Supreme Court of India
CENTRAL BUREAU OF INVESTIGATIONversusSURENDRA PATWA & ORS
- Citation
- 2025 INSC 572
- Decided
- 25 April 2025
- Disposal
- Appeal(s) allowed
- Bench
- M M SUNDRESH
Holding
Administrative and criminal actions are separate; an FIR remains maintainable irrespective of the validity of the administrative action, and the High Courts erred in quashing the FIRs.
Summary
The Reserve Bank of India issued Master Directions on Frauds to enable banks to detect and report fraudulent accounts, leading the appellant banks to declare the respondents' accounts fraudulent (an administrative action) and to refer the matter to the CBI, resulting in FIRs and criminal proceedings. The High Courts quashed both the administrative actions and the FIRs on the ground that the banks violated the principle of audi alteram partem by not hearing the respondents before blacklisting their accounts. The Supreme Court held that administrative actions and criminal proceedings are distinct; the filing of an FIR does not depend on the validity of the administrative action and natural‑justice principles do not apply to the registration of an FIR. Consequently, the High Courts exceeded their jurisdiction by quashing the FIRs, and the Court restored the FIRs and criminal proceedings while allowing the banks to re‑initiate administrative action in compliance with natural‑justice requirements. The appeals were allowed and the matters were remitted to the High Courts with directions for fresh consideration and for the CBI to be impleaded where omitted.
Issues considered
- The nature and scope of administrative actions under RBI's Master Directions vis‑à‑vis criminal proceedings.
- Whether a violation of the principle of audi alteram partem in an administrative action invalidates a related FIR.
- Whether the High Courts had jurisdiction to quash FIRs and criminal proceedings on the basis of the administrative action's infirmity.
Legislation cited
Subjects
RBI’s Master DirectionsMaster Directions on FraudsAdministrative actionsCriminal proceedingsNo opportunity of being heardAudi alteram partemPrinciples of natural justiceCognizable offenceFraudulentBank accounts declared as fraudulent/blacklistedStatutory/public authoritiesNon‑compliance of legal necessity or mandateCognizance of an offence
Judgment
[2025] 4 S.C.R. 1771 : 2025 INSC 572
Central Bureau of Investigation
v.
Surendra Patwa & Ors.
(Criminal Appeal No. 2199 of 2025)
25 April 2025
[M.M. Sundresh* and Rajesh Bindal, JJ.]
Issue for Consideration
The issue pertains to the nature and scope of administrative
actions initiated in pursuance of the Master Directions on Frauds
issued by RBI vis-à-vis criminal proceedings initiated, against the
respondents.
Headnotes†
Administrative actions vis-à-vis criminal proceedings –
Nature and scope – RBI issued Master Directions on Frauds
providing framework for early detection and reporting of
fraud and consequently taking timely action – In view thereof,
the appellant-Banks initiated administrative action against
the respondents by declaring companies’ bank accounts as
fraudulent – Criminal proceedings were also initiated against
the respondents – Respondents challenged the Master
Directions and the actions taken thereunder – High Courts
quashed the administrative action on the ground of violation of
the principles of natural justice and consequently, the FIRs and
the criminal proceedings were also quashed – Interference with:
Held: An administrative action and a criminal proceeding stand on
different footings – An FIR, by taking cognizance of an offence,
merely sets the law into motion which has nothing to do with a
decision on the administrative side, made by a different authority –
Merely because the facts are same or similar it cannot be said
that in the absence of a valid administrative action, no offence
which is otherwise cognizable, can be registered – At that stage,
only the existence of a cognizable offence has to be seen, based
on the FIR registered – Therefore, even assuming that there is
no action forthcoming on the administrative side, an FIR can be
held to be maintainable – The scope and role of both the actions
* Author
1772 [2025] 4 S.C.R.
Supreme Court Reports
are totally different and distinct, more so when undertaken by
different statutory/public authorities – Even in a case where an
FIR is registered based on an administrative action, setting aside
the latter on a technical or a legal premise would not ipso facto
nullify the former – It is ultimately a matter for investigation by the
appropriate authority – When an administrative order is set aside
on the ground of non-compliance of a legal necessity or mandate,
the facts mentioned thereunder could still be the basis for the
registration of an FIR – High Courts exceeded their jurisdiction
by quashing the FIRs and the subsequent criminal proceedings,
despite not being challenged – FIRs and the subsequent criminal
proceedings which have been quashed are restored, as directed.
[Paras 6-8, 11, 13.1, 13.2]
Administrative actions – Administrative actions initiated in
pursuance of the RBI’s Master Directions were set aside
only on the ground of non-adherence to the principle of Audi
Altarem Partem, not on merits – Administrative authorities, if
barred from proceeding afresh:
Held: No – Setting aside of an administrative action on the grounds
of violation of the principles of natural justice does not bar the
administrative authorities from proceeding afresh – Thus, there is
no bar on the RBI or the Complainant-Banks to proceed afresh,
by adhering to the principles of natural justice. [Paras 12, 13]
Criminal Law – Reporting of a criminal offence – Inapplicability
of principles of natural justice – High Courts relying on Rajesh
Agarwal’s case quashed the administrative action initiated in
pursuance of the RBI’s Master Directions on the ground of
violation of the principles of natural justice consequently, the
FIRs and the criminal proceedings were also quashed:
Held: High Courts quashed the FIRs and the subsequent criminal
proceedings on an erroneous interpretation of Rajesh Agarwal’s
case – It was held therein that the principles of natural justice
are not applicable at the stage of reporting a criminal offence – It
was further clarified that providing an opportunity of being heard
prior to the commencement of a criminal action (i.e. registration
of an FIR), would frustrate the very purpose of initiating a criminal
proceeding, which is to meet the ends of justice – Rajesh Agarwal’s
case explicitly stated that no opportunity of being heard is required
before an FIR is lodged or registered. [Para 9]
[2025] 4 S.C.R. 1773
Central Bureau of Investigation v. Surendra Patwa & Ors.
