Delhi HC Quashes Cheating FIR After Parties Settle Dispute Over Alleged ₹4.06 Crore Retained In Shimla Land Deal

The FIR alleged that the petitioner received ₹4,55,60,000 from respondent no. 2 in 2007 for purchasing agricultural land in Shimla, refunded ₹48,72,460, and retained the balance.

Although an agreement to sell was later executed and possession of the Junga land delivered, the requisite permission was not obtained and no sale deed was executed.

The parties subsequently entered into a settlement dated 17 August 2026, under which the retained amount was treated as consideration for the Junga land, and the petitioner undertook to facilitate transfer of title, including through an irrevocable Special Power of Attorney.

The petitioner sought quashing of the FIR under Sections 420 and 406 IPC and the proceedings arising from it.

Both parties affirmed the settlement in Court, and the State submitted that the commercial dispute had been resolved.

Article 226 of the Constitution and Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (pari materia to Section 482 CrPC) empower the High Court to quash criminal proceedings to secure the ends of justice or prevent abuse of process, including in appropriate cases involving non-compoundable offences.

Under Gian Singh v. State of Punjab, such power may be exercised where a dispute is predominantly civil or commercial, the parties have settled it, and continuation of proceedings would defeat the ends of justice; the Court must consider the nature and gravity of the offence.

Narinder Singh v. State of Punjab requires consideration of the dispute’s civil or commercial character, the possibility of conviction, and whether continued proceedings would cause oppression or injustice.

Ramgopal v. State of Madhya Pradesh identifies the offence’s nature and effect, the seriousness of any injury, the voluntary nature of the compromise, and the accused’s conduct as relevant considerations.

The Court also cited Reverend Rockes Barnabass Sandhu v. Govt. of NCT of Delhi concerning quashing of an FIR under Sections 420 and 406 IPC in a commercial dispute.

The Court treated the dispute as commercial and noted that the parties had resolved it through the settlement, which they affirmed before the Court; the State also raised no impediment to quashing.

Applying the principles governing quashing on settlement, the Court accepted the joint request to terminate the FIR and related proceedings.

It preserved the petitioner’s obligations under the settlement and his undertakings concerning execution of title-transfer documents, but expressly left open the legality of the proposed transfer and any permission required under Section 118 of the Himachal Pradesh Tenancy and Land Reforms Act, 1972, or other local law.

The Court did not determine whether the land transfer complied with applicable law and directed the parties to comply with local requirements.

Each party was directed to pay ₹25,000 to the Delhi High Court Legal Services Committee within four weeks, with proof of deposit to be filed in the Registry.

The petition and pending application were disposed of.