Police cannot restart probe after cancellation report without Magistrate’s permission, Punjab and Haryana High Court holds

The petitioner sought quashing of FIR No. 331 dated 02.06.2024, registered at Police Station Industrial Sector-29, Panipat, under Section 32 of the Haryana Protection of Interest of Depositors in Financial Establishments Act, 2013 and Sections 120-B and 420 IPC, along with consequential proceedings, the ADGP, Crime, Haryana’s communication dated 04.02.2025 directing further investigation, and protection from coercive action.

The complainant alleged that the petitioner presented himself as the owner/mastermind of the Upnomix and Oris Coin MLM/cryptocurrency scheme, represented that investors would receive returns and commissions, and induced the complainant to invest ₹10 lakhs, which was neither returned nor converted into the promised returns.

After investigation, the police found no transaction connecting the petitioner or the named accused with the alleged payments in Panipat and submitted a cancellation report dated 17.12.2024 before the ACJM, Panipat, on 20.12.2024.

Before the Magistrate considered the cancellation report, the ADGP directed further investigation on 04.02.2025. The ACJM thereafter returned the original file to the police for further investigation, without recording independent judicial satisfaction on its necessity.

1. Whether the police or ADGP could direct further investigation after submission of the cancellation report before the Magistrate, without first obtaining judicial permission.

2. Whether the ACJM’s order dated 20.02.2025 returning the cancellation-report file could be treated as a valid judicial order authorising further investigation.

3. Whether the FIR itself disclosed no offence against the petitioner and was liable to be quashed under the High Court’s inherent jurisdiction under Section 528 BNSS.

Section 528 BNSS confers inherent jurisdiction upon the High Court to prevent abuse of process and secure the ends of justice.

Upon receiving a police cancellation/final report, the Magistrate may accept it, disagree with it and take cognizance under Section 190(1)(b) CrPC, proceed on the original complaint/protest petition, or direct further investigation under Section 173(8) CrPC, as explained in Hemant Dhasmana v. CBI, Tularam v. Kishore Singh, Mukhtar Zaidi v. State of Uttar Pradesh and Vishnu Kumar Tiwari v. State of Uttar Pradesh.

Under the corresponding Section 193(9) BNSS, the power to direct further investigation after submission of the final report rests with the Magistrate or competent Court, not solely with the investigating agency.

Relying principally on Pramod Kumar & Ors. v. State of Uttar Pradesh & Ors., 2026 INSC 120, and also on Vinay Tyagi v. Irshad Ali and Peethambaran v. State of Kerala, the Court held that the investigating agency must obtain prior permission of the Magistrate/Court before undertaking further investigation and filing a supplementary report.

Submission of a cancellation report does not automatically terminate the criminal case or create an indefeasible right in favour of the accused; the Magistrate must first apply judicial mind to the report and the material on record.

The investigation had been completed and the cancellation report had already been placed before the competent Magistrate. Consequently, the matter was no longer within the exclusive domain of the police, and the Magistrate was required to determine whether to accept the report, take cognizance, proceed on a protest petition, or order further investigation.

The ADGP’s communication dated 04.02.2025 bypassed this mandatory judicial stage and directed further investigation without a prior application seeking the Magistrate’s permission.

The ACJM’s subsequent order merely facilitated return of the file and did not record independent judicial satisfaction or formally authorise further investigation; therefore, it could not cure the initial jurisdictional defect.

Since the executive direction and consequential steps were legally unsustainable, the Court found it unnecessary at this stage to assess the truth of the FIR allegations or the petitioner’s culpability.

The question of quashing the FIR on merits was accordingly left open to avoid prejudicing the Magistrate’s consideration of the cancellation report.

The ACJM’s order dated 20.02.2025 was also set aside to the extent that it facilitated such further investigation and returned the cancellation-report file.

The State was directed to place the cancellation report dated 17.12.2024 before the ACJM, Panipat, within one month, and the Magistrate was directed to consider it, along with any protest petition, independently and in accordance with law.

The Court clarified that the Magistrate could accept the cancellation report, take cognizance, proceed on a protest petition, or consider a future application for further investigation under Section 193(9) BNSS.

The prayer for quashing the FIR itself was left open for consideration after the Magistrate passes an appropriate order on the cancellation report.