Quashing proceedings under Section 174-A IPC is justified where the initial declaration as a proclaimed offender stemmed from a Section 138 NI Act complaint that has since been withdrawn owing to amicable settlement. The judgment affirms the prevailing position adopted in prior Punjab & Haryana High Court decisions and can be cited as binding authority within the jurisdiction for similar factual matrices, especially in cheques dishonour disputes settled between parties.
Summary
| Category | Data |
|---|---|
| Case Name | CRM-M/19080/2024 of DARSHANA DAGAR Vs STATE OF HARYANA AND ANOTHER |
| CNR | PHHC010470132024 |
| Date of Registration | 16-04-2024 |
| Decision Date | 10-09-2025 |
| Disposal Nature | DISPOSED OF |
| Judgment Author | MR. JUSTICE JASJIT SINGH BEDI |
| Court | High Court of Punjab and Haryana |
| Bench | Single Judge (MR. JUSTICE JASJIT SINGH BEDI) |
| Precedent Value | Binding within jurisdiction (Punjab & Haryana HC) |
| Overrules / Affirms |
|
| Type of Law | Criminal Procedure, Negotiable Instruments, Abuse of Process |
| Questions of Law | Whether proceedings under Section 174-A IPC can be quashed when the underlying Section 138 NI Act complaint stands withdrawn due to settlement between parties. |
| Ratio Decidendi | If an FIR under Section 174-A IPC was registered solely because the accused was declared a proclaimed person in proceedings under Section 138 of the NI Act, and the main complaint is later withdrawn due to settlement, then continuation of the Section 174-A IPC proceedings constitutes an abuse of process. The Court relied upon various similar precedents and concluded that, in such cases, the quashing of the FIR is warranted. |
| Judgments Relied Upon |
|
| Logic / Jurisprudence / Authorities Relied Upon by the Court | Follows the principle that once the main Section 138 NI Act complaint is withdrawn due to settlement, continuation of proceedings under Section 174-A IPC is rendered unnecessary and is an abuse of court process. |
| Facts as Summarised by the Court | Petitioner issued two cheques totaling over Rs.11 lakh in discharge of legal liability, which were dishonoured. A Section 138 NI Act complaint was filed and the petitioner was declared a proclaimed person. Subsequently, parties settled, the complainant withdrew the Section 138 complaint, and the petitioner sought quashing of the FIR under Section 174-A IPC, based on settlement. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts within Punjab & Haryana High Court’s jurisdiction |
| Persuasive For | Other High Courts handling analogous circumstances involving Section 138 NI Act settlements |
| Follows |
|
What’s New / What Lawyers Should Note
- Reiterates that FIRs under Section 174-A IPC, where based solely on non-appearance in Section 138 NI Act proceedings and subsequently regularised by settlement and complaint withdrawal, can be quashed as an abuse of process.
- Lawyers handling cheque dishonour cases with subsequent settlement can cite this judgment for quashing related proclaimed offender proceedings.
- Explicitly affirms that withdrawal of the main complaint nullifies the foundation for further Section 174-A action.
- Cost payment condition (deposit of Rs.25,000 with Punjab State Legal Services Authority-cum-Disaster Relief Fund) imposed before quashing—a practical point for such petitions.
Summary of Legal Reasoning
- The Court examined the factual background, noting that the FIR under Section 174-A IPC was a direct consequence of the petitioner being declared as a proclaimed offender in proceedings under Section 138 of the Negotiable Instruments Act.
- Referencing the precedent set by Baldev Chand Bansal v. State of Haryana (2019), the Court observed that, where the main Section 138 petition stands withdrawn on account of settlement, continuance of subsequent Section 174-A proceedings amounts to abuse of process.
- In Ashok Madan v. State of Haryana (2020), the Court had previously held that once the main case is dismissed for want of prosecution and absence is regularised, Section 174-A proceedings should be quashed.
- The Court also cited recent judgments (Anil Kumar cases; Varinder Kumar case) in line with this principle.
- The key statutory interpretation is that continuation of 174-A IPC proceedings, post-settlement of the main NI Act complaint, is unjustified and abusive.
- Quashing allowed subject to deposit of specified costs with State Legal Services Authority.
Arguments by the Parties
Petitioner
- The petitioner was wrongly declared a proclaimed person.
- Upon learning of the declaration, the petitioner entered into a compromise with the complainant.
- The complainant withdrew the Section 138 NI Act complaint, leading to the petitioner’s discharge.
- Sought quashing of the FIR under Section 174-A IPC, as its basis no longer exists.
State
- Opposed the petition.
- Submitted that the FIR had been rightly registered.
Factual Background
The petitioner issued two cheques totaling Rs.5,50,000 and Rs.5,49,699 in favour of the complainant, which were dishonoured. A complaint under Section 138 of the Negotiable Instruments Act, 1881 was filed, and the petitioner was declared a proclaimed offender by the Magistrate. Subsequently, the matter was amicably settled and the complainant withdrew the complaint in the trial court, resulting in the petitioner’s discharge. The present petition sought quashing of the consequential FIR under Section 174-A IPC registered on account of the earlier proclamation order.
Statutory Analysis
- Section 174-A IPC (“Non-appearance in response to a proclamation under Section 82 CrPC”) was at issue.
- Section 138 of the Negotiable Instruments Act, 1881 (dishonour of cheque) formed the foundation of the original proceedings.
- The High Court evaluated whether proceedings under Section 174-A IPC can continue when the underlying Section 138 NI Act case is resolved and withdrawn through amicable settlement.
- The statutory approach taken is pragmatic: where foundation for proclamation is removed by settlement and withdrawal, continued criminal proceedings under Section 174-A IPC serve no purpose and are an abuse of process.
Procedural Innovations
- The order to quash FIR under Section 174-A IPC was coupled with a condition precedent: deposit of Rs.25,000 as costs with the Punjab State Legal Services Authority-cum-Disaster Relief Fund.
- No other procedural innovations indicated in the judgment.
Alert Indicators
- ✔ Precedent Followed – The decision follows and affirms established precedent within the Punjab & Haryana High Court regarding quashing of FIRs under Section 174-A IPC subsequent to settlement in Section 138 NI Act matters.