P&H High Court Refuses Quashing of Cyber Fraud FIR Despite Compromise; Says Digital-Banking Crimes Affect Public at Large

Case Name: Badri Mandal & Others vs. State of Haryana & Another
Date of Judgment: 12 November 2025
Citation: CRM-M-54453-2025
Bench: Hon’ble Mr. Justice Sumeet Goel

Held: The Punjab & Haryana High Court held that cyber fraud cases cannot be quashed merely because parties sign a compromise. The Court ruled that fraudulent digital transactions undermine public trust in online banking and create a wider systemic impact. It found that the FIR alleged a genuine cyber fraud involving seven unauthorized withdrawals totalling ₹14,83,696. The Court held that such offences are not private disputes and cannot be treated like civil-flavoured financial disagreements. It clarified that inherent powers under Section 528 BNSS must be exercised cautiously, and quashing requires careful scrutiny of the offence’s nature and effect on society. The Court held that this incident amounted to cyber fraud simpliciter, not a mere commercial misunderstanding.

Summary: The complainant, an accountant, discovered seven unauthorized online transactions from her HDFC account, made without OTP or alerts. She reported the matter to the Cyber Crime Helpline. The FIR alleged that the accused used fake documents and fraudulent digital channels to withdraw the funds. The petitioners sought quashing on the ground that they had executed a compromise dated 20.09.2025. Their counsel argued that the dispute now stood resolved. The State argued that cyber fraud affects public confidence in digital systems, and such offences cannot be quashed lightly. The Court examined Supreme Court precedents on compromise-based quashing. It held that private settlements cannot override the public interest involved in cybercrime cases. It found no indication that the allegations were exaggerated or that the case lacked elements of real cyber fraud. The Court held that quashing the case would legitimize a growing threat to digital-banking security.

Decision: The petition was dismissed. The FIR and all proceedings were allowed to continue. The Court directed the trial court and police to proceed strictly in accordance with law. Pending applications were also disposed of.