Introduction:

The Calcutta High Court, in Arup Mondal v. The State of West Bengal & Anr., CRR 493 of 2025, delivered an important ruling clarifying the law on further investigation and the limited scope of inherent jurisdiction at the pre-trial stage, particularly in complex cyber fraud cases involving cryptocurrency investments. Justice Chaitali Chatterjee Das, while dismissing a petition filed under Section 482 of the Code of Criminal Procedure, now corresponding to Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, held that an order directing further investigation after submission of a final report does not suffer from illegality and that criminal proceedings cannot be quashed merely on the basis of apprehension of implication. The case arose out of allegations of a sophisticated cyber fraud wherein the de facto complainant claimed to have been induced by unknown persons to invest a substantial amount of ₹85.80 lakhs in bitcoin trading through an online platform named “Yotemo Currency Services Company,” with assurances of unusually high returns. According to the complaint, despite transferring large sums through online banking channels between April and June 2024, the complainant was denied full withdrawal of his funds and was repeatedly asked to deposit additional amounts towards so-called verification charges and tax liabilities. Upon refusal to make further payments, the complainant alleged that he lost the entire invested amount. During investigation, while the petitioner was not named in the FIR, his bank account was frozen and certain digital footprints allegedly surfaced, prompting him to approach the High Court seeking quashing of proceedings and challenging the Magistrate’s order permitting further investigation after an earlier Final Report True had been submitted by the police. The judgment assumes significance as it reaffirms judicial restraint in interfering with ongoing investigations, particularly in cybercrime cases involving layered financial transactions, and underscores that criminal law cannot be stalled at an embryonic stage based on speculative fears.

Arguments of the Petitioner:

The petitioner contended that he had been wrongly dragged into the criminal process despite having no connection whatsoever with the alleged bitcoin investment fraud. It was emphatically argued that he was not named in the FIR, nor did the complaint attribute any specific role to him in inducing the de facto complainant to invest money. According to the petitioner, he became aware of the criminal case only when his bank account was frozen, which, in his submission, was a drastic coercive step taken without any legally sustainable basis. The petitioner asserted that the continuation of investigation against him was founded purely on conjecture and suspicion and that there was no legally admissible material to connect him with the offence. It was further argued that the investigating agency itself had earlier submitted a Final Report True, concluding that no sufficient evidence was available to proceed further, which demonstrated that the allegations were inherently weak and unsustainable. Challenging the subsequent order permitting further investigation, the petitioner submitted that the Magistrate had acted mechanically and without application of mind. It was argued that the order for further investigation was passed even before the court had formally accepted or rejected the final report and before the de facto complainant had appeared pursuant to notice, thereby rendering the order procedurally irregular and legally flawed. Relying on various judgments of the Supreme Court, the petitioner contended that further investigation under Section 173(8) CrPC is not an unfettered power and can be exercised only upon discovery of fresh material or compelling circumstances, which were conspicuously absent in the present case. The petitioner also alleged mala fides and abuse of process, asserting that the proceedings were being kept alive only to harass him and to justify the freezing of his bank account. On these grounds, it was urged that the High Court ought to exercise its inherent powers to quash the proceedings at the threshold in order to prevent miscarriage of justice and unnecessary harassment.

Arguments of the State and the Prosecution:

Opposing the petition, the State of West Bengal submitted that the prayer for quashing was wholly misconceived and premature. The prosecution argued that the nature of the offence alleged was a sophisticated cyber fraud involving cryptocurrency trading, online inducement, and complex financial transactions spread across multiple banking channels, which necessitated a deeper and more comprehensive investigation. It was submitted that the initial Final Report True was not the end of the matter and that further investigation was directed upon instructions from superior officers after detection of intricate fund trails that required specialized scrutiny by the Anti-Fraud section. The State contended that further investigation under Section 173(8) CrPC is statutorily permissible and is intended precisely to meet situations where new angles, evidence, or complexities emerge after submission of a report. It was further submitted that during the course of investigation, several mobile numbers were found to be registered in the name of the petitioner, which raised legitimate suspicion regarding his possible involvement or knowledge of the fraudulent transactions. Notices were issued to the petitioner to join the investigation, but he allegedly failed to respond or cooperate, and his conduct, according to the prosecution, indicated evasion rather than innocence. The State emphasized that freezing of the bank account was a lawful investigative step to prevent dissipation of suspected proceeds of crime and to preserve the money trail for forensic examination. The prosecution strongly argued that the petitioner was not even an accused at that stage and had approached the High Court merely on the basis of apprehension that he might be implicated in the future, which could not be a ground for invoking the extraordinary inherent jurisdiction of the Court. Placing reliance on settled law, the State submitted that criminal proceedings, particularly in cases involving allegations of fraud exceeding ₹80 lakhs, cannot be quashed at the nascent stage when investigation is still ongoing and the truth has yet to be unearthed.

Court’s Judgment:

Justice Chaitali Chatterjee Das undertook a detailed examination of the statutory framework governing further investigation and the scope of inherent powers under Section 482 CrPC. The Court began by reiterating the settled legal position that further investigation under Section 173(8) CrPC is supplemental in nature and does not wipe out or invalidate the earlier investigation. Relying on authoritative pronouncements of the Supreme Court in State through CBI v. Hemendra Reddy, Vinubhai Haribhai Malviya v. State of Gujarat, and Rama Chaudhary v. State of Bihar, the Court observed that a Magistrate possesses wide powers to direct further investigation at any stage before commencement of trial, provided the matter is still pending before the court. The High Court emphasized that the object of further investigation is to ensure a fair, complete, and effective probe, and that procedural technicalities cannot be allowed to thwart the discovery of truth. Applying these principles to the facts of the case, the Court held that the Magistrate had acted within jurisdiction in permitting further investigation even after submission of the Final Report True, as the case was still pending and had not progressed to the stage of trial. The Court found no illegality, perversity, or procedural irregularity in the impugned order and rejected the contention that acceptance or rejection of the final report was a precondition for ordering further investigation. Addressing the petitioner’s plea of apprehension, the Court noted that he was not a named accused in the FIR and that his fear of possible implication was purely speculative at that stage. The Court categorically held that criminal proceedings cannot be quashed on the basis of such apprehension, particularly when allegations involve serious economic offences and the investigation is being carried out by a specialized Anti-Fraud unit. The Court further observed that freezing of a bank account during investigation, by itself, does not amount to abuse of process and is often a necessary step in cases involving financial fraud. Justice Das underscored that inherent jurisdiction under Section 482 CrPC is to be exercised sparingly, with great caution, and only to prevent manifest injustice or abuse of process, neither of which was demonstrated in the present case. Holding that no exceptional circumstance was made out to justify interference, the High Court dismissed the criminal revisional application and declined to stall the ongoing investigation, while making it clear that the petitioner would be at liberty to avail appropriate remedies at the appropriate stage in accordance with law.