In a significant ruling on the scope of police powers after a cancellation report, the High Court of Punjab and Haryana at Chandigarh Bench sets aside the Haryana ADGP’s order directing further investigation in the Tarun Trikha crypto/MLM matter, holding that the police cannot bypass judicial oversight and must seek the Magistrate’s permission before reopening a concluded investigation.
The legal principle laid down is that once a final report or cancellation report under Section 173(2) CrPC (corresponding to Section 193 BNSS) has been submitted before the jurisdictional Magistrate, the matter ceases to be within the exclusive domain of the investigating agency, and the power to direct further investigation under Section 173(8) CrPC (corresponding to Section 193(9) BNSS) rests solely with the Magistrate/Court concerned and not with the police or any executive authority.
The Court clarified that though Section 173(8) does not in express terms require prior leave of the Court, such requirement has to be read into the provision as a necessary implication, and it is the settled practice that the police must seek permission of the Court to conduct further investigation and file a supplementary report. An executive direction by a senior police officer such as the ADGP directing further investigation, without obtaining prior permission of the Magistrate, is without jurisdiction and all consequential steps taken pursuant thereto are liable to be set aside.
The subsequent order of the Magistrate merely returning the original case file to the police does not constitute a judicial direction for further investigation and does not cure the defect of the prior absence of judicial permission, added the Court.
A Single Judge Bench of Justice Manisha Batra observed that the law regarding the course to be followed by a Magistrate upon receipt of a cancellation/final report is well settled by a catena of Supreme Court judgments. In Hemant Dhasmana v. Central Bureau of Investigation [2001(7) Supreme Court Cases 536], the Supreme Court had listed three options open to the Magistrate: to accept the report, to disagree with the report and issue process under Section 190(1)(b) CrPC, or to exercise power under Section 173(8) CrPC and order further investigation.
The Court reiterated that submission of a cancellation report does not, by itself, bring the criminal case to an end, and the final decision as to whether the report is to be accepted, whether cognizance is to be taken, or whether any protest petition is to be treated as a complaint, lies with the competent Magistrate by applying his judicial mind. The Court further observed that in the present case, the procedure adopted could not be sustained because the investigating agency had completed its investigation and submitted a cancellation report before the ACJM, Panipat on Dec 20, 2024, at which stage the matter had ceased to be within the exclusive domain of the investigating agency.
The record did not indicate that the Magistrate accepted the cancellation report, rejected it, took cognizance, or proceeded upon any protest petition. The cancellation report remained pending consideration before the Magistrate. The subsequent order dated Feb 20, 2025 passed by the ACJM merely facilitated the return of the file and did not record any independent judicial satisfaction as to the necessity or desirability of further investigation, and therefore could not be construed as an order judicially directing further investigation, noted the Court.
The Court placed heavy reliance on Pramod Kumar v. State of Uttar Pradesh [2026 INSC 120], wherein the Supreme Court authoritatively held that the power to direct further investigation rests with the Magistrate/Court concerned and not with the investigating agency. It has been the settled practice that the police must seek permission of the Court to conduct further investigation and file a supplementary report. Though Section 173(8) does not in express terms state that prior leave of the Court must be obtained, such requirement has to be read into the provision as a necessary implication.
The Court observed that in the present case, the facts stood on an even stronger footing against the impugned action because the investigating agency had completed the investigation and submitted a cancellation report, yet without awaiting a judicial determination, the ADGP, Crime, Haryana, directed further investigation. No application seeking permission for further investigation had been moved before the Magistrate prior to issuance of the said direction, and the subsequent application seeking return of the original case file did not cure the defect.
The sequence of events was exactly the reverse, with the executive direction for further investigation preceding any judicial consideration. The Court clarified that the submission of a cancellation report does not confer any indefeasible right upon the accused to claim termination of criminal proceedings, and the investigating agency cannot, by an executive direction, bypass the stage of judicial consideration by the competent Magistrate, concluded the Court.
Briefly, petitioner, Tarun Trikha, approached the Punjab and Haryana High Court under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, seeking quashing of FIR registered at Police Station Industrial Sector-29, Panipat, along with all consequential proceedings. The FIR was registered under Section 32 of the Haryana Protection of Interest of Depositors in Financial Establishments Act, 2013 and Sections 120-B and 420 of the Indian Penal Code. The FIR arose out of a complaint filed by respondent No. 2 alleging that an MLM/cryptocurrency scheme under the names “Upnomix” and “Oris Coin” was being operated, and that the petitioner was introduced as the owner/mastermind of the scheme at a meeting held in Panipat.
On the basis of the petitioner’s representations regarding weekly/monthly returns and commissions, the complainant invested Rs. 10 lakhs, but neither the promised returns nor the invested amount were ever received. After registration of the FIR, the investigating agency recorded statements, examined documents, and verified the alleged transactions. The account mentioned in the receipt was not found to be connected with the petitioner or the alleged transactions in the Panipat area, and no transaction of money by the witnesses with the named accused persons was found to have taken place in the district.
Consequently, a cancellation report was submitted before the ACJM, Panipat on Dec 20, 2024, concluding that no truth was found in the allegations. Thereafter, the complainant sought transfer of investigation, and the ADGP, Crime, Haryana, directed further investigation by the State Crime Branch, Jind, without obtaining prior permission of the Magistrate. The SHO then moved an application before the ACJM seeking return of the original case file, and the ACJM passed an order directing return of the file to the concerned quarter. The petitioner also sought cancellation of the Look-Out Circular issued against him, but the status report indicated that further investigation was ongoing and his custodial interrogation was considered necessary.
