Holding

In personal disputes where no public policy is involved, the court may quash FIRs even for non‑compoundable offences, and the Rs.250 monetary limit is irrelevant to the exercise of this power.

Summary

An FIR (No.155/2001) was lodged under Sections 379, 406, 409, 418 and 506/34 IPC arising from a business dispute between the complainant and the accused. The parties executed a compromise deed on 25 January 2002, settling all differences. The complainant applied to the High Court for quashing the FIR, but the application was dismissed on the ground that Section 406 is non‑compoundable because the amount involved exceeded Rs.250. On appeal, the Supreme Court held that the dispute was purely personal, involved no public policy, and that the Rs.250 limit is irrelevant for quashing proceedings. It emphasized that courts should ordinarily accept compromises in personal criminal matters to avoid unnecessary burden. Consequently, the Court allowed the appeal and ordered the FIR and all related proceedings to be quashed, noting also that the complainant had died, making a conviction unlikely.

Issues considered

Whether an FIR involving a non‑compoundable offence (IPC s.406) can be quashed on the basis of a compromise between the parties.
Whether the monetary threshold of Rs.250 for compounding offences is relevant to the power to quash criminal proceedings.
Whether the distinction between compounding an offence and quashing proceedings affects the court's discretion in personal disputes.

Legislation cited

Code of Criminal Procedure, 1973
Indian Penal Code, 1860s. 379, s. 406, s. 409, s. 418, s. 506/34

Subjects

compromisequashing of FIRnon‑compoundable offencepersonal disputepublic policycriminal procedureoverburdened courtsSection 406 IPC

Judgment

[2008] 5 S.C.R. 526

·'r
A MADAN MOHAN ABBOT
V.
STATE OF PUNJAB
(Criminal Appeal No. 555 of 2008)

MARCH 26, 2008
B
[TARUN CHATTERJEE AND HARJIT SINGH BEDI, JJ.] .... <

Code of Criminal Procedure, 1973 - Quashing of
proceedings - FIR alleging offences under provisions of /PC
c - Compromise between the parties - Quashing of proceedings
sought on the basis of compromise - Denied by High Court
on the ground thats. 406 was not compoundable as the amount
involved was more than Rs. 2501- - On appeal, held:
Proceedings are liable to be quashed as the dispute was of
personal nature and no public policy was involved - The
D
dispute where the question involved is of purely personal
'!
nature, the court should ordinarily accept the terms of ,...
compromise even in criminal proceedings - The outer limit
of Rs. 2501- is irrelevant in the matter of quashing of
proceedings - Penal Code, 1860 - s. 406.
E
An FIR was registered u/ss 379, 406, 409, 418 and
506/34 IPC. Thereafter a compromise was entered into
between the parties. On the basis of the compromise,
application was filed before High Court for quashing of
F the proceedings. The application was dismissed holding
that s. 406 IPC was not compoundable as the amount
involved was more than Rs. 250/-. Hence the present .I..

appeal.
Allowing the appeal, the Court
G
HELD: From a reading of the FIR and the other
documents on record, it is evident that the dispute was
purely a personal one between two contesting parties and
that it arose out of extensive business dealings between

H 526
MADAN MOHAN ABBOT v. STATE OF PUNJAB 527

"'(.
them and that there was absolutely no public policy A
involved in the nature of the allegations made against the
accused. Therefore, no useful purpose would be served
in continuing with the proceedings in the light of the
compromise and also in the light of the fact that the
complainant has passed away and the possibility of a B
. ~
conviction being recorded has thus to be ruled out.
[Para 5] [529-D-F]
2. It is advisable that in disputes where the question
involved is of a purely personal nature, the Court should
ordinarily accept the terms of the compromise even in c
criminal proceedings as keeping the matter alive with no
possibility of a result in favour of the prosecution is a
luxury which the Courts, grossly overburdened as they
are, cannot afford and that the time so saved can be
utilized in deciding more effective and meaningful D
+. litigation. This is a common sense approach to the matter
,..>.
based on ground of realities and bereft of the technicalities
of the law. The Judge has confused a compounding of
an offence with the quashing of proceedings. The outer
limit of Rs.250/- which has led to the dismissal of the E
application is an irrelevant factor in the letter case. The
FIR and all proceedings connected therewith shall be
deemed to be quashed. [Para 5] [529-F-H; 530-A-B]
CRIMINAL APPELLATE JURISDICTION : Criminal
Appeal No. 555 of 2008. F
·.:., From the Judgment and Order dated 14.2.2006 of the High
Court of Punjab and Haryana at Chandigarh in Crl. Misc. No.
40589-M/2003.
Vikas Mehta, Nalin Talwar and Shashi M. Kapila for the G
Appellant.
Kuldip Singh, R.K. Pandey and T.P. Mishra for the
Respondent.

