Petitioners' Plea to Quash FIR Registered by Directorate of Enforcement Unsuccessful; Court Urges Alternative Proceedings for Arrest Safeguard
In a significant development, the Delhi High Court, presided over by Justice Girish Kathpalia, refused to stay the ongoing investigation against Experion Developers Pvt Ltd concerning FIR No. 64/2026, registered for alleged offences under Section 120B read with Section 420 of the Indian Penal Code (IPC). The petitioners had sought quashing of the FIR, asserting that the Directorate of Enforcement lacked authority to register it, especially in the absence of a complaint from creditors purportedly affected by the alleged financial misdeeds.
During the court proceedings, senior counsel representing the petitioners argued that the Corporate Insolvency Resolution Process (CIRP), once concluded, should not be reopened. The petitioners contended that the FIR did not establish any cognizable offence and was allegedly influenced by two other business entities.
The Directorate of Enforcement, however, maintained that the FIR was recently lodged and the investigation was still in its nascent stage. It was further revealed that the Directorate had moved an application to recall the resolution process, though formal notice was pending.
Justice Kathpalia, acknowledging the preliminary stage of the investigation, declined the plea to halt proceedings, emphasizing that a thorough hearing from both sides was necessary before considering such a motion. However, the court clarified that the petitioners could pursue appropriate legal proceedings to seek protection from arrest, ensuring that the current petition's pendency would not impede any such attempts.
The case has been scheduled for further hearing on May 14, 2026, allowing respondents time to file a status report within four weeks.
Bottom Line:
Petitioners sought quashing of FIR under Section 120B read with Section 420 IPC, challenging the Directorate of Enforcement's authority to register FIR and alleging that FIR fails to make out a cognizable offence. Court declined to stay investigation due to its nascent stage but clarified that protection from arrest may be sought through appropriate proceedings.
Statutory provision(s): Section 120B IPC, Section 420 IPC
Experion Developers Pvt Ltd v. State Govt of NCT of Delhi, (Delhi) : Law Finder Doc id # 2873988
