Madhya Pradesh High Court

Pankaj Bhargava vs The State Of Madhya Pradesh on 7 October, 2025

IN THE HIGH COURT OF MADHYA PRADESH
AT G WA L I O R
BEFORE
HON'BLE SHRI JUSTICE ASHISH SHROTI
WRIT PETITION No. 730 OF 2021
PANKAJ BHARGAVA
Versus
STATE OF M.P. & ORS.
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Appearance:
Shri Nishant Sharma- Advocate for the petitioner.
Shri M.S.Jadon- GA for the respondents/State.
Shri Nitin Agrawal- Advocate for respondent no. 4
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AND
WRIT PETITION No. 10539 OF 2021
NIRMAL RAJORIYA
Versus
STATE OF M.P. & ORS.
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Appearance:
Shri Raghvendra Dixit - Advocate for the petitioner.
Shri M.S.Jadon- GA for the respondents/State.
Shri Narrottam Sharma- Advocate for respondent no. 2.
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AND
WRIT PETITION No. 10541 OF 2021
PANKAJ BHARGAVA
Versus
STATE OF M.P. & ORS.
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Appearance:
Shri Nishant Sharma- Advocate for the petitioner.
Signature Not Verified
Signed by: JAI PRAKASH
SOLANKI
Signing time: 10/7/2025
5:24:47 PM
2

Shri M.S.Jadon- GA for the respondents/State.
Shri Narrottam Sharma- Advocate for respondent no. 4.
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AND
WRIT PETITION No. 11311 OF 2021
VIRENDRA SAHAU
Versus
STATE OF M.P. & ORS.
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Appearance:
Shri Satendra Singh Rawat- Advocate for the petitioner.
Shri M.S.Jadon- GA for the respondents/State.
Shri Nitin Agrawal- Advocate for respondent no. 2.
AND
WRIT PETITION No. 12465 OF 2023
GANGA SINGH THAKUR
Versus
STATE OF M.P. & ORS.
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Appearance:
Shri Nishant Sharma- Advocate for the petitioner.
Shri M.S.Jadon- GA for the respondents/State.
Shri Nitin Agrawal- Advocate for respondent no. 4.
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AND
WRIT PETITION No. 12472 OF 2021
PURSHOTTAM SHRIVASTAVA
Versus
STATE OF M.P. & ORS.
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Appearance:
Shri Nishant Sharma- Advocate for the petitioner.
Shri M.S.Jadon- GA for the respondents/State.
Signature Not Verified
Signed by: JAI PRAKASH
SOLANKI
Signing time: 10/7/2025
5:24:47 PM
3

Shri Nitin Agrawal - Advocate for respondent no. 4.
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RESERVED ON. 26/09/2025
ORDER PASSED ON:- 07/10/2025.
ORDER

The petitioners in this bunch of writ petitions are the employees of Primary Agriculture Credit Cooperative Society Maryadit, Putti/Bageh except the petitioner Ganga Singh Thakur who was working as Branch Manager at Pichore Branch of respondent Bank. They are aggrieved by the directions issued by respondent authorities asking them to deposit amount allegedly defalcated by them with a further direction to concerned authority to lodge an FIR against them. This Court has passed interim orders in these cases, except in W.P. No.10541/021, staying operation of impugned directions issued by respondent authorities.

2. Since, the facts and issue for consideration is similar, all these petitions are being disposed off by this common order. For convenience sake, the facts are taken from W.P. No.730 of 2021.

3. The petitioner was initially appointed as Assistant Society Manager in Primary Agriculture Credit Cooperative Society Maryadit, Putti, Tehsil Dabra, District Gwalior (hereinafter referred to as "Society"). The appointment of petitioner was made pursuant to resolution, dated 27.09.2008, (Annexure P/2) passed by Board of Directors of Society. At the relevant time the petitioner was working as In-charge Society Manager of the Society.

