Criminal Proceedings for Cheating Quashed Under Inherent Powers Following Settlement and Full Restitution of Cryptocurrency Value

The petitioners sought the quashing of FIR No. 0147/2026 registered at P.S. Neb Sarai for cheating under Sections 318(4)/3(5) of the Bharatiya Nyaya Sanhita (BNS), corresponding to Sections 420/34 of the IPC.

The complainant, Abdul Rahman, alleged he transferred 6100 USDT (digital currency) to petitioner Mohammad Azeem Ansari on the promise of high returns, but the petitioners failed to provide the equivalent cash of ₹6,10,000/- as promised.

During the investigation, the parties entered into a settlement via a Memorandum of Understanding (MoU) dated 09.05.2026, wherein the petitioners returned the entire settlement amount to the complainant.

The complainant appeared before the Court and expressed his "no objection" to quashing the FIR.

Whether the High Court should exercise its inherent powers to quash the criminal proceedings based on a compromise between the parties in a case involving an offence of a compoundable nature.

The court primarily applied Section 528 of the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023 (formerly Section 482 CrPC), which vests inherent powers in the High Court to prevent abuse of the process of any court or to secure the ends of justice.

Section 318(4) of the BNS (corresponding to Section 420 IPC) is a compoundable offence under the law.

The court observed that the dispute was essentially private in nature and the parties had "ironed out" their differences through the intervention of family and well-wishers.

Since the complainant had received the full settlement amount and the investigation revealed no prior criminal antecedents for the petitioners, the court reasoned that continuing the criminal proceedings would serve no useful purpose.

The court determined that quashing the FIR was appropriate to secure the ends of justice, provided the petitioners were subjected to a cost to be paid to the Legal Services Committee.

The quashing was made subject to each of the three petitioners depositing a cost of ₹10,000/- (total ₹30,000/-) with the Delhi High Court Legal Services Committee (DHCLSC) within four weeks and the petitioners were further directed to submit proof of deposit and the original MoU to the concerned Investigating Officer.