Supreme Court Rules Against Multiple FIRs in Economic Offences, Restoring Investigating Agencies' Discretion

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The Supreme Court has overturned a 2019 Delhi High Court ruling that mandated the registration of separate FIRs for each investor or depositor allegedly cheated in large-scale economic offences. In a significant judgment, the apex court has restored discretion to investigating agencies and trial courts, holding that whether multiple FIRs are required or a single consolidated FIR would suffice depends on the facts of each case. The court, comprising justices Sanjay Kumar and Alok Aradhe, ruled that the manner in which criminal law is set into motion cannot be governed by a rigid or inflexible rule. The judgment is likely to have a significant bearing on how large-scale financial frauds involving thousands of victims are investigated and prosecuted across the country. The Delhi High Court's 2019 ruling had put an end to the prevailing practice of the Delhi Police and the Economic Offences Wing (EOW) of registering a single FIR in cases involving cheating of a large number of investors or depositors. The high court had held that each deposit constituted a separate and individual transaction, necessitating a separate FIR for each complainant who disclosed a cognisable offence. However, the Supreme Court found the high court's approach to be legally unsustainable. The court noted that the concept of a 'same transaction' is not rigidly defined in criminal law and must be assessed on a case-by-case basis. Relying on a long line of precedents, the court reiterated that when multiple offences arise out of acts that are connected by unity of purpose, proximity of time and place, or continuity of action, they may legitimately be treated as part of the same transaction. The court also rejected the high court's assumption that consolidation of FIRs was impermissible. Instead, it noted that consolidation or clubbing of FIRs is well recognised in law, particularly where multiplicity of proceedings would not be in the larger public interest. In the case at hand, the Supreme Court left it to the magistrate concerned to determine whether the various acts of cheating constituted part of the same transaction. If they do, the magistrate would be entitled to frame consolidated charges and conduct a joint trial. If not, separate trials would be required, subject to statutory exceptions permitting limited consolidation. The judgment is a significant development in the investigation and prosecution of large-scale financial frauds, and it is likely to have far-reaching implications for the criminal justice system in India.