Subsequent restitution of compensation does not negate criminal liability; FIR allegations support continuation of criminal proceedings under IPC for misappropriation despite civil suit settlement.

JUDGMENT :

Sanjeeb K.Panigrahi, J.

1. The petitioners, by way of the present petition, seek quashing of the FIR and the consequential criminal proceedings in respect of Angul P.S. Case No. 305 of 2021 corresponding to G.R. Case No.825 of 2021, pending before the learned S.D.J.M., Angul, inter alia, on the ground of subsequent settlement and restitution of the compensation amount.

I. FACTUAL MATRIX OF THE CASE

2. The brief facts of the case are as follows:

i. The prosecution case, as reflected in the FIR, is that on 13.06.2021 the complainant, Shri R.S. Rawat, Chief Administrative Officer, Air Force, Kalaikunda, Midnapore (West), West Bengal, lodged an FIR against Mrs. Sangita Swain, Secretary of an NGO namely “Human Rights Watch”, Angul.

ii. The FIR alleges that the said NGO had filed complaints before the National Human Rights Commission, New Delhi, being Case Nos. 687/18/1/2017 and 716/18/1/2017, in connection with an incident dated 31.12.2016 at village Chematata in District Balasore, where an infra-red flare allegedly caused death and burn injuries. In the said incident, Master Sameer Naik, son of Liku Naik, died on 31.12.2016, and Ms. Rakhi Naik, daughter of Liku Naik, sustained burn injuries. Mrs. Padmabati Naik, wife of Liku Naik, also sustained burn injuries.

iii. It is further alleged that pursuant to a settlement deed dated 22.08.2019 entered into between the parties, compensation of Rs.10,00,000/- was to be paid to Claimant No.1 and Rs.5,00,000/- to Claimant No.2. In terms of the settlement, the Indian Air Force paid a sum of Rs.15,00,000/- to Mrs. Sangita Swain, as power of attorney holder, through Cheque No. 368679 dated 27.06.2019, which was credited to her SBI account on 28.08.2019. The FIR further alleges that the said amount was not transferred to the actual beneficiaries and that Mrs. Sangita Swain submitted a cash receipt dated 09.09.2019 showing payment of Rs.15,00,000/- to the claimants. According to the prosecution, the Office of the Collector, Balasore reported that no compensation amount had been paid to the beneficiaries either in cash or through cheque or DBT.

iv. Taking note of the report dated 01.12.2020 submitted by the Office of the District Magistrate, Balasore, the National Human Rights Commission directed initiation of criminal proceedings against the concerned NGO and its office bearers.

v. On the basis of the said allegations, Angul P.S. Case No. 305 of 2021 was registered under Sections 420, 468, 471, 409 and 120-B of the Indian Penal Code.

vi. During the pendency of the criminal proceedings, a civil suit being C.S. No. 129 of 2022 was instituted before the Court of the Civil Judge (Senior Division), Angul, for realization of the compensation amount. It is stated that during the said proceedings, the entire amount along with accrued interest was deposited before the civil court and was subsequently withdrawn by the beneficiaries in the presence of the complainant. Thereafter, the suit was withdrawn unconditionally.

vii. By order dated 04.12.2025, this Court called for a report from the Secretary, District Legal Services Authority, Balasore, to verify whether the compensation amount had been received by the victims. Pursuant thereto, a report dated 16.12.2025 was submitted stating that an amount of Rs.20,07,873/- had been repaid to the victims.

viii. In the aforesaid factual background, the petitioners have invoked the inherent jurisdiction of this Court seeking quashing of the FIR and the consequential criminal proceedings.

II. SUBMISSIONS ON BEHALF OF THE PETITIONERS

3. Learned counsel for the petitioners made the following submissions in support of his contentions:

i. Learned co