The Allahabad High Court has refused to quash an FIR lodged against former Uttar Pradesh MLC Haji Iqbal alias Bala in connection with an alleged ₹6.33 crore real estate fraud involving a Greater Noida plot. At the same time, the Court directed that the investigation against him be transferred from the Special Task Force (STF) to the Serious Fraud Investigation Office (SFIO), observing that the allegations formed part of a wider corporate fraud already being examined by the specialised agency.
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“Transfer of investigation in the impugned FIR qua the petitioner to the SFIO is the course that best serves the ends of justice for both parties. It preserves the integrity of the broader inquiry, avoids the risk of conflicting outcomes, and ensures that the complainant’s grievance is addressed within the framework of an investigation that already encompasses the scheme of which it forms a part.”
A Division Bench of Justice Chandra Dhari Singh and Justice Lakshmi Kant Shukla held that while the complainant’s individual grievance regarding the plot transaction could not be extinguished by quashing the FIR, permitting a parallel investigation by the STF would result in fragmentation of what was essentially a single and interconnected fraud scheme.
The case stemmed from allegations that the complainant invested ?6.33 crore in M/s Enchant Infrastructure Pvt. Ltd. for the development of a 12,500-square-metre plot in Greater Noida. According to the FIR, the promised development never took place, the Greater Noida Authority later cancelled the allotment owing to unpaid dues exceeding ₹29 crore, and the investment was allegedly siphoned off through a network of shell companies linked to the petitioner and his associates.
The petitioner argued that the allegations had already been investigated by the SFIO pursuant to directions of the Supreme Court, and that a fresh FIR amounted to an impermissible second investigation. The State countered that the FIR concerned a distinct instance of cheating suffered by an individual investor, which had not been examined in the SFIO proceedings.
Examining both proceedings, the High Court found substantial overlap between the entities, accused persons and alleged modus operandi. However, it noted that the complainant’s specific investment in Plot GH-02-D did not form part of the SFIO complaint. Quashing the FIR, therefore, would deprive the complainant of any criminal remedy.
The Court reiterated that the inherent power to quash criminal proceedings must be exercised sparingly and only in exceptional cases. Since the FIR disclosed cognisable offences, identified a specific transaction and quantified the alleged loss, it declined to interfere with the investigation at the threshold.
At the same time, the Bench held that the complainant’s allegations should be investigated by the SFIO as part of its ongoing probe into the broader fraud, directing the STF to transfer the case diary, witness statements, electronic records and all other investigative material relating to the petitioner to the specialised agency. It also permitted the SFIO to conduct further investigation and file a supplementary complaint before the Special Court, if warranted.
