Supreme Court Sets Aside Madhya Pradesh High Court Order Quashing CBI Investigation | Challenge To CBI’s Authority For Want Of State Consent Must Be Raised Immediately After FIR
Kiran Raj
The Supreme Court of India Division Bench of Justice Surya Kant and Justice Joymalya Bagchi set aside the Madhya Pradesh High Court’s order that had quashed criminal proceedings against a private company and its directors in a case investigated by the Central Bureau of Investigation. The Court held that objections to the CBI’s jurisdiction for want of State consent under Section 6 of the Delhi Special Police Establishment Act, 1946, must be raised at the initial stage, soon after the FIR is registered. It further held that once the investigation concludes, a chargesheet is filed, and cognizance is taken, such objections cannot later invalidate the proceedings unless a quashing petition was already pending. The Bench directed the Trial Court to continue the case in accordance with law.
The case arose from credit facilities extended by a consortium of banks—UCO Bank, Punjab National Bank, and Corporation Bank—to a private company under the Companies Act. The company’s credit limit was enhanced to an aggregate of Rs. 110.5 crores. Following default, the accounts were declared non-performing assets on March 31, 2013. After an unsuccessful compromise proposal and one-time settlement attempt in 2017, the banks lodged complaints alleging fraud.
Based on these complaints, the CBI registered an FIR on November 5, 2020, under Sections 420 and 120-B IPC, and later filed a charge sheet under Sections 120-B, 406, 420, and 471 IPC. Charges under the Prevention of Corruption Act, 1988 were dropped for want of sanction against public servants. The High Court of Madhya Pradesh, on a petition filed by the company, quashed the FIR and charge sheet citing absence of State consent under Section 6 of the DSPE Act and lack of prima facie case, holding that the allegations were improbable as no loss had been caused to the banks.
The Supreme Court observed that “lack of consent under Section 6 of the Delhi Special Police Establishment Act, 1946 ought to have been raised soon after registration of FIR.” It stated that “once the investigation is complete, chargesheet has been filed and the court of competent jurisdiction has taken cognizance, no such plea can be raised to vitiate the validity of an order taking cognizance, save and except when it causes severe miscarriage of justice.”
The Bench further observed that the High Court “exceeded its jurisdiction while assuming the role of a Trial Court” in examining the merits of the allegations. It recorded that “there are debatable issues which ought to have been left to the wisdom of the Trial Court.”
The Supreme Court set aside the impugned judgment of the Madhya Pradesh High Court and directed that the case pending before the XXVII Additional Sessions Judge, Indore, shall proceed in accordance with law. It ordered: “The respondents are directed to appear before the Trial Court on 28.10.2025 and furnish bail bonds to the satisfaction of the Trial Court.” The Court clarified that if the Trial Court finds prima facie material to prosecute bank officials under the Prevention of Corruption Act, “there shall be no impediment for the Trial Court to summon such bank officials also to face the trial.” The appeal was allowed accordingly.
Advocates Representing the Parties
For the Petitioner: Mr. Suryaprakash V. Raju, Additional Solicitor General; Mr. Mukesh Kumar Maroria, AOR; Ms. Kanu Agarwal, Advocate;
For the Respondents: Mr. Sidharth Luthra, Senior Advocate; Ms. Sadhana Sandhu, AOR; assisted by Mr. Rohit Pandey
Case Title: Central Bureau of Investigation v. M/s Narayan Niryat India Pvt. Ltd. & Ors.
Case Number: Criminal Appeal No. 4390 of 2025; arising out of SLP (Crl.) No. 3443 of 2025
Bench: Justice Surya Kant, Justice Joymalya Bagchi
