Cheating proceedings arising from private commercial disputes may be quashed upon voluntary settlement.

Respondent No. 3 initiated proceedings concerning a commercial dispute arising from the sale and dismantling of machinery scrap, alleging payment disputes, misdescription of scrap and misappropriation.

The petitioners sought to quash the FIR dated 15 January 2026, registered under Section 420 IPC at Police Station Lalkuan, District Nainital.

During the proceedings, the parties filed a joint compounding application supported by affidavits.

Respondent No. 3 confirmed before the Court that the settlement was voluntary, that the amount in dispute had been settled, and that he had no objection to quashing the FIR and consequential proceedings.

1. Whether the FIR under Section 420 IPC and consequential proceedings could be quashed in view of the parties’ voluntary settlement of their commercial dispute.

2. Whether continuation of the criminal proceedings, despite the settlement and the complainant’s stated lack of grievance, would serve any useful purpose.

The Court considered its extraordinary jurisdiction under Article 226 of the Constitution of India and its inherent powers to quash criminal proceedings where parties have settled a private or personal dispute and the possibility of conviction is remote, provided the offence is not heinous or of a nature that seriously affects society at large.

It relied on Gian Singh v. State of Punjab, (2012) 10 SCC 303; Narinder Singh v. State of Punjab, (2014) 6 SCC 466; and State of Madhya Pradesh v. Laxmi Narayan, (2019) 5 SCC 688.

The Court found that the dispute arose from commercial dealings and that the parties had resolved their inter se differences.

Respondent No. 3 confirmed in Court that the compromise was voluntary, free from coercion or undue influence, and that he no longer wished to pursue the criminal proceedings.

Applying the cited authorities, the Court concluded that the circumstances warranted quashing and that continuing the proceedings would serve no useful purpose and amount to an abuse of process.

The criminal writ petition was allowed, and any pending applications were disposed of.