The High Court's clear message—cyber fraud is a crime against the system.
- Petition to quash FIR on the basis of compromise dismissed.
- Court's interpretation of Section 528 of the BNSS and the High Court's inherent powers.
- Why can relief not be granted by treating cyber fraud as a private dispute?
- When can the court consider a compromise—important exceptions.
- Case background—unauthorised transaction of ₹14.83 lakh from the account.
- Three key principles laid down by the court.
Outcome of the petition and further proceedings.
The Punjab and Haryana High Court held that cyber fraud is a crime involving serious public harm; a mere compromise cannot result in the quashing of an FIR. The court dismissed the petition.
Cyber Fraud Offences Can’t Be Quashed Merely On Compromise: P&H HC
It is most significant to note that in a major development, we see that the Punjab and Haryana High Court in a most learned, laudable, logical, landmark and latest judgment titled Badri Mandal and others V/s State of Haryana and another in CRM-M-54453-2025 and cited in Neutral Citation No.: 2025:PHHC:155780 that was pronounced as recently as on 12.11.2025 has minced absolutely just no words to make it indubitably clear that cyber fraud constitutes a systemic offence against public trust and the digital economy and therefore, such cases cannot be quashed merely on the basis of a compromise or settlement between the complainant and the accused.
It is worth paying attention that the Court held so while dismissing a petition that had been filed under Section 528 of the BNSS, seeking quashing of FIR that had been registered under Sections 318(4), 336(3), 338, 340, 61 of BNS at Police Station Cyber Sonipat, Haryana on the ground that the matter had been amicably settled between the parties.
We also need to note that the Court, however, clarified that in cases where allegations of cyber fraud are artificially invoked to lend gravity to an otherwise private pecuniary dispute, the High Court retains discretion to permit compromise in the interest of justice. Very rightly so!
At the very outset, this brief, brilliant, bold and balanced judgment authored by the Single Judge Bench comprising of Hon’ble Mr Justice Sumeet Goel of Punjab and Haryana High Court at Chandigarh sets the ball in motion by first and foremost putting forth in para 1 that, “The petition in hand has been preferred by the accused–petitioners, under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, for quashing of FIR No.38 dated 27.06.2025 (hereinafter to be referred as the impugned FIR) registered under Sections 318(4), 336(3), 338, 340, 61 of BNS at Police Station PS Cyber Sonipat, Haryana, as also the proceedings subsequent thereto, on the basis of a compromise deed dated 20.09.2025 (appended as Annexure P-2 with the present petition).”
To put things in perspective, the Bench envisages in para 2 that, “The gravamen of the impugned FIR is that the complainant, namely Divya, daughter of Suresh Kumar, Resident of ...... Sonipat, alleged that she is employed as an Accountant at the Institute of Competitive Studies Pvt. Ltd, having an account with the HDFC Bank bearing Account No.........
On 24.06.2025, a total of seven unauthorised transactions amounting to Rs. 14,83,696/- were carried out from the said account without the knowledge or consent of the complainant. No OTP or transaction message was received at the time of these transactions. Upon logging into net banking, the complainant discovered the fraudulent withdrawals.
The complainant later learned that the money had been transferred to fraudulent accounts opened using fake documents through a fake website. Thereafter, an online complaint was lodged at the Cyber Crime Helpline (1930) and a complaint was registered under No.31306250043329. Based on this complaint, the present FIR has been registered.”
As it turned out, the Bench enunciates in para 7 that, “The issue that arises for consideration in the petition in hand is as to whether the impugned FIR and the proceedings arising therefrom deserve to be quashed on the basis of compromise/settlement having been arrived at between the rival private parties. The seminal legal issue that arises for rumination is as to whether an FIR (as also proceedings emanating therefrom) can be quashed on the basis of compromise/settlement between the rival parties wherein the FIR pertains to allegations of cyber fraud.”
Be it noted, the Bench notes in para 10 that, “The conventional outlook, in view of the statutory framework, was that criminal offence(s) could be settled only by way of compounding, as per the provisions of Section 320 of the Cr.P.C., 1973 (now Section 359 of BNSS, 2023). In ordinary parlance, “compounding” is known as “compromise” or “settlement”. This expression is, ordinarily, understood as condoning a felony in exchange for repatriation received by the victim-complainant from the felon. In other words, no compounding/compromise of a criminal offence could be permitted by the Court, except for an offence which met with rigours of the Section 320 of Cr.P.C. Therefore; the question arose whether the High Court, by exercising its plenary/inherent jurisdiction, under Section 482 of Cr.P.C., could quash ongoing FIR/criminal proceedings on the basis of compromise/settlement having been arrived at between the rival parties.
10.1. Before proceeding further, it would be germane to delve into the nature, scope and ambit of powers of the High Court under Section 482 of Cr.P.C., 1973.
