Single FIR for Mass Investor Cheating When There Is One Conspiracy: Supreme Court Clarifies Law

The Supreme Court in State (NCT) of Delhi Vs Khimji Bhai Jadeja has delivered an important ruling on how large-scale cheating cases involving numerous investors should be investigated and tried. Where a single criminal conspiracy leads to multiple acts of cheating against many victims, these acts can be treated as part of the “same transaction”, allowing:

  • One consolidated FIR, and
  • A single, combined investigation and possible joint trial,

instead of insisting on separate FIRs and separate investigations for each investor.

The Court has also clarified when consolidation is permissible, how the concept of “same transaction” under Sections 220(1) and 223 CrPC should be understood, and what this means for sentencing and the rights of individual complainants.

Background: Large-Scale Investment Fraud and a Single FIR

The case arose out of FIR No. 89 of 2009 registered on 01.06.2009 by the Economic Offences Wing, Delhi Police under Sections 420 and 120B IPC.

  • A complainant, Rajesh Kumar, alleged that Ashok Jadeja and his associates, including Khimji Bhai Jadeja, induced people to deposit money by claiming that Ashok Jadeja was blessed with the divine power of Sikotar Mata to triple their money in a few days.
  • Thousands of individuals invested funds based on these representations.
  • Investigation revealed 1,852 victims, allegedly cheated of approximately ₹46.40 crores.
  • Only one FIR was registered, based on the first complaint. The complaints of the remaining 1,851 victims were clubbed with this FIR and treated as statements under Section 161 CrPC.

In due course:

  • A main charge-sheet was filed on 09.02.2014 against 15 accused persons.
  • Six supplementary charge-sheets were filed between 2014 and 2025.
  • During a bail application filed by Khimji Bhai Jadeja in 2014, the Additional Sessions Judge expressed doubts on the legality of a single FIR for such a large number of victims and referred three questions of law to the Delhi High Court under Section 395(2) CrPC.

The Reference to Delhi High Court

The Additional Sessions Judge sought answers on three core issues:

  1. Whether each investor’s deposit in a mass cheating scheme is a separate transaction requiring a separate FIR, or whether all such dealings can be merged into a single FIR, with one complainant and the others treated as witnesses.

  2. If each deposit is treated as a separate transaction, how many such transactions can be combined into a single charge-sheet, especially in light of Section 219 CrPC and the decision in Narinderjit Singh Sahni & anr. vs. Union of India & ors., which indicated that only three transactions of a particular year can be clubbed in one charge-sheet.

  3. Whether clubbing all incidents into one FIR effectively caps punishment at the maximum for a single offence (e.g., seven years), and whether that offends the principle of proportionality of punishment, especially in light of Narinderjit Singh Sahni vs. Union of India & ors. and State vs. Ramesh Chand Kapoor.

Delhi High Court’s View

The Division Bench of the Delhi High Court, by judgment dated 08.07.2019, answered against consolidation:

  • For Question (a):

    • Each deposit by an investor was held to be a separate, individual transaction.
    • The Court ruled that one FIR is not sufficient; a separate FIR must be registered for each complainant disclosing a cognizable offence.
    • Other complainants cannot merely be treated as witnesses in a single FIR.

  • For Question (b):

    • For each FIR, there must be a separate final report/charge-sheet.
    • No amalgamation of final reports from different FIRs was permissible.
    • Any clubbing was said to be governed strictly by Section 219 CrPC, to be considered by the trial court at the stage of framing charges, allowing at most three offences of the same kind in one trial.

  • For Question (c):

    • The High Court held that this question effectively did not survive in view of answers to (a) and (b).
    • Sentencing was left to the trial court under Section 31 CrPC, subject to Section 71 IPC.

The State (NCT of Delhi) challenged these answers before the Supreme Court.

State’s Arguments Before the Supreme Court

The learned Additional Solicitor General for the State contended:

  • The entire scheme was one overarching conspiracy to induce deposits and cheat numerous investors.
  • All such acts should be regarded as part of a “single transaction”, even if the investors, amounts and dates differ.
  • Consequently, one FIR and a consolidated investigation are legally permissible.
  • Requiring a separate FIR for each investor would:
    • Lead to massive multiplicity of proceedings,
    • Overburden investigation agencies and courts, and
    • Run contrary to public policy.
  • Reliance was placed on State of Andhra Pradesh vs. Cheemalapati Ganeswara Rao and another, where the Supreme Court had held that a unity of purpose or design in a series of acts is a strong indicator of a “same transaction”.

Amicus Curiae’s Submissions

Mr. R. Basant, acting as amicus curiae, made the following key submissions: