Rs.15 Crores from M/s. Sindhu Trade
Links and it was only subsequently that the Trusts through the petitioner P.
Paramsivam Mahalingam,
Mahalingam had sought financial assistan
assistance from respondent No.4
by creating charge over 272 flats existing in Ghaziabad and 63.45 acres of land
existing within different villages of Ghaziabad, UP. It was on account of some
unforeseen circumstances beyond the control of the petitioners that ther
theree was
AMIT SHARMA
2026.04.02 14:14
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integrity of this order/judgment.
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some default in repayment of the loan. The transaction that took place between
the parties had arisen out of a contract and was purely a civil transaction given a
criminal colour by the respondent No.4,
No.4 to exert pressure upon the petitioners.
Moreso,
o, the Hon’ble Supreme Court vide order dated 08.05.2017 passed in a
litigation with HUDCO, had specifically observed that respondent No.4 had
remedy of recovery of loan amount. It is argued that when civil remedy for
recovery of the loan amount had been available
available with the respondent No.4, as
such, it is apparent that the criminal proceedings have been initiated in a matter
which is essentially of civil nature to abuse the process of the Court and hence
the same are not maintainable.
7. It is further argued
ed by learned Senior counsel for the petitioners that
the allegations in the complaint do not show at all that there was any dishonest
intention since the very inception on the part of the petitioners to cheat the
respondent No.4. The loan transactions had
had been going on between them since
the year 2009. The loan availed in the year 2009
2009, had been duly repaid. Even
the loan amount of Rs.35 crores as availed in the year 2015 had also been repaid
to the extent of Rs.8,66,00,000/-.
Rs.8,66,00,000/ . The ingredients for commi
commission
ssion of offence of
cheating are not at all attracted since the allegations of dishonest or inducement
since the very beginning are lacking. To buttress his arguments, learned counsel
for the petitioner has placed reliance upon G. Sagar Suri and Another Vs. State
of UP and another (2000) 2 SCC 636, Indian Oil Corporation Vs. NEPC India
Ltd. (2006) 6 SCC 736, Paramjeet Batra Vs. State of Uttarakhand (2013) 11
SCC 673, Mahmood Ali and others Versus State of UP and others 2023 SCC
AMIT SHARMA
2026.04.02 14:14
I attest to the accuracy and
integrity of this order/judgment.
CRM-M-28636–2021 (O&M)
CRM-M-32624–2021 (O&M)
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OnLine
nLine SC 950, Chandran Ratnaswami Versus K.C. Palanisamy and others
2013 (6) SCC 740, Archana Rana Vs. State of UP (2021) 3 SCC 751, Vijay
Kumar Ghai and others Vs. State of West Bengal and others (2022) 7 SCC 124
and Vesa Holdings Private Limited Vs. State
State of Kerala (2015) 8 SCC 293.
8. Learned Senior counsel for the petitioner has further argued that
even the ingredients for commission of offence under Section 405
405, punishable
under Section 406 of IPC are not at all attracted in this case since there is nneither
either
any allegation that the petitioners were entrusted with any property belonging to
the respondent No.4 or they had converted the same to their own use while
having dominion over such property. It is argued that FIR under this Section is
therefore, liable
iable to be quashed. Reliance in this regard has been placed upon
State of Gujarat Vs. Jaswant Lal Nathalal (1968) 2 SCR 408 and Satish
Chandra Ratanlal Shah Vs. State of Gujarat and Another (2019) 9 SCC 148.
9. Learned Senior counsel for the petitioner has raised another
argument to the effect that the allegations in the FIR on the face of record do not
make out any case at all for commission of offences of forgery of any valuable
security
y for the purpose of cheating or use of any forged document punisha
punishable
ble
within the meaning of Sections 467, 468 and 471 of IPC and as such, no case for
taking cognizance
ance under the aforementioned sections and proceeding against the
petitioners, has been made out.
10. It is also argued by learned counsel for the petitioner
petitioners that
petitioner Sharmila Anand was not responsible for day
day-to-day
day conduct of the
AMIT SHARMA
2026.04.02 14:14
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integrity of this order/judgment.
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business of the Trusts. She had resigned from the Trusts way
way-back
back in the year
2016/2017. She was not the signatory to the agreement(s) executed between the
Trusts and the respondent
respondent No.4 and as such no vicarious liability could be
fastened upon her for commission of subject offences. To fortify this argument,
reliance has been placed upon SK Alagh Vs. State of UP and others (2008) 5
SCC 662 and Sunil Bharti Mittal Vs. CBI (2015)
(2015) 4 SCC 609.
11. Per contra, learned State counsel while relying upon the short reply
filed by way of affidavit and learned Senior counsel for the respondent No.4
No.4–
complainant while referring to the contents of the reply as filed by this
respondent, havee vehemently argued that the petition under Section 482 of the
Code is not maintainable at all since
since there is no exceptional or rrare circumstance
seeking intervention thereunder by this Court. It is submitted that after
conducting preliminary inquiry and finding that the allegations in the complaint
disclosed thee factum of commission of cognizable
cognizable offences by the petitioners,
recommendation
dation for registration of FIR had been made and the same has been
registered. The case is at its nascent stage. Two of the petitioners have not even
joined investigation and directly approached this Court within a period of 09
days of lodging of the FIR.