4. The Society is Primary Agriculture Cooperative Society registered under M.P. Cooperative Societies Act, 1961. It is a member Society of District Cooperative Central Bank Maryadit, Gwalior, (hereinafter referred to as "Bank"). The Society meets out its financial obligations by availing credit facilities from Pichore Branch of the Bank.

5. From the return filed by the Bank, it is gathered that certain

complaint with regard to financial irregularities in relation to respondent Society and another Society at Bhageh was received. As per the allegations made in the complaint, fictitious accounts in the name of Society were opened in the Bank and the funds of Society were siphoned through the said accounts. Taking cognizance of the complaint, the Chief Executive Officer of the Bank issued impugned communication, dated 05.01.2021, directing the petitioner, Mr. Pankaj Bhargav, to deposit the alleged defalcated amount failing which action to remove him from service and to lodge an FIR with the Police shall be taken. It is against this communication, dated 05.01.2021, the W.P. No.730 of 2021 was filed by petitioner Mr. Pankaj Bhargav.

6. It appears that the Bank vide its order, dated 29.12.2020, directed enquiry into the matter by a five member committee which made inspection of the Pichore Branch of the Bank on 04.01.2021. A report was submitted by the five member committee which has been brought on record as Annexure R/3 alongwith the return filed by the Bank. The committee has made one of the recommendations for recovery of Rs.87,86,946/- from the petitioner, Mr. Pankaj Bhargav. It further appears that the committee also recorded statement of Mr. Pankaj Bhargav which has been brought on record as Annexure R/5 alongwith the return filed by Bank i.e. respondent no.2.

7. After filing of the writ petition (W.P. No.730/21) by Mr. Pankaj Bhargav, it appears that Joint Commissioner, Gwalior & Chambal Division also directed for an enquiry vide its letter, dated 22.03.2021. A three member committee consisting of Branch Manager of Pichore Branch of the Bank and two Cooperative Inspectors conducted enquiry and submitted its report on 03.04.2021 (Annexure R/4) wherein also the petitioner Mr. Pankaj Bhargav and others have been held responsible for financial embezzlement.

8. Taking cognizance of the report, dated 03.04.2021, the Joint Commissioner, Cooperatives, Gwalior, vide memo, dated 05.04.2021, (Annexure P/6) directed the Chief Executive Officer of the Bank to initiate disciplinary action against the erring incumbents in accordance with service

rules and also to lodge an FIR against them. It appears that, in compliance with directions issued by Joint Commissioner, the complaint was lodged with the Police. However, the same was returned by Police with instructions to submit the complaint with original documents. Since the matter relates to Pichore Branch of the Bank, the Deputy Commissioner, Cooperatives, Gwalior, vide memo, dated 03.06.2021, (Annexure P/7) authorized the Branch Manager of Pichore Branch to lodge an FIR. Further, the Chief Executive Officer of the Bank also issued similar direction to Branch Manager of Pichore Branch vide memo, dated 09.07.2021, to lodge FIR in the matter with the Police.

9. The other petitions (connected with W.P. No.730/21) have been filed challenging the communication, dated 03.06.2021 & 09.07.2021.

10. Challenging the action of respondent authorities, the learned Counsel for petitioners submitted that the directions issued by Chief Executive Officer of the Bank vide impugned communication, dated 05.01.2021, are without authority of law inasmuch as he has no administrative control over the petitioner who is the employee of Society. It is his submission that the petitioner's service conditions are governed by Prathmik Krishi Sakh Sahakari Sansthan Vrahttakar Sakh Sahakari Sansthan, Adim Jati Sewa Sahakari Sansthan, Krishak Sewa Sahakari Sansthan Karmachari Sewa (Niyojan, Nibandhan Tatha Karya Sthiti) Niyam (hereinafter referred as "Service Rules) whereunder, only the Society is competent to take action against its employees. The learned counsel also submitted that directions have been issued without conducting any enquiry and without affording any opportunity of hearing to the petitioners. He also submitted that direction to deposit the amount without determining the liability, is illegal and unsustainable in law. The learned counsel also submitted that the respondents have remedy of lodging a dispute under Section 64 of the Act for recovery of amount and without resorting to said remedy, a direction to lodge an FIR is wrong and illegal.