Case Law Cited
State Bank of India and Others v. Rajesh Agarwal and Others
[2023] 7 SCR 476 : (2023) 6 SCC 1; State Bank of Patiala v. S.K.
Sharma [1996] 3 SCR 972 : (1996) 3 SCC 364; Canara Bank v.
Debasis Das [2003] 2 SCR 968 : (2003) 4 SCC 557 – referred to.
List of Keywords
RBI’s Master Directions; Master Directions on Frauds –
Classification and Reporting by commercial banks and select FIs
dated 01.07.2016; Administrative actions; Criminal proceedings;
No opportunity of being heard; Audi altarem partem; Principles of
natural justice; Cognizable offence; Fraudulent; Bank accounts
declared as fraudulent/blacklisted; Statutory/public authorities;
Non-compliance of legal necessity or mandate; Cognizance of
an offence.
Case Arising From
CRIMINAL & CIVIL APPELLATE JURISDICTION: Criminal Appeal
No. 2199 of 2025
From the Judgment and Order dated 25.07.2023 of the High Court
of Madhya Pradesh at Indore in WP No. 23800 of 2021
With
Criminal Appeal Nos. 2200, 2201, 2202-2203, 2204-2205, 2206-
2207, 2208, 2209-2212, 2213, 2214, 2215, 2216, 2217, 2218,
2219, 2220, 2221, 2222, 2223-2224, 2225, 2226, 2227-2228,
2229-2230, 2231, 2232, 2233, 2235, 2234, 2236, 2237 of 2025
and Civil Appeal Nos. 5548-5549, 5550, 5551-5552, 5553, 5554,
5555, 5556 and 5557 of 2025
Appearances for Parties
Advs. for the Appellant:
S.V. Raju, Suryaprakash V Raju, A.S.Gs., Sanjay Kapur, Surya
Prakash, Arjun Bhatia, Ms. Mahima Kapur, Mukesh Kumar
Maroria, Samrat Goswami, Zoheb Hussain, Annam Venkatesh,
Kanu Agarwal, Amit Sharma B, B.K. Satija, Saurabh Pandey,
Madhav Sinhal, Mukesh Kumar Maroria, Rajesh Kumar Gautam,
Anant Gautam, Dinesh Sharma, Ms. Likivi Jakhalu, Kushagra
Nilesh Sahay, Mukesh Kumar Maroria, Gaurang Bhushan, Annam
Venkatesh, Vivek Gurnani.
1774 [2025] 4 S.C.R.
Supreme Court Reports
Advs. for the Respondent:
S Nagamuthu, Siddhartha Dave, Siddarth Agarwal, Anand Chibbar,
V. Giri, Sr. Advs., Mahesh Agarwal, Rishi Agrawala, Ankur Saigal,
Rohan Talwar, Shashwat Singh, Ms. Nidhi Sri, E. C. Agrawala, Ms.
Udita Singh, Karan Nehra, Abhay Josan, Harvinder Singh, Amol
Chitravanshi, Krishan Kumar, Nitin Pal, Rohit Pandey, Chritarth Palli,
Himanshu Tyagi, Chritarth Palli, Zoheb Hossain, Annam Venkatesh,
Chandra Prakash, Arvind Kumar Sharma, Ms. Samridhi S. Jain,
Amrendra Kumar Mehta, Sahil A Garg Narwana, Ranpal Awana, D
N Ojha, Ms. Neeha Nagpal, Malak Manish Bhatt, Surjeet Bhadu,
Vishvendra Tomar, Ankit Bhatia, Kailash Ram, Siddharth R Gupta,
Mrigank Prabhakar, Aman Agrawal, Shantanu Sharma, Ms. Sakshi
Banga, Siddharth Sahu, Abhinav Malhotra, Aayush Agarwala, Anuj
P. Agarwala, Ms. Mallika Luthra, M/S. Pba Legal, Vaibhav Sahni, Ms.
Tina Garg, M. K. Ghosh, Rajesh Kumar Gautam, Anant Gautam,
Dinesh Sharma, Ms. Likivi Jakhalu, Kushagra Nilesh Sahay, Vijay
Aggarwal, Nagesh Behl, Vishal Gaurav, Rhythm Aggarwal, Pankush
Goyal, Somesh Chandra Jha, Shashank Dey, Saurabh Nager, Ms.
Alkaa Chojar, Ramesh Babu M. R., Ms. Jagriti Bharti, Ms. Tanya
Chowdhary, Kausar Raza Faridi, Sarfaraz Khan, Mirza Amir Baig,
Abdul Wahid, Faisal Ahmad, Ms. Praveena Gautam, Pawan Shukla,
Ms. Tissy Annie Thomas, Ms. Akanksha Tyagi, Arun Aggarwal, Ms.
Anshika Agarwal, Shivam Saini, Praful Rawat, Anupam Kishore
Sinha, Avinash K Sharma, Rishesh Sikarwar, Pradeep Kumar Tiwari,
Apoorv Jha, Sahitya Srivastava, Ms. Aagam Kaur, Ms. Akshata Teli,
Ms. Keertana Nair, Krishna Dev Jagarlamudi, Shresth Mukharya,
Arpit Kumar Mishra, Ms. Jagriti Pandey, Vishnukanth Mundada,
Sanjay Kapur, Surya Prakash, Arjun Bhatia, Ms. Mahima Kapur.
