Full Judgment Text
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Location: ORISSA HIGH COURT, CUTTACK
Date: 26-May-2026 16:09:47
IN THE HIGH COURT OF ORISSA AT CUTTACK
CRLMC No.5199 of 2025
Along with
CRLMC Nos.5449 of 2025, 5476 of 2025 and 153 of 2026
(In the matter of an application under Section 528 of the Bharatiya
Nagarik Suraksha Sanhita)
(In CRLMC No.5199 of 2025)
Umesh Kumar Ramani & Anr. …. Petitioner (s)
-versus-
State of Odisha & Anr. …. Opposite Party (s)
Advocates appeared in the case through Hybrid Mode :
For Petitioner (s) : Mr. Soumya Ranjan Das, Adv.
For Opposite Party (s) : Ms. Sarita Moharana, ASC
CORAM:
DR. JUSTICE SANJEEB K PANIGRAHI
DATE OF HEARING:-20.03.2026 & 12.05.2026
DATE OF JUDGMENT:-15.05.2026
Dr. Sanjeeb K Panigrahi, J.
1. Since common question of facts and law are involved in both the
CRLMCs, the same have been heard together and are being disposed
of by this common judgment. However, this Court feels it apposite
to deal with the CRLMC No. as the leading case for proper
adjudication of both the cases.
2. In filing the CRLMC No.5199 of 2025, the Petitioners against whom
the allegation of fraud and misappropriation of money of the
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Opposite Party No.2 are made, have prayed for quashing the entire
criminal proceeding initiated against them vide Jhirpani P.S. Case
No.181 of 2024 corresponding to G.R. Case No.1303 of 2024 pending
before the Court of learned J.M.F.C (R), Rourkela.
I. FACTUAL MATRIX OF THE CASE:
3. On 26.11.2024, a written complaint was lodged before the local Police
Station alleging therein that the Petitioners have made a fraud of
Rs.13,540/- (Rupees Thirteen thousand five hundred forty only) from
the bank account of the Opposite Party No.2 by creating an account
named MVC (My Victory Club) on 28.07.2023. Hence, the Petitioners
were booked for the offences under Sections 419, 420, 465, 467, 471,
120-B & 34 of the I.P.C and Sections 66C & 66D of the Information
Technology (Amendment) Act, 2008. It is also alleged therein that
the Petitioners have created a fake DIGI MUDRA PVT. LTD. and the
money was being deposited through the Google Pay/ Phone Pay
number of the Petitioners vide Mobile No.9337941849 & 9861075855.
II. SUBMISSIONS ON BEHALF OF THE Petitioner:
4. Learned counsel for the Petitioners Mr. Soumya Ranjan Das
earnestly made the following submissions in support of his
contentions orally as well as borne out from the Written Note of
Submissions:
i. Learned counsel for the Petitioners submits that the Petitioners
were the agents of the company in question. They were
engaged in promotion of crypto currency as per the direction
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of their superior authorities and the investors were aware of
the market risks. Due to the loss of money for the volatility in
the market, the complainant/investors had lodged an F.I.R in
the local Police Station.
ii. Being fully aware about the market risks the investors had
invested their respective money. Though the investors have a
right to pursue legal remedies, losses suffered are majorly
attributable to the policies of the company/ officials who are at
the helm of the affairs. The scope of authority of the Petitioners
is merely extended to the extent of promotion of the scope of
investment in crypto-currency and nothing beyond the same.
iii. The allegations made under Sections 420 of the I.P.C and other
Sections noted hereinabove are not made out against the
Petitioners. Though the concept of crypto currency is yet to
receive official status through a legislative enactment, nature of
the same has been recognized to be a legal tender and
therefore, though the financial authorities such as the SEBI and
RBI can regulate it, no blanket embargo can be imposed on its
circulation since it amounts to a virtual digital asset in the
prevailing circumstances.
iv. The Apex Court in the case of Internet Mobile Association of
1
Vrs.
