UCO Bank vs State Of HP & Ors

Rakesh Kainthla, J

The petitioner has filed the present petition seeking quashing of the FIR No. 15 of 2025, dated 4.2.2025, registered at Police Station Kandaghat, District Solan, H.P., for the commission of offences punishable under Section 316 (5) and Section 302 of the Bharatiya Nayaya Sanhita (BNS) 2023.

Briefly stated, the facts giving rise to the present petition are that the informant, Anshul Verma, had taken a loan of ₹2,72,000/- on the 22.6.2020 by pledging the gold ornaments for a period of two years. The account was closed on 28.9.2022. It was renewed on the same day, and the loan amount was increased to ₹2,95,000/-. The account was again renewed on 27.12.2024, and the amount was increased to ₹4,30,000/-. The informant required money in August, 2020. He pledged a gold chain. A loan of ₹93,750/- was disbursed on 17.8.2020. The bank retained the jewellery. The informant's uncle, Rakesh Kumar, owned the gold chain; hence, the second gold loan was transferred in his name on 29.11.2021. Subsequently, the informant's account was frozen/blocked, and the informant was unable to operate the account after 31.12.2024. The informant enquired on 1.1.2025, and he was told that, as per the audit, the ornaments were found to be fake. The informant made a complaint to the manager, but his complaint was not taken. The bank also issued a recall notice and threatened to file an FIR against the informant. The bank also froze/blocked the account of Rakesh Kumar. The manager revealed on enquiry that the gold chain was found to be fake. The bank had verified the gold at the time of advancing the loan from the approved gold valuer. The informant suspected that the gold pledged by him had been replaced in the custody of the bank. He reported the matter to the police, and the police registered the FIR.

Being aggrieved by the registration of the FIR, the bank has approached the Court for quashing the FIR, asserting that the informant had approached the Bank for the grant of a gold loan. The Bank sought a valuation report from its approved valuer, namely M/s Verma Goldsmith. Subsequently, the loan was renewed, and the bank obtained the revaluation/verification from the approved valuer. As per the notification of the bank, the revaluation certificate is to be obtained regarding the genuineness/purity of the gold. The gold ornaments were valued by an approved valuer from time to time. However, the corporate auditor, namely Mr Manoj Dhurba, Forbors Gold Technologies Pvt. Ltd., conducted the audit and found that the gold ornaments were fake/imitation. The bank issued a show cause/demand notice to the informant who lodged a complaint against the bank before the police. The informant had committed the offence of cheating by pledging the fake and imitation gold articles to the bank. The bank had taken the valuation certificates from the approved valuer and had acted upon the certificate issued by him.

Hence, it was prayed that the present petition be allowed and the FIR and consequential proceedings arising out of it be quashed.

Mr Sanjay Dalmia, learned counsel for the petitioner, submitted that the petitioner/bank was cheated by the informant as fake/imitation jewellery was pledged with the bank. This fact was detected during the audit by an approved valuer. The bank had filed a complaint against the informant and his uncle, but the police had not taken any action. Therefore, he prayed that the present petition be allowed and the FIR be quashed.

Mr Lokender Kutlehria, learned Additional Advocate General for the respondents No.1 to 3-State, submitted that the petitioner bank had verified the gold at the time of advancing the loan from the approved jeweller. Either the certificate issued by the approved jeweller was fake, or the jewellery was changed during its custody with the bank. Either of these eventualities is serious and requires a thorough probe. The contents of the FIR disclose the commission of a cognizable offence. The police are continuing with the investigation. Therefore, he prayed that the present petition be dismissed.

I have given considerable thought to the submissions made at the bar and have gone through the records carefully.

The law relating to quashing of criminal cases was explained by the Hon'ble Supreme Court in B.N. John v. State of U.P., 2025 SCC OnLine SC 7 as under: -

"7. As far as the quashing of criminal cases is concerned, it is now more or less well settled as regards the principles to be applied by the court. In this regard, one may refer to the decision of this Court in State of Haryana v. Ch. Bhajan Lal, 1992 Supp (1) SCC 335, wherein this Court has summarised some of the principles under which FIR/complaints/criminal cases could be quashed in the following words:

"102. In the backdrop of the interpretation of the various relevant provisions of the Code under Chapter

XIV and of the principles of law enunciated by this Court in a series of decisions relating to the exercise of the extraordinary power under Article 226 or the inherent powers under Section 482 of the Code which we have extracted and reproduced above, we give the following categories of cases by way of illustration wherein such power could be exercised either to prevent abuse of the process of any court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guidelines or rigid formulae and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised.