FIR A Special Investigation Team (SIT) had been
constituted by the orders of the Commissioner of Police, Gurugram on
20.07.2021. The petitioners were sent notices to join the preliminary inquiry but
they did not come forward. The objections are prematur
premature.
e. There is nothing to
show that the investigation has not been conducted in a proper manner
manner.
AMIT SHARMA
2026.04.02 14:14
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integrity of this order/judgment.
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12. It is further argued that the criminal proceedings cannot be scuttled
at the initial stage. The allegations make out a prima facie case for commission
of cognizable
ognizable offences as against the petitioners. This Court cannot embark
upon inquiry as to the reliability or genuineness of the allegations. The merits of
the allegations also cannot be gone into at this stage. It is, thus,, argued that the
Investigating
g Agency deserves to be permitted to investigate the allegations in
the FIR and no ground for allowing the petitions
petitions is made out. Reliance has been
placed by learned counsel for respondent No.4 upon Neeharika Infrastructure
Pvt. Ltd. Vs. State of Maharashtra
Maharashtra (2021) SCC OnLine SC 315, Jhandu
Pharmaceutical Works Limited Versus Mohammad SharafulHaque (2005) 1
SCC 122,, Skoda Auto Volkswagen India Private Limited V. State of Uttar
Pradesh, 2020 SCC OnLine SC 958, Kaptan Singh Vs. State of UP (2021) 9
SCC 35 and
d Ram Babu Vs. State of MP (2009) 7 SCC 194
194,, State of
Maharashtra Vs. Ishwar Piraji Kalpatri (1996) 1 SCC 452 and State of
Chhattisgarh and another Vs. Aman Kumar Singh and others (2023) 6 SCC
559,, Kaushik Chatterjee V. State of Haryana and Others (2020) 110
0 SCC 92,
Asit Bhattacharjee V. Hanuman Parsad Ojha (2007) 5 SCC 786, Satvinder
Kaur Vs. State (Government of NCT, Delhi) and another (1999) 8 SCC 728
and KV Rajendra Vs. Superintendent of Police, SBCID, South Zone, Chennai
(2013) 2 SCC 480.
13. It is further argued that the allegations prima facie make out a case
to show that there existed fraudulent and dishonest intention on the part of the
petitioners while executing agreement dated 18.03.2015 in favour of respondent
AMIT SHARMA
2026.04.02 14:14
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integrity of this order/judgment.
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No.4 and while availing loan
lo to the tune of Rs.35 Crores since a material fact
was concealed that qua 21 acres out of 63.45 acres of land which was kept under
second charge in favour of respondent No.4, an agreement to sell had already
been executed in favour of SGS Constructions. Despite the fact that the
obligation arising out of the contract was
was of civil nature, still existence of
element of cheating is prima facie made out and therefore
therefore, it is open for the
respondent No.4 who is a party to the contract to prosecute other side ffor
or
offences alleged. It is, hence, argued that since a case for commission of
cognizable offences is made out, as such no ground for quashing of FIR is made
out. In support of this contention, learned Senior counsel for the respondent
No.4 has placed reliance
rel upon Dr. Lakshman V. State of Karnataka (2019) 9
SCC 677.
14. This Court has heard the rival submissions made by learned counsel
for the parties at considerable length.
15. On considering the contentions as raised by both the sides, the first
ground
d that this Court is called upon to answer in view of the pleas raised by
learned senior counsel for the petitioners is, whether and to what extent
extent, would a
Court exercising powers under Section 482 of Cr.P.C., be justified to quash an
FIR while the Police embarks on an investigation against a person named as
accused therein. At the outset, it would be proper to mention that the Hon’ble
Supreme Court in a celebrated judgment cited as State of Haryana Vs. Bhajan
335 has laid down thee following principles giving the
Lal 1992 Supp. (1) SCC 335,
AMIT SHARMA
2026.04.02 14:14
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integrity of this order/judgment.
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categories of cases by way of illustrations wherein powers under Section 482 of
Cr.P.C. can be exercised either to prevent abuse of process of Court or to secure
the ends of justice. Some of these guidelines are mentione
mentioned as hereunder :-
(a) where the allegations made in the First Information Report or
the complaint, even if they are taken at their face value and
accepted in their entirety do not prima facie constitute any
offence or make out a case against the accused;
(b) where the allegations in the First Information Report and
other materials, if any, accompanying the F.I.R. do not disclose a
cognizable offence, justifying an investigation by police officers
under Section 156(1) of the Code except under an order of a
Magistrate within the purview of Section 155(2) of the Code;
(c) where the uncontroverted allegations made in the FIR or
‘complaint and the evidence collected in support of the same do
not disclose the commission of any offence and make out a case
agains the accused;
against
(d) where the allegations in the FIR do not constitute a
cognizable offence but constitute only a non
non-cognizable
cognizable offence,
no investigation is permitted by a police officer without an order
of a Magistrate as contemplated under Section 155(2
155(2)) of the
Code;
(e) where the allegations made in the FIR or complaint are so
absurd and inherently improbable on the basis of which no
prudent person can ever reach a just conclusion that there is
sufficient ground for proceeding against the accused;
(f) where there is an express legal bar engrafted in any of the
provisions of the Code or the concerned Act (under which a
AMIT SHARMA
2026.04.02 14:14
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integrity of this order/judgment.
