Criminal prosecution for forgery quashed where underlying property dispute was settled and principal offences compounded.

The petitioners challenged an FIR and subsequent framing of charges involving alleged double-selling of residential property.

The prosecution alleged that the petitioners received consideration from one party under an agreement to sell, but subsequently executed a registered sale deed in favor of a second party (the complainant), and later entered a third agreement with a different individual.

The petitioners contended the dispute was purely civil, noting significant delays in filing the FIR and the existence of prior civil litigation.

During trial, the parties reached a settlement; the trial court accepted the compromise for offences under Sections 406 and 420 of the IPC but refused to discharge the petitioners for alleged forgery under Sections 465, 467, and 468, leading to these petitions.

1. Whether the continuation of criminal proceedings after a private settlement constitutes an abuse of the process of court when the dispute is predominantly civil in nature.

2. Whether allegations of forgery can be maintained as independent criminal offences when they are intrinsically linked to a property dispute that has been compounded.

The court applied Section 482 of the CrPC and Section 528 of the Bharatiya Nagarik Suraksha Sanhita (BNSS) regarding inherent powers to prevent the abuse of judicial processes.

It relied on Gian Singh v. State of Punjab and State of M.P. v. Laxmi Narayan, which establish that proceedings with an "overwhelmingly civil flavour" involving property or commercial transactions may be quashed upon settlement.

The court cited V.Y. Jose v. State of Gujarat and Hridaya Ranjan Prasad Verma v. State of Bihar to distinguish between a mere breach of contract and criminal cheating, requiring dishonest intent at the inception of the transaction.

Reference was also made to Paramjeet Batra v. State of Uttarakhand regarding the quashing of civil disputes dressed as criminal cases.

The court reasoned that the controversy was a classic civil dispute regarding competing claims and the validity of property transactions, evidenced by multiple pending civil suits.

It observed that the FIR was a "counterblast" to earlier complaints by the petitioners and noted a three-year delay in its lodging.

Regarding the forgery charges, the court found that since the trial court had already accepted the compromise for the underlying cheating and breach of trust allegations, the forgery charges lacked an independent foundation.

The court determined that the alleged "forged" documents were the same instruments whose validity was being contested in civil court and did not involve fabrication of public records.

Consequently, the court found that the possibility of conviction was remote and that the criminal machinery was being used to settle civil scores.

Both petitions were allowed, and the High Court quashed FIR No. 725/2023, the resulting charge-sheet, the trial court's order dated 07.04.2026, and the charges framed under Sections 465, 467, 468, and 120-B of the IPC.