Ashutosh Vs State of Uttarakhand and Others (Uttarakhand High Court)
Summary: The Uttarakhand High Court directed the Central Bureau of Investigation (CBI) to investigate criminal cases arising from the alleged deposit fraud involving The Loni Urban Multi-State Credit and Thrift Co-operative Society. Twenty-seven petitioners alleged that the Society, registered to operate in Uttar Pradesh and Delhi, had unlawfully opened more than eighteen Suvidha Centres in Uttarakhand, collected public deposits by promising high returns, and defaulted on repayments. The petitioners alleged misappropriation exceeding ₹500 crore.
The petitioners complained that the police had failed to act promptly despite written representations and an application under Section 175(3) of the Bharatiya Nagarik Suraksha Sanhita, 2023. Referring to Lalita Kumari v. Government of Uttar Pradesh, (2014) 2 SCC 1, the Court noted the obligation to register an FIR where cognizable offences are disclosed. It further observed that the Central Registrar’s winding-up order dated 3 March 2025 under Section 86 of the Multi-State Co-operative Societies Act, 2002 could not replace criminal investigation.
The Court identified the need for a coordinated investigation given the multiple FIRs, alleged interstate dimensions, and risks of fragmented evidence-gathering. It also emphasized that the State and Liquidator should secure the Society’s assets to protect depositors’ interests and facilitate lawful restitution.
The High Court directed the CBI to take up investigation of the concerned criminal cases, required police officers to hand over records, and ordered the State to preserve financial and digital evidence and provide manpower, vehicles and accommodation. Both the criminal writ petition and connected public interest litigation were disposed of.
Cases Discussed
- Lalita Kumari v. Government of Uttar Pradesh, (2014) 2 SCC 1 — FIR registration where a cognizable offence is disclosed.
FULL TEXT OF THE JUDGMENT/ORDER OF UTTARAKHAND HIGH COURT
1. The present writ petition under Article 226 of the Constitution of India has been filed by twenty-seven petitioners, all residents of the State of Uttarakhand, seeking a direction for registration of a case and a fair and impartial investigation against The Loni Urban Multi-State Credit and Thrift Co-operative Society and its office-bearers for allegedly defrauding investors of crores of rupees through unauthorized operations in the State.
2. The record reveals that the said Society was registered under Section 7 of the Multi-State Co-operative Societies Act, 2002, bearing Registration No. MSCS/CR/639/2012, with its area of operation confined to the States of Uttar Pradesh and Delhi. Despite this statutory restriction, the Society illegally expanded its operations into Uttarakhand and opened more than eighteen “Suvidha Centres” in districts including Dehradun, Haridwar, Pauri Garhwal, Chamoli, Tehri, Rudraprayag, Uttarkashi, Bageshwar and Nainital.
3. Acting through its local managers and agents, the Society invited deposits from the public, promising high returns and commissions on collections. The petitioners, most of whom are unemployed persons, homemakers, or retired individuals, were persuaded to deposit their savings and also induced their acquaintances and relatives to invest further sums, resulting in total investments running into several crores of rupees.
4. Subsequently, the petitioners discovered that the Society had stopped making repayments on maturity and that its offices were abruptly closed. Complaints made by the investors were either ignored or met with assurances that the payments would soon be released. When no payments were made, the petitioners approached the police authorities, but their requests for registration of FIRs were allegedly declined.
5. Thereafter, the petitioners submitted multiple written complaints between March and August 2025 to the Senior Superintendent of Police, Dehradun, the District Magistrate, and other authorities, detailing the fraud and naming the branch managers responsible. When no effective action ensued, an application under Section 175(3) of the Bharatiya Nagarik Suraksha Sanhita, 2023 was moved before the Civil Judge (S.D.)-6, Dehradun, seeking a direction for registration of an FIR against the office- bearers of the Society.
6. Parallelly, the Government of Uttarakhand, acting upon reports of large- scale misappropriation, issued communications to the Central Registrar of Co-operative Societies, the Reserve Bank of India, and the Ministry of Cooperation, Government of India. The Central Registrar thereafter initiated proceedings under Section 86 of the Multi-State Co-operative Societies Act, 2002 and, vide order dated 03.03.2025, directed winding-up of the Society and appointed the Joint Commissioner & Joint Registrar, Meerut Division, as the Liquidator.