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criminal proceeding is instituted) to the institution and
continuance of the proceedings and/or where there is a specific
provision in the
the Code or the concerned Act, providing efficacious
redress for the grievance of the aggrieved party;
(g) where a criminal proceeding is manifestly attended with mala
fide and/or where the proceeding is maliciously instituted with an
ulterior motive for wreaking
wreaking vengeance on the accused and with
a view to spite him due to private and personal grudge.
16. In Neeharika Infrastructure Private Limited (supra), the Hon’ble
Supreme Court has observed as follows :-
:
i) Police has the statutory right and duty under the
relevant provisions of the Code of Criminal Procedure
contained in Chapter XIV of the Code to investigate into a
cognizable offence;
ii) Courts would not thwart any investigation into the
cognizable offences;
iii) It is only in cases where no cog
cognizable
nizable offence or
offence of any kind is disclosed in the first information report
that the Court will not permit an investigation to go on;
iv) The power of quashing should be exercised sparingly
with circumspection, as it has been observed, in the ‘rar
‘rarest
est of
rare cases (not to be confused with the formation in the
context of death penalty).
v) While examining an FIR/complaint, quashing of which
is sought, the court cannot embark upon an enquiry as to theAMIT SHARMA
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integrity of this order/judgment.
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reliability or genuineness or otherwise of the aallegations
llegations
made in the FIR/complaint;
vi) Criminal proceedings ought not to be scuttled at the
initial stage;
vii) Quashing of a complaint/FIR should be an exception
rather than an ordinary rule;
viii) Ordinarily, the courts are barred from usurping the
jurisdiction of the police, since the two organs of the State
operate in two specific spheres of activities and one ought not
to tread over the other sphere;
ix) The functions of the judiciary and the police are
complementary, not overlapping;
x) Save inn exceptional cases where non
non-interference
interference
would result in miscarriage of justice, the Court and the
judicial process should not interfere at the stage of
investigation of offences;
xi) Extraordinary and inherent powers of the Court do not
confer an arbitrary
rary jurisdiction on the Court to act according
to its whims or caprice;
xii) The first information report is not an encyclopaedia
which must disclose all facts and details relating to the
offence reported. Therefore, when the investigation by the
police is in progress, the court should not go into the merits of
the allegations in the FIR, Police must be permitted to
complete the investigation. It would be premature to
pronounce the conclusion based on hazy facts that the
AMIT SHARMA
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integrity of this order/judgment.
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complaint/FIR does not deserve to be investigated or that it
amounts to abuse of process of law. After investigation, if the
investigating officer finds that there is no substance in the
application made by the complainant, the investigating officer
may file an appropriate report/summary bbefore
efore the learned
Magistrate which may be considered by the learned
Magistrate in accordance with the known procedure;
xiii) The power under Section 482 Cr. P.C. is very wide,
but conferment of wide power requires the court to be more
cautious. It casts an
n onerous and more diligent duty on the
court;
xiv) However, at the same time, the court, if it thinks fit,
regard being had to the parameters of quashing and the self –
restraint imposed by law, more particularly the parameters
laid down by this Court in the cases of R.P. Kapur (supra)
and BhajanLal (supra), has the jurisdiction to quash the
FIR/complaint;
xv) When a prayer for quashing the FIR is made by the
alleged accused and the court when it exercises the power
under Section 482 Cr. P.C., only has to consider whether the
allegations in the FIR disclose commission of a cognizable
offence or not. The court is not required to consider on merits
whether or not the merits of the allegations make out a
cognizable offence and the court has to permit the
investigating
stigating agency/police to investigate the allegations in
the FIR;
17. In Kaptan Singh’s case (supra), it was observed by Hon’ble
Supreme Court as under :-
AMIT SHARMA
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integrity of this order/judgment.
CRM-M-28636–2021 (O&M)
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At the outset, it is required to be noted that in the present case
case, theHigh Court in exercise of powers under Section 482 CrPC has
quashed the criminal proceedings for the offences under Sections
147, 148, 149, 406, 329 and 386 IPC. It is required to be noted that
when the High Court in exercise of powers under Section 482 CrPC
quashed the criminal proceedings,
proceedings, by the time the investigatingofficer after recording the statement of the witnesses, statement of
the complainant and collecting the evidence from the incident place
and after taking statement of the independent witnesses and even
statement of the accused persons, has filed the charge
charge-sheet
sheet beforethe learned Magistrate for the offences under Sections 147, 148,
149, 406, 329 and 386 IPC and even the learned Magistrate also
took the cognizance.