11. The learned counsel for petitioners also placed reliance upon

Coordinate Bench judgment of this Court in the case of Santosh Sharma & another vs. State of M.P. & ors. passed in W.P. No.4990 of 2019 to say that action without conducting an enquiry is illegal.

12. On the other hand the learned counsel for respondent Bank submitted that no action has been taken against the petitioners so far and, therefore, the writ petitions filed by them are premature. It is his submission that vide communication, dated 05.01.2021, no penalty has been imposed upon the petitioner. Rather, only a demand of defalcated amount has been made from him and in case he chooses not to deposit the amount, the disciplinary action as also action to lodge an FIR shall be taken. The learned counsel submitted that the action shall be taken against the petitioners only in accordance with service rules and/or as per provisions of Section 64 of the Act. It is his further submission that no opportunity is required to be given before lodging an FIR and if a case constituting offence is registered, the petitioners shall have full opportunity during trial. The learned counsel submitted that serious allegations of financial embezzlement have been found prima facie established against the petitioners and, therefore, action is required to be taken against them in accordance with law.

13. The learned counsel placed reliance on judgment rendered by this Court in the case of Smt. Vidhya Devi & ors. vs. State of M.P. & ors. passed in W.P. No.21834 of 2019 as also in the case of Smt. Vidhya Devi & ors. vs. State of M.P. & ors. passed in W.A. No.128/2020.

14. The learned counsel for respondents/State adopted the arguments of counsel for respondent Bank and prayed for dismissal of writ petitions.

15. Considered the arguments and perused the records.

16. In the writ petition filed by Mr. Pankaj Bhargav i.e.W.P. No.730/2021, challenge has been made to communication, dated 05.01.2021, issued by Chief Executive Officer of the Bank to petitioner Pankaj Bhargav asking him to deposit the defalcated amount failing which action for his removal from service and for lodging FIR shall be taken. In other writ petitions, challenge has been made to communication, dated

03.06.2021 & 09.07.2021, wherein direction to lodge an FIR against erring incumbents has been issued.

17. After filing of W.P. No.730 of 2021, enquiry has been conducted by two committees wherein the petitioners have been prima facie found involved in the financial irregularities.

18. So far as direction issued to petitioner Pankaj Bhargav vide communication, dated 05.01.2021, is concerned, it is only a demand made from him with a stipulation that if he do not deposit the amount, action for his removal from service shall be taken in accordance with law. In the same communication, the Administrator of the Society has been directed to lodge an FIR against the petitioner and further to initiate action for recovery of amount under Section 64 of the Act with further action to attach his property under Section 68 of the Act. Thus, no decision has yet been taken. The petitioner's objection that no enquiry was conducted before issuing aforesaid directions, is not acceptable inasmuch as, in case he chooses not to deposit the amount, the enquiry shall now be conducted, either under the service rules or under the provisions of the Act, wherein the petitioner shall have full opportunity to defend himself.

19. The similar issue was considered by coordinate bench of this Court in the writ petition filed by Smt. Vidhya Devi (supra). This Court held in para 12 as under:

"(12) It is clear from the record that the impugned notice/order was issued on 28/09/2019 and when the petitioners did not deposit the amount as mentioned in the said notice, only thereafter the dispute under Section 64 of MP Cooperative Societies Act was filed on 07/10/2019. Therefore, it is clear that the dispute under Section 64 of MP Cooperative Societies Act was filed subsequent to the impugned notice/order dated 28/09/2019. When the petitioners did not deposit the amount in compliance of the notice/order dated 28/09/2019, then the Cooperative Society was left with no other option, but to raise the dispute under Section 64 of MP Cooperative Societies Act for recovery of the said amount, otherwise, the Cooperative Society had no other mode to recover the amount as mentioned in the impugned notice/order. Therefore, filing of the dispute

