Delhi HC Quashes FIR Alleging Institute Employees Forged Complainant’s Loan Signatures After Loan Closure And ₹1.15 Lakh Settlement

In brief

The question

Whether the FIR and consequential proceedings could be quashed in the exercise of the High Court’s inherent jurisdiction under Section 582 of the Bharatiya Nagarik Suraksha Sanhita, 2023, on the basis of the parties’ settlement.

The court held

The Court allowed the petition and quashed FIR No. 134/2026, registered under Sections 318(4) and 336(2) of the BNS, together with all proceedings emanating from it.

It also directed

The pending application was also disposed of.

01Facts

The petitioners sought quashing of FIR No. 134/2026, registered at Police Station Lajpat Nagar under Sections 318(4) and 336(2) of the Bharatiya Nyaya Sanhita, 2023 (BNS), and the proceedings arising from it.

pp. 1–2

The complaint alleged that the petitioners, employees of Orane International Institute, forged the complainant’s signatures on a loan application in connection with her admission to the institute and used it to obtain a loan.

pp. 1–2

The petitioners and complainant entered into a settlement-cum-Memorandum of Understanding dated 10 October 2026. The complainant confirmed receipt of the agreed compensation of ₹1,15,000 in total; the alleged loan account had been closed.

p. 1, 4

The parties appeared before the Court and were identified by the Investigating Officer.

p. 4

02Issues

i.Whether the FIR and consequential proceedings could be quashed in the exercise of the High Court’s inherent jurisdiction under Section 582 of the Bharatiya Nagarik Suraksha Sanhita, 2023, on the basis of the parties’ settlement.

pp. 1, 4–7

ii.Whether quashing was appropriate given the nature of the allegations and the settlement, including the closure of the loan account and payment of compensation.

pp. 4–7

03Law Applied

The Court exercised its inherent power under Section 582 of the Bharatiya Nagarik Suraksha Sanhita, 2023, which it treated as pari materia to Section 482 of the Code of Criminal Procedure, 1973.

p. 1

It relied on Gian Singh v. State of Punjab, (2012) 10 SCC 303, for the principle that proceedings involving non-compoundable offences may be quashed where the dispute is predominantly private or civil in character, the parties have settled, and continuation would serve no useful purpose or defeat the ends of justice.

p. 5

It also applied Narinder Singh v. State of Punjab, (2014) 6 SCC 466, which directs courts to consider the ends of justice, the civil character of the dispute, and whether the prospect of conviction is remote.

p. 6

Relying on K. Bharthi Devi v. State of Telangana, 2024 INSC 750, the Court noted that the non-compoundable character of a forgery offence does not, by itself, prevent quashing where a settlement makes continuation futile.

p. 7

Provisions in the judgment · 7 · Linked ones open on LawLens

Bharatiya Nagarik Suraksha Sanhita, 2023 Section 582

Code of Criminal Procedure, 1973 Section 482 Section 320

Bharatiya Nyaya Sanhita, 2023 Section 318 Section 336

Indian Penal Code, 1860 Section 420 Section 465

04Reasoning

The Court treated the dispute as private in nature, with no public element, and noted that the complainant—the only person aggrieved—had settled with the petitioners, the alleged loan account had been closed, and the agreed compensation had been paid.

p. 4

Applying the principles in Gian Singh, Narinder Singh and K. Bharthi Devi, it concluded that the settlement justified quashing notwithstanding the non-compoundable nature of the alleged offences.

pp. 5–7

05Holding

The Court allowed the petition and quashed FIR No. 134/2026, registered under Sections 318(4) and 336(2) of the BNS, together with all proceedings emanating from it.

p. 7

The pending application was also disposed of.

p. 7

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