Sanchayita Lahkar

The High Court of Punjab and Haryana Single Bench of Justice Sumeet Goel held that the FIR alleging unauthorized online transfers and the ensuing criminal proceedings must continue, refusing a request to quash the case on the basis of a settlement between the accused and the complainant. The dispute concerned allegations of multiple fraudulent withdrawals executed without the account holder’s consent and routed through accounts opened with fabricated documents. The Court noted that offences of this nature implicate the integrity of digital financial systems and extend beyond a private dispute. It further observed that cyber fraud represents a systemic breach of public trust and the digital economy, and therefore cannot be nullified merely because the parties have reached a compromise.

The petition arose from an FIR registered for offences relating to unauthorized electronic transactions carried out from the complainant’s bank account . The complainant alleged that multiple withdrawals had been executed without his knowledge and that the money had been transferred to accounts opened using forged documents. The petitioners approached the Court seeking quashing of the FIR on the basis of a compromise entered into between them and the complainant. They submitted that the dispute had been resolved and that continuation of proceedings would serve no purpose.

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The State opposed the request, submitting that the allegations involved cyber fraud and the use of fraudulent documents to open bank accounts. It was contended that the transactions were executed through digital means, suggesting fraudulent access rather than a personal dispute. The State further argued that such offences affected public confidence in electronic banking systems and could not be treated as private financial disputes capable of settlement.

The complainant confirmed the compromise before the Court. The petitioners relied on this statement to seek quashing under the inherent jurisdiction of the Court, arguing that the complainant had no objection to termination of proceedings. No additional evidence was placed on record by the petitioners regarding the nature of the withdrawals or the manner in which the accounts had been opened.

The Court examined the FIR narrative, which revealed that the transactions were executed without authorization and that the accounts into which funds were transferred were allegedly opened using forged documents. The allegations included impersonation and unauthorized access through digital platforms. On this basis, the case involved elements of cyber fraud simpliciter, beyond a private dispute between two individuals. No statutory provision was invoked by the petitioners to classify the offence as compoundable.

The Court recorded that the FIR disclosed “unauthorized transactions executed from the complainant’s bank account through online mode” and that the funds were transferred to “accounts opened using forged documents.” It observed that the nature of allegations indicated features of cyber fraud rather than a dispute arising out of personal dealings.

The Court stated: “the mere fact of a compromise having been effected cannot be made the basis for quashing an FIR which discloses the commission of offences bearing upon public confidence in digital financial systems.” It recorded that allegations involving fraudulent opening of accounts and online transfers could not be equated with private monetary disputes arising out of contractual or familial relationships.

The Court observed: “what emerges from the FIR is a case of cyber fraud simpliciter.” It stated that such offences “have ramifications beyond the parties inter se and raise concerns of systemic integrity.”

The Court recorded that although the complainant had affirmed the compromise, “the State has opposed the prayer on the ground that the allegations pertain to financial fraud committed through digital means.” It noted that the FIR narration disclosed no pre-existing relationship or civil transaction between the parties from which the dispute originated.

It stated: “the petitioners have sought quashing solely on the strength of the compromise, without addressing the nature of the allegations in the FIR.” The Bench recorded that the petitioners had not produced any material to show that the digital transactions had occurred due to error, mutual dealings, or any consensual arrangement.

The Court observed: “offences of this nature cannot be given the colour of a private settlement merely because the complainant chooses to compromise.” It stated that quashing would be inappropriate where allegations indicate misuse of bank accounts, impersonation, or fraudulent digital activity.

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The Court recorded: “the allegations in the FIR are grave and cannot be nullified on the basis of compromise.” It stated that the petitioners had failed to show that the case fit within the limited category of situations where quashing on compromise could be permitted.

The Court directed: “the present petition is dismissed. The FIR cannot be quashed on the basis of compromise arrived at between the complainant and the petitioners. In view of the nature of allegations constituting cyber fraud simpliciter, no ground is made out for interference. All pending miscellaneous applications, if any, stand disposed of.”

Advocates Representing the Parties

For the Petitioners: Mr. Akshay Jagga, Advocate

For the Respondents: Mr. Uday Kaushik, DAG for the State; Mr. Rahul Sharma, Advocate for the complainant

Case Title: State of Haryana and Another v. Badri Mandal & others
Neutral Citation: 2025: PHHC:155780
Case Number: CRM-M-54453-2025
Bench: Justice Sumeet Goel