% 13.06.2025 CRL.M.A. 17884/2025 (for release of the Petitioner Nos. 1 & 2) and CRL.M.A. 17885/2025 (stay)

1. These applications are filed under Section 528 of Bharatiya Nagarik Suraksha Sanhita, 2023 ("BNSS") read with Section 482 of the Code of Criminal Procedure, 1973 (" CrPC ") seeking interim bail of the Petitioner Nos. 1 and 2 during the pendency of the quashing petition and for stay of investigation being conducted pursuant to FIR No. 0101/2024 ("FIR") registered at P.S. Economic Offences Wing, Mandir Marg, New Delhi, This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 24/06/2025 at 12:32:15 under Sections 406 , 409 , 420 , 465 , 467 , 468 , 471 , 477A, 120-B and Section 34 of Indian Penal Code 1860 (" IPC ") and Section 66 of Information Technology Act, 2000 (" IT Act ").

2. Pursuant to the orders dated 06.06.2025 and 11.06.2025, the settlement agreement / MoU has been notarized and a copy of the same has been handed over. The same is taken on record.

Factual Background:

3. It is stated that the Petitioners and Respondents were engaged in a professional and business relationship. Petitioner No. 1, acting individually and through his associated entities, was rendering consultancy services to Respondent Nos. 2 and 3 for procurement of garment supply orders for various domestic and international brands under the trade name "Fashinza". Subsequently, Petitioner Nos.1, 2, 4 and 5 entered into formal employment with Respondent No. 2. In the course of this commercial relationship, certain disputes arose which ultimately culminated into registration of the FIR.

4. Petitioner No.1 preferred a writ petition being Writ Petition (Criminal) No. 3251/2024 on 25.10.2024 seeking quashing of the lookout circular issued in connection with the FIR, which is pending before this Court and next listed on 22.09.2025.

5. On 05.05.2025, notices under Section 35(3) of the BNSS were issued to the Petitioners directing them to join the investigation. On 09.05.2025 Petitioner Nos. 1 and 2 joined the investigation and were subsequently taken This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 24/06/2025 at 12:32:15 into judicial custody. On 15.05.2025 and 29.05.2025, the judicial custody of Petitioner Nos. 1 and 2 was extended by the learned Duty Magistrate.

6. On 28.05.2025, a comprehensive settlement agreement was executed between the Parties, wherein it was agreed that all the disputes between them were mutually and amicably resolved, including the disputes which found the basis of the FIR and ancillary proceedings. The Petitioners submit that the settlement agreement was entered into without any coercion and undue influence.

7. In terms of the settlement agreement, a sum of Rs. 4,50,00,000/- (Rupees four crores fifty lakhs only) was paid by the Petitioners to Respondent Nos. 2 and 3 through a demand draft. Both Respondent Nos. 2 and 3 also agreed to furnish no objection and provide all necessary cooperation for grant of bail of the Petitioner Nos. 1 & 2 and quashing of the FIR.

8. Accordingly, CRL.M.C. 4119/2025 has been filed for quashing of the FIR ("Quashing Petition") and it was listed on 06.06.2025 before the Vacation Bench. Vide order dated 06.06.2025 the Vacation Bench observed that the settlement agreement needed to be given a legal colour and, hence, Petitioner Nos. 1 and 2 were directed to be produced on 11.06.2025 before the Vacation Bench. On 11.06.2025, Petitioner Nos. 1 and 2 were produced and they were directed to get the settlement agreement notarized and also made the balance payment of Rs. 2,50,00,000/- (Rupees two crores fifty lakhs only) to Respondent Nos. 2 and 3 by way of a demand draft and also handed over two Security Cheques in terms of the settlement agreement.

This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 24/06/2025 at 12:32:15

9. The learned counsel for Respondent Nos. 2 and 3, on instructions, made a statement that they do not have any objection for quashing of the FIR and they shall not encash the demand draft handed over on 11.06.2025 until the Quashing Petition is disposed of. However, the learned APP appearing for Respondent No. 1 State submitted that the Respondent No. 1 had an objection with regard to the quashing of the FIR and sought time to file a reply to place the objections on record.

10. Accordingly, the Quashing Petition has been listed before the Roster bench on 14.07.2025, while granting time to Respondent No. 1 State to file reply within three (3) weeks. As regards the applications for release on interim bail and stay of further investigation in FIR, vide order dated 11.06.2025 notice was issued to Respondent No. 1 State and time was granted to file a reply along with compilation of judgments as the learned APP opposed the prayers made in these applications for release of Petitioner Nos. 1 and 2 on interim bail during the pendency of the Quashing Petition and further stay of the investigation in the FIR. Accordingly, the matter was listed before the Vacation Bench on 13.06.2025.

11. When the matter was taken up on 13.06.2025, Mr. Hariharan, the learned Senior Counsel for the Petitioners submitted that the dispute has been amicably settled between the Petitioners and Respondent No. 2 and 3 and the Quashing Petition in compliance with the terms of the settlement agreement deserves to be allowed. He further submitted that till such time the Quashing Petition is decided by this Court, there is no purpose to keep Petitioner Nos. 1 and 2 in judicial custody as the entire amount as agreed This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 24/06/2025 at 12:32:15 under the settlement agreement has been fully paid to Respondent Nos. 2 and 3. It was further submitted that Respondent Nos. 2 and 3 conveyed no objection for release of Petitioner Nos. 1 and 2 from judicial custody and Respondent No. 1 State cannot object to release of Petitioner Nos. 1 and 2. The learned Senior Counsel for the Petitioners have placed on record a notarized settlement agreement, order dated 04.06.2025 passed by the learned Additional Sessions Judge ("ASJ"), South District, Saket Courts passed in Bail Application No. 1132 and 1133 of 2025 filed by Petitioner Nos. 1 and 2 whereby the learned ASJ dismissed the bail applications. The learned Senior Counsel for the Petitioners has also placed on record the orders dated 29.05.2025 passed by the learned Chief Judicial Magistrate, South District / Saket Courts, Delhi ("CJM") in bail applications filed by Petitioner Nos. 1 and 2. These documents are taken on record.

