Settlement negotiations without an intentional threat of injury do not constitute attempted extortion.

The applicants, flat purchasers, had disputes with respondent no. 2, the developer, concerning construction and amenities at their residential complex.

Consumer proceedings had been filed by the flat purchasers, while the developer had instituted civil and criminal proceedings against them.

The developer alleged that, at meetings on 9 May and 12 June 2017, the applicants demanded ₹25 lakh each and threatened further trouble if he did not pay.

An FIR was registered under Sections 385 and 34 of the IPC, followed by a chargesheet and proceedings in S.C.C. No. 57 of 2021.

The applicants sought quashing under Section 482 CrPC, contending that the meetings were settlement discussions and the FIR was retaliatory.

1. Whether the allegations and material, including the meeting transcripts, made out a prima facie offence under Sections 385 and 34 IPC.

2. Whether the FIR and consequential proceedings could be quashed under Section 482 CrPC despite the filing of a chargesheet, on the grounds that the allegations disclosed no offence and the prosecution was mala fide.

Section 383 IPC defines completed extortion as intentionally putting a person in fear of injury and thereby dishonestly inducing delivery of property; Section 385 IPC punishes putting, or attempting to put, a person in fear of injury in order to commit extortion, and does not require actual delivery of property.

The Court treated an intentional threat or attempt to create fear of injury as essential to Section 385; a demand alone, including a disproportionate demand, is insufficient.

Section 34 IPC concerns joint liability where a criminal act is done by several persons in furtherance of their common intention.

Under State of Haryana v. Bhajan Lal, proceedings may be quashed where the allegations do not prima facie constitute an offence or where the proceeding is manifestly mala fide.

Anand Kumar Mohatta v. State (NCT of Delhi) establishes that filing a chargesheet does not bar the High Court from exercising its inherent jurisdiction under Section 482 CrPC.

Moh. Wajid v. State of Uttar Pradesh recognises that, where mala fide or vexatious prosecution is alleged, the Court may examine the surrounding circumstances and material collected during investigation with care.

The Court examined the transcripts of both meetings alongside the parties’ dispute history and found that they reflected negotiations over compensation, the proposed construction, and possible withdrawal or resolution of pending proceedings—not threats or conduct intended to put the developer in fear of injury.

The developer’s ability to participate coherently in the discussions and make counteroffers supported the view that the meetings were settlement talks.

The Court held that the size of the alleged demand, without the essential threat or fear, did not establish an offence under Section 385; continuing litigation or pursuing lawful remedies could not itself be treated as extortion.

It also considered the competing proceedings and the circumstances surrounding the complaint in assessing the applicants’ claim of mala fides.

The chargesheet did not prevent quashing because the Court could still assess whether the material disclosed an offence.

It allowed the application and quashed the FIR and the resultant chargesheet/proceedings, including S.C.C. No. 57 of 2021, in terms of the prayer clauses.