Complete settlement and extraordinary delay may justify quashing criminal proceedings arising from commercial transactions.

The petitions arose from a CBI investigation into gold supplied by MMTC under its Domestic Tariff Area scheme. M/s Kamayani International, of which Akshay Jha was proprietor, received 51 kg of gold, of which 8 kg allegedly remained unexported and unreturned; M/s Balaji Exports, of which Vijay Kumar Jha was proprietor, received 105 kg, of which 16 kg allegedly remained unexported and unreturned

The CBI filed separate charge-sheets alleging offences under Sections 409 and 120-B IPC, and charges were framed and subsequently amended

MMTC later accepted ₹5,30,08,842 as full and final settlement of its claims concerning four firms, including the petitioners’ firms, and released the security documents

The petitioners sought quashing of the proceedings under Section 482 CrPC; the CBI opposed, relying, among other matters, on an earlier order refusing to quash proceedings against co-accused

1. Whether, considering the nature of the transactions, the full and final settlement with MMTC, and the passage of time, continuation of the criminal proceedings against the petitioners would amount to an abuse of process warranting relief under Section 482 CrPC

2. Whether the non-compoundable character of the alleged offences and the earlier refusal to quash proceedings against co-accused precluded quashing in the petitioners’ cases

Section 482 CrPC preserves the High Court’s inherent power to prevent abuse of process and secure the ends of justice; it is not ordinarily a basis for conducting a mini-trial or appreciating disputed evidence

Quashing under Section 482 on the basis of settlement is distinct from statutory compounding under Section 320 CrPC, and non-compoundability alone does not bar quashing; the Court must assess the nature of the allegations, the settlement, the identity and position of the aggrieved party, the likelihood of conviction, and whether continuation would constitute an abuse of process

The Court applied Suresh C. Singal & Ors. v. State of Gujarat & Ors., 2025 SCC OnLine SC 788, concerning the relevance of settlement in predominantly civil or commercial disputes, and Anand Kumar @ Sanjay Lalwani v. State of Madhya Pradesh & Ors., 2026 SCC OnLine SC 1724, concerning the distinction between compounding and quashing and the assessment of likely conviction and abuse of process

The Court treated the settlement as one factor in the overall assessment, not as automatically extinguishing the alleged offences. It considered that the dispute arose from commercial DTA transactions; substantial quantities of the gold had been exported; the petitioners had relied on correspondence seeking extensions; and MMTC had accepted the full and final settlement and released the securities

The Court did not determine the petitioners’ guilt or reappraise disputed evidence, but considered the undisputed settlement and subsequent developments alongside the nearly three-decade-old transactions and proceedings

Although it acknowledged the caution required in cases involving public funds and noted the earlier order concerning co-accused, it held that neither MMTC’s status as a Government company nor the earlier order operated as an absolute bar to the present petitions

In the totality of these circumstances, continuation of the proceedings was considered unlikely to serve a meaningful purpose and would amount to an abuse of process

It quashed RC No. 2(A)/97-ACU.X, Charge Sheet No. 03/99 and all consequential proceedings qua Akshay Jha, and the same RC, Charge Sheet No. 02/99 and all consequential proceedings qua Vijay Kumar Jha

The relief was expressly confined to the petitioners before the Court