India Reserve Bank of India has held that though the
R.B.I had wide statutory powers, it could not impose a blanket
1
AIR 2021 SC 2720
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ban/ embargo on dealing of virtual currency and since it is a
virtual digital asset, the dissemination or trade in crypto
currency can be regulated, however, it cannot be completely
curtailed. The Apex Court further recognized the same as legal
tender.
v. The High Court of Madras in the case of Rhutikumari Vrs.
2
Zanmai Labs Pvt. Ltd. has held that the crypto-currency is
covered under the definition of intangible property and is
capable of being held in trust, it was further observed that the
same being virtual digital asset and was governed under
Section 2(47A) of the Income Tax Act, 1961. He also relies on
the decision of the Bombay High Court in the case of Zanmai
3
Labs Pvt. Ltd. Vrs. Bitcipher Labs LLP .
vi. It is further contended that the Apex court while adjudicating
as to whether the provision under Section 420 of the IPC is
applicable in a particular case or not stated that
elements/ingredients of the same have to coexist with Section
415 IPC. To make out a case against the Petitioners under
Section 420 IPC which is the primary allegation, the following
elements have to be satisfied:
a. The deception of any person
b. Fraudulently or dishonestly inducing that person to
deliver any property to any person and
2
2025 SCC Online Mad. 9290
3
2025 SCC Online Bom 4074
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c. Dishonest intention of the accused at the time of making
the inducement
vii. In the case of A.M. Mohan Vrs. State represented by SHO and
4
Anr. the Apex Court while analyzing an application under
Section 482 Cr.P.C which is equivalent to Section 528 of the
BNSS, has held that dishonest intention at the time of making
the inducement is the sine qua-non to attract Section 415 and
420 of the IPC, and also held that in absence of the same, the
remedy of 482 should be invoked since continuation of the
proceedings shall amount to an abuse of process of law.
viii. It is further submitted that High Court of Delhi in the case of
Yogesh Singh Vrs. State of NCT of Delhi & Anr. in Bail
Application No.3183 of 2020 while quashing the proceeding
under Section 482 against some of the accused persons, has
held at paragraph nos.38.1 and 38.2 that though fraud has to be
punished, investors who suffer due to their own lack of
prudence cannot claim victimhood and therefore, in such
cases, when no prima facie case is made out against persons
guilty of procuring investments, the High Courts should not be
hesitant to quash such proceedings since continuation of same
shall severely prejudice the accused persons. He, accordingly,
prays for allowing the prayer made in this CRLMC.
4
SLP (Criminal) No.9598 of 2022
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III. SUBMISSIONS ON BEHALF OF THE OPPOSITE PARTY:
5. On the contrary, learned Counsel Ms. Sarita Moharana for the
Opposite Party No.1/State made the following submissions:
i. In opposition, learned counsel for the State submits that the
power to quash the FIR or criminal proceedings under
Section 528 of the BNSS (erstwhile Section 482 of the Cr.P.C)
is an extraordinary power and should be exercised
sparingly and with caution, only in cases where the
allegations in the FIR even if taken at their face value do not
disclose any cognizable offence.
ii. She further contends that in the present case, pursuant to
registration of the F.I.R., investigation has been duly
conducted and culminated in filing of charge-sheet. It is
contended that at this stage, when the investigating agency
has found prima facie materials and placed the same before
the learned Court below, there exists no compelling or
exceptional circumstance warranting exercise of inherent
jurisdiction to quash the proceeding.
iii. She contends that allegations in the FIR clearly disclose that
the Petitioners were active participants in a well-
orchestrated financial fraud, misleading vulnerable
individuals through false promises of high returns on
crypto currency investments and creating fake entities to
facilitate the cheating. In the present case, the Petitioners
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acting in criminal conspiracy created a fake entity named
“Digi Mudra Connect Pvt. Ltd.” and induced innocent
investors including the complainant to deposit money by
falsely promising high returns and promoting a fake digital
coin called ‘SIITO’ which they claimed would be listed on
major crypto currency exchanges including BINANCE.
iv. It is pertinent to note here that money of investors was
deposited into accounts of DIGI MUDRA CONNECT Pvt.