under Section 64 of MP Cooperative Societies Act would not have any impact on the impugned notice/order dated 28/09/2019. In fact, only after issuing a demand mentioned in the impugned notice/order, a cause of action had arisen in favour of the Cooperative Society to file a dispute under Section 64 of MP Cooperative Societies Act. Accordingly, the first contention of the counsel for the petitioners that the impugned notice/order dated 28/09/2019 is bad in law in the light of pendency of the dispute under Section 64 of MP Cooperative Societies Act is misconceived and is hereby dismissed."

20. The order passed by learned Single Bench has been affirmed by Division Bench vide order, dated 26.02.2020, passed in W.A. No.128/2020. Thus, vide impugned communication, dated 05.01.2021, only a demand has been made by the Bank from the petitioner and in case he chooses not to make payment, the cause of action for initiating action under Section 64/68 of the Act as also under the service rules would arise. Thus, the objection of petitioners that the aforesaid communication has been issued without conducting any enquiry, is not acceptable and is accordingly rejected.

21. The next objection raised by the petitioners' counsel is regarding jurisdiction of the Bank to have issued impugned directions inasmuch as taking action against petitioner is the sole authority of his employer i.e. the Society. In this regard, it be noted that vide communication, dated 05.01.2021, the Bank has directed the Administrator of the Society to take action in the matter. Thus, it cannot be said that any action has been taken by the Bank against the employees of Society. The counsel for the respondent Bank has also fairly contended that any action under the service rules or the Act shall be taken by the Society only. In view of the aforesaid, this objection of petitioners also does not survive and is accordingly rejected.

22. The learned counsel for petitioners next contended that direction to lodge an FIR against all the petitioners is nothing but an attempt to pressurize them to deposit the amount in question. It is his submission that criminal prosecution is being used as a mode to recover the money from the petitioners which is impermissible in law. It is his further submission that

criminal prosecution could not have been directed without first allowing the dispute under Section 64 of the Act or the enquiry under Service Rules to have come to its logical conclusion. The learned counsel submitted that vide impugned communications, the authorities have jumped to a conclusion about guilt of petitioners which has yet not been determined in any legal proceedings.

23. Whether the petitioners are involved in financial irregularities or not would be subject matter of legal process that may be adopted by the Society/Bank. It is not proper for this Court to make any comment in this regard at this stage. Suffice it to say that petitioners have been found prima facie involved in the reports submitted by two committees.

24. It is well established principle of law that no opportunity of hearing is required to be given for lodging an FIR. The moment Police receives information from any source disclosing commission of cognizable offence, it is obliged in law to register FIR under Section 154 of Cr.P.C. and proceed ahead with the investigation. In case of certain offences, the Police is given liberty to conduct an enquiry only to ascertain as to whether information received discloses cognizable offence or not. The law in this regard has been discussed by Apex Court in the case of Lalita Kumari vs. Govt. of U.P. reported in (2014)2 SCC 1. The Apex Court held in para 120 as under:

"120. In view of aforesaid discussion, we hold:

120.1. The registration of FIR is mandatory under Section 154 of the Code, if the information discloses commission of a cognizable offence and no preliminary inquiry is permissible in such a situation.

120.2. If the information received does not disclose a cognizable offence but indicates the necessity for an inquiry, a preliminary inquiry may be conducted only to ascertain whether cognizable offence is disclosed or not.

120.3. If the inquiry discloses the commission of a cognizable

offence, the FIR must be registered. In cases where preliminary inquiry ends in closing the complaint, a copy of the entry of such closure must be supplied to the first informant forthwith and not later than one week. It must disclose reasons in brief for closing the complaint and not proceeding further. 120.4. The police officer cannot avoid his duty of registering offence if cognizable offence is disclosed. Action must be taken against erring officers who do not register the FIR if information received by him discloses a cognizable offence."

