Offences involving forgery, cheating, and fraudulent withdrawals cannot be quashed solely on the basis of compromise.

The complainant, Smt. Anusuya Jadon, alleged that in 2012 she sold approximately 0.356 hectares of land to a real-estate company represented by the petitioner, Suresh Chandra Jain, against payment through several cheques.

She claimed that approximately ₹60,50,000 remained unpaid and that the petitioner had used forged signatures on self-cheques, fabricated documents, and dishonestly withdrawn amounts from her bank account to falsely demonstrate that the sale consideration had been paid.

On the basis of her complaint dated 10 April 2021, Crime No. 89/2021 was registered at Police Station Kotwali, Lashkar, District Gwalior, for an offence under Section 420 of the IPC.

During the proceedings, the petitioner and the complainant entered into a compromise, supported by affidavits, which was verified by the Principal Registrar as voluntary and free from coercion.

The petitioner consequently sought quashing of the FIR and consequential proceedings under Section 528 of the BNSS; the State opposed the petition.

Whether the FIR registered for allegations of cheating, forged signatures, fabrication of documents, and fraudulent withdrawal of money could be quashed under Section 528 of the BNSS solely on the basis of a compromise between the accused and the complainant.

Whether the alleged offences were predominantly private or civil in character so as to justify exercise of the Court’s inherent jurisdiction notwithstanding the alleged impact on the integrity of financial transactions and the administration of justice.

The Court applied Section 528 of the BNSS, which preserves the High Court’s inherent jurisdiction to prevent abuse of process and secure the ends of justice, and considered the allegation under Section 420 of the IPC.

It held that compromise is not by itself sufficient to justify quashing every criminal proceeding.

The Court must examine the nature and gravity of the offence, its impact on society, and whether the dispute is predominantly private or civil in character.

Offences involving cheating, forgery, fabrication of documents, fraudulent withdrawal of money, and economic misconduct having wider societal ramifications ordinarily cannot be quashed merely because the parties have settled the dispute.

The Court found that the prosecution case was not confined to a contractual dispute or a simple failure to pay sale consideration.

The allegations involved forged signatures on banking instruments, fabrication of documents, dishonest withdrawal of money, and an attempt to create a false record of payment.

Applying the principle that offences with serious criminal and societal consequences are not purely private disputes, the Court held that the alleged conduct affected the integrity of financial transactions, public confidence in the banking system, and the administration of justice.

Although the compromise had been voluntarily verified by the Principal Registrar, the nature and gravity of the allegations outweighed the parties’ settlement and did not warrant exercise of the inherent power under Section 528 of the BNSS.

The petition was accordingly dismissed as devoid of merit.

The Court clarified that its observations were confined to the adjudication of the quashing petition and would not prejudice the merits of the case at trial.