Recourse to quashing of FIR has to be taken in rarest of rare cases, and this power should be used sparingly more so when investigation is at its initial stage: Delhi HC refuses to quash FIR against ATS Infrastructure and its Directors in alleged fraud case pertaining to real estate project in Greater Noida
Justice Swarana Kanta Sharma [01-07-2024]

Read Order: Ats Infrastructure Limited & Ors v. State Of Nct Of Delhi & Ors [DEL HC W.P.(CRL) 3729/2023 with W.P.(CRL) 3740/2023]

LE Correspondent

New Delhi, July 4, 2024: The Delhi High Court has dismissed petitions filed by ATS Infrastructure Limited and others including the Directors of the real estate firm seeking the quashing of an FIR registered against them for alleged offenses of criminal breach of trust, cheating, and criminal conspiracy.

A Single-Judge Bench of Justice Swarana Kanta Sharma observed that the investigation in the present case is at its initial stage and that the police after conducting preliminary enquiry had registered the FIR since prima facie, it appeared that cognizable offences were committed by the petitioners.

“The investigation is at a nascent stage and without investigation, it cannot be ascertained as to whether or not there was intention on part of the accused persons i.e. the petitioners to dupe the complainants of their hard-earned money on the pretext of providing higher returns through the buyback scheme,” the High Court observed.

The Court further observed that “As revealed from Status Report filed on record, there are other FIRs also registered against the petitioners, wherein similar allegations of duping the complainants under the pretext of buy back scheme have been levelled”.

Guided by the principles laid down by the Supreme Court in several judgements –

State Of Haryana  v. Chaudhari Bhajan Lal, Union Of India v. Prakash P. Hinduja, Skoda Auto Volkswagen India Private Limited v. The State Of Uttar Pradesh & Ors, M/s Neeharika Infrastructure Pvt. Ltd v. State of Maharashtra and others -- the High Court held that the FIR could not be quashed at this stage and that the police investigation would bring clarity to the matter, including whether any offenses were committed under the relevant sections of law.

“In all the aforesaid decisions, the Hon’ble Supreme Court has clearly laid down that the recourse to quashing of an FIR has to be taken in rarest of rare cases, and this power should be used sparingly moreso when the investigation of a case is at its initial stage,” the bench observed.

The court clarified that if no offenses were found to be committed, the police would be at liberty to file an appropriate report under Section 173 of the Code of Criminal Procedure.

The FIR in question was registered based on a complaint lodged by several investors who alleged that the accused, including ATS Infrastructure Limited, Domus Greens Private Limited, and their directors, had induced them to invest in a real estate project called 'ATS Dolce' in Greater Noida by presenting an attractive buy-back scheme.

The complainants alleged that the accused issued post-dated cheques as part of the scheme but later requested them not to deposit the cheques, citing financial instability. When the cheques were eventually deposited, they were dishonored due to account blocks or insufficient funds. The accused then allegedly refused to honor the agreement, causing significant financial losses to the complainants.

The petitioners had approached the High Court seeking quashing of the FIR, arguing that the dispute was purely civil in nature and that no criminal offenses were made out.