Criminal proceedings for private financial disputes may be quashed upon a bona fide compromise.

The petitioners invoked Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, seeking quashing of FIR/Crime No. 128/2026 registered at Police Station Mauganj, District Mauganj, for offences under Sections 420 and 120-B of the Indian Penal Code, along with consequential proceedings, on the basis of a compromise with respondent No. 2/complainant.

During the proceedings, the parties reported that they had amicably settled their dispute and filed I.A. No. 15343/2026 in support of the compromise.

Pursuant to the Court’s order, the Registrar (Judicial-II) verified the compromise; the parties appeared in person, were identified by counsel, and stated that the settlement was voluntary, genuine, and free from coercion, inducement, or undue influence.

The dispute arose from private financial/transactional dealings.

Whether the High Court could exercise its inherent jurisdiction under Section 528 of the BNSS, 2023 to quash proceedings for alleged offences under Sections 420 and 120-B IPC on the basis of a voluntary compromise between the accused and the complainant.

Whether, in light of the compromise and the private nature of the dispute, continuation of the criminal proceedings would constitute an abuse of the process of law.

The Court applied Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, which preserves the High Court’s inherent power to prevent abuse of process and secure the ends of justice.

The alleged offences were under Sections 420 and 120-B of the IPC.

Relying principally on Gian Singh v. State of Punjab and Another, (2012) 10 SCC 303, the Court held that non-compoundable criminal proceedings involving predominantly private, civil, commercial, financial, or transactional disputes may be quashed where the parties have genuinely settled the matter, the possibility of conviction is remote, and continuation of the prosecution would cause injustice or amount to abuse of process.

The Court first relied on the Registrar’s verification report, which established that the compromise was genuine, voluntary, and entered into with full understanding by the parties.

It then assessed the nature of the allegations and found the dispute to be essentially private and transactional, without any overriding element of public interest.

Applying the principle in Gian Singh, the Court concluded that the settlement substantially diminished the likelihood of conviction and that continuing the prosecution despite the complete resolution of the dispute would serve no legitimate justice-related purpose and would amount to abuse of process.

The petition was consequently allowed; FIR/Crime No. 128/2026 registered at Police Station Mauganj, District Mauganj, and all consequential criminal proceedings were quashed.

The applicants were discharged from the alleged charges, and their bail bonds, if any, were ordered to stand discharged.