After Complainant Kept Full ₹12 Lakh Settlement, P&H HC Quashes Plot-Sale Cheating Conviction Despite His Refusal To Compound

Respondent No. 2 complained that the petitioners had agreed to sell him a plot, received the full sale consideration of ₹40 lakh, but sold the plot to another person and failed to honour a cheque issued for repayment.

After trial, the petitioners were convicted under Section 420 IPC and acquitted under Section 406 IPC; each was sentenced to two-and-a-half years’ rigorous imprisonment and fined ₹5,000.

While their appeal was pending, the parties agreed to settle for ₹12 lakh, and jointly applied to compound the offence.

The petitioners paid the full amount, although in instalments later than the agreed dates.

The complainant accepted and retained the payments but subsequently declined to affirm the compromise before the appellate court, which dismissed the compounding application.

The petitioners sought to set aside that order and quash the conviction and related proceedings under Section 528 BNSS.

Section 320 CrPC makes compounding dependent on the consent of the person entitled to compound the offence; a court cannot compel that consent.

However, compounding is distinct from quashing, and the High Court may use its inherent power under Section 528 BNSS to quash proceedings where their continuation would abuse the process of law.

Under the third paragraph of Section 55 of the Indian Contract Act, 1872, a promisee who accepts performance after the agreed time cannot claim compensation for the delay without giving notice of that intention when accepting it.

Raj Reddy Kallem v. State of Haryana, 2024 INSC 347, recognises the distinction between compounding and quashing and permits quashing in an appropriate case despite refusal to compound.

Ramgopal v. State of Madhya Pradesh, 2021 INSC 568, permits quashing after conviction for non-heinous or predominantly private offences where the circumstances and compromise warrant it and quashing would secure the ends of justice.

Ruchi Agarwal v. Amit Kumar Agrawal, (2005) 3 SCC 299, and the other cited authorities support the principle that a party who has accepted the benefit of a compromise may not resile from it so as to perpetuate criminal proceedings.

The Court found that the petitioners had paid the entire ₹12 lakh settlement, and the complainant did not dispute receipt or claim to have returned any part of it.

Although the instalments were late and the compromise contained a default clause, the complainant accepted them without protest and continued to participate in the compromise process; under Section 55 of the Contract Act, that conduct waived the stipulation as to time.

The Court accepted that the complainant’s refusal prevented compounding under Section 320 CrPC, but held that this did not bar quashing under Section 528 BNSS.

Given that the dispute arose from a plot-sale transaction, was predominantly private and commercial, and the complainant had received the agreed settlement in full, the Court concluded that continuing the appeal and sentence proceedings would serve no useful purpose and would amount to an abuse of process.

The pending criminal appeal was disposed of as infructuous, and the petitioners’ appeal bail bonds were discharged.