10.2. Inherent powers of the High Court are those which are incidental, inherent powers, which, if they did not so exist, the Court would be obliged to sit still and helplessly see the process of law and the Courts being abused for the purposes of injustice. In other words, such power(s) is intrinsic to the High Court, it is its very life-blood, its very essence, its immanent attribute. Without such power(s), the High Court would have a form but lack the substance. These powers of the High Court, hence, deserve to be construed with the widest possible amplitude. These inherent powers are in consonance with the nature of the High Court, which ought to be, and has in fact been, invested with power(s) to maintain its authority to prevent the process of law/Courts being obstructed or abused. It is a trite posit of jurisprudence that though the laws attempt to deal with all cases that may arise, the infinite variety of circumstances which shape events and the imperfections of language make it impossible to lay down provisions capable of governing every case, which, in fact, arise.
The High Court, which exists for the furtherance of justice in an indefatigable manner, should therefore have unfettered power(s) to deal with situations which, though not expressly provided for by the law, need to be dealt with, to prevent injustice or the abuse of the process of law and Courts.
The maxim, namely, “quando lex aliquid alicui concedit, concedere videtur et id sine quo res ipsa, esse non potest” (when the law gives anything to anyone, it also gives all those things without which the thing itself cannot exist) also signifies that the inherent powers of the High Court are all such powers which are necessary to do the right and to undo a wrong in the course of administration of justice. Further, the maxim “ex debito justitiae” stipulates that such powers are given to do real and substantial justice, for which purpose alone, the High Court exists. Hence, the powers under Section 482 of Cr.P.C. are aimed at preserving the inherent powers of a High Court to prevent abuse of the process of any Court or to secure the ends of justice.
The juridical basis of these plenary power(s) is the authority; in fact, the seminal duty and responsibility of the High Court, to uphold, to protect and to fulfil the judicial function of administering justice, in accordance with the law, in a methodical, orderly and effective manner. In other words, Section 482 of Cr.P.C. reflects peerless powers, which a High Court may draw upon as necessary, whenever it is just and equitable to do so; in particular, to ensure the observance of the due process of law, to prevent vexation or oppression, to do justice, nay substantial justice between the parties and to secure the ends of justice.
10.3 The above principle(s), in the context of provisions of Section 482 of Cr.P.C, 1973, would apply with complete vigour to the provisions of Section 528 of BNSS of 2023 as well, since there is no alteration in the wording of these two provisions.”
Most significantly, the Bench encapsulates in para 12 what constitutes the cornerstone of this notable judgment, postulating precisely that, “The contemporary felony of cyber fraud presents a transgression sui generis that mandates its categorical exclusion from the judicial indulgence for quashing of criminal proceedings solely on the basis of a compromise/ settlement having been arrived at between the complainant/ victim and the accused. The digital economy is the unassailable locus of modern commerce, sustained entirely by the bedrock of public trust.
Cyber Fraud acts as a corrosive insurgency, causing not merely an isolated pecuniary loss, but an aggravated systemic damage upon the public financial exchequer, thereby inflicting profound in rem detriment. Owing to the anonymity, trans-border expanse and a propensity to cause substantial adverse impact, a court is compelled to look beyond the private settlement, lest it may tantamount to granting judicial imprimatur to an ongoing systemic threat. When such an offender escapes prosecution simply by offering post facto restitution, the penal measure is ipso facto converted into a mere calculus of profit and risk.
The perpetrator of such an organised crime is emboldened to treat the compromise/settlement as a predictable expense, creating a deleterious lacuna in the law and gravely impacting the sanctity of the criminal justice system.
When a cyber fraud is perpetrated, the immediate and visible financial deceit/loss is only the tip of the spear; the real victim is the digital ecosystem itself. A private compromise/settlement between the rival private parties, i.e. the accused and the complainant/victim, is merely an ineffectual repudiation of individual liability, lacking utterly in addressing the cascading and unquantifiable institutional injury.
Pertinently, this Court is abundantly cognizant of the fact that the sine qua non behind a complainant/victim’s assent to a compromise/settlement in cases of financial fraud remains the assured restitution of the monies of which she has been duped/criminally divested.
This assurance of monetary indemnification acts as a sole allurement motivating her to participate in compromise/settlement proceedings. Nevertheless, such a compromise/settlement, having been arrived at under the allurement of monetary restitution, is inherently incapable of ameliorating the inherent gravity and egregious nature of the offence of cyber fraud, which has the propensity of causing extensive public detriment and imparting a pernicious impact on the foundational trust, underpinning any commercial activity.
12.1. Another aspect nay vital aspect of the lis in hand craves attention.
The legal landscape is replete with cases where invocation of serious/ grievous allegations pertaining to the stringent penal provisions (such as those relating to the offence of cyber fraud), constitute an instrument of premeditated hyperbole, scrupulously invoked to artificially inflate the gravity of allegations, otherwise rooted in pecuniary bilateral transactions. However, a more ruminative scrutiny reflects the inherent nature of transgression to be that of simpliciter cheating, conspicuously devoid of the ingredient of public detriment required of an offence pertaining to cyber fraud.
