After Borrower’s ₹65,000 Loan Settlement, Karnataka HC Quashes FIR Against Two Finance Company Employees

Respondent No. 2’s complaint led Koratagere Police to register Crime No. 21/2025 against the petitioners for offences under Sections 329(4), 324(4), 308(4), 352 and 351(2) of the Bharatiya Nyaya Sanhita, 2023.

The petitioners sought to quash the FIR under Articles 226 and 227 of the Constitution and Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023.

The parties filed joint memos recording a settlement concerning the loan account: respondent No. 2 paid ₹65,000 by demand draft, and the petitioners agreed to close the loan account and return the original documents and no-objection certificate to the co-applicant.

Respondent No. 2 consented to quashing the FIR, and the petitioners’ representative confirmed receipt of the payment.

The petitions invoked Articles 226 and 227 of the Constitution and Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, as the bases for seeking quashing of the FIR.

The Court’s order rests on the parties’ recorded settlement, the complainant’s no-objection to quashing, and confirmation that the settlement payment had been received.

The Court accepted that the parties had amicably settled the dispute: respondent No. 2 had paid ₹65,000 toward the loan account, and the petitioners’ representative confirmed receipt of that amount as full and final settlement.

As respondent No. 2 expressly had no objection to quashing the FIR, the Court gave effect to the settlement and quashed the proceedings.

It recorded that ₹65,000 had been received in full and final settlement of the loan and that the original documents and no-objection certificate were to be returned to the surety, Maruthesh.

Both writ petitions were disposed of accordingly.