Judgment / Order of the Supreme Court
Judgment
M.M. Sundresh, J.
1. Leave granted.
2. The Reserve Bank of India (hereinafter referred to as the “RBI”)
issued the Master Directions on Frauds – Classification and Reporting
by commercial banks and select FIs, dated 01.07.2016 (hereinafter
referred to as “Master Directions”). The Master Directions had been
formulated with the objective of providing a framework for banks,
[2025] 4 S.C.R. 1775
Central Bureau of Investigation v. Surendra Patwa & Ors.
to enable early detection and reporting of frauds, and consequently
taking actions in a timely manner. In view of the same, the Appellant-
Banks initiated administrative actions that affected the respondents,
by declaring the companies’ bank accounts as fraudulent - an action
which had significant civil consequences delineated in the Master
Directions. The Appellant-Banks also initiated criminal proceedings
against the respondents, with respect to fraudulent activity that
was detected, as the Master Directions require the Banks to refer
certain categories of cases to the State Police or the Central Bureau
of Investigation (hereinafter referred to as “CBI”), as a general
rule. Aggrieved by the same, the respondents approached different
jurisdictional High Courts, challenging the validity of the Master
Directions, and the actions taken consequently.
3. The High Courts, vide the impugned orders, have quashed not only the
administrative actions initiated in pursuance of the Master Directions,
but also the First Information Reports (FIRs) registered and the
subsequent criminal proceedings initiated against the respondents.
Placing reliance upon the ratio of the judgment of this Court in State
Bank of India and Others v. Rajesh Agarwal and Others, (2023)
6 SCC 1 (hereinafter referred to as “Rajesh Agarwal’s case”), the
administrative actions were quashed primarily on the ground of non-
adherence to the principles of natural justice, more specifically the
principle of Audi Altarem Partem, as the concerned respondents
were not given an opportunity of being heard before the companies’
bank accounts were declared as fraudulent/blacklisted. The High
Courts consequently quashed the criminal proceedings initiated
against the respondents, holding that they are a natural corollary
to the administrative action of declaring the aforementioned bank
accounts as fraudulent.
SUBMISSIONS
4. The learned Solicitor General (SG) & Additional Solicitor Generals
(ASGs) for the Appellant-CBI submitted that the High Courts ought
not to have equated the administrative actions initiated in pursuance
of the Master Directions with the criminal proceedings. A civil or an
administrative action stands on a different footing in comparison to a
criminal proceeding. In some cases, the High Courts have erroneously
quashed the FIRs and the subsequent criminal proceedings, despite
1776 [2025] 4 S.C.R.
Supreme Court Reports
no prayer being made for the same. In certain other cases, the
Appellant-CBI, despite being a necessary party, has not been heard.
In few others, the Appellant-CBI has not even been impleaded as
a respondent before the High Courts. Finally, it is submitted that
the High Courts have misinterpreted the judgment delivered by this
Court in Rajesh Agarwal’s case (supra) while passing the impugned
judgments. The learned SG and ASGs placed reliance upon paras
37 to 40 and 98 of Rajesh Agarwal’s case (supra) to reinforce
their submissions.
5. The learned senior counsel and learned counsel appearing for the
respondents submitted that the High Courts have rightly appreciated
the ratio of the judgment of this Court in Rajesh Agarwal’s case
(supra). The criminal proceedings are a consequence of the
administrative actions initiated in pursuance of the Master Directions
issued by the RBI. Hence, the High Courts were right in quashing
the FIRs and the subsequent criminal proceedings. It is an admitted
position that the administrative actions initiated in pursuance of the
Master Directions, were taken without adhering to the principle of
Audi Altarem Partem. Hence, no interference is warranted with the
impugned judgments.
DISCUSSION
6. Having heard the respective contentions of the parties, the question
before us pertains to the nature and scope of administrative actions
initiated in pursuance of the Master Directions vis-à-vis criminal
proceedings initiated, against the respondents. We clarify that there
is an apparent distinction between the two. The former is within the
domain of the RBI and the Complainant-Banks, while the latter is
within the domain of the Appellant-CBI. We would like to reiterate that
an administrative action and a criminal proceeding stand on different
footings, as clarified in para 39 of Rajesh Agarwal’s case (supra).
7. An FIR, by taking cognizance of an offence, merely sets the law into
motion. This has nothing to do with a decision on the administrative
side, made by a different authority. Merely because the facts are
same or similar, one cannot say that in the absence of a valid
administrative action, no offence which is otherwise cognizable, can
be registered. At that stage, one only has to see the existence of a
cognizable offence, based on the FIR registered. Therefore, even
[2025] 4 S.C.R. 1777
Central Bureau of Investigation v. Surendra Patwa & Ors.
assuming that there is no action forthcoming on the administrative
side, an FIR can be held to be maintainable. The scope and role
of both the actions are totally different and distinct, more so when
undertaken by different statutory/public authorities.
8. The foundational facts may well be the same. Even in a case where
an FIR is registered based on an administrative action, setting aside
the latter on a technical or a legal premise would not ipso facto
nullify the former. It is ultimately a matter for investigation by the
appropriate authority. When an administrative order is set aside on
the ground of non-compliance of a legal necessity or mandate, the
facts mentioned thereunder could still be the basis for the registration
of an FIR. Hence, the High Courts have clearly failed to take note
of the same.
9. The High Courts have quashed the FIRs and the subsequent criminal
proceedings on an erroneous interpretation of Rajesh Agarwal’s
case (supra).