cognizance. From the impugned judgment and order
passed by the High
High Court, it does not appear that the High Courttook into consideration the material collected during the
investigation/inquiry and even the statements recorded. If the
petition under Section 482 CrPC was at the stage of FIR in that
case the allegations in the FIR/complaint only are required to be
considered and whether a cognizable offence is disclosed or not is
required to be considered. However, thereafter when the statements
are recorded, evidence is collected and the charge
charge-sheet
sheet is filedafter conclusion
conclusion of the investigation/inquiry the matter stands ondifferent footing and the Court is required to consider the
AMIT SHARMA
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CRM-M-32887–2021 (O&M) 16material/evidence collected during the investigation. Even at this
stage also, as observed and held by this Court in a catena of
decisions, the High Court is not required to go into the merits of the
allegations and/or enter into the merits of the case as if the High
Court is exercising the appellate jurisdiction and/or conducting the
trial. As held by this Court in Dineshbhai Chandubhai Patel
Patel, inorder to examine as to whether factual contents of FIR disclose any
cognizable offence or not, the High Court cannot act like the
investigating agency nor can exercise the powers like an appellate
court. It is further observed and held that that questi
question
on is requiredto be examined keeping in view, the contents of FIR and prima facie
material, if any, requiring no proof. At such stage, the High Court
cannot appreciate evidence nor can it draw its own inferences from
contents of FIR and material relied on
on.. It is further observed it ismore so, when the material relied on is disputed. It is further
observed that in such a situation, it becomes the job of the
investigating authority at such stage to probe and then of the court
to examine questions once the charge
charge-sheet
sheet is filed along with suchmaterial as to, how far and to what extent reliance can be placed
on such material”
18. In Ram Babu‘s case (supra), the Hon’ble Supreme Court had
observed that the question to be considered while exercising power under
Section 482 of Cr.P.C. for quashing a complaint/FIR is not whether there was
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any truth in the allegations made but the question is whether on the basis of the
allegations, a cognizable offence or offences is made out or not?
19. On going through the principles
principles of law as laid down in the
aforementioned cases, it is apparent that powers under Section 482 of the Code
for quashing of FIR at the initial stages are to be exercised in exceptional and
extra-ordinary
ordinary circumstances and the High Court at this stage is required to
consider only the allegations in the FIR and as to whether a cognizable offence
is disclosed or not?
20. Now it is to be seen as to whether the allegations in the FIR make
out a case for commission of any cognizable offence(s) or not? As per the
allegations, the Trusts operated by the petitioners availed loan facility to the tune
of Rs.35 Crores from the complainant company as on 18.03.2015 against certain
securities. The first security was by way of second charge created over land
measuring
ring 63.45 acres of land owned by the Trusts. The fact that HUDCO was
having first charge over land,
land was known to the respondent No.4 and had also
been incorporated in the written agreement. However, from the bare reading of
the allegations in the FIR, it has come on record, and it has also not been
categorically denied by the petitioners that as per the directions of the Hon’ble
Apex Court in some litigation, out of 63.45 acres of land, 42.845 acres of land of
the Trusts had been directed to be sold by HUDCO
HUDCO and the first charge qua the
remaining 20.605 acres of land was given to the respondent No.4 on intervention
application moved by the complainant, before the Hon’ble Supreme Court, but
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the said direction was withdrawn qua the 20.605 acres of land as an agreement
to sell was found to be executed in favour of above-mentioned M/s. SGS
Constructions in the year 2009 and sale deed was ordered to be registered in its
favour.
21. The fact that agreement in favour of SGS Constructions, was
executed way back in the year 2010, is not found mentioned in the loan
agreement dated 18.03.2015 executed with respondent No.4 and obviously,
bviously, the
same was concealed by the petitioners while creating second charge in respect of
the same property in favour of respondent No.4 w
which
hich clearly amounts to
suppression and misrepresentation of facts, thereby inducing the respondent
No.1 to part with a sum of Rs.35 crores which alongwith interest has now been
increased to manifold amount. If the allegations in the FIR are to be believe
believed
d
which is a norm that is to be followed at this stage, then the same reveal
commission of cognizable offence under Section 420 by the petitioner. So far as
the allegations that the petitioners in violation of the undertakings given by
them, had opened new
new bank accounts to divert the revenue/deposit received
from the Trusts to some other sources and apparently to misappropriate them
and had not kept any balance in the bank accounts qua which undertaking was
given, also show their dishonest intention and thi
thiss fact also lends credence to the
allegations made by respondent No.4 that petitioners by misrepresentation and
deception had opened new accounts with regard to revenue of the Trusts to
avoid repayment to the respondent No.4. The intention to deceive the
respondent No.4 on the part of the petitioners since the very inception is
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therefore, apparent from the record, thereby showing a prima facie case for
commission of offence punishable under Section 420 of IPC.
22. Since the petitioners have been booked for commission of offences
punishable under Sections 406, 467, 468 and 471 of IPC as well, it is imperative
to examine the ingredients of these offences
offences. Essential ingredients for
commission of offence punishable under Section 405 i.e. the offence of criminal
minal
breach of trust are :-
:
(1) The accused must be entrusted with the property or with
dominion over it,
(2) The person so entrusted must use that property, or;
(3) The accused must dishonestly use or dispose of that property
or wilfully suffer any other person to do so in violation,
(a) of any direction of law prescribing the mode in which such
trust is to be discharged, or;
(b) of any legal contract made touching the discharge of such
trust.
23. Section 467 of the IPC deals with forgery of valuable se
security
curity etc..
The ingredients for commission of offence of forgery as defined under Section
463 of IPC are :–
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(i) the making of a false document or part of it, and
(ii) such making should be with such intention as is specified in
the Section viz. (a) to cause damag
damagee or injury to (i) thepublic, or (ii) any person or (b) to support any claim or title,
or (c) to cause any person to part with property, or (d) to
cause any person to enter into any express or implied
contract, or (e) to commit fraud or that fraud may be
committed
24. Section 468 of IPC provides punish
punishment
ment for offence of forgerycommitted for the purpose of cheating. For conviction of a person under this
Section, it must be proved that the accused forged some document with the
intention of using the same for the purpose of cheating.
25. The essential ingredients for commission of offence punishable
under Section 471 of IPC are :
(i) Fraudulent or dishonest use of document as genuine
genuine;
(ii) Knowledge or reasonable belief on the part of the person
using that document
ument that it is a forged one.
