Civil settlement cannot erase criminal liability where allegations include cheating, forgery and conspiracy; prosecution may continue.

Settlement of bank dues and return of title deeds did not by themselves justify discharge or quashing of criminal proceedings where the allegations included conspiracy, cheating, forgery and falsification of records. Compounding under Section 320 CrPC is limited to offences expressly made compoundable, and a civil compromise before the Debt Recovery Tribunal does not extinguish criminal liability for offences against society. The civil settlement therefore had only limited evidentiary value and could not control the criminal case. At the discharge stage under Section 239 CrPC, a prima facie case and strong suspicion were sufficient to continue the prosecution, so the criminal proceedings were allowed to proceed.

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Issues: Whether settlement of the bank dues and return of title deeds entitled the accused to discharge or quashing of the criminal proceedings under the Code.

Analysis: The statutory scheme of compounding under Section 320 of the Code of Criminal Procedure permits only those offences that are expressly compoundable. The allegations in the case were not confined to a civil debt dispute but included criminal conspiracy, cheating, forgery and falsification of records, which are offences distinct from the recovery proceedings before the Debt Recovery Tribunal. A compromise between creditor and debtor in a civil forum does not extinguish criminal liability where the alleged offence is against society. The civil adjudication based on settlement was held to have limited evidentiary value and could not control the criminal case. At the stage of discharge under Section 239 of the Code of Criminal Procedure, the existence of a prima facie case and strong suspicion was sufficient to justify continuation of the prosecution.

Conclusion: Settlement and repayment did not warrant discharge or quashing, and the criminal proceedings were rightly allowed to continue.

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