After Complainant Receives Rs 25.1 Lakh In Wheat Deal Settlement, Karnataka HC Quashes Cheating Proceedings

In brief

The question

Whether the High Court should quash proceedings for the alleged non-compoundable offences on the basis of the parties’ settlement

The court held

The Court accepted the compromise and allowed the criminal petition.

It also directed

It quashed the proceedings in C.C. No. 2777/2026 against accused Nos. 1 and 2 for the offences under Sections 318(2), 318(3), 318(4), read with Section 3(5) of the BNSS, and allowed I.A. No. 1 of 2026

01Facts

The petitioners, accused Nos. 1 and 2, faced prosecution in C.C. No. 2777/2026 for offences under Sections 318(2), 318(3), 318(4), read with Section 3(5) of the BNSS.

The complaint alleged that the complainant transferred ₹25,10,000 to accused No. 2, on accused No. 1’s directions, for the purchase of wheat, but the goods were not delivered

p. 12

During the proceedings, the petitioners and complainant settled the dispute; the complainant acknowledged receipt of ₹25,10,000 and agreed to withdraw the allegations.

pp. 3–5

They jointly sought to compound the offences and quash the proceedings

pp. 3–5

The petitioners invoked the High Court’s inherent jurisdiction under Section 528 BNSS/Section 482 Cr.P.C.

p. 2

02Issues

i.Whether the High Court should quash proceedings for the alleged non-compoundable offences on the basis of the parties’ settlement

pp. 6–7, 12–13

ii.Whether continuation of the prosecution, in light of the settlement and repayment, would serve the ends of justice or instead amount to an abuse of process

pp. 6–7, 13

03Law Applied

Section 528 BNSS, corresponding to Section 482 Cr.P.C., preserves the High Court’s inherent power to quash criminal proceedings, including proceedings for non-compoundable offences, where necessary to secure the ends of justice or prevent abuse of process.

pp. 2–3, 6–12

The Court relied on Narinder Singh v. State of Punjab, (2014) 6 SCC 466, which states that this power must be exercised sparingly and with caution; it may be appropriate in cases with a predominantly private or civil character where the parties have settled their dispute, the possibility of conviction is remote, and continuation would cause unnecessary oppression.

pp. 6–12

The Court also recorded that the alleged offences were non-compoundable, but treated the application under Section 359(2) BNSS alongside the request to quash under the High Court’s inherent jurisdiction

pp. 2–3, 6–12

Provisions in the judgment · 10 · Linked ones open on LawLens

Bharatiya Nagarik Suraksha Sanhita, 2023 Section 528 Section 318 Section 3 Section 359

Code of Criminal Procedure, 1973 Section 482 Section 320

Indian Penal Code, 1860 Section 307 Section 324 Section 323 Section 34

04Reasoning

The Court treated the dispute as arising from a business transaction and noted that the complainant had received the full amount of ₹25,10,000 and voluntarily settled the matter

pp. 12–13

Applying the principles in Narinder Singh, it considered that the settlement reduced the likelihood of the complainant supporting the prosecution, making conviction remote; continuation of the case would therefore be unnecessary

pp. 7, 12–13

On that basis, it concluded that quashing would prevent an abuse of process and serve the ends of justice

p. 13