Chhattisgarh High Court Upholds Criminal Proceedings in ₹226 Crore Cooperative Bank Fraud Against Jeweller

Introduction

The Chhattisgarh High Court recently adjudicated a significant matter concerning alleged banking fraud involving funds exceeding ₹226 crores. In the case of Navneet Soni @ Pintu Vs State of Chhattisgarh, the judicial forum declined to terminate the criminal proceedings initiated against a gold merchant accused of receiving proceeds from fraudulent banking operations. The court's decision underscores the judiciary's approach toward economic offenses affecting public financial institutions and clarifies the boundaries within which quashment jurisdiction can be exercised.

Background of the Controversy

Genesis of the Criminal Case

The criminal proceedings originated from an FIR No. 39/2025 dated 26.05.2025, filed at Police Station Kusmi, District Balrampur-Ramanujganj. The registration occurred following a formal complaint submitted by the Chief Executive Officer of Janpad Panchayat Sankargarh to the headquarters of Jila Sahakari Bank, Raipur. The complainant, Arvind Shrivastava, highlighted suspicious banking activities detected in the Sankargarh/Kusmi Branch of the cooperative bank.

The allegations pertained to offences under Sections 409, 420, 467, 468, 471, 120-B read with Section 34 of the IPC. These provisions address criminal breach of trust, cheating, forgery, conspiracy, and common intention—offences that collectively suggest systematic financial misconduct.

Discovery Through Audit Mechanisms

Upon receiving the complaint, the banking institution established an internal inquiry committee and commissioned its Chartered Accountant to conduct a statutory examination. This preliminary investigation uncovered discrepancies amounting to approximately ₹213.14 crores across specific account numbers: 604007085677, 604007009117, and 604007013601.

Subsequently, a specialized audit exercise was undertaken, revealing financial malpractices totaling roughly ₹226 crores. According to the audit findings, twelve individuals allegedly orchestrated a scheme involving fabricated banking accounts through which Kisan Credit Card allocations meant for agricultural producers were diverted and misappropriated.

Allegations Against the Petitioner

Among the various beneficiaries identified during the investigation was M/s Jamuna Alankar Mandir, a jewellery establishment operated by the petitioner in Ambikapur. The enterprise maintained proper registration under the Goods and Services Tax Act and conducted retail jewellery transactions.

The prosecution alleged that Ashok Soni, a banking employee implicated as a co-accused, facilitated transfers aggregating approximately ₹21.8 crores during the period spanning 2018 to 2022 to the business account of M/s Jamuna Alankar Mandir. These monetary movements raised investigative concerns regarding their legitimacy and connection to the broader fraudulent scheme.

Petitioner's Contentions Before the Court

Nature of Business Relationship

The petitioner maintained that Ashok Soni, along with his spouse, constituted regular patrons of the jewellery business since 2017-2018. According to this version, the couple routinely acquired gold ornaments and jewelry items for personal consumption, settling payments through legitimate banking instruments including National Electronic Funds Transfer (NEFT) from Ashok Soni's account to M/s Jamuna Alankar Mandir's business account.

The petitioner emphasized that every transaction followed Business-to-Consumer (B2C) commercial practices, accompanied by proper GST invoicing, banking documentation, and compliance with statutory tax obligations. The defense presented comprehensive records including GST returns filed annually, demonstrating tax payments on each transaction.

The petitioner approached the High Court under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, seeking quashment of multiple instruments: the FIR dated 26.05.2025, the charge-sheet dated 31.08.2025, and the cognizance order dated 23.08.2025. The petition also sought termination of Criminal Case No. 1841/2025 registered before the Judicial Magistrate First Class, Rajpur, District Balrampur-Ramanujganj.

The core argument advanced by the petitioner's legal team, led by Senior Advocate Manoj Paranjape assisted by Rishabh Gupta, rested on the principle that even accepting the prosecution narrative in its entirety, the fundamental ingredients of the alleged offences remained absent. Specifically, the defense contended that:

  • No dishonest intention existed at the transaction's inception
  • No wrongful gain accrued to the petitioner
  • No conspiracy participation could be established
  • All business dealings occurred transparently through banking channels
  • Complete documentary evidence supported every monetary receipt

Precedential Support

The petitioner relied on the Supreme Court's decision in Pradeep Kumar Kesharwani v. State of U.P., 2025 SCC OnLine SC 1947, which established guiding principles for terminating criminal proceedings where continuation would result in justice being defeated. Additionally, reference was made to Vijaya Rao v. State of Rajasthan, (2005) 7 SCC 69, establishing that when offense ingredients are conspicuously absent, proceeding with prosecution constitutes process abuse.