Allegations of theft and criminal misappropriation warrant FIR investigation despite availability of civil remedies.

The petitioners were the complainants in proceedings seeking police investigation into the alleged theft, criminal misappropriation and unauthorised export of scrap materials from the premises of the erstwhile Surya Chakra Power Corporation at Bamboo Flat. Under a deed of assignment dated 14 September 2023, Indo Aquaties assigned the relevant sale certificate to Petitioner No. 1 for disposal of plant, machinery, electrical and scrap materials. A supervisor was engaged for dismantling and handling the materials, but his authority was subsequently cancelled in October 2024.

The petitioners alleged that eight tax invoices were issued in favour of City Power Solutions for approximately 134 MT of scrap worth about ₹52 lakh plus GST. They further alleged that approximately 1,065 MT of heavy equipment and scrap, valued at about ₹2.45 crore plus applicable taxes, was exported to Chennai/Kolkata without the petitioners’ permission, payment, or valid tax invoices, allegedly by using forged or false invoices.

The Chief Judicial Magistrate, Port Blair, declined to direct registration of an FIR, holding that no cognizable case was disclosed and describing the complaint as fabricated. The Sessions Judge dismissed the petitioners’ criminal revision and affirmed that order.

The petitioners thereafter approached the High Court under Article 227 of the Constitution, contending that the allegations disclosed cognizable offences and that the police and courts below could not determine the genuineness of the allegations at the stage of seeking investigation.

Whether the complaint disclosed allegations of cognizable offences, including theft and criminal misappropriation, warranting a direction for registration of an FIR and police investigation under the BNSS, 2023.

Whether the availability of a civil or contractual remedy, or the preliminary police report suggesting that the sale was contractual, justified refusal to order investigation into the alleged non-accounting and unauthorised disposal of the materials and sale proceeds.

Whether the orders of the Chief Judicial Magistrate and the Sessions Judge declining to direct registration of an FIR required interference under Article 227 of the Constitution.

The Court applied the provisions of the BNSS, 2023 concerning directions for police investigation and registration of an FIR, referring principally to Section 175(3) and the corresponding provision discussed by the Magistrate as Section 173(3).

The governing principle was that where the allegations disclose cognizable offences, the police may be directed to register an FIR and investigate; the truth or falsity of the allegations, genuineness of documents, and involvement of the accused are ordinarily matters for investigation.

The Court further applied the principle that the existence of a civil or contractual remedy does not bar criminal proceedings where the allegations also disclose criminal offences. It relied on Indian Oil Corporation v. NEPC India Ltd., (2006) 6 SCC 736, for the proposition that a dispute having a civil element may nevertheless attract criminal liability if the ingredients of a criminal offence are disclosed.

The High Court exercised supervisory jurisdiction under Article 227 of the Constitution to correct the refusal to order investigation.

The Court found that the complaint contained specific allegations against Opposite Parties Nos. 2 to 5 concerning theft and criminal misappropriation of the scrap materials. Although the preliminary investigation report indicated that the sale had been made pursuant to a contract, there was no material showing proper accounting of the sale proceeds or payment of those proceeds to the petitioners.

The alleged quantity and value of the materials were substantial, and the alleged failure of the accused to cooperate in furnishing accounts and relevant details created a prima facie suspicion requiring investigation. The Court held that the Magistrate and the revisional court had effectively rejected the complaint without permitting the police to verify the relevant documents, trace the materials, examine the accused, and determine whether false invoices had been used.

Since the allegations, if taken at face value, disclosed cognizable offences, the existence of a possible contractual or civil dispute did not justify refusal of investigation.

The Station House Officer of Police Station Bambooflat was directed to register an FIR and proceed in accordance with law against Opposite Parties Nos. 2 to 5.

The Court clarified that no coercive steps should be taken against those accused without leave of the Magistrate.

The petitioners were directed to serve a copy of the application on the Station House Officer for necessary action.