SBI v. Rajesh Agarwal, (2023) 6 SCC 1
“37. While the borrowers argue that the actions of banks
in classifying borrower accounts as fraud according to
the procedure laid down under the Master Directions on
Frauds is in violation of the principles of natural justice,
RBI and lender banks argue that these principles cannot
be applied at the stage of reporting a criminal offence to
investigating agencies. At the outset, we clarify that
principles of natural justice are not applicable at
the stage of reporting a criminal offence, which is a
consistent position of law adopted by this Court.
38. In Union of India v. W.N. Chadha [1993 Supp (4) SCC
260 : 1993 SCC (Cri) 1171], a two-Judge Bench of this
Court held that that providing an opportunity of hearing
to the accused in every criminal case before taking any
action against them would “frustrate the proceedings,
obstruct the taking of prompt action as law demands,
defeat the ends of justice and make the provisions
of law relating to the investigation lifeless, absurd,
and self-defeating” [Id, SCC p. 293, para 98.] . Again,
a two-Judge Bench of this Court in Anju Chaudhary v.
1778 [2025] 4 S.C.R.
Supreme Court Reports
State of U.P. [(2013) 6 SCC 384 : (2013) 4 SCC (Cri) 503]
has reiterated that the Code of Criminal Procedure,
1973 does not provide for right of hearing before the
registration of an FIR.
39. Chapter VIII of the Master Directions on Fraud provides
detailed procedures to be followed by the banks before
forming an opinion to proceed with a criminal complaint
against the borrowers. Under the said chapter, the
lender banks have to report a borrower to the CBI
after classifying the borrower’s account as fraudulent.
However, the classification of the borrower’s account
does not simpliciter lead to reporting of criminal
complaint with the enforcement authorities; it also
entails penal consequences for the borrowers as laid
down under Clause 8.12.
40. The process of forming an informed opinion under the
Master Directions on Frauds is administrative in nature.
This has also been acceded to by RBI and lender banks
in their written submissions. It is now a settled principle
of law that the rule of audi alteram partem applies to
administrative actions, apart from judicial and quasi-judicial
functions. [A.K. Kraipak v. Union of India, (1969) 2 SCC
262; St. Anthony’s College v. Rev. Fr. Paul Petta, 1988
Supp SCC 676 : 1989 SCC (L&S) 44; Uma Nath Pandey v.
State of U.P., (2009) 12 SCC 40 : (2010) 1 SCC (Cri) 501.]
It is also a settled position in administrative law that it is
mandatory to provide for an opportunity of being heard
when an administrative action results in civil consequences
to a person or entity.
xxx xxx xxx
98. The conclusions are summarised below:
98.1. No opportunity of being heard is required before
an FIR is lodged and registered.
98.2. Classification of an account as fraud not only results
in reporting the crime to the investigating agencies, but
also has other penal and civil consequences against the
borrowers.
[2025] 4 S.C.R. 1779
Central Bureau of Investigation v. Surendra Patwa & Ors.
98.3. Debarring the borrowers from accessing institutional
finance under Clause 8.12.1 of the Master Directions
on Frauds results in serious civil consequences for the
borrower.
98.4. Such a debarment under Clause 8.12.1 of the Master
Directions on Frauds is akin to blacklisting the borrowers
for being untrustworthy and unworthy of credit by banks.
This Court has consistently held that an opportunity of
hearing ought to be provided before a person is blacklisted.
98.5. The application of audi alteram partem cannot be
impliedly excluded under the Master Directions on Frauds.
In view of the time-frame contemplated under the Master
Directions on Frauds as well as the nature of the procedure
adopted, it is reasonably practicable for the lender banks
to provide an opportunity of a hearing to the borrowers
before classifying their account as fraud.
98.6. The principles of natural justice demand that the
borrowers must be served a notice, given an opportunity
to explain the conclusions of the forensic audit report,
and be allowed to represent by the banks/JLF before
their account is classified as fraud under the Master
Directions on Frauds. In addition, the decision classifying
the borrower’s account as fraudulent must be made by a
reasoned order.
98.7. Since the Master Directions on Frauds do not
expressly provide an opportunity of hearing to the
borrowers before classifying their account as fraud, audi
alteram partem has to be read into the provisions of the
directions to save them from the vice of arbitrariness.”
(emphasis supplied)
10. From a perusal of the above paragraphs, it is clear that the principles
of natural justice are not applicable at the stage of reporting a criminal
offence. It has further been clarified that providing an opportunity
of being heard prior to the commencement of a criminal action (i.e.
registration of an FIR), would frustrate the very purpose of initiating
1780 [2025] 4 S.C.R.
Supreme Court Reports
a criminal proceeding, which is to meet the ends of justice. More
specifically, para 98.1 of Rajesh Agarwal’s case (supra) explicitly
states that no opportunity of being heard is required before an FIR
is lodged or registered.
11. We are in full agreement with the submission made on behalf of
the Appellant-CBI that the High Courts exceeded their jurisdiction
by quashing the FIRs and the subsequent criminal proceedings,
despite no challenge being made to the same. Further, the same
have been erroneously quashed in certain instances, either where
there was no opportunity of being heard afforded to the Appellant-
CBI (respondents before the High Courts), or where the Appellant-
CBI was not even impleaded as a party-respondent before the
High Courts.
12. It is pertinent to mention that the administrative actions initiated in
pursuance of the RBI’s Master Directions were set aside only on the
ground of non-adherence to the principle of Audi Altarem Partem
and not on merits. Setting aside of an administrative action on the
grounds of violation of the principles of natural justice does not bar
the administrative authorities from proceeding afresh.