26. It is apparent from the above that to constitute an offence of
criminal breach of trust, entrustment of property is pivotal whereas to constitute
offences of forgery or use of forged document, making of a false docume
document
nt with
intention to cause damage or injury is must. In the instant case, however, on
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going through the allegations in the FIR, this Court is of the opinion that there
are no allegations of entrustment of any property by the complainant by either of
the petitioners.
etitioners. Further, the allegations also do not make out any prima facie
case of making of a false document by either of the petitioners with intent to
commit offence of forgery or use of any such document as such, at this stage it
cannot be stated that the ingredients of aforementioned offenc
offences
es are attracted in
this case though,
hough, it may be a question of further investigation. Nonetheless
Nonetheless,,
since this Court has opined that the allegations prima facie reveal factum of
commission of offence of cheating,
cheating which
ich too is a cognizable offence
offence, hence, it
cannot be stated that no cognizable offence is made out. It is well
well-settled
settled
proposition of law that if from the allegations in the FIR, the factum of
commission of a cognizable offence which only sets in motion tthe
he investigating
agency to collect all necessary evidence and then to take action in accordance
with law, is disclosed, then in such a situation,
situation, the investigating officer has no
option but to proceed to investigate the case either himself or to depute any other
competent officer to conduct the investigation. The question as to whether the
report is true, whether it discloses full details regarding the manner of
occurrence, whether the accused is named and whether there is sufficient
evidence to support the
the allegations are matters which are alien to the
consideration of the question whether the report discloses the commission of a
cognizable offence. Even if the information does not give full details regarding
these matters, the Investigating Officer is not
not absolved of his duty to investigate
the case and discover the true facts, if he can. Reliance in this regard can be
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placed upon CBI Vs. Tappan Kumar Singh (2003) 6 SCC 175, wherein, it was
held so.
27. Learned Senior counsel for the petitioner
petitioners has laid much stress on
the argument that the properties of the Trusts are existing at Ghaziabad, the
cause of action
tion if any had accrued there, none
none of the peti
petitioners
tioners is resident of
Gurugram and no
no offence took place within the jurisdiction of Police St
Station,
ation,
DLF Gurugram but the FIR has been lodged therein only for the benefit of the
respondent No.4. It is argued that since the Police Station DLF Gurugram has
no territorial jurisdiction in the matter, hence the Investigating Officer of this
Police Station
ion has no power to investigate as well. To buttress his arguments,
learned Senior counsel placed reliance upon Manoj Kumar Sharma & Ors. Vs.
State of Chhattisgarh & Anr. (2016) 9 SCC 1 and Vijay Kumar Ghai and
others Vs. State of West Bengal and others (2022)
(2022) 7 SCC 124.
28. In Manoj Kumar Sharma’s case (supra)
(supra), the contention raised by
the accused was that the concerned Police Station had no territorial jurisdiction
to investigate the matter alleging commission of offences under Section 304
304-B
B
and 498A of IPC because none of the part of the alleged offence was committed
within the territorial jurisdiction of that police station. The Hon’ble Apex Court
vide referring to the provisions of Sections 177 and 178 of the Cr.P.C. observed
that when it is uncertain in which of several local areas an offence is committed
committed,,
or where the offence is committed in one local area
area,, the said offence can be
inquired into or tried by a Court having jurisdiction over any such local area. It
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was observed also that at the stage of investigation, it cannot be held that the
SHO does not have territorial jurisdiction to investigate the crime. After the
investigation is over,
over if the officer arrives at a conclusion that the cause of action
for lodging the FIR has not arisen within his territorial jurisdiction, then he will
forward the case to the Magistrate concerned empowered to take cognizance of
the matter.
29. In Vijay Kumar Ghai’s case (supra)
(supra),, the origin of the dispute
emanating from an investment
investment made by the complainant finally culminated into
a MoU based on which the complainant had filed 03 complaints, 02 at Delhi and
01 at Calcutta. The FIR was lodged at Delhi. It was observed that jurisdiction
had been created in Delhi. The order passed
passed by the High Court of Calcutta
thereby declining to quash the FIR was set aside.
30. It is well settled proposition of law that question of territorial
jurisdiction in criminal cases revolves the place of commission of offence, it was
observed by the Hon’ble Supreme Court in Kaushik Chatterjee’s case (supra),
that the question of territorial
territorial jurisdiction in criminal cases revolves around the
place of commission of the offence, or place where the consequence of an act,
both of which constitute an offence, ensues or the place where the accused or
victim was found or the place where the property
property in respect of which the offence
was committed, was found or the place where the property forming the subject
matter of an offence was required to be returned or accounted for etc. In Asit
Bhattacharjeet‘s case (supra) while considering the provisions ooff Sections 178,
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181(4) and 156(3) of the Cr.P.C., the Hon’ble Supreme Court observed that
commission of even a part of offence within the jurisdiction of the
Court/Magistrate concerned, is sufficient for exercising of jurisdiction by the
said Court, Magistrate
Magistrate in relation to the offence committed. .