7. It is further placed on record that in WPPIL No. 46 of 2025 (Ashutosh v. State of Uttarakhand & Ors.), a public-spirited individual raised identical issues concerning the same Society. The Division Bench, noting that FIRs had been registered in fourteen cases across the State and similar offences were reported in three other States, directed the State to furnish an action- taken report and requested the learned Standing Counsel for the CBI to obtain instructions for possible transfer of investigation to a central agency.
8. In WPCRL No. 1020 of 2025, the petitioners contend that, despite the gravity of the matter and the clear directions issued in the connected public interest litigation, no tangible progress has been achieved, and the victims continue to be deprived of their hard-earned money.
9. Shri Devang Dobhal, learned counsel for the petitioners, submits that the action of The Loni Urban Multi-State Credit and Thrift Co-operative Society constitutes a massive financial scam operating under the guise of a co-operative structure. Despite multiple complaints and prima facie evidence, the local police have failed to register appropriate offences under the BNS, 2023, the Banning of Unregulated Deposit Schemes Act, 2019, and the Uttarakhand Protection of Interest of Depositors (in Financial Establishments) Act, 2005.
10. It is urged that the offence is trans-State in nature and involves misappropriation exceeding ₹500 crores, necessitating investigation by an independent central agency such as the CBI. The petitioners rely upon the orders passed in WPPIL No. 46 of 2025 to contend that this Court has already recognized the magnitude of the fraud and the inter-State dimension of the crime.
11. It is further argued that the inaction of the authorities has compounded the petitioners’ suffering. Despite written representations and a statutory application under Section 175(3) BNSS, the local police have neither registered FIRs nor submitted any report explaining the delay. The failure to act, it is submitted, violates Articles 14 and 21 of the Constitution and justifies the invocation of the extraordinary writ jurisdiction of this Court.
12. Shri J.S. Virk, learned Deputy Advocate General, submits that the State is fully conscious of the seriousness of the issue. Multiple FIRs have already been registered across districts, and the investigation is being monitored at senior levels. It is pointed out that coordination has been established with the CBCID, and proposals have been forwarded to the Central Government for entrusting the matter to the Central Bureau of Investigation.
13. The learned DAG further submits that Blue-Corner and Look-Out Circulars have been issued against Sameer Agarwal, who has fled abroad, and a proclamation order under the BNSS is being pursued before the competent court.
14. Mr. Piyush Garg, learned counsel for the CBI, appearing on advance notice, submits that, in compliance with earlier directions issued by this Court in WPPIL No. 46 of 2025, the matter has been placed before the competent authority of the Bureau, and instructions are awaited. He assures that the decision of the CBI regarding the assumption of the investigation will be communicated to this Court expeditiously.
15. Heard learned counsel for the Parties and perused the records.
16. The pleadings and documents placed on record show that the said Society was registered under Section 7 of the Multi-State Co-operative Societies Act, 2002, with its notified area of operation restricted to the States of Uttar Pradesh and Delhi. Notwithstanding this statutory limitation, the Society opened numerous branch offices and “Suvidha Centres” in several districts of Uttarakhand and mobilised deposits from the public by holding out assurances of high returns and regular dividends. The pattern of inducement, uniformity of representations, and eventual default on maturity payments clearly indicate the operation of an organized fraudulent scheme designed to extract money from unsuspecting investors.
17. The materials produced by the Petitioners, including deposit receipts, advertisements, and correspondence exchanged with the local officials, reveal that the victims are predominantly from middle- and lower-income groups, individuals who invested their modest savings in the hope of financial security. The deception was thus not merely contractual but systemic, undermining both public trust and institutional regulation. It is evident that the Society functioned in complete breach of its registration conditions and violated statutory provisions governing co-operative and financial establishments.
18. The record further demonstrates that repeated complaints were made by the depositors to the Senior Superintendent of Police and to the District Magistrates of Dehradun and Haridwar, seeking police intervention. The Petitioners have also produced copies of written representations addressed to the Registrar, Co-operative Societies, detailing the modus operandi of the accused persons. The admitted position, however, is that no immediate FIR was registered on these complaints, compelling the Petitioners to move an application under Section 175(3) of the Bharatiya Nagarik Suraksha Sanhita, 2023, before the Civil Judge (S.D.)-6, Dehradun. Such a delay in registering a case in the face of detailed written allegations is contrary to the settled legal position declared in Lalita Kumari v. Government of Uttar Pradesh, (2014) 2 SCC 1, which mandates registration of an FIR upon disclosure of a cognizable offence.