State Bank of Patiala v. S.K. Sharma, (1996) 3 SCC 364
“33. We may summarise the principles emerging from the
above discussion. (These are by no means intended to be
exhaustive and are evolved keeping in view the context of
disciplinary enquiries and orders of punishment imposed
by an employer upon the employee):
xxx xxx xxx
(5) Where the enquiry is not governed by any
rules/regulations/statutory provisions and the only
obligation is to observe the principles of natural
justice — or, for that matter, wherever such principles
are held to be implied by the very nature and impact
of the order/action — the Court or the Tribunal should
make a distinction between a total violation of natural
justice (rule of audi alteram partem) and violation of
a facet of the said rule, as explained in the body of
[2025] 4 S.C.R. 1781
Central Bureau of Investigation v. Surendra Patwa & Ors.
the judgment. In other words, a distinction must be
made between “no opportunity” and no adequate
opportunity, i.e., between “no notice”/“no hearing” and
“no fair hearing”. (a) In the case of former, the order
passed would undoubtedly be invalid (one may call
it ‘void’ or a nullity if one chooses to). In such cases,
normally, liberty will be reserved for the Authority
to take proceedings afresh according to law, i.e., in
accordance with the said rule (audi alteram partem).
(b) But in the latter case, the effect of violation (of a facet
of the rule of audi alteram partem) has to be examined
from the standpoint of prejudice; in other words, what the
Court or Tribunal has to see is whether in the totality of
the circumstances, the delinquent officer/employee did
or did not have a fair hearing and the orders to be made
shall depend upon the answer to the said query. [It is
made clear that this principle (No. 5) does not apply in
the case of rule against bias, the test in which behalf are
laid down elsewhere.]”
(emphasis supplied)
Canara Bank v. Debasis Das, (2003) 4 SCC 557
“21. How then have the principles of natural justice
been interpreted in the courts and within what limits are
they to be confined? Over the years by a process of
judicial interpretation two rules have been evolved as
representing the principles of natural justice in judicial
process, including therein quasi-judicial and administrative
process. They constitute the basic elements of a fair
hearing, having their roots in the innate sense of man
for fair play and justice which is not the preserve of any
particular race or country but is shared in common by
all men. The first rule is “nemo judex in causa sua” or
“nemo debet esse judex in propria causa sua” as stated
in Earl of Derby’s case [(1605) 12 Co Rep 114 : 77 ER
1390] that is, “no man shall be a judge in his own cause”.
Coke used the form “aliquis non debet esse judex in
1782 [2025] 4 S.C.R.
Supreme Court Reports
propria causa, quia non potest esse judex et pars” (Co.
Litt. 1418), that is, “no man ought to be a judge in his
own case, because he cannot act as judge and at the
same time be a party”. The form “nemo potest esse simul
actor et judex”, that is, “no one can be at once suitor
and judge” is also at times used. The second rule is
“audi alteram partem”, that is, “hear the other side”.
At times and particularly in continental countries,
the form “audietur et altera pars” is used, meaning
very much the same thing. A corollary has been
deduced from the above two rules and particularly
the audi alteram partem rule, namely “qui aliquid
statuerit, parte inaudita altera acquum licet dixerit,
haud acquum fecerit” that is, “he who shall decide
anything without the other side having been heard,
although he may have said what is right, will not have
been what is right” [see Boswel’s case [(1605) 6 Co
Rep 48b : 77 ER 326] (Co Rep at p. 52-a)] or in other
words, as it is now expressed, “justice should not only
be done but should manifestly be seen to be done”.
Whenever an order is struck down as invalid being
in violation of principles of natural justice, there is
no final decision of the case and fresh proceedings
are left upon (sic open). All that is done is to vacate
the order assailed by virtue of its inherent defect,
but the proceedings are not terminated.”
(emphasis supplied)
Hence, we clarify that there is no bar on the RBI or the Complainant-
Banks to proceed afresh, by adhering to the principles of natural
justice.
13. Based on the aforesaid discussions, we set aside the impugned
judgments. However, since we are dealing with a batch of appeals,
we would like to deal with the same in a staggered manner by
classifying them into 5 different categories, for the sake of convenience
and to give clarity with respect to the outcome of each appeal. The
classification is being done strictly in accordance with the written
submissions that have been filed by the appellants.
[2025] 4 S.C.R. 1783
Central Bureau of Investigation v. Surendra Patwa & Ors.
Classification Description Classification Outcome/Status of the
of Categories of the Case of Sub Case
Categories
FIR Restore the Petitions in
challenged their original form and
Category 1
and set N.A. remit to the High Court.
aside by the
High Court
FIR not 2 weeks from the date
challenged, of passing this judgment
Category 2
but still set N.A. for the respondents to
aside by the resort to remedies in a
High Court manner known to law.
To continue till the
disposal of the petition
3A - Passed
being remitted to the
High Court.
Interim No coercive steps
Category 3
Orders against the concerned
3B - Not respondents for a period
passed of 2 weeks from the
date of passing this
judgment.
Investigation shall
continue, but no
coercive steps shall
Ongoing
be taken against the
concerned respondents/
Status of Accused
Category 4
Investigation
The concerned
respondents/accused
Completed are not to be arrested
and no coercive steps
shall be taken.
CBI not
added as
To be impleaded by way
a Party –
Category 5 N.A. of a suo moto order by
Respondent
this Court
before the
High Court
1784 [2025] 4 S.C.R.
Supreme Court Reports
13.1 CATEGORY 1: FIR CHALLENGED AND SET ASIDE BY THE
HIGH COURT
S. Case Title
No.
1. SLP (Crl.) No.7735/2024 - CBI v. SURENDRA PATWA AND
ORS.
2. SLP (Crl.) No.7748/2024 - CBI v. E. SUDHIR REDDY AND
ORS.
3. SLP (Crl.) No. 14011/2024 - CBI v. MADANLAL GOYAL AND
ORS.
4. SLP (Crl.) No. 13050 -13051/2024 - CBI v. NARINDER
CHUGH AND ORS.
