HC says compromise in personal disputes warrants FIR quashing, cites 'principles of proportionality’

In a recent ruling, the Punjab and Haryana High Court has decided to quash an FIR filed under the Negotiable Instruments Act after both parties reached a compromise. The court acknowledged that criminal proceedings should not continue when the dispute is personal in nature and has been genuinely resolved between the parties involved.

Justice Sumeet Goel, while delivering the judgment on January 14, 2025, emphasized that such legal proceedings, when a compromise has been made, serve no useful purpose and contribute to the already overburdened judicial system. The court highlighted that allowing criminal prosecution in such instances, particularly when the original complaint has been settled, would distort the intended legislative framework of Section 138 of the Negotiable Instruments Act.

"Allowing such prosecution, when the initial complaint has been settled or withdrawn, would undermine the legislative intent and distort the remedial nature of Section 138 of the Negotiable Instruments Act. It would also contravene the 'principles of fairness, proportionality, and justice in criminal proceedings'," the court remarked in its ruling.

The case pertains to an FIR filed on March 12, 2023, at the Longowal police station in Sangrur, against an individual who was declared a proclaimed offender in a matter related to the dishonor of a cheque under the Negotiable Instruments Act. Justice Goel pointed out that an FIR does not automatically warrant quashing just because the parties have reached a settlement. However, the fact that the dispute was settled and classified as a compoundable offence by the legislature under the Act played a significant role in the court’s decision.

In his detailed order, Justice Goel noted: "This fact assumes greater significance considering that the initial proceedings pertain exclusively to a private criminal complaint under the Negotiable Instruments Act, which the legislature has expressly classified as a compoundable offence."