Once a Magistrate Takes Cognizance Under Sections 200 and 202 CrPC, Final Reports Become Irrelevant: Allahabad High Court Refuses to Quash Summoning

“Prima Facie Offence Is Made Out, Allegations Are Specific, and Trial Is the Only Method to Uncover the Truth” – In a latest judgement Allahabad High Court (Lucknow Bench), in a reportable judgment delivered by Justice Brij Raj Singh, dismissed three criminal applications filed under Section 482 of the Code of Criminal Procedure, 1973, seeking quashing of proceedings in a banking fraud case involving officials of Union Bank of India. The case concerns allegations of misappropriation and fraudulent disbursement of a loan amounting to ₹8 lakhs through forged documentation, unauthorized withdrawals, and breach of banking norms.

Refusing to interfere with the summoning orders issued by the trial court, the High Court ruled that the criminal proceedings disclose cognizable offences under Sections 406, 420, 467, 468, 471, and 504 of the Indian Penal Code, and therefore, “trial is the only process by which the evidence can be adduced and the truth can be found out”.

Loan Sanctioned Without Consent, Withdrawn in Cash in Violation of Bank Norms

The controversy originates from an FIR lodged on 12.09.2019 by the complainant, Sandeep Kumar, a laborer with limited education. He alleged that he was misled by Abhay Kumar, the then Branch Manager of Union Bank of India, Ashiyana, Lucknow, into opening an account and submitting identity documents. His signatures were allegedly obtained on blank documents and a cheque under the guise of loan facilitation.

Subsequently, he discovered that a loan of ₹8,00,000 had been sanctioned and entirely withdrawn without his knowledge. Upon inquiry, the complainant was informed that his account had been declared Non-Performing Asset (NPA) due to non-repayment. He alleged that the loan amount had been siphoned off in collusion with multiple bank officials, including the Deputy Branch Manager, Loan Manager, Head Cashier, and a Class IV employee.

 “Final Reports Have No Bearing Once Cognizance Is Taken”

The key issue before the Court was whether the criminal proceedings should be quashed under Section 482 CrPC despite two final reports exonerating the applicants, and whether the summoning order issued by the Magistrate based on statements under Sections 200 and 202 CrPC could stand judicial scrutiny.

Rejecting the argument that the applicants were not named in the FIR and had no direct role, the Court held:

“Once the complaint is registered and the Magistrate takes cognizance after examining the complainant and witnesses, the findings of the police investigation lose relevance.”

Referring to paragraphs 26–29 of the judgment, the Court emphasized that the Magistrate had applied his mind and the summons were based on specific and detailed allegations by the complainant and corroborated by two witnesses, Nitin Pachauri and Bhupendra Singh, under Section 202 CrPC.

“From a bare perusal of the statements recorded under Sections 200 and 202 CrPC, prima facie the offence is made out as there is sufficient material available on record.”

Forged Sanction, Unauthorized Withdrawal, and Collusion Among Officials

Evidence submitted before the Court indicated that the loan sanction letter bore no signatures of the borrower or the guarantor, a procedural violation that reinforced the case for forgery and fraud. Further, RTI replies revealed that cash withdrawal from a loan account was not permissible, and yet, ₹8,00,000 was withdrawn in cash through a single cheque, violating the prescribed ₹25,000 limit on loose cheque withdrawals.

The Court was particularly persuaded by the specificity of the complainant’s statement, which named individual officials, including:

• Ayushi Mishra (Loan Manager),

• Rajesh Kumar (Deputy Branch Manager),

• Brijesh Kumar @ Brijesh Kumar Kashyap (Peon), and others.

It was alleged that these officials were present in the Branch Manager’s cabin when the complainant was asked to sign blank documents and no paperwork was ever provided to him. The involvement of sanctioning and disbursing authorities was found prima facie evident.

No Quashing at Pre-Trial Stage: “Section 482 Is Not a Mini-Trial”

Citing a series of Supreme Court rulings, including Dharambeer Kumar Singh v. State of Jharkhand (2025) 1 SCC 392, CBI v. Aryan Singh (2023) 18 SCC 399, and Parbatbhai Aahir (2017) 9 SCC 641, the High Court underscored the limited jurisdiction under Section 482 CrPC:

“While exercising the inherent jurisdiction under Section 482 CrPC, the High Court is not required to conduct a mini trial... whether any offence was committed by the applicants or not can be adjudicated only at trial.”

Further, the Court held that economic offences involving systemic fraud and financial misconduct cannot be brushed aside merely because the accused were not named in the FIR or received a clean chit in police reports. "The complicity of the accused in case of forgery will have to be addressed only after proper appreciation of evidence."

No Sympathy for Economic Offenders: Banking Fraud Is a Social Offence

The Court observed that such offences “create a dent in the economic spine of the nation” and must be dealt with seriously. Referring to Parbatbhai Aahir, it reiterated:

“Economic offences involving the financial and economic well-being of the State have implications which lie beyond the domain of a mere dispute between private disputants... The consequences of the act complained of upon the financial or economic system will weigh in the balance.”

The petitioners’ reliance on earlier judgments such as Pepsi Foods Ltd., Sunil Bharti Mittal, and Birla Corporation Ltd. was rejected on the ground that in the present case, statements recorded under Sections 200 and 202 CrPC, corroborated by documents and RTI disclosures, established a prima facie case against the bank officials.

Trial Is Necessary to Ascertain the Truth

Summing up, the Court categorically held that: “This Court while exercising the inherent jurisdiction under Section 482 CrPC cannot give any finding whether the offence was committed by the applicants or not... the allegations are specific against the applicants, for which certainly the trial is required.”

Accordingly, all three Section 482 CrPC applications were dismissed, and the summoning orders and complaint proceedings were upheld, allowing the matter to proceed to trial.

Date of Decision: 29 October 2025