Ltd. in AU Small Finance Bank, HDFC Bank and ICICI bank
in Jaipur, Rajasthan and also routed through Google Pay/
Phone Pay numbers of the Petitioners. Once the money was
collected, the Petitioners refused to return the invested
capital or pay the promised returns, thus indicating a clear
intent to deceive and defraud. The Petitioners’ claim that
“not a single pie of the investors’ money went into to the
Petitioners’ account is demonstrable false and contradicted
by the FIR itself, which states that money was deposited via
Google Pay/ Phone Pay numbers of Samuel Cyril Lakra and
Umesh Kumar Ramani. Furthermore, the substantial
commission of Rs.1.5 core earned by Umesh Kumar Ramani
and his acquisition of assets directly link them to the
misappropriation of funds. This clearly establishes their
direct involvement in the fraudulent transactions and
personal benefit and derived from the criminal activity.
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Thus, the Petitioners did not engage themselves in
legitimate cryptocurrency trading rather they acted as the
principal conspirators who designed, executed and got
profit from the fraudulent scheme, which attracts Section
420 of the IPC cheating and dishonestly inducing delivery
of property. Therefore, the scale of the fraud involving
collection of “more than 5 crores” from multiple districts
underscores the gravity of the offences and the need for a
thorough trial.
v. The victim belongs to economically disadvantaged
communities and waited for a prolonged period hoping that
the Petitioners would return their money four time double
as promised. The Petitioners actively concealed their fraud
by assuring the investors for getting double return and
giving false timelines for listing of ‘SIITO’ coin. Delay in
filing an FIR in cases of financial fraud particularly where
the accused actively misrepresents facts and keeps the
victims under the hope of recovery, cannot be a ground for
quashing. The delay, if any, stands fully explained. The core
of the allegations against the Petitioners is not the legality of
cryptocurrency trading itself, but the deliberate
misrepresentation, creation of fake entities, false promises of
returns and misappropriation of funds which unequivocally
constitute offences under the I.P.C and the Information
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Technology Act and are independent of whether
cryptocurrency is legal or not.
vi. Further, the present case is not a case of lawful
cryptocurrency trading as the Petitioners floated a fake
company, created a nonexistent coin named ‘SIITO’ made
false promises of listing on ‘BINANCE’, and
misappropriated the money of investors. She also relies on
the following decisions to bolster her submissions:-
a. Neeharika Infrastructure Pvt. Ltd. Vrs. State of
5
Maharashtra & Ors.
6
b. Parbatbhai AAHIR Vrs. State of Gujarat & Anr.
c. Central Bureau of Investigation Vrs. Aryan Singh &
7
Ors.
vii. Learned counsel further submits that the veracity of the
allegations and the question of false implication are all matters to
be adjudicated upon recording of evidence during the course of
trial. According to her, premature interference would stifle a
legitimate prosecution. She, accordingly, prays for dismissal of
the present CRLMC.
IV. THIS COURT’S REASONING AND ANALYSIS:
6. Heard learned counsel for the parties at length. Upon careful
consideration of the rival submissions, the pleadings on record, the
5
2021 19 SCC 401
6
2017 9 SCC 641
7
2023 18 SCC 399
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F.I.R., and the materials collected during investigation, the principal
issue which arises for consideration as to whether the present case
warrants exercise of the extraordinary inherent jurisdiction of this
Court under Section 528 of the Bharatiya Nagarik Suraksha Sanhita,
2023, for quashing the impugned criminal proceeding at its
threshold. The jurisprudential contours governing such jurisdiction
are now firmly crystallized through a consistent line of judicial
pronouncements. Though the inherent power of the High Court is of
the widest amplitude and exists to secure the ends of justice and
prevent abuse of the process of Court, the same is nevertheless
controlled by well-settled self-imposed restraints evolved through
judicial discipline. Such jurisdiction is not intended to convert the
High Court into a Court of preliminary trial, nor does it authorize
meticulous appreciation of evidence or adjudication upon disputed
factual controversies.
