The High Court of Punjab and Haryana set aside a proclamation and a subsequent FIR after the parties settled the underlying negotiable-instrument disputes, clarifying that ancillary criminal proceedings under Section 290 BNS cannot survive a withdrawn complaint under Section 138 of the NI Act.
Background & Facts
The Dispute
The petitioners, Nilesh Shantilal Patel and Shantilal Daya Bhati Patel, were sued by respondent No.2, Adgel Corporation, under five separate complaints filed under Section 138 of the Negotiable Instruments Act, 1881 (NACT Nos. 212/2019, 315/2019, 316/2019, 455/2019 and 456/2019). The complaints alleged dishonour of cheques.
Key Facts
- The complaints were instituted by Adgel Corporation in 2019.
- On 22 May 2025, the learned Judicial Magistrate First Class (JMIC), Faridabad, declared the petitioners proclaimed persons under Section 82 CrPC and directed the Station House Officer (SHO) to act under Section 209 of the BNSS, 2023.
- Consequently, FIR No. 157 was registered on 06 May 2026 at Police Station Faridabad Kotwali under Section 209 BNS.
- The parties amicably resolved their dispute and executed a Settlement Deed on 08 May 2026, wherein respondent No.2 agreed to withdraw all five complaints.
- The JMIC dismissed the five complaints as withdrawn on 08 June 2026.
- The petitioners filed six separate petitions (CRM-M-38448-2026 and five connected petitions) under Section 528 of the BNSS, 2023, seeking quash of the proclamation order and the FIR.
Procedural History
- 22 May 2025: Proclamation order declaring petitioners proclaimed persons (JMIC, Faridabad).
- 06 May 2026: FIR No. 157 registered under Section 209 BNS.
- 08 May 2026: Settlement Deed executed; respondent withdraws complaints.
- 08 June 2026: JMIC dismisses the five complaints as withdrawn.
- 31 August 2026: High Court delivers common order quashing the proclamation order and FIR.
Relief Sought
The petitioners prayed for:
- Quashing of the order dated 22 May 2025 declaring them proclaimed persons.
- Quashing of FIR No. 157 dated 06 May 2026 and all subsequent proceedings.
- Restoration of their legal position as private citizens.
The Legal Issue
Whether continuation of criminal proceedings under Section 290 of the BNSS, 2023 (equivalent to Section 174-A IPC) is permissible when the principal complaint under Section 138 of the Negotiable Instruments Act has been withdrawn on account of a settlement between the parties.
Arguments Presented
For the Petitioners
The petitioners contended that:
- The withdrawal of the principal complaint extinguishes the basis for any ancillary criminal action, making continuation of the FIR an abuse of process.
- The proclamation was issued without observing the mandatory statutory period prescribed under Section 82/84 CrPC.
- The FIR was registered without a complaint in writing as required by Section 195 CrPC for offences punishable under Section 174-A IPC.
- Precedents such as Smriti v. State of Haryana (12 May 2022), Narinder Pal Singh v. State of Punjab (26 May 2022), Mohammad Hanif Attari v. State of Haryana (06 July 2023) and Ashok Madaan v. State of Haryana (2020) support quashing FIRs where the underlying complaint is settled.
For the Respondents
The respondents argued that:
- Section 174-A IPC (and its counterpart Section 290 BNS) is a cognizable, independent offence that can continue irrespective of the status of the underlying complaint.
- The proclamation and FIR were lawfully issued following the statutory provisions, and no infirmity exists in the order.
- The State’s position is that the procedural requirements of Section 195 CrPC are not applicable because the FIR was a consequence of the proclamation, not a direct complaint.
The Court's Analysis
The Court first noted that the factual matrix was undisputed: the FIR under Section 290 BNS arose solely because the petitioners were proclaimed persons after the NI Act complaints were pending. The settlement and withdrawal of those complaints removed the substantive basis for the proclamation.
"The seminal question which arises for consideration is as to whether continuation of proceedings under Section 290 BNS would survive once the principal proceedings under Section 138 of the N.I. Act already stand withdrawn on the basis of compromise between the parties."
The Court examined the doctrine that an offence under Section 174-A IPC is independent, citing Daljit Singh v. State of Haryana (02 Jan 2025). However, it observed that the Supreme Court has quashed FIRs under Section 174-A IPC where the underlying complaint was settled, emphasizing the principle of abuse of process.
The Court then turned to statutory compliance. It held that registration of an FIR under Section 174-A IPC (or Section 290 BNS) requires a written complaint under Section 195 CrPC. The learned JMIC had directed the police to register the FIR merely on the basis of the proclamation, without any such complaint, rendering the FIR vitiated.
Further, the proclamation itself was found to be procedurally defective. The Court observed that the proclamation was issued without observing the mandatory period prescribed under Section 82/84 CrPC, and therefore the proclamation order was infirm.
Relying on the earlier judgments of Smriti, Narinder Pal Singh, Mohammad Hanif Attari and Ashok Madaan, the Court concluded that continuation of the FIR would amount to an abuse of the process of law and would be a miscarriage of justice.
The Verdict
The petitioners succeeded. The Court quashed the order dated 22 May 2025 that declared the petitioners proclaimed persons and also quashed FIR No. 157 dated 06 May 2026 registered under Section 209 BNS, together with all subsequent proceedings. No monetary award or further relief was ordered.
What This Means For Similar Cases
Withdrawal of Principal Complaint Bars Ancillary Proceedings
- When a complaint under Section 138 NI Act is settled and withdrawn, any criminal action under Section 290 BNS (or Section 174-A IPC) that was initiated solely to enforce the proclamation must be dismissed as abuse of process.
- Practitioners should ensure that settlement agreements expressly withdraw the underlying complaint to pre-empt further criminal proceedings.
Mandatory Compliance with Section 195 CrPC
- Registration of an FIR for offences covered by Section 174-A IPC requires a written complaint under Section 195 CrPC. Failure to comply renders the FIR invalid.
- Lawyers must verify that the statutory pre-condition of a written complaint is satisfied before advising clients on the viability of an FIR.
Proper Proclamation Procedure Is Essential
- Proclamations must adhere to the time-frames and procedural safeguards of Section 82/84 CrPC. Non-compliance can invalidate both the proclamation and any consequential FIR.
- Counsel should scrutinise proclamation orders for statutory defects and raise them promptly.