5. SLP (Crl.) Nos. 15574 - 15575/2024 - CBI AND ANR. v. M/S
BHARAT PAPERS LTD. AND ORS.
6. SLP (Crl.) Nos. 15572 - 15573/2024 - CBI v. PRANAV GUPTA
AND ORS.
7. SLP Diary No. 43552/2024 - CBI v. SUYOG JAIN AND ORS.
8. SLP Diary No. 44000/2024 - CBI v. ASHOK KUMAR MIGLANI
AND ORS.
9. SLP Diary No. 43977/2024 - CBI v. BHAGWAN DASS GARG
AND ORS.
10. SLP (Crl.) No. 18393/2024 - CBI v. NAVNEET GUPTA AND
ORS.
11. SLP Diary No. 49283/2024 - CBI v. RAJA SINGH KAPOOR
AND ORS.
12. SLP Diary No. 49284/2024 - CBI AND ORS. v. ABHISHEK
SOIN AND ANR.
13. SLP (Crl.) No. 881/2025 - CBI v. RAMAN KUMAR
AGGARWAL AND ORS.
14. SLP Diary No. 60578/2024 - CBI v. NARESH MALHOTRA
AND ORS.
15. SLP Diary No. 3564/2025 - CBI v. VIMAL KUMAR AND ORS.
16. SLP (Crl.) No. 6371 - 6374/2024 - CBI v. VIJAY SONI AND
ORS.
[2025] 4 S.C.R. 1785
Central Bureau of Investigation v. Surendra Patwa & Ors.
17. SLP (C) No. 29120/2024 - STATE BANK OF INDIA v. MS
BHARAT PAPERS LTD AND ORS.
18. SLP (Crl) No. 630/2025 - PUNJAB NATIONAL BANK v.
SHALLU GUPTA AND ORS.
19. SLP (Crl) No. 635/2025 - PUNJAB NATIONAL BANK v.
NARINDER CHUGH AND ORS.
20. SLP (C) No. 28055-28056/2024 - STATE BANK OF INDIA v.
ISHWAR CHAND GOEL AND ORS.
21. SLP (C) No. 28057-28058/2024 - STATE BANK OF INDIA v.
ABHISHEK SOIN AND ORS.
22. SLP (Crl) No. 16786/2024 - PUNJAB NATIONAL BANK v.
NARESH MALHOTRA AND ORS.
23. SLP (C) No. 29119/2024 - STATE BANK OF INDIA v. RAMAN
KUMAR AGGARWAL AND ORS.
24. SLP (Crl) No. 18396/2024 - PUNJAB NATIONAL BANK AND
ANR. v. VIMAL KUMAR AND ORS.
We set aside the impugned judgments and remit the matters in
their original form to the High Court for fresh consideration on all
issues, except the one issue which has been decided by us in these
appeals. Needless to state that the FIRs and the subsequent criminal
proceedings which have been quashed will also stand restored in
their original form.
We request the High Courts to make an endeavour to dispose of the
matters being remitted within a period of 4 months from the date of
passing this judgment, after affording an opportunity of hearing to
all the concerned parties.
13.2 CATEGORY 2 : FIR NOT CHALLENGED, BUT STILL SET
ASIDE BY THE HIGH COURT
S. Case Title
No.
1. SLP (Crl.) No. 9094/2024 - CBI v. RUCHI ACRONI
INDUSTRIES LIMITED AND ORS.
2. SLP (Crl.) No. 420/2025 - CBI v. GAUTAM GUPTA AND ORS.
1786 [2025] 4 S.C.R.
Supreme Court Reports
3. SLP (Crl.) No. 634/2025 - CBI v. GAUTAM GUPTA AND ORS.
4. SLP (Crl.) No. 18394 /2024 - CBI v. HAKAM CHAND JOSAN
AND ORS.
5. SLP (Crl.) No. 631/2025 - CBI v. KALARITHARA MICHAEL
SEBASTINE AND ORS.
6. SLP (Crl.) No. 18395/2024 – CBI AND ORS. v. SUKHINDER
SINGH AND ORS.
7. SLP (Crl.) No. 18414/2024 - CBI v. VIJAY KUMAR AND ORS.
8. SLP (Crl.) Nos. 945-946/2025 - CBI v. RUCHI GLOBAL
LIMITED AND ORS.
9. SLP (C) No. 28059/2024 - STATE BANK OF INDIA v. HAKAM
CHAND JOSAN AND ORS.
10. SLP (C) No. 28184/2023 - PUNJAB NATIONAL BANK v.
VIJAY SONI AND ANR.
11. SLP (C) No. 28231/2023 - PUNJAB NATIONAL BANK v.
RAJIV SONI AND ANR.
12. SLP (C) No. 29121/2024 - STATE BANK OF INDIA v.
GAUTAM GUPTA AND ORS.
13. SLP (Crl) No. 632-633/2025 - CBI v. KARNAL
AGRICULTURAL INDUSTRIES PVT. LTD. AND ORS.
14. SLP Diary No. 968/2025 - PUNJAB NATIONAL BANK v. M/S
KARNAL AGRICULTURAL INDUSTRIES PVT. LTD. & ORS.
We set aside the impugned judgments and grant a period of two
weeks, from the date of passing this judgment, for the concerned
respondents to resort to appropriate remedies in a manner known
to law. All the issues are left open to be raised, except for the one
issue which has been decided by us in these appeals. Needless to
state that the FIRs and the subsequent criminal proceedings which
have been quashed, despite no prayer being made, will also stand
restored in their original form. Further, the respondents before us
in the aforementioned cases are directed to compulsorily implead
the Appellant-CBI as a party-Respondent while taking resort to the
remedy known to law.