31. The case as set up by the respondent No.4 complainant is that since
negotiations and conversations qua availing of loan and repayment of the same
had taken place in the corporate office of the responde
respondent No.4-Company
Company which
is situated at Gurugram within the jurisdiction of the concerned Police Station,
hence it has jurisdiction to conduct investigation in the matter. This Court draws
reliance upon Satwinder Kaur‘s case (supra), wherein it was observed by
Hon’ble Supreme Court that at the stage of the investigation, the material
collected by an Investigating Officer cannot be judicially scrutinized for arriving
at a conclusion that the police station officer of a particular police station would
have no territorial
erritorial jurisdiction. It has to be stated that in view of Section 178(C)
of Cr.P.C., when it is uncertain in which of the several local areas an offence
was committed, or where it consists of several acts done in different areas, the
said offence can be
be inquired into or tried by a Court having jurisdiction over any
of the local areas. As per Section 156(2) an embargo is contained that no
proceeding of a police officer shall be challenged on the ground that he has no
power to investigate. In the opinionn of this Court also, the situs
itus or part of
offence cannot be unilaterally determined without completion of investigation
by the Police. In this regard, reliance is placed upon Rajiv Modi Vs. Sanjay
241 wherein it was observed by Hon’ble Supreme Court
Jain (2009) 13 SCC 241,
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that from the allegations made in the complaint, if prima facie opinion is taken
that the whole or part of the cause of action has arisen in its jurisdiction this
Court can certain taken cognizance of the complaint. As such, the arguments so
raised cannot be accepted.
32. It is also important to note that the FIR was registered on
17.7.2021. The first petition was filed on 26.07.2021 i.e. within 9 days of
registration of FIR by the two petitioners and the investig
investigation
ation proceedings were
ordered to be stayed by passing an order that no coercive step shall be taken
against them. Two of the petitioners had not even joined investigation. In
(supra),, the Hon’ble Supreme
Jhandu Pharmaceutical Works Limited case (supra)
Court observed
served as under :-
:
11. …the powers possessed by the High Court under Section
482of the Code are very wide and the very plenitude of the
power requires great caution in its exercise. Court must be
careful to see that its decision in exercise of this power iiss
based on sound principles. The inherent power should not be
exercised to stiflee a legitimate prosecution. The High Court
being the highest court of a State should normally refrain
from giving a prima facie decision in a case where the
entire facts are incomplete
complete and hazy, more so when the
evidence has not been collected and produced before the
court and the issues involved, whether factual or legal, are
of magnitude and cannot be seen in their true perspective
without sufficient material, of course, no ha
hard-and-fast
fast rule
can be laid down in regard to cases in which the High
Court will exercise its extraordinary jurisdiction ofAMIT SHARMA
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quashing the proceeding at any stage. It would not be
proper
per for the High Court to analyz
analyzee the case of the
complainant in the light of all probabilities in order to
determine whether a conviction would be sustainable and on
such premise arrive at a conclusion that the proceedings are
to be quashed. It would be erroneous to assess the material
before it and conclude that the complaint cannot be
proceeded with. In a proceeding instituted on complaint,
exercise of the inherent powers to quash the proceedings is
called for only in a case where the complaint does not
disclose any offence or is frivolous, vexatious or oppressive.
If the allegations
gations set out in the complaint do not constitute
the offence of which cognizance has been taken by the
Magistrate, it is open to the High Court to quash the same in
exercise of the inherent powers under Section 482 of the
Code. It is not, however, necess
necessary
ary that thereshould be
meticulous analysis of the case before the trial to find out
whether the case would end in conviction or acquittal. The
complaint has to be read as a whole. If it appears that on
consideration of the allegations in the light of the statement
made on oath of the complainant that the ingredients of the
offence or offences are disclosed and there is no material to
show that the complaint is mala fide, frivolous or vexatious,
in that event there would be no justification for interference
by the High Court. When an information is lodged at the
police station and an offence is registered, then the mala
fides of the informant would be of secondary importance. It
is the material collected during the investigation and
evidence led in court which
ch decides the fate of the accused
person. The allegations of mala fides against the informant
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are of no consequence andcannot by themselves be the basis
for quashing the proceedings.
s.
33. In Skoda Auto Volkswagen India Private Limited case (supra), the
following observations were made by Hon’ble Supreme Court ::-
“41. It is needless to point out that ever since the decision
of the Privy Council in King Emperor v. KhwajaNazir
Ahmed AIR 1945 PC 18,, the law is well settled that Courts
would not thwart any investigation.
nvestigation. It is only in cases where
no cognizable offence or offence of any kind is disclosed in
the first Information report that the Court will not permit an
investigation to go on. As cautioned by this Court in State of
Supp (1) SCC 335, the power of
Haryana v. BhajanLal 1992 Sup
quashing should be exercised very sparingly and with
circumspection and that too in the rarest of rare cases. While
examining a complaint, the quashing of which is sought, the
Court cannot embark upon an enquiry as to the reliab
reliability
ility or
genuineness or otherwise
therwise of the allegations made in the FIR
or in the complaint. In S.M. Datta v. State of Gujarat (2001)
7 SCC 659 this Court again cautioned that criminal
proceedings ought not to be scuttled at the initial stage.
Quashing of a complaint
omplaint should rather be an exception and a
rarity than an ordinary rule. In S.M. Datta (supra),, this Court
held that if a perusal of the first information report leads to
disclosure of an offence even broadly, law courts are barred
from-usurping the jurisdiction
sdiction of the police, since the two
organs of the State operate in two specific spheres of
activities and one ought not to tread over the other sphere.”
