1. Dispute over misappropriation of company funds — Criminal breach of trust and cheating — Petition under BNSS Section 528 for quashing FIR. (Para 1 , 4 )
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2026 Supreme(Online)(Del) 1521
IN THE HIGH COURT OF DELHI AT NEW DELHI
Prateek Jalan, J
Sanjay Goel – Appellant
Versus
State NCT of Delhi – Respondent
CRL.M.C. 7057/2025
Advocates:
For the Appellants/Petitioners: Shorya Goel, Sammeer Vatts
For the Respondents: Hitesh Vali, Namanveer Singh Sodhi
For the Appellants/Petitioners: Shorya Goel, Sammeer Vatts
For the Respondents: Hitesh Vali, Namanveer Singh Sodhi
The High Court can exercise its inherent jurisdiction to quash criminal proceedings for non-compoundable offences if the dispute is predominantly civil or commercial in nature and has been amicably settled, provided no public interest is adversely affected.
Headnote:(A) Quashing of FIR - Inherent Jurisdiction - Settlement between parties - High Court may quash criminal proceedings, including non-compoundable offences, if the dispute is predominantly civil, commercial, or financial in nature and no overarching public interest is affected. (Para 9, 12)
(B) Exercise of Power under Section 528 BNSS / Section 482 CrPC - Distinction from Compounding - The power to quash is distinct from the statutory power of compounding under Section 320 CrPC and is exercised to secure the ends of justice or prevent abuse of the process of law, provided the offence is not heinous or of mental depravity. (Para 10, 11)
Issues: Whether the criminal proceedings arising out of a commercial dispute can be quashed on the basis of a voluntary settlement between the parties.
Legal Category Hierarchy
- crime and sentencing
- practice and procedure
- commercial law
Table of Contents
2. Petitioner sought quashing based on settlement; State and respondents did not object; parties confirmed full implementation. (Para 5 , 6 , 7 , 8 )
3. Alleged offences arose from commercial transaction, private in nature, no overriding public interest; settlement was voluntary. (Para 9 , 10 , 12 )
4. High Court may quash non-compoundable offences with overwhelmingly civil flavour if settlement ends justice and prevents abuse of process. (Para 9 , 10 , 12 )
5. Petition allowed; FIR under Sections 406/420 IPC and all consequential proceedings quashed. (Para 13 , 14 )
6. Can the High Court quash criminal proceedings for non-compoundable offences based on a settlement?
Yes, in exercise of inherent power under Section 482 CrPC (Section 528 BNSS), the High Court can quash such proceedings where the dispute is predominantly civil, no overarching public interest is affected, and ends of justice demand it. (Para 9 , 10 )
7. What principles guide the High Court in quashing criminal proceedings after a settlement?
The court must consider if the offence is heinous or serious; if it has a overwhelmingly civil character; if conviction is remote and bleak; and if continuing proceedings would cause oppression. (Para 10 , 12 )
8. Are offences arising from commercial transactions quashable upon settlement between parties?
Yes, criminal cases with predominantly civil character, especially from commercial or financial transactions, can be quashed when parties have resolved all disputes, provided no serious public interest is involved. (Para 12 )
9. What is the difference between compounding an offence and quashing proceedings under inherent powers?
Compounding under Section 320 CrPC is a statutory right for specific offences; quashing under Section 482/Section 528 BNSS is a wider inherent power to prevent abuse of court process and secure ends of justice. (Para 9 , 10 )
10. Can offences like criminal breach of trust and cheating be quashed after settlement?
Yes, where such offences arise from commercial or contractual disputes and the parties have fully and voluntarily settled, the High Court may quash them to prevent futility of proceedings. (Para 12 , 13 )
O R D E R
% 29.01.2026
1. The petitioner has filed this petition under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023 [“BNSS”] (corresponding to Section 482 of the Code of Criminal Procedure, 1973 [“CrPC”]) seeking quashing of FIR No. 39/2020 dated 06.03.2020, lodged at Police Station Defence Colony, Delhi, under Sections 406/420 of Indian Penal Code, 1860 [“IPC”], alongwith all consequential proceedings emanating therefrom, on the ground of settlement.
2. Issue notice. Mr. Hitesh Vali, learned Additional Public Prosecutor, accepts notice on behalf of the State. Mr. Namanveer Singh Sodhi, learned counsel, accepts notice on behalf of respondent Nos. 2&3. 3. The impugned FIR was lodged on the complaint of respondent No.
2-Company through its director, who is impleaded as respondent No. 3. The accused in the FIR is the petitioner, who was also the director of respondent No. 2-company and two other companies i.e. RSRN Buildcon Pvt. Ltd. and Nicky Marmo Ltd, who are impleaded as respondent Nos. 4 and 5 herein.
4. The dispute concerns allegations of misappropriation of funds of respondent No. 2. The complaint alleges that the petitioner herein, a promoter-director of respondent No. 2, committed criminal breach of trust and cheating by deliberately failing to submit a board resolution mandating joint operation of the company’s ICICI bank account, thereby unilaterally transferring and siphoning company funds, including diversion of loan repayments from BKR Capital Pvt. Ltd. to third-party companies [respondent Nos. 4 and 5] and to himself, causing wrongful loss of about Rs. 1.95 crore to the company. There were also several civil litigations between the parties.
5. The litigations have all been settled by a mediated settlement agreement dated 24.09.2025 to which the present petitioner, and respondent Nos. 2 and 3 are party. The petitioner and respondent No. 3 are also related to each other. The settlement involves resolution of all the disputes, and the litigations arising out of it.
6. I have heard learned counsel for the parties. The petitioner has been identified by the Investigating Officer [“IO”] as well as by his learned counsel. Respondent Nos. 3 has also been identified by his learned counsel and the IO.
7. Learned counsel for the parties state that settlement has also been implemented fully.
8. The parties have settled their disputes voluntarily. The settlement is supported by board resolution of respondent No. 2 in favour of respondent No. 3, which specifically refers to the settlement of the disputes in the present FIR. Respondent Nos. 2 and 3 have also agreed not to pursue the FIR in question and to cooperate with the petitioners in the present quashing petition. Respondent No. 3 states that he has no objection to the FIR being quashed in its entirety.
9. The Supreme Court has clearly held that, in certain circumstances, the High Courts, in exercise of their powers under Section 528 of BNSS [corresponding to Section 482 of CrPC], can quash criminal proceedings, even with respect to non-compoundable offences, on the ground that there is a compromise between the accused and the complainant, especially when no overarching public interest is adversely affected.
10. In Gian Singh v. State of Punjab and Anr., 1(2012)10SCC303., the Supreme Court has observed as follows:
“58. Where the High Court quashes a criminal proceeding having regard to the fact that the dispute between the offender and the victim has been settled although the offences are not compoundable, it does so as in its opinion, continuation of criminal proceedings will be an exercise in futility and justice in the case demands that the dispute between the parties is put to an end and peace is restored; securing the ends of justice being the ultimate guiding factor. No doubt, crimes are acts whichhaveharmful effect onthe publicand consist inwrongdoing that seriously endangers and threatens the well-being of the society and it is not safe to leave the crime-doer