- H
528 SUPREME COURT REPORTS [2008] 5 S.C.R.

A The Judgment of the Court was delivered by ......
HARJIT SINGH BEDI, J. 1. Leave granted.

2. This appeal is directed against the judgment dated 14th
February 2006 whereby an application for quashing of FIR
B No.155 dated 17th November 2001 registered at Police Station
Kotwali, Amritsar under Sections 379,406,409,418,506/34 of
4 •
the Indian Penal Code on account of the compromise entered
into between the complainant and the accused, has been
declined on the ground that Section 406 was not compoundable
c as the amount involved was more 1
than Rs.250/- and that the
case was already fixed on 28 h April 2006 for the examination
of the prosecution witnesses.
3. Notice was issued in this case on 21st August 2006 and
the operation of the order was stayed in the meanwhile. A counter
D affidavit has been filed by the sole respondent i.e. State of Punjab
and it has been pointed out, inter-alia, that the investigating officer
had no information about the compromise between the parties, ...'
.

that the case was ripe for the recording of the prosecution
evidence and that Section 406 was not compoundable as the
E amount involved was more than Rs.250/-.
4. We have heard the learned counsel for the parties.
Concededly a compromise deed has been executed between
the parties on 25th January 2002 in which it has been inter-alia
recorded as under:
F
"Whereas for the past some time some dispute had arisen
in between both the parties regarding which first party has ~-

got an FIR No.155/2001 registered under Sections 379/
406/409/418/34 of IPC in P.S. Kotwali Amritsar. After the
registration of aforesaid criminal case a compromise has
G
been arrived at in between both the parties. As a result of
which both the parties have resolved their differences once
for all. Now second party does not owe anything to the first
party and first party has undertaken to cooperate with -<
second party in every manner to get the aforesaid FIR
H

-
MADAN MOHAN ABBOT v. STATE OF PUNJAB 529
[HARJIT SINGH BEDI, J.]
--.'·
cancelled/quashed from appropriate Forum. Further more A
first party has no objection if the Bail of second party be
accepted. Rather first party shall cooperate with second
party in every manner to secure bail for him. In view of the
compromise arrived at in between the parties entire
differences and tensions those had arisen in between both B
\ J,. the parties stands resolved and both the parties have
undertaken not to file any proceedings either civil or
.. criminal or any other such like proceedings against one
another in any court of law at Amritsar or any other place
within or outside India. This compromise is hereby c
executed in between both the parties in the presence of
marginal witnesses on this 25th day of January 2002 at
Amritsar."
5. It is on the basis of this compromise that the application
was filed in the High Court for quashing of proceedings which D
i '
.J.. has been dismissed by the impugned order. We notice from a
reading of the Fl R and the other documents on record that the
dispute was purely a personal one between ,two contesting
parties and that it arose out of extensive business dealings
between them and that there was absolutely no public policy E
involved in the nature of the allegations made against the
accused. We are, therefore, of the opinion that no useful purpose
would be ~erved in continuing with the proceedings in the light
of the compromise and also in the light of the fact that the
complainant has, on 11th January 2004, passed away and the F
possibility of a conviction being recorded has thus to be ruled
~ out. We need to emphasize that it is perhaps advisable that in
disputes where the question involved is of a purely personal
nature, the Court should ordinarily accept the terms of the
compromise even in criminal proceedings as keeping the matter
G
alive with no possibility of a result in favour of the prosecution is
a luxury which the Courts, grossly overburdened as they are,
cannot afford and that the time so saved can be utilized in
1 deciding more effective and meanin"gful litigation. This is a
common sense approach to the matter based on ground of
,,.. H
530 SUPREME COURT REPORTS [2008] 5 S.C.R.

A realities and bereft of the technicalities of the law. We see from
the impugned order that the learned Judge has confused a
compounding of an offence with the quashing of proceedings.
The outer limit of Rs.250/- which has led to the dismissal of the
application is an irrelevant factor in the later case. We
B accordingly allow the appeal and in the peculiar facts of the case,
direct that FIR No.155 dated 17th November 2001 P.S. Kotwali, ....
Amritsar and all proceedings connected therewith shall be
deemed to be quashed.
K.K.T. Appeal allowed.
c

. .