Can't quash cyber fraud merely on compromise: High Court

Holding that cyber fraud could not be treated as a mere private dispute, the Punjab and Haryana High Court has ruled that an FIR or criminal proceedings pertaining to allegations of cyber fraud cannot be quashed solely on the basis of a compromise or settlement between the complainant and the accused.

Justice Sumeet Goel made it clear that cybercrime “transgression sui generis” or violation of a law and “the pervasive public detriment and the systemic erosion of trust irrevocably supersedes the purely private remedial adjustment achieved between the complainant/victim and the accused.”

Dismissing a plea for quashing of an FIR registered under provisions of the Bharatiya Nyaya Sanhita (BNS) for cyber fraud, Justice Goel observed that digital economy was resting on public trust and any compromise in such cases “acts as a corrosive insurgency”, causing not merely an isolated pecuniary loss, but an aggravated systemic damage upon the public financial exchequer.

“The contemporary felony of cyber fraud presents a transgression sui generis (of its own kind) that mandates its categorical exclusion from the judicial indulgence for quashing of criminal proceedings solely on the basis of a compromise/settlement having been arrived at between the complainant/victim and the accused,” Justice Goel held.

Elaborating on the rationale, the court asserted: “Digital economy is the unassailable locus of modern commerce, sustained entirely by the bedrock of public trust. Cyber fraud acts as a corrosive insurgency... When such an offender escapes prosecution simply by offering post-facto restitution, the penal measure is ipso facto converted into a mere calculus of profit and risk.”

Justice Goel warned that permitting quashing in such circumstances would “tantamount to granting judicial imprimatur to an ongoing systemic threat” and embolden offenders to treat settlements as a predictable cost of wrongdoing.

“The perpetrator of such an organised crime is emboldened to treat the compromise/settlement as a predictable expense, creating a deleterious lacuna in the law and gravely impacting the sanctity of the criminal justice system,” Justice Goel observed, cautioning that “the real victim is the digital ecosystem itself.”

At the same time, the High Court acknowledged that in some cases allegations of cyber fraud are used tactically to exaggerate otherwise private financial disputes. Justice Goel clarified that where such allegations are found to be artificial or exaggerated, courts can still exercise inherent powers to sanction a bona fide settlement.

“Where a meticulous judicial appraisal of facts reflects that the cyber fraud allegations have been strategically invoked to lend unwarranted gravity and seriousness to otherwise simpliciter pecuniary transaction inter se the complainant/victim and the accused, the Court must not permit the rigidity of law to defeat the ends of justice,” the Bench stated.

The ruling came in a case where an accused was seeking the quashing of an FIR registered on June 27 at the Cyber Police Station, Sonepat, on the basis of a compromise deed dated September 20. Rejecting the plea, Justice Goel held that the case pertains to cyber fraud simpliciter.

“It is neither pleaded nor decipherable from the factual milieu of the case that the rival private parties were known to each other beforehand or that the offence is in the nature of a private dispute…. Ergo, the petition in hand ought not to be entreated and deserves rejection,” the Bench concluded before dismissing the petition and directing that the trial proceed in accordance with law.

The Bench added exhaustive set of guideline could not possibly be laid down. “Circumstantial flexibility, one additional or different fact, may make a sea of difference between conclusions of two cases.”