Why court refused to clear Madurai cop over Rs 1.45 crore counterfeit notes at abandoned quarters

Justice L Victoria Gowri heard the matter on June 1.

“A police officer is not merely a government servant. He represents the visible arm of the State. When allegations emerge that the machinery intended to suppress crime itself became a participant in criminality, the judicial response cannot be one of premature interdiction unless the prosecution is demonstrably absurd or legally impossible,” the court said June 1, refusing to interfere with the prosecution.

Courts must remain vigilant

• The present criminal original petition projects a deeply disturbing narrative touching the integrity of the law-enforcement machinery itself, the court observed.
• The allegations are not directed against an ordinary citizen, but against a police officer who, according to the prosecution, was entrusted with the solemn duty of combating serious crimes and tracing offenders.
• The accusation, in essence, is that the guardian of law himself became the manipulator of criminal process, the custodian of seized properties transformed into their clandestine possessor, and the protector of justice allegedly converted into its violator.
• Simultaneously, courts must remain vigilant against motivated prosecution targeting police officers who may have fallen victim to institutional rivalries.
• Yet, the balancing exercise cannot culminate in judicial burial of a prosecution which discloses prima facie material requiring evidentiary adjudication.
• Allegations against police officers occupy a peculiar constitutional space.

‘Fake currency hoarding’

• According to the prosecution, Anand was serving as a sub-Inspector attached to the serious crime squad in Madurai district.
• He headed a special team tasked with tracing absconding offenders and recovering properties linked to criminal cases.
• Investigators alleged that during the probe into a counterfeit currency racket in a case registered in 2021 at Kallikudi Police Station, substantial quantities of fake currency notes and related materials were seized.
• However, Anand allegedly failed to hand over all the recovered materials to the investigating officer and secretly retained part of the seized property.
• The prosecution further claimed that Anand had been occupying an old and dilapidated police quarters behind the Thirumangalam Town Police Station for over two years without authorisation.
• Acting on secret information, a special team led by a deputy superintendent of police searched the premises on May 23, 2022.
• During the search, police allegedly recovered counterfeit currency notes worth Rs 1,45,50,000, large quantities of paper bundles cut to resemble currency notes, old newspaper bundles and certain genuine currency notes allegedly intended to facilitate the circulation of fake notes.
• Investigators also claimed that Anand admitted during an enquiry that the seized materials were connected to the counterfeit currency case.

Separate allegation of Rs 25 lakh extortion

The prosecution also linked Anand to another criminal case registered at Kallikudi Police Station in 2020.

According to investigators, Anand illegally detained a man named Punniyamoorthy and demanded Rs 25 lakh from his wife in exchange for securing his release.

The prosecution alleged that he received the money and subsequently misappropriated a substantial portion of it while accounting for only part of the amount through official channels.

To support its case, the prosecution relied on statements from police personnel, private witnesses, including the wife and daughter of Punniyamoorthy, bank transaction records, recovery proceedings and a forensic science laboratory report confirming the counterfeit nature of the seized currency notes.

Based on these allegations, a final report was filed, accusing Anand of offences under sections 409 (criminal breach of trust by a public servant), 420 (cheating and dishonestly inducing delivery of property), 489-C (possession of forged or counterfeit currency notes or banknotes), 448 (house trespass), 406 (criminal breach of trust), 225-A (omission by a public servant to apprehend, or sufferance of escape of, a person lawfully ordered to be apprehended) and 346 (wrongful confinement in secret) of the Indian Penal Code (IPC).

Defence claims fabricated case

Seeking to have the proceedings quashed, Anand argued that the prosecution was malicious and built on fabricated allegations.

His counsel contended that he was not the investigating officer in either of the underlying criminal cases and pointed to what were described as glaring contradictions between the FIR and witness statements regarding who actually conducted vehicle checks and seizure operations.

The defence also questioned the legality of the search, the absence of a valid seizure mahazar and the delay of nearly six months in registering the First Information Report (FIR).

The petitioner further argued that the alleged bank deposits cited by investigators were merely gifts received during his daughter’s ear-piercing ceremony and that the prosecution lacked a valid sanction for prosecution.

‘Contradictions can’t be examined at quashing stage’

• Rejecting the plea, the high court emphasised that its powers under Section 528 of the Bharatiya Nagarik Suraksha Sanhita are extraordinary and must be exercised sparingly.
• The court acknowledged that the petitioner had highlighted certain inconsistencies between the FIR and later witness statements.
• However, it said such contradictions, embellishments or improvements are matters that must be tested during trial and cannot justify termination of criminal proceedings at the threshold.
• Justice Gowri noted that the prosecution explained that Anand, as head of a special district team, often caused local station officers to formally record recoveries that had actually been carried out by his own team.
• Whether such explanation is truthful or fabricated cannot be “conclusively determined” in a quashing petition, the court said.

Recovery and forensic evidence

• The court also found significance in the prosecution’s claim that counterfeit currency worth over Rs 1.45 crore was recovered from premises allegedly under Anand’s exclusive use.
• While the petitioner disputed exclusive possession of the police quarters, the court noted that several police officers had given statements asserting that the premises had been used exclusively by him and his team for more than two years.
• The FSL report confirming the counterfeit nature of the recovered notes further strengthened the prosecution’s case at the prima facie stage, it held.
• The judge added that questions relating to conscious possession of counterfeit currency, procedural irregularities during the search and the reliability of witness statements were all matters requiring evidence and cross-examination during trial.

Delay in FIR not enough to end prosecution

Addressing the challenge based on the delay in registration of the FIR, the high court said the prosecution had explained that preliminary enquiry, internal verification and collection of departmental information had preceded the registration of the case.

“Mere delay in registration of FIR, by itself, cannot automatically annihilate the prosecution, particularly when allegations involve police misconduct and internal enquiries,” the court observed.

Sanction was already granted

The court also rejected the contention that the prosecution lacked valid sanction. It recorded that the competent authority had granted sanction on February 12, 2025, after examining the materials collected during the investigation.

While the validity of the sanction order could be challenged before the trial court, the argument that there was no sanction at all was factually unsustainable, the court held.

Petition dismissed

Concluding that the prosecution had collected witness statements, forensic evidence, documentary material and financial transaction records that disclosed a prima facie case, the high court held that the matter did not fall within the exceptional categories where criminal proceedings could be quashed at the threshold.

Dismissing the petition, the court ruled that the allegations require a full-fledged trial and clarified that all observations made in the order were confined to deciding the quashing plea and would not influence the trial court’s independent assessment of the evidence.