Why Allahabad High Court Transferred Probe In ₹6.33 Crore Fraud FIR Against Former MLC Haji Iqbal From UP STF To SFIO

The Allahabad High Court on Thursday transferred an investigation from Uttar Pradesh Special Task Force (UP STF) to the Serious Fraud Investigation Office (SFIO) against former Member of Legislative Council (MLC) Haji Iqbal alias Bala in connection with an alleged ₹6.33 crore real estate fraud. A Bench of Justice Chandra Dhari Singh and Justice Lakshmi Kant Shukla also refused to quash the FIR, noting that doing so would leave the complainant remediless. "Where the allegations are specific, the offences are cognisable, and the accusations are not inherently improbable on their face, the criminal process must ordinarily be permitted to run its course. The power to quash is not to be used to stifle a legitimate prosecution at the threshold…", the Bench observed. Transferring the probe, the Court noted that the SFIO had already investigated a broader fraud involving Iqbal and a network of shell companies, and that the present FIR and the company named therein form part of the same network. The bench added that if the STF were permitted to continue a "parallel investigation" into the same corporate network that is already being probed by the SFIO and is now before a Special Court in Delhi, it would "fragment what is, in substance, a single and indivisible scheme of fraud". Allegations in brief Briefly put, one Naved Ahmad filed a complaint in 2023, alleging that between December 2013 and March 2014, he transferred ₹6.33 crore to M/S Enchant Infrastructure Pvt. Ltd. for the development of a real estate plot in Greater Noida. However, no construction activity was undertaken on the plot thereafter. The company also failed to keep up with instalment payments due to the Greater Noida Authority. Consequently, in August 2022, the Authority cancelled the allotment of the said plot, citing outstanding dues of around Rs 29 Crores, against which only around Rs. 4.5 Crores had been paid. Meanwhile, a petition was filed before the Supreme Court in 2015, raising concerns about alleged financial irregularities and shell company operations linked to the petitioner. The apex court directed the Ministry of Corporate Affairs to sanction an SFIO investigation into the affairs related to the petitioner. Upon completing its investigation, the SFIO filed a complaint before the Special Judge, Dwarka Court, New Delhi. Significantly, M/s Enchant Infrastructure Pvt. Ltd., the company at the centre of Naved Ahmad's FIR, was also named as an accused entity in the SFIO complaint. The SFIO complaint arrayed Iqbal as Accused No. 1 and identified him as the alleged “directing will and mind” of the group's operations.In fact, the SFIO's complaint reveals that a sum of INR 610.30 crore is alleged to have been systematically routed through 84 accused entities under investigation, each a shell company with no genuine operational activity, for the purpose of acquiring land, real estate, and sugar mills, and channelling funds to the Petitioner-Haji Iqbal's Abdul Waheed Educational and Charitable Trust. Arguments put forth In his quashing plea, the petitioner contended that the impugned FIR is nothing but a reiteration of the very allegations already investigated by the SFIO, and that a corporate fraud complaint has already been filed and is pending before a Special Court in New Delhi. He argued that the fresh IPC registration by the UP STF amounted to an impermissible parallel investigation into the same set of facts. In his defence, he asserted that he held no post or shareholding in M/s Enchant Infrastructure Pvt. Ltd. and the transactions in the Impugned FIR were entered into solely between the Complainant and the company's authorised signatory, Vinod Kumar. He stressed that no specific overt act, independent of the company's actions, has been attributed to the petitioner anywhere in the FIR On the other hand, the State opposed the plea, contending that the petitioner is not an ordinary accused but a former legislator who has been absconding abroad for a considerable period and is actively monitoring and operating a syndicate of white-collar crimes from abroad. The State argued that the SFIO investigation and the Impugned FIR are distinct in nature and cannot be treated as investigations into the same subject matter. Hence, he prayed for dismissal of the petition. High Court's observations At the outset, the bench noted that the SFIO had examined the entire architecture of the alleged fraud, i.e. the network of shell companies, the individual roles of the accused, and the criminal conspiracy that bound them together. "The SFIO complaint records that the petitioner's group operated through an extensive network of accused entities, spanning seven identified clusters, to accumulate and launder funds across activities ranging from fictitious share allotments to the acquisition of land, real estate, and sugar mills", the...

Why Allahabad High Court Transferred Probe In ₹6.33 Crore Fraud FIR Against Former MLC Haji Iqbal From UP STF To SFIO

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Why Allahabad High Court Transferred Probe In ₹6.33 Crore Fraud FIR Against Former MLC Haji Iqbal From UP STF To SFIO

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