(1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety, do not prima facie constitute any oflence or make out a case against the accused.

(2) Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code.

(3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused.

(4) Where the allegations in the FIR do not constitute a cognizable oflence but constitute only a non-cognizable oflence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code.

(5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable based on which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused.

(6) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings, and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party.

(7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to a private and personal grudge." (emphasis added)

Of the aforesaid criteria, clause no. (1), (4) and (6) would be of relevance to us in this case.

In clause (1), it has been mentioned that where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety, do not prima facie constitute any offence or make out a case against the accused, then the FIR or the complaint can be quashed.

As per clause (4), where the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order dated by the Magistrate as contemplated under Section 155 (2) of the CrPC, and in such a situation, the FIR can be quashed.

Similarly, as provided under clause (6), if there is an express legal bar engrafted in any of the provisions of the CrPC or the concerned Act under which the criminal proceedings are instituted, such proceedings can be quashed."

This position was reiterated in Ajay Malik v. State of Uttarakhand, 2025 SCC OnLine SC 185, wherein it was observed:

"8. It is well established that a High Court, in exercising its extraordinary powers under Section 482 of the CrPC, may issue orders to prevent the abuse of court processes or to secure the ends of justice. These inherent powers are neither controlled nor limited by any other statutory provision. However, given the broad and profound nature of this authority, the High Court must exercise it sparingly. The conditions for invoking such powers are embedded within Section 482 of the CrPC itself, allowing the High Court to act only in cases of clear abuse of process or where intervention is essential to uphold the ends of justice.

It is in this backdrop that this Court, over the course of several decades, has laid down the principles and guidelines that High Courts must follow before quashing criminal proceedings at the threshold, thereby pre-empting the Prosecution from building its case before the Trial Court. The grounds for quashing, inter alia, contemplate the following situations : (i) the criminal complaint has been filed with mala fides; (ii) the FIR represents an abuse of the legal process; (iii) no prima facie offence is made out; (iv) the dispute is civil in nature; (v.) the complaint contains vague and omnibus allegations; and (vi) the parties are willing to settle and compound the dispute amicably (State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335).

A similar view was taken in Rajendra Bihari Lal v. State of U.P., 2025 SCC OnLine SC 2265, wherein it was observed:

"70. The aforesaid decisions of this Court make it clear that where the High Court is satisfied that the process of any court is being abused or likely to be abused or that the ends of justice would not be secured, it is not only empowered but also obligated under the law to exercise its inherent powers. The provision does not confer any new power on the High Court but rather saves the power which the High Court already possesses, from before the enactment of the legislation, by reason of its very existence. In exercise of its power, it would be legitimate for the High Court to quash any criminal proceedings if the High Court finds that the initiation or continuation of it may lead to abuse of process of court, and quashing of the proceedings would serve the ends of justice."

The present petition is to be decided as per the parameters laid down by the Hon'ble Supreme Court.

The contents of the FIR and the present petition disclose that the bank had obtained the certificate from the approved jewellers regarding the purity and value of the gold. The jewellery remained in the custody of the bank. Subsequently, the corporate valuer found the jewellery to be fake. These allegations prima facie show that either the certificate issued by the jewellers was fake or the gold ornaments were changed when they remained in the custody of the bank. It was rightly submitted on behalf of the State that either of these eventualities discloses the serious fraud with the bank or the customer. This requires a thorough probe so that repetition of such fraud is prevented. The bank is an aggrieved person in both eventualities and should have cooperated with the investigation; rather, it has approached the Court for quashing the FIR, which prima facie shows that it wants to shield the approved valuers or the officials, or it was a party to a fraud.

It was submitted that the allegations in the FIR are false and the informant had pledged the fake/imitation jewellery with the bank. Even if it is so, it can be verified only after the investigation of the matter and not before that. Therefore, the investigation is necessary for unearthing the truth, and it is impermissible to quash the FIR at this stage.

The matter is at the initial stage, and the police are continuing with the investigation. The contents of the FIR disclose the cheating or the misappropriation of the jewellery. Therefore, the FIR cannot be quashed while exercising the inherent jurisdiction.

No other point was urged.

In view of the above, the present petition fails, and it is dismissed.

The observations made herein before shall remain confined to the disposal of the petition and will have no bearing whatsoever on the merits of the case.