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34. Reliance can also be placed upon Aman Kumar Singh’s case
(supra),, wherein the Hon’ble Supreme Court had observed that it being the
settled principle of law that when an investigation is yet to start, there should be
no scrutiny to what extent the allegations in an FIR are probable, reliable or
genuine and also that an First Information Report can be registered merely on
suspicion. It was also observed that viewed through the prism of gravity of
allegations, a First Information Report based on “probability” of a crime have
not been committed, would obviously be of a hig
higher
her degree as compared to a
FIR lodged on merely suspicion that a crime has been committed.
35. In State of Maharashtra Versus Arun Gulab Gawali (2010) 9
SCC,, the Hon’ble Supreme Court has held as under ::-
“13.
13. The power of quashing criminal proceedings has to be
exercised very sparingly and with circumspection and that
too in the rarest of rare cases and the Court cannot be
justified in embarking upon an enquiry as to the reliability or
genuineness or otherwise of allegations made in the
FIR/complaint, unless the allegations are so patently absurd
and inherently improbable so that no prudent person can
ever reach such a conclusion. The extraordinary and
inherent powers of the Court do not confer an arbitrary
jurisdiction on the Court to act according to its whims or
caprice. However, the Court, under its inherent powers, can
neither intervene at an uncalled for stage nor can it “soft
“soft–
pedal the course of justice” at a crucial stage of
Investigation/proceedings. The provisions of Articles 226,
227 of the Constitution
nstitution of India and Section 482 of the CodeAMIT SHARMA
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are a device to advance justice and not to frustrate it. The
power of judicial review is discretionary, however, it must be
exercised to prevent the miscarriage ooff justice and for
correcting somee grave errors and to ensure that stream of
administration of justice remains clean and pure. However,
there are no limits of power of the Court, but the more the
power, the more due care and caution is to be ex
exercised
ercised in
invoking these powers
36. In view of the ratio of law as laid down in the above cited cases, it
is explicit that though this Court has extra-ordinary
extra ordinary and inherent powers under
Section 482 of the Code. However, under these powers, the Court can neither
intervene at an uncalled for stage nor can it soft
soft-pedal
pedal the course of justice at a
crucial stage of Investigation/proceedings unless a case of gross abuse of power
is made out against those Incharge of investigation. Otherwise, the High Court
should
ould be loath to interfere at early/premature stage of investigation. Reliance
in this context can be placed upon State of Orissa V. Ujjal Kumar Burdhan
(2012) 4 SCC 547 wherein similar observations were made.
37. Further, so far as the argument that the dispute between the parties
is of civil nature and hence no criminal proceeding could be initiated, is
concerned, it may be stated that the well settled proposition of law is that civil
and criminal remedies are not mutually inclusive but are co
co-extensive
extensive and
essentially independent in their content and sequence. Pendency of a civil
litigation cannot act as a bar to the investigation of a cognizable offence. Civil
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and criminal proceedings can proceed simultaneously
simultaneously.. Reliance in this context
can be placed upon to the observations made by Hon’ble Supreme Court in Syed
Askar Hadi Ali Augusten Imam Vs. Delhi Administration (2009) 5 SCC 528,
wherein it was observed that it is trite law that mere institution of a civil
proceeding
roceeding is not a ground for quashing the FIR or to hold that the dispute is
merely a civil dispute. Simply because there is a remedy provided for breach of
contract, that does not by itself clothe the Court to conclude that civil remedy is
the only remedy,
dy, and the initiation of criminal proceedings in any manner, will
be an abuse of the process of the Court. Simply because the offence was
committed during a commercial transaction, it would not be sufficient to hold
that the complaint did not warrant further
further investigation and if necessary, a trial.
Reliance in this context can also be placed upon K. Jagdish Vs. Udaya Kumar
GS and Another (2020) 14 SCC 552, Rajesh Bajaj Vs. State of NCT of Delhi
and Others AIR (1999) SC 1216 and Lee Kun Hee Vs. State of UP (2012) 3
SCC 132 wherein similar observations were made.
38. As per the discussion made above, a prima facie case for presuming
that the petitioners had dishonest intent since the very inception of execution of
the agreement dated 08.03.2025, hence, despite
despite the fact that the transaction
between the parties was commercial/civil in nature, it cannot be stated that the
criminal proceedings cannot be initiated. So far as the argument as raised by the
petitioners that only petitioner P. Paramsivam Mahalinga
Mahalingam
m was signatory to the
agreement and the argument that petitioner Sharmila Anand had resigned as a
trustee way-back
back in the year 2016/2017 and hence no vicarious liability could be
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fastened upon them is concerned, in S.K. Alagh’s case (supra), which has been
en
relied upon by the petitioners, the accused were booked under Section 406 of the
IPC. In the peculiar circumstances of the case, it was held that vicarious liability
could not be fastened upon MD, Director or other officers of a company and the
persons incharge of the affairs of the company and in control thereof are
vicariously liable. In Sunil Bharti Mittal‘s case (supra), it was observed by
Hon’ble Supreme Court that when a company is accused, its Directors can be
roped in only when there is sufficient
sufficient incriminating evidence against them
coupled with criminal intent or the statutory regime attracts the doctrine of
vicarious liability. The petitioners were admittedly trustees of the Trusts at the
time of execution of agreement dated 08.03.2015. At tthis
his stage, neither the
merits of the allegations nor the contention that one or the other of the petitioner
were not involved in day-to-day
day day conduct of business of the Trusts can
cannot
not be
considered by this Court.