7.
At the stage of quashing, this Court is not expected to weigh the
sufficiency of evidence for conviction; rather, the enquiry is confined
to examining whether the allegations, taken at their face value and
accepted in their entirety, prima facie disclose the essential
ingredients of the alleged offences. The jurisdiction under Section
528 of the B.N.S.S., therefore, is essentially preventive and not
adjudicatory in character.
8. The foundational plank of the Petitioners’ argument is that they
were merely agents or promotional associates acting under the
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directions of superior authorities of the company concerned and that
the complainant, having voluntarily invested in cryptocurrency with
full knowledge of the speculative and volatile nature of such
investments, cannot subsequently invoke criminal law merely
because the investment did not yield the expected returns.
9. It is further contended that cryptocurrency, being recognized in law
as a virtual digital asset and not being per se prohibited, cannot form
the basis of criminal prosecution. The proposition canvassed by the
Petitioners, to the extent it asserts that every failed commercial
transaction does not ipso facto constitute cheating, is legally
unexceptionable. Criminal law cannot be permitted to degenerate
into a coercive instrument for enforcement of purely civil claims or
recovery of money arising out of commercial losses. The distinction
between a civil wrong and a criminal offence, however, lies not in
the nature of the transaction alone, but in the intention which
animates it. A transaction ostensibly commercial in appearance may
nevertheless assume criminal colour if the representation inducing
the transaction was tainted with deception from the inception itself.
10. In the considered opinion of this Court, the present case, prima facie,
travels substantially beyond the realm of a mere failed investment
venture or ordinary commercial dispute. The allegations emerging
from the F.I.R. and the materials collected during investigation
disclose assertions of deliberate and systematic inducement,
projection of false representations, creation of allegedly fictitious
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entities, circulation of assurances regarding unrealistic and
exorbitant returns, and collection of funds through digital payment
channels allegedly linked with the Petitioners themselves.
11. The accusation is not merely that the investors suffered losses owing
to market volatility; rather, the gravamen of the allegation is that the
investors were induced to part with their money on the basis of
representations which were allegedly false to the knowledge of the
accused persons from the very inception. The prosecution case
specifically alleges that a fake entity was floated, a non-existent
digital coin under the nomenclature ‘SIITO’ was propagated, and
assurances were extended regarding its proposed listing on
internationally recognized cryptocurrency exchanges. Such
allegations, if ultimately substantiated during trial, unmistakably
transcend the domain of civil liability and enter the province of
criminal culpability founded upon deceit and dishonest inducement.
12.
The distinction between a mere breach of promise and the offence of
cheating has long occupied a central place in criminal jurisprudence.
The essence of the offence under Sections 415 and 420 of the Indian
Penal Code/Section 318(1) and Section 318(4) of the BNS lies in the
existence of mens rea at the inception of the transaction. It is the
dishonest intention accompanying the inducement which constitutes
the criminal element. A subsequent failure to honour a promise may
give rise to civil consequences; however, where the intention to
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deceive exists from the inception of the transaction, the law visits
such conduct with criminal sanction.
13. At this stage, this Court is not called upon to conclusively consider
whether the allegations are ultimately true or false. The enquiry is
confined to whether the factual assertions contained in the
prosecution materials disclose the foundational ingredients of the
offences alleged. Tested on this touchstone, the allegations relating
to false representations, inducement to invest, collection of money
through identified payment channels, and subsequent refusal or
failure to honour the promises allegedly made, prima facie furnish
sufficient factual basis necessitating a full-fledged trial.
