Delhi High Court on Section 156(3) Cr.P.C.: FIR Can Be Directed Only When Prima Facie Offence Is Disclosed.

Headnote:

The Delhi High Court held that directions for registration of FIR under Section 156(3) Cr.P.C. can be issued only when the complaint discloses a prima facie cognizable offence, and not merely because civil disputes or contractual breaches exist between the parties. The Court upheld the ASJ’s decision setting aside the ACMM’s order that mechanically directed the Economic Offences Wing (EOW) to register an FIR. It emphasized that Section 156(3) is not intended to convert civil disputes into criminal investigations.

Background:

The petitioners entered into an MoU dated 16.08.2018 with Respondent No. 2 (a real estate company, Angle Infrastructure Pvt. Ltd.) to invest ₹8.38 crore for obtaining permissions under the Transit Oriented Development (TOD) Policy and for additional FAR.

As security, the respondents allotted nine apartments in Florence Estate and two apartments in Monde De Provence projects.

Petitioners later alleged:

False representations on entitlement under TOD Policy.

Apartments given as “security interest” could only be transferred to Central Government employees, making the security illegal.

One project developer (VRPL) was under insolvency, making security unenforceable.

Apartment Buyer Agreements were pre-dated (dated 2015 though MoU was signed in 2018).

Respondents misused funds and did not obtain required approvals.

Petitioners terminated the MoU on 01.11.2019 and sought refund.

A complaint to police resulted in no action, so petitioners moved under Section 156(3) Cr.P.C..

ACMM directed registration of FIR.

ASJ reversed the order, holding the dispute was civil and ACMM had passed the order mechanically.

Petitioners challenged ASJ’s order before the High Court under Section 482 Cr.P.C..

Court’s Observations:

• The power under Section 156(3) Cr.P.C. is discretionary and must be exercised only when the complaint clearly discloses a cognizable offence requiring police investigation.

• A Magistrate cannot mechanically forward complaints for FIR registration without assessing whether basic criminal ingredients exist.

• The dispute between the parties primarily arises from the MoU, containing reciprocal obligations, timelines, and rights—indicative of a commercial/civil relationship.

• Allegations regarding:

misrepresentation about FAR/TOD,

enforceability of security apartments,

pre-dating agreements,

misuse of funds,

are matters requiring civil evidence and contractual interpretation, not criminal prosecution at the threshold.

• The ASJ correctly held that the ACMM’s order lacked reasoning and amounted to non-application of mind.

• Criminal investigation cannot be ordered merely because the parties level allegations of cheating when their underlying relationship is contractual.

Legal Provisions Discussed:

• Section 156(3), Cr.P.C. – Power of Magistrate to order investigation.

• Section 482, Cr.P.C. – Inherent powers of High Court.

• Sections 420, 406, 468, 471, IPC – Offences alleged by petitioners.

• Principles from Supreme Court precedents on when criminal prosecution may coexist with civil claims.

Case: Mohinder Kumar Jain & Ors. v. State of NCT of Delhi & Angle Infrastructure Pvt. Ltd.

Court: High Court of Delhi at New Delhi

Coram: Hon’ble Ms. Justice Neena Bansal Krishna

Reserved On: 20 August 2025

Date of Decision: 21 November 2025

Crl.M.C. No.: 2953 of 2021

Crl.M.A.: 18572 of 2021