Court. Investigation has to be conducted by tthe
he investigating
agency also to that extent, as such, on the basis of the plea so raised, it cannot be
stated that the FIR has become liable to be quashed.
39. With regard to the prayer made by the petitioner Santosh
Mahalingam for transfer of investigation
investigation to CBI or some other independent
agency, it may be mentioned that the well settled proposition of law is that the
investigation can be transferred from State Police to CBI only in rare and
exceptional cases,
cases where it is necessary to do justice and ins
instil
til confidence in
investigation, where it is necessary for a fair, honest and complete investigation;
where investigation by State lacks credibility; where the
he State officials and
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authorities are involved and are likely to influence investigation and wher
wheree
investigation is biased and where the incident may have national and
international ramifications
ramification or where such an order may be necessary for doing
complete justice and enforcing fundamental rights. Reliance in this context can
be made to the observations made in K.V. Rajendran’s case (supra).
40. Reliance can also be placed upon Secretary Minor Irrigation and
Rural Engineering Services, UP Vs. Sahngoo Ram Arya (2002) 5 SCC 521
521,,
wherein it was observed by the Hon’ble Supreme Court that an order directing
an enquiry by the CBI should be passed only when the High Court, after
considering the material on record, comes to the conclusion that such material
does not disclose a prima facie
facie case calling for investigation by the CBI or any
other similar agency. Reference can also be made to CBI Vs. Rajesh Gandhi;
1997 CRI-LJ 63, it was observed that no one can insist that an offence be
LJ 63,
investigated by a particular agency. An aggrieved per
person
son can only claim that the
offence be investigated properly, but he has no right to claim that it be
investigated by any particular agency of his choice.
41. In State of WB Vs. Committee for Protection of Democratic
401 a Constitution
Rights (2010) 2 SCC Cr. 401, itution Bench of Hon’ble Supreme Court
observed that the extra-ordinary
extra ordinary power for sending the matter to CBI must be
exercised sparingly, cautiously and in exceptional circumstances where it
becomes necessary to provide credibility and instil confidence in investigations
or where the incident may have national and inter
inter-national
national ramifications or
AMIT SHARMA
2026.04.02 14:14
I attest to the accuracy and
integrity of this order/judgment.
CRM-M-28636–2021 (O&M)
CRM-M-32624–2021 (O&M)
CRM-M-32887–2021 (O&M) 33
where such an order may be necessary for doing complete justice and enforcing
the fundamental rights.
rights. Reliance can also be placed upon Narmada Bai Vs.
rat (2011) 5 SCC 179, wherein it was observed that the accused
State of Gujarat
persons do not have a say in the appointment of investigating agency and cannot
choose as to which investigating agency must investigate the alleged offences
committed by them. The petitioner has only raised bald allegations against the
investigation agency.
agency Noo police officer has been named
named. The allegations do nott
show that any su
uch exceptional circumstance iss made out that justifies transferr
of case to CBI. None of the officers
officer or other party against whom allegations are
levelled, are being named. The accused cannot
cannot have any say in the matter of
appointment of investigating agency nor he can insist that an offence be
investigated
stigated by a particular agency. As
As such this Court finds no reason to acceptt
the contention raaised by the petitioner Santosh M
Mahalingam.
42. As a sequel to the discussion as made above, tthis
his Court is of the
considered opinion that since the investigation of this case was at its very initial
stage when the petitions had been filed and as the allegations levelled in the FIR,
prima facie disclose a case for commission of a cognizable offence, ass such no
ground for thwarting the investigation and quashing of FIR is made out. In this
context, this Court also finds support from the observations made by the
Hon’ble Supreme Court in Union of India V. Prakash P. Hinduja, (2003) 6
SCC 195, wherein it was observed that the legal position is absolutely clear and
also settled by the judicial authorities that the Court would not interfere with the
investigation or during the course of investigation which would mean from the
AMIT SHARMA
2026.04.02 14:14
I attest to the accuracy and
integrity of this order/judgment.
CRM-M-28636–2021 (O&M)
CRM-M-32624–2021 (O&M)
CRM-M-32887–2021 (O&M) 34
time of the lodging of the first information report till the submission of the
report by the officer in charge of the police station in Court under Section 173(2)
Cr.P.C., this field being exclusively reserved for the investigating agency. The
he
remaining citations of law which have
have been relied upon by learned Senior
counsel for the petitioners are not applicable to the peculiar facts and
circumstances of this case and hence no reliance can be placed upon them.
43. Having noticed the facts and circumstances of the case and the le
legal
gal
position as explained above, as well as the parameters in which an FIR can be
quashed as expounded by Hon’ble Apex Court from time to time, this Court
finds no compelling ground for quashing of the FIR, at this stage is made out,
neither any ground for transferring of the investigation to the CBI is made out.
Accordingly, the petitions are dismissed.
44. It is, however, clarified that the observations made above shall not
be construed as an expression of opinion of this Court on the merits of the case
and shall not influence the outcome of the trial in any manner.
45. A photocopy of this order be placed on record of the connected
file(s).
(MANISHA BATRA)
JUDGE
02.04.2026 Whether speaking/reasoned:- Yes/No
Amit Sharma Whether reportable:- Yes/No
AMIT SHARMA
2026.04.02 14:14
I attest to the accuracy and
integrity of this order/judgment.