[2025] 4 S.C.R. 1787
Central Bureau of Investigation v. Surendra Patwa & Ors.
13.3 CATEGORY 3A : INTERIM ORDER, HAVING BEEN PASSED,
TO CONTINUE TILL THE DISPOSAL OF THE PETITION BEING
REMITTED BACK TO THE HIGH COURT
S. Case Title
No.
1. SLP (Crl.) No.7748/2024 - CBI v. E. SUDHIR REDDY AND ORS.
2. SLP (Crl.) Nos. 15574 - 15575/2024 - CBI AND ANR. v. M/S
BHARAT PAPERS LTD. AND ORS.
3. SLP (Crl.) Nos. 15572 - 15573/2024 - CBI v. PRANAV GUPTA
AND ORS.
4. SLP (Crl.) No. 420/2025 - CBI v. GAUTAM GUPTA AND ORS.
5. SLP Diary No. 43552/2024 - CBI v. SUYOG JAIN AND ORS.
6. SLP (Crl.) No. 634/2025 - CBI v. GAUTAM GUPTA AND ORS.
7. SLP Diary No. 44000/2024 - CBI v. ASHOK KUMAR MIGLANI
AND ORS.
8. SLP (Crl.) No. 18393/2024 - CBI v. NAVNEET GUPTA AND ORS.
9. SLP (Crl.) No. 18394 /2024 - CBI Vs. HAKAM CHAND JOSAN
10. SLP(C) No. 29120/2024 - STATE BANK OF INDIA v. MS
BHARAT PAPERS LTD AND ORS.
11. SLP(Crl) No. 630/2025 - PUNJAB NATIONAL BANK v.
SHALLU GUPTA AND ORS.
12. SLP (Crl) No. 635/2025 - PUNJAB NATIONAL BANK v.
NARINDER CHUGH AND ORS.
13. SLP (C) No. 28059/2024 - STATE BANK OF INDIA v. HAKAM
CHAND JOSAN AND ORS.
14. SLP (Crl) No. 16786/2024 - PUNJAB NATIONAL BANK v.
NARESH MALHOTRA AND ORS.
15. SLP (C) No. 28184/2023 - PUNJAB NATIONAL BANK v.
VIJAY SONI AND ANR.
16. SLP (C) No. 28231/2023 - PUNJAB NATIONAL BANK v.
RAJIV SONI AND ANR.
17. SLP (C) No. 29121/2024 - STATE BANK OF INDIA v.
GAUTAM GUPTA AND ORS.
18. SLP (Crl) No. 18396/2024 - PUNJAB NATIONAL BANK AND
ANR. v. VIMAL KUMAR AND ORS.
1788 [2025] 4 S.C.R.
Supreme Court Reports
The interim orders passed by the High Court shall continue till the
disposal of the petitions being remitted.
13.4 CATEGORY 3B : INTERIM ORDER, HAVING NOT BEEN
PASSED, NO COERCIVE STEPS SHALL BE TAKEN AGAINST
THE CONCERNED RESPONDENTS FOR A PERIOD OF 2 WEEKS
FROM THE DATE OF PASSING OF THIS JUDGMENT
S. Case Title
No.
1. SLP (Crl.) No.7735/2024 - CBI v. SURENDRA PATWA AND ORS.
2. SLP (Crl.) No. 9094/2024 - CBI v. RUCHI ACRONI
INDUSTRIES LIMITED AND ORS.
3. SLP (Crl.) No. 14011/2024 - CBI v. MADANLAL GOYAL AND ORS.
4. SLP (Crl.) No. 13050 -13051/2024 - CBI v. NARINDER
CHUGH AND ORS.
5. SLP Diary No. 43977/2024 - CBI v. BHAGWAN DASS GARG
AND ORS.
6. SLP Diary No. 49283/2024 - CBI v. RAJA SINGH KAPOOR
AND ORS.
7. SLP Diary No. 49284/2024 - CBI AND ORS. v. ABHISHEK SOIN
AND ANR.
8. SLP (Crl.) No. 631/2025 - CBI v. KALARITHARA MICHAEL
SEBASTINE AND ORS.
9. SLP (Crl.) No. 881/2025 - CBI v. RAMAN KUMAR AGGARWAL
AND ORS.
10. SLP (Crl.) No. 18395/2024 – CBI AND ORS. v. SUKHINDER
SINGH AND ORS.
11. SLP (Crl.) No. 18414/2024 - CBI v. VIJAY KUMAR AND ORS.
12. SLP (Crl.) Nos. 945-946/2025 - CBI v. RUCHI GLOBAL
LIMITED AND ORS.
13. SLP Diary No. 60578/2024 - CBI v. NARESH MALHOTRA
AND ORS.
14. SLP Diary No. 3564/2025 - CBI v. VIMAL KUMAR AND ORS.
15. SLP (Crl.) No. 6371 - 6374/2024 - CBI v. VIJAY SONI AND ORS.
[2025] 4 S.C.R. 1789
Central Bureau of Investigation v. Surendra Patwa & Ors.
16. SLP (C) No. 28055-28056/2024 - STATE BANK OF INDIA v.
ISHWAR CHAND GOEL AND ORS.
17. SLP (C) No. 28057-28058/2024 - STATE BANK OF INDIA v.
ABHISHEK SOIN AND ORS.
18. SLP (C) No. 29119/2024 - STATE BANK OF INDIA v. RAMAN
KUMAR AGGARWAL AND ORS.
19. SLP (Crl) No. 632-633/2025 - CBI v. KARNAL
AGRICULTURAL INDUSTRIES PVT. LTD. AND ORS.