14. The reliance placed by the Petitioners upon judicial pronouncements
recognizing cryptocurrency as a virtual digital asset does not
materially advance their case. The legality or permissibility of
cryptocurrency transactions, in the abstract, is not the crucial issue in
the present proceeding. The prosecution is not based upon the mere
dissemination, trading, or promotion of cryptocurrency as such. The
allegations, rather, concern the use of the facade of cryptocurrency
trading as an instrumentality for perpetrating deception and
inducing innocent investors to part with their money. Even a legally
permissible business activity may attract criminal liability, if it is
employed as a cloak for fraudulent conduct. The law does not extend
immunity to deceit merely because the medium through which such
deceit is practised is not itself prohibited. In order to hold otherwise
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would amount to elevating the form over substance and permitting
technological complexity to become a shield against criminal
accountability.
15. This Court is also mindful of the consistent judicial caution
administered by the Hon’ble Supreme Court that economic offences
stand on a distinct footing and must be viewed with a greater degree
of seriousness. Economic offences are not confined in their impact to
individual victims alone; they corrode public confidence in the
integrity of financial systems and undermine the collective faith of
society in commercial dealings. Allegations involving organized
financial fraud, systematic inducement of multiple investors, and
collection of substantial amounts through coordinated mechanisms
ordinarily require comprehensive evidentiary examination during
trial. The societal impact of such offences often extends far beyond
the pecuniary loss suffered by individual complainants.
Consequently, Courts exercising inherent jurisdiction are expected to
adopt greater circumspection before interdicting prosecutions
involving allegations of large-scale financial deception at the
threshold itself.
16. The defence projected by the Petitioners that they were merely
subordinate agents acting under instructions of superior authorities
equally raises disputed questions of fact incapable of adjudication
within the narrow confines of jurisdiction under Section 528 of the
B.N.S.S. Whether the Petitioners acted innocently without
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knowledge of the alleged fraud, whether they were passive
intermediaries, or whether they were active participants in the
alleged conspiracy, are all matters intrinsically dependent upon
appreciation of evidence. Such determination necessarily requires
examination of financial transactions, electronic records, witness
testimonies, and surrounding circumstances, which can only be
properly undertaken during trial. The inherent jurisdiction of this
Court cannot be invoked for weighing the probable defence of the
accused or for entering upon an enquiry as to the reliability or
otherwise of the prosecution evidence.
17. It is a cardinal principle of criminal procedure that the High Court,
while exercising inherent jurisdiction for quashing, does not conduct
a mini-trial. The truthfulness of the allegations, the admissibility of
evidence, the sufficiency of material for conviction, and the possible
defences available to the accused are matters lying squarely within
the domain of the trial Court. So long as the allegations disclose the
commission of cognizable offences and raise triable issues requiring
evidentiary adjudication, judicial interference at the threshold would
be wholly unwarranted. Premature quashing in such circumstances
would amount to stifling a legitimate prosecution before the
prosecuting agency is afforded an opportunity to establish its case in
accordance with law.
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V. CONCLUSION:
18. Having considered the entirety of the matter, this Court is unable to
persuade itself that the present case falls within the limited and
exceptional categories warranting exercise of inherent jurisdiction
for quashing the criminal proceeding. The allegations made in the
F.I.R. read conjointly with the materials collected during
investigation and the charge-sheet submitted before the learned
Court below, prima facie disclose the commission of cognizable
offences necessitating adjudication upon evidence. At this stage, the
prosecution cannot be characterized as manifestly frivolous,
inherently absurd, or legally untenable so as to justify judicial
interdiction. Interference at the threshold would not only amount to
trenching upon the domain of trial but would also risk foreclosing a
legitimate prosecutorial enquiry into allegations of serious economic
fraud. Consequently, this Court finds no justifiable ground to invoke
its inherent jurisdiction under Section 528 of the B.N.S.S.
19. The present CRLMCs, being devoid of merit, accordingly stands
dismissed.
(Dr. Sanjeeb K Panigrahi)
Judge
Orissa High Court, Cuttack,
th
Dated the 15 May, 2026
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