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Issues: Whether criminal proceedings for cheating, use of forged documents and corruption-related offences could be quashed under the inherent jurisdiction of the High Court merely because the borrower and the bank had settled the monetary dispute.
Analysis: The power under Section 482 of the Code of Criminal Procedure, 1973 is distinct from the power to compound offences under Section 320 of the Code. It may be exercised to secure the ends of justice or to prevent abuse of process, but not as a matter of course in every case of settlement. Offences involving serious societal impact, including those under special statutes like the Prevention of Corruption Act, 1988, do not fall in the category ordinarily fit for quashing on compromise. In the present case, the allegations concerned cheating and use of forged documents in banking transactions, and the repayment of dues pursuant to the debt recovery proceedings did not amount to a true compromise of the criminal case. The High Court, therefore, erred in treating the settlement as sufficient basis to terminate the prosecution.
Conclusion: The quashing of the criminal proceedings was impermissible; the order of the High Court was set aside and the prosecution was directed to proceed in accordance with law.
Ratio Decidendi: Settlement between the complainant and the accused does not justify quashing of criminal proceedings for serious offences having public or societal impact, especially offences under special statutes, unless continuation of the case would itself amount to abuse of process or defeat the ends of justice.
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