Non-compoundable proceedings may be quashed where a settled commercial dispute has a predominantly civil character.

The petitioner sought quashing, on the basis of settlement, of FIR No. 35/2021 registered under Sections 406, 120B and 34 of the Indian Penal Code, 1860, and the proceedings arising from it.

The complainant had paid ₹5,61,000 to a travel company for a Dubai trip that was cancelled following COVID-19 lockdown restrictions; the FIR alleged that the payment was not refunded.

The petitioner was a director and 10% shareholder in the company, and a chargesheet had been filed against the petitioner and two others.

Under a settlement with the complainant’s brother-in-law and son, the petitioner agreed to pay ₹1,87,000 in total. A subsequent settlement recorded that the amount had been paid, and the complainant confirmed that he did not wish to pursue the case.

The State did not oppose the petition.

Whether the High Court could quash the FIR and consequential proceedings against the petitioner, despite the non-compoundable offence under Section 120B IPC, where the parties had settled the dispute.

Whether the settlement and its performance justified exercising the Court’s inherent jurisdiction under Section 528 BNSS in the circumstances of this case.

Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, corresponding to Section 482 of the Code of Criminal Procedure, 1973, preserves the High Court’s inherent power to prevent abuse of process or secure the ends of justice; that power is distinct from statutory compounding under Section 320 CrPC and may extend to non-compoundable offences.

Applying Parbatbhai Aahir Alias Parbatbhai Bhimsinhbhai Karmur v. State of Gujarat, (2017) 9 SCC 641, the Court noted that quashing on settlement depends on the facts and circumstances, including the nature and gravity of the offence, whether the dispute has an essentially civil or commercial character, and whether conviction is remote and continuation of proceedings would cause oppression or prejudice.

Although Section 120B IPC was non-compoundable, the Court considered whether the inherent power to quash was warranted in light of the settlement. The dispute arose from payment for travel arrangements that could not proceed after COVID-19-related cancellations, and the petitioner had paid the agreed ₹1,87,000 to the complainant’s relatives.

The complainant confirmed receipt and stated that he did not wish to pursue the matter, while the State raised no objection. In those circumstances, the Court found no impediment to quashing the proceedings against the petitioner.

The petition and pending application were disposed of.