Section 154 CrPC & Government Circulars | Enquiry Report Must Disclose Offence for FIR in Gram Panchayat Fund Misappropriation : Bombay HC Nagpur Bench

The Bombay High Court has clarified that directions to lodge an FIR under government circulars for misappropriation of Gram Panchayat funds can only be issued if the enquiry report conclusively discloses an offence. The judgment underscores that mere irregularities or procedural lapses, without evidence of criminal misappropriation, do not warrant criminal action under Section 154 of the Code of Criminal Procedure (CrPC).

Background & Facts

The Dispute

The petitioner, a 75-year-old agriculturist and resident of Village Kotodi, District Nagpur, alleged misappropriation of Gram Panchayat funds by the respondents, including the former Sarpanch, current Sarpanch, and Gram Panchayat secretaries. The petitioner sought directions to the Chief Executive Officer, Zilla Parishad, Nagpur and the Block Development Officer, Panchayat Samiti, Saoner to lodge an FIR against the respondents under relevant government circulars.

Key Facts

• 17.01.2025: The petitioner and villagers filed a complaint with the Chief Executive Officer, Zilla Parishad, Nagpur, alleging misappropriation of Gram Panchayat funds by the respondents.
• 07.03.2025: The Deputy Chief Executive Officer, Zilla Parishad, Nagpur directed the Block Development Officer, Panchayat Samiti, Saoner to conduct an enquiry.
• 27.06.2025: The Extension Officer, Panchayat Samiti submitted an enquiry report, holding the respondents responsible for misappropriation.
• The petitioner relied on Government Circulars dated 12.06.2013, 04.01.2017, and 18.09.2019, which prescribe procedures for lodging FIRs in cases of misappropriation by Sarpanches and other officials.
• The respondents contended that the enquiry report did not disclose any misappropriation, only irregularities, and thus no FIR was warranted.

Procedural History

• 17.01.2025: Complaint filed by the petitioner and villagers.
• 07.03.2025: Direction issued to conduct enquiry.
• 27.06.2025: Enquiry report submitted, holding respondents responsible.
• 13.11.2025: The petitioner cited previous judgments (Criminal Writ Petition Nos. 169/2023 and 427/2023), where the Bombay High Court directed authorities to act under Section 154 CrPC and government circulars.
• 2026: The present Criminal Writ Petition No. 26 of 2026 filed before the Bombay High Court, Nagpur Bench, seeking directions to lodge an FIR.

Relief Sought

The petitioner sought:

• Directions to the Chief Executive Officer, Zilla Parishad, Nagpur and the Block Development Officer, Panchayat Samiti, Saoner to lodge an FIR against the respondents under Section 154 CrPC.
• Implementation of government circulars dated 12.06.2013, 04.01.2017, and 18.09.2019.
• Recovery of the misappropriated amount from the respondents.

The Legal Issue

The central question was whether the authorities were obligated to lodge an FIR under Section 154 CrPC and government circulars when an enquiry report merely alleges irregularities but does not conclusively disclose misappropriation or criminal liability.

Arguments Presented

For the Petitioner

• The petitioner relied on previous judgments of the Bombay High Court (Criminal Writ Petition Nos. 169/2023 and 427/2023), where the Court directed authorities to act under Section 154 CrPC and government circulars.
• The enquiry report dated 27.06.2025 held the respondents responsible for misappropriation, warranting criminal action.
• The respondents failed to comply with government circulars, necessitating judicial intervention.

For the Respondents

• The respondents contended that the enquiry report did not disclose any misappropriation, only procedural irregularities.
• No criminal liability arose from the enquiry findings, as the funds were utilized, albeit with some irregularities.
• Lodging an FIR would be premature and unjustified without clear evidence of misappropriation.
• The petitioner had an alternate remedy to challenge the enquiry report in appropriate proceedings.

The Court's Analysis

The Court examined the enquiry report and government circulars to determine whether the respondents' actions constituted misappropriation warranting an FIR. The key observations were:

1. Enquiry Report Findings: The Court noted that the enquiry report did not conclusively disclose misappropriation. While irregularities were pointed out, there was no evidence that the respondents had criminally misappropriated funds.

2. Government Circulars: The Court reproduced and analyzed the government circulars dated 12.06.2013, 04.01.2017, and 18.09.2019. These circulars prescribed procedures for lodging FIRs against Sarpanches and other officials in cases of misappropriation. However, the circulars emphasized that criminal action could only be initiated if the enquiry report disclosed an offence.

   "The Government Circular dated 04.01.2017 clearly states that if the enquiry report reveals misappropriation, irregularities, or other offences, the Block Development Officer shall register an FIR under Section 154 CrPC and take further action as per law."

3. No Conclusive Evidence: The Court held that the enquiry report did not meet the threshold required by the circulars to lodge an FIR. The report merely pointed out irregularities, which did not constitute criminal misappropriation.

4. Alternative Remedy: The Court observed that the petitioner had the liberty to challenge the enquiry report in appropriate proceedings if aggrieved by its findings.

The Verdict

The Court dismissed the Criminal Writ Petition No. 26 of 2026 with the following directions:

• The petitioner was granted liberty to challenge the enquiry report in appropriate proceedings.
• The respondents were not directed to lodge an FIR, as the enquiry report did not disclose misappropriation.
• The rule was discharged, and pending applications, if any, were disposed of accordingly.

What This Means For Similar Cases

Enquiry Report Must Disclose Offence for FIR

• Practitioners must ensure that enquiry reports conclusively disclose misappropriation or criminal liability before seeking directions to lodge an FIR under government circulars.
• Mere irregularities or procedural lapses, without evidence of criminal intent, are insufficient to warrant criminal action.

Government Circulars Are Not Automatic Triggers

• Government circulars prescribing procedures for lodging FIRs in cases of misappropriation are not automatic triggers. The enquiry report must establish a prima facie case of criminal liability.
• Authorities are not obligated to act under Section 154 CrPC if the enquiry report fails to disclose an offence.

Alternative Remedies for Aggrieved Parties

• Parties aggrieved by enquiry reports have the option to challenge the findings in appropriate forums, such as civil courts or administrative tribunals.
• Criminal proceedings should not be used as a tool to pressure authorities when the enquiry report does not support criminal liability.