Investigators must focus on recovery, not just prosecution in financial frauds: HC

The Punjab and Haryana High Court has made it clear that the foremost concern of victims in criminal cases involving financial fraud is not merely the conviction of the accused, but the recovery of the defrauded money.

Holding that such cases are inherently criminal in nature, the Court asserted that it is the investigator’s principal responsibility to take steps for recovering the proceeds of crime—making recovery not incidental, but central to the administration of criminal justice.

“Needless to say that the Court is not a recovery agent, but when the case is not in civil nature but of criminal, the primary objective of every complainant is not the prosecution of the accused but recovery of their lost money. Thus, it is paramount duty of the investigator to take steps for recovery of the proceeds of crime in criminal cases,” observed Justice Anoop Chitkara.

The assertion came as the Bench rejected anticipatory bail to a man, who along with another accused, allegedly duped the complainants of Rs 23.5 lakh for sending their sons abroad in a well-hatched conspiracy. The visas handed over by the accused persons to the complainants were also found to be fake. An FIR in the matter was registered on October 24, 2024, at a police station in Zirakpur.

“It is not a case of merely bank transactions, but providing a fake visa. The petitioner was very well aware of the activities of the co-accused and his stand of being cheated is not substantiated. The investigation points out that proceeds of crime of Rs 23.5 lakh are yet to be recovered,” Justice Chitkara observed.

The judgment is significant as it reflects a clear judicial stance that financial fraud cases must be treated as serious criminal offences, not mere civil disputes dressed up as crimes; and the key objective in such matters was the recovery of defrauded money.

The court added that custodial interrogation was necessary to trace the money trail and ensure recovery. “In the present case, the investigation conducted so far points towards thugee and cheating and it is not a case of any civil offence. Given this, the petitioner is not entitled to bail for the reason that the proceeds of crime which was attributed to him have not been recovered. Further, custodial interrogation is required to recover the proceeds of crime which according to the investigator, had been taken by the petitioner,” Justice Chitkara added

The Bench said perusal of the bail petition and the documents attached prima facie pointed towards the petitioner’s involvement and did not make out a case for anticipatory bail. “The impact of crime would also not justify anticipatory bail,” Justice Chitkara concluded.