20. SLP Diary No. 968/2025 - PUNJAB NATIONAL BANK v. M/S
KARNAL AGRICULTURAL INDUSTRIES PVT. LTD. & ORS.
We direct that no coercive steps shall be initiated against the
respondents for a period of two weeks from the date of passing
this judgment.
13.5 CATEGORY 4A : INVESTIGATION IS ONGOING, AND IS
TO CONTINUE, BUT NO COERCIVE STEPS SHALL BE TAKEN
AGAINST THE CONCERNED RESPONDENTS/ACCUSED
S. Case Title
No.
1. SLP (Crl.) No. 9094/2024 - CBI v. RUCHI ACRONI
INDUSTRIES LIMITED AND ORS.
2. SLP (Crl.) No.7748/2024 - CBI v. E. SUDHIR REDDY AND ORS.
3. SLP (Crl.) No. 14011/2024 - CBI v. MADANLAL GOYAL AND ORS.
4. SLP (Crl.) No. 13050 -13051/2024 - CBI v. NARINDER
CHUGH AND ORS.
5. SLP (Crl.) Nos. 15574-15575/2024 - CBI AND ANR. v. M/S
BHARAT PAPERS LTD. AND ORS.
6. SLP (Crl.) Nos. 15572-15573/2024 - CBI v. PRANAV GUPTA
AND ORS.
7. SLP (Crl.) No. 420/2025 - CBI v. GAUTAM GUPTA AND ORS.
8. SLP Diary No. 44000/2024 - CBI v. ASHOK KUMAR MIGLANI
AND ORS.
9. SLP Diary No. 43977/2024 - CBI v. BHAGWAN DASS GARG
AND ORS.
1790 [2025] 4 S.C.R.
Supreme Court Reports
10. SLP (Crl.) No. 18393/2024 - CBI v. NAVNEET GUPTA AND ORS.
11. SLP (Crl.) No. 18394 /2024 - CBI v. HAKAM CHAND JOSAN
AND ORS.
12. SLP Diary No. 49283/2024 - CBI v. RAJA SINGH KAPOOR
AND ORS.
13. SLP Diary No. 49284/2024 - CBI AND ORS. v. ABHISHEK
SOIN AND ANR.
14. SLP (Crl.) No. 631/2025 - CBI v. KALARITHARA MICHAEL
SEBASTINE AND ORS.
15. SLP Diary No. 60578/2024 - CBI v. NARESH MALHOTRA AND
ORS.
16. SLP Diary No. 3564/2025 - CBI v. VIMAL KUMAR AND ORS.
17. SLP (Crl.) No. 6371-6374/2024 - CBI v. VIJAY SONI AND
ORS. (RC0092022A0008)
18. SLP (Crl) No. 632-633/2025 - CBI v. KARNAL
AGRICULTURAL INDUSTRIES PVT. LTD. AND ORS.
Since the investigation qua the concerned respondents/Accused is
currently ongoing, we direct that the investigation shall continue, but
no coercive steps shall be taken against the concerned respondents/
Accused in the meantime.
13.6 CATEGORY 4B : INVESTIGATION IS COMPLETED, AND THE
ACCUSED ARE NOT TO BE ARRESTED AND NO COERCIVE
STEPS SHALL BE INITIATED AGAINST THEM
S. Case Title
No.
1. SLP (Crl.) No.7735/2024 - CBI v. SURENDRA PATWA AND ORS.
2. SLP Diary No. 43552/2024 - CBI Vs. SUYOG JAIN
3. SLP (Crl.) No. 634/2025 - CBI v. GAUTAM GUPTA AND ORS.
4. SLP (Crl.) No. 881/2025 - CBI v. RAMAN KUMAR AGGARWAL
AND ORS.
5. SLP (Crl.) No. 18395/2024 – CBI AND ORS. v. SUKHINDER
SINGH AND ORS.
6. SLP (Crl.) No. 18414/2024 - CBI v. VIJAY KUMAR AND ORS.
[2025] 4 S.C.R. 1791
Central Bureau of Investigation v. Surendra Patwa & Ors.
7. SLP (Crl.) Nos. 945-946/2025 - CBI v. RUCHI GLOBAL
LIMITED AND ORS.
8. SLP (Crl.) No. 6371 - 6374/2024 - CBI v. VIJAY SONI AND
ORS. (RC0092020A0004, RC0092020A0005 &
RC0092020A0007)
Since the investigation qua the concerned respondents/Accused is
complete, we direct that there is no necessity to take coercive steps
or arrest the concerned respondents/Accused.
13.7 CATEGORY 5 : CBI NOT ADDED AS A PARTY – RESPONDENT
BEFORE THE HIGH COURT
S. Case Title
No.
1. SLP (Crl.) No. 634/2025 - CBI v. GAUTAM GUPTA AND ORS.
2. SLP Diary No. 60578/2024 - CBI v. NARESH MALHOTRA AND
ORS.
3. SLP Diary No. 3564/2025 - CBI v. VIMAL KUMAR AND ORS.
In the aforementioned cases and in any other case being dealt
with in the instant appeals, where the Appellant-CBI has not been
added as a party-Respondent before the High Court despite being
a necessary party, we direct that they be impleaded before the High
Court by way of a suo moto order being passed by this Court, since
these matters are being remitted for fresh consideration. We also
make it clear that the permission to file the Special Leave Petitions
in the aforementioned cases stands granted.
14. The appeals stand allowed, accordingly.
15. Pending application(s), if any, shall stand disposed of.
Result of the case: Appeals allowed.
†
Headnotes prepared by: Divya Pandey
Search Indian case law
Ask in plain English, not just keywords. 25,000 AI words free, no card.
Try "RBI’s Master Directions"Sign in to search