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 Court further noted.

"The SFIO complaint and the impugned FIR, when read together, disclose a degree of congruence that is material to the adjudication of the present petition", the bench observed.

Against this backdrop, the Court concluded that the Impugned FIR names the petitioner in connection with the same companies and the same alleged modus operandi that form the subject matter of the SFIO complaint pending before the Special Court.

Furthermore, referring to Section 212(2) of the Companies Act, 2013, the bench noted that where the Central Government assigns an investigation to the SFIO, no other investigating agency shall proceed further, and all relevant documents shall stand transferred.

It added that the SFIO's jurisdiction is not confined to violations under the Companies Act and extends to all offences arising from the transaction assigned to it, including those under the IPC.

However, the bench also highlighted that the SFIO complaint, as filed before the Special Court, had not specifically examined the transaction attributed to the complainant in respect of Plot.

Therefore, considering the victim's right to a remedy and to avoid fragmented probe and parallel investigations, the High Court invoked its extraordinary writ jurisdiction to transfer the STF investigation to the specialized central agency.

The Court directed the UP STF to immediately hand over all case diaries and seized material to the SFIO.

The central agency has been ordered to treat the complainant's grievance as a "further investigation" under Section 193(9) of the BNSS and to file a supplementary report before the Special Court in New Delhi, if the investigation so warrants.

The Court also clarified that no fresh sanction from the Central Government would be required, as its order did not constitute a fresh assignment to the SFIO but merely extended the scope of an ongoing inquiry.

Case title - Haji Iqbal Alias Bala vs State of U.P. and 2 others 2026 LiveLaw (AB) 424

Case Citation: 2026 LiveLaw (AB) 424

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