In such a factual milieu, the rigid denial to exercise inherent powers as saved by way of Section 528 of the BNSS, 2023, to sanction an otherwise bona fide compromise/settlement of dispute(s), solely, because the FIR/Criminal Complaint is ridden with the allegations of cyber fraud, would tantamount to abdication of judicial duty, defeating the cause of substantial justice.
For it is an irrevocable judicial principle that a court, in its transcendent duty to ensure complete justice, must unflinchingly be cognizant of practical exigencies and social verities.
12.2. To determine whether offence(s) in question pertain to a situation where the allegations of cyber fraud have been made merely to lend severity or it is inherently a case of cyber fraud simpliciter, the Court is, essentially, required to look into the entire factual milieu of the particular case in hand.
No exhaustive set of guideline(s) to govern, the exercise of this aspect by the High Court can possibly be laid down, however illecebrous this aspect may be. It is neither fathomable nor desirable to lay down any straightjacket formula in this regard. To do so would be to crystallise into a rigid definition, a judicial discretion, which, for the best of all reasons, deserves to be left undetermined. Any attempt in this regard would be, to say the least, a quixotic endeavour.
Circumstantial flexibility, one additional or different fact, may make a sea of difference between the conclusions of two cases. Ergo, such exercise would thus, indubitably, be dependent upon the factual matrix of the particular case which the High Court is in seisin of, since every case has its own peculiar factual conspectus.”
Most remarkably and as a corollary, the Bench then propounds in para 13 holding that, “As a sequitur of the above rumination, the following postulates emerge:
I. The inherent jurisdiction vested in the High Court ought not be exercised for quashing of an FIR/Criminal Complaint, pertaining to the allegations of cyber fraud, solely on the basis of compromise/settlement. The pervasive public detriment and the systemic erosion of trust, irrevocably, supersedes the purely private remedial adjustment, achieved between the complainant/victim and the accused.
II. Where a meticulous judicial appraisal of facts reflects that the cyber fraud allegations have been strategically invoked to lend unwarranted gravity and seriousness to otherwise simpliciter pecuniary transaction inter-se the Complainant/victim and the accused, the Court must not permit the rigidity of law to defeat the ends of justice and may sanction the bona fide compromise/ settlement to put an end to the lis.
III. To effectually determine whether the case in hand falls within the ambit and scope of postulate (I) or postulate (II) (supra), the Court must undertake a scrupulous and granular scrutiny of the entire factual milieu of the case at hand. No exhaustive guidelines can possibly be laid down for exercise of the aforesaid judicial discretion by a Court as every case has its own unique factual conspectus.
There is no gainsaying that an order passed by the Court, while exercising such discretion, must be a speaking order clearly giving out reasons therein & must be in consonance with the basic canons of Justice, good conscience and equity.”
It is worth noting that the Bench notes in para 14 that, “Reverting to the facts of the present case, the petition in hand has been filed for quashing of the impugned FIR (as also the proceeding emanating therefrom) on the basis of compromise deed(s) dated 20.09.2025. It is neither pleaded nor decipherable from the factual milieu of the case in hand that the rival private parties were known to each other beforehand or that the offence is in the nature of a private dispute between them.
On the contrary, a bare perusal of the contents of the FIR in question, as also the other factual aspects of the case in hand, it is abundantly deducible that the case in hand pertains to a cyber fraud simpliciter. Ergo, the petition in hand ought not to be entertained and deserves rejection.”
Finally and resultantly, the Bench then concludes by directing and holding in para 15 that, “In view of the prevenient ratiocination, it is ordained thus:
(i) The petition; seeking quashing of FIR No.38 dated 27.06.2025 (the impugned FIR) registered under Sections 318(4), 336(3), 338, 340, 61 of BNS at Police Station PS Cyber Sonipat, Haryana, as also the proceedings subsequent thereto, on the basis of a compromise deed dated 20.09.2025 (Annexure P-2); is dismissed.
(ii) Any observations made hereinabove shall not have any effect on the merits of the case and the trial Court/ police shall proceed further, in accordance with law, without being influenced by the same.
(iii) No disposition as to costs, for the nonce.
(iv) Pending application(s), if any, shall also stand disposed of.”
In a nutshell, we thus see that the Punjab and Haryana High Court has made it crystal clear that in cybercrime, compromise can be no shield. The Court warned that permitting quashing in such circumstances would ‘tantamount to granting judicial imprimatur to an ongoing systemic threat’. Absolutely right!
Sanjeev Sirohi, Advocate,
(The author is an advocate based in Meerut, Uttar Pradesh. The views expressed are his personal.)