25. The apprehension of the petitioners that criminal prosecution is being used as a mode to recover money is unfounded. If the complaint made by respondents does not disclose cognizable offence, the Police would be at liberty to close the case at that stage itself. However, at this stage, there is no good ground to halt the procedure.

26. One Vinod Agrawal, who is also found involved in the instant matter, approached this Court challenging communication, dated 05.04.2021, in W.P. No.8793/2021. The said writ petition was disposed off by this Court with the following observation/directions:

"Apprehension of the petitioner is basically founded upon the directives contained in Annexure P-1 which according to petitioner leaves no scope for the Police to exercise its discretion even if information does not reveal commission of any cognizable offence.

After hearing learned counsel for the petitioner on admission, this Court is of the considered view that interest of justice would be served if direction is issued to the Police to perform its statutory duty u/S.154 Cr.P.C. without being influenced by any extraneous consideration.

Accordingly, present petition is disposed of with direction that the concerned Police will not only consider Annexure P-1 but also enquiry report dated 03.04.2021 Annexure P-5, which 4

WP.8793.2021 according to petitioner is exonerative in nature qua petitioner before deciding as to whether the information supplied reveals commission of cognizable offence against petitioner or not.

This Court has no manner of doubt that the Police will apply its independent mind while exercising its statutory obligation u/S.154 Cr.P.C. and shall not be persuaded alone by the directives contained in Annexure P-1 issued by the Joint Commissioner, Co-operative Societies."

27. The order passed by learned Single Judge in the aforesaid case has been affirmed by Division Bench vide order, dated 27.10.2021, passed in W.A. No.547 of 2021.

28. The learned counsel for petitioners placed heavy reliance upon the judgment rendered by this Court in the case of Santosh Sharma & another (supra) wherein this Court quashed the demand of money and direction to lodge an FIR. A bare perusal of the order passed in this case, it is revealed that the order has been passed on the facts of the case and no law has been laid down by the Court. Infact, in the said case the Court granted liberty to authorities to take up the matter afresh after affording opportunity of hearing to the petitioners. This Court also proposes to pass similar directions to the respondent authorities. Thus, the petitioners do not get much help from the order passed by this Court in the case of Santosh Sharma (supra). The contention of petitioners' counsel that criminal prosecution could not be launched without waiting for the result of action to be initiated under Section 64 of the Act is also not acceptable inasmuch as the scope of both the proceedings is entirely different. The similar issue was considered by Apex Court in the case of State of Madhya Pradesh vs. Rameshwar & ors. reported in (2009)11 SCC 424 wherein the Court held as under:

"48. Mr Tankha's submissions, which were echoed by Mr Jain, that the M.P. Cooperative Societies Act, 1960 was a complete code in itself and the remedy of the prosecuting agency lay not

under the criminal process but within the ambit of Sections 74 to 76 thereof, cannot also be accepted in view of the fact that there is no bar under the M.P. Cooperative Societies Act, 1960, to take resort to the provisions of the general criminal law, particularly when charges under the Prevention of Corruption Act, 1988, are involved."

29. Thus, the respondent authorities cannot be stopped from launching criminal prosecution only because proceeding for recovery of amount is pending or contemplated.

30. In view of discussion made above, this Court does not find any ground to interfere in these matters. The petitions are accordingly disposed off with following directions:

                                        i.     the   impugned     communication      dated   05.01.2021,
                                               03.06.2021 & 09.07.2021 are hereby upheld;
                                        ii.    the Society/Bank is permitted to proceed against their

respective employees under the provisions of Service Rules and/or provisions of the M.P. Cooperative Societies Act, 1961;

iii. the respondent authorities are also at liberty to launch criminal prosecution. If any such prosecution is launched, the Police will apply its mind independently while exercising its obligations under Section 154 of Cr.P.C. and shall not be persuaded only by the directives issued by respondent authorities.

(ASHISH SHROTI) JUDGE jps/-