19. It also emerges from the record that the Central Registrar of Co- operative Societies, upon receipt of multiple State reports, has exercised powers under Section 86 of the 2002 Act and ordered winding-up of the Society on 03.03.2025. A Liquidator has been appointed to take charge of its assets and liabilities. While this administrative step is commendable, it cannot substitute the need for criminal prosecution. The determination of criminal liability, tracing of money trails, and identification of beneficiary accounts are matters that lie exclusively within the domain of investigative agencies.
20. This Court notes that similar allegations concerning the same Society are already engaging the attention of this Court in WPPIL No. 46 of 2025 (Ashutosh v. State of Uttarakhand & Ors.), wherein a Division Bench observed that the alleged fraud extends across several States; that First Information Reports have been lodged in fourteen districts; and that Blue- Corner as well as Look-Out Circulars have been issued against the principal accused, who is stated to have fled abroad. These findings lend further assurance to the Petitioners’ contention that the scam possesses inter-State and trans-national dimensions, warranting a centralised and coordinated investigation.
21. The contention of the Petitioners that the State machinery has not acted with requisite promptitude cannot be brushed aside. The multiplicity of FIRs, the lack of coordination among investigating officers, and the absence of a unified strategy for asset recovery together reflect a fragmented approach ill-suited to a crime of this magnitude. A disjointed investigation risks duplication of effort, conflicting findings, and eventual loss of public confidence in the justice process.
22. At the same time, it is also noted that the State authorities have already coordinated with the Central Registrar and that the CBI’s consideration of the matter is pending at the level of the competent authority. This Court expects that decision to be taken without further delay and in the spirit of cooperative federalism, ensuring that neither the investigation is compromised, nor the rights of victims remain unredressed.
23. The duty of the State does not end with the registration of cases. The objective of a criminal justice process, particularly in economic offences, extends to the restitution of victims. Therefore, while this Court finds merit in the Petitioners’ request for centralised investigation, it equally emphasizes the obligation of the State and the Liquidator to identify, attach, and secure the assets of the Society so that depositors’ claims can be addressed in accordance with law.
ORDER
In light of the foregoing, this Court finds that the prayers made by the Petitioners for registration of offences, a fair and independent investigation, and protection of depositors’ interests are justified, and the matter calls for structured directions to ensure that the investigation proceeds in a coordinated and professional manner without further delay or jurisdictional impediment.
The Central Bureau of Investigation (CBI), through its learned Standing Counsel, has already apprised this Court that the proposal for taking over the investigation is under active consideration of the competent authority. In the facts of the present case, this Court deems it appropriate to direct that such consideration be concluded with utmost priority.
Accordingly, the following directions are issued:
(1) The Central Bureau of Investigation is hereby directed to take up investigation of all criminal cases concerned, and this Court directs the concerned Investigating Officers (IOs) and Station House Officers (SHOs) to hand over the records and materials collected in all such cases to the CBI.
(2) The State Government shall extend full cooperation to the Central Bureau of Investigation and the Central Registrar, ensuring that all financial, digital, and documentary records are duly preserved and transmitted as and when required for the ongoing or centralised investigation; and
(3) The Chief Secretary, Government of Uttarakhand, shall provide requisite manpower and logistical support to the CBI, including Police Officers of the rank of Inspector to conduct and assist in the investigation, Constables and Head Constables, technical staff skilled in computing, typing, and record maintenance, official vehicles with drivers, and suitable State accommodation or guest house premises to function as office space and lodging during the course of the investigation.
In light of the above directions, the primary reliefs sought in the present petition stand substantially satisfied. The role of this Court at this stage is limited to ensuring an effective investigative framework, which has now been secured by the above directions.
Consequently, WPCRL No. 1020 of 2025 (Vishal Chhetri & Ors. v. State of Uttarakhand & Ors.) and the connected WPPIL No. 46 of 2025 (Ashutosh v. State of Uttarakhand & Ors.) stand disposed of.