12. The learned counsel for the Petitioners has relied upon the decision of the Supreme Court in Arnab Manoranjan Goswami Versus State of Maharashtra and Ors (2021) SCC 427 to submit that this Court has power to release Petitioner Nos. 1 and 2 on interim bail during the pendency of the Quashing Petition. The Supreme Court had held as under:

13. In view of the above, the learned Senior Counsel for the Petitioners has submitted that each day spent by Petitioner Nos. 1 and 2 in judicial custody, despite making full payment as agreed in the settlement agreement, is the casualty as observed by the Supreme Court. In view of the same, Petitioner Nos. 1 and 2 should be released on interim bail during the pendency of the Quashing Petition.

Submissions by Respondent No. 1 State

14. The learned APP appearing for Respondent No. 1 submits that merely because the Petitioners have entered into the settlement agreement cannot be the basis for releasing the Petitioners Nos. 1 and 2 on interim bail. The learned CJM and the learned ASJ both have vide orders dated 29.05.2025 and 04.06.2025 have rejected the bail applications filed by the Petitioners Nos. 1 and 2, respectively. It was further submitted that the investigation is ongoing and releasing Petitioners Nos. 1 and 2 on interim bail will hamper the investigation as the allegations of forgery are serious in nature, which has resulted into wrongful loss to Respondent Nos. 2 and 3 to the tune of more than Rs. 11,00,00,000/- (Rupees eleven crores).

This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 24/06/2025 at 12:32:15

15. It was further submitted by the learned APP that Petitioner Nos. 1 and 2 have indulged in destruction of evidence and have tampered with the digital evidence. It was also submitted that the money trail is being established and that the investigation points towards Hong Kong, Bangladesh and Germany, where Petitioner No. 1 runs various companies. It was submitted that Petitioner No. 1 is a German National and Petitioner No. 2 works for Petitioner No. 1 and both have, in active connivance with each other, created fake emails and forged documents for committing the offences as mentioned in the FIR.

16. In view of the same, the learned APP strongly opposed grant of interim bail and stay of further investigation during the pendency of the Quashing Petition.

Conclusion:

17. Admittedly, the Petitioners and Respondent Nos. 2 and 3 have entered into the settlement agreement whereby an amount of Rs. 7,00,00,000/- (Rupees seven crores) has been paid by the Petitioners to Respondent Nos. 2 and 3.

18. As per the settlement agreement, Respondent Nos. 2 and 3 have given their no objection for quashing of the FIR. Petitioner Nos. 1 and 2, who have been in judicial custody since 09.05.2025, have agreed to be bound by the terms of the settlement agreement. The dispute which culminated into the FIR has been finally resolved between the Petitioners and Respondent Nos. 2 and 3 as the entire agreed amount under the settlement agreement has been paid by the Petitioners to Respondent Nos. 2 and 3.

This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 24/06/2025 at 12:32:15

19. It is settled law that even in respect of non-compoundable offences the High Court in exercise of its inherent power under Section 482 of CrPC, which is now Section 528 of BNSS, can quash criminal proceedings, where the offences predominantly are of a civil, mercantile, commercial or financial nature and the victim and the accused have amicably resolved the disputes. Where the parties have settled their disputes, the High Court can under Section 482 of CrPC quash the criminal proceedings. However, this power has to be exercised sparingly and with caution. The High Court can only exercise this power in cases where quashing would secure the ends of justice or prevent abuse of the process of law. While exercising the power of quashing, the High Court has to form an opinion on either of the said two objectives. In criminal cases having overwhelmingly and predominantly civil character, arising out of commercial transactions, the same should be quashed when the parties have resolved their entire disputes among themselves.

20. In the case of Narender Singh and ors vs. State of Punjab and anr (2014) 6 SCC 466, the Supreme Court has held that while deciding whether to exercise its power under Section 482 of the CrPC in the cases of settlement, timing of the settlement plays a crucial role. It is held that the cases where the settlement is arrived at immediately after the alleged commission of the offence and while the matter is still under investigation, the High Court may be liberal in accepting the settlement to quash the criminal proceedings / investigation. The reason for the same is that the stage of investigation is still on, the chargesheet has not been filed and even in cases where the charge is framed but the evidence is yet to start or the This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 24/06/2025 at 12:32:15 evidence is at infancy stage, the High Court can show benevolence in exercising its powers favourably to quash the FIR after prima facie assessment of the circumstances / material available.

21. In the present case, although the FIR is filed on 31.07.2024, the settlement agreement has been arrived at on 28.05.2025 immediately after the notices under Section 35(3) of BNSS were issued to the Petitioners directing them to join the investigation on 05.05.2025 and on 09.05.2025 the Petitioner Nos. 1 and 2 joined the investigation, however, were taken into judicial custody on the same day. In view of the timing of the settlement and the stage of investigation, no purpose would be served to keep Petitioner Nos. 1 and 2 in judicial custody, especially when the terms of the settlement with respect to payment have already been fully complied with and Petitioner Nos. 1 and 2 have agreed to be bound by the terms of the settlement agreement.

22. This Court has considered the objections of the learned APP and also the observations of learned ASJ in the orders rejecting the bail applications filed by Petitioner Nos. 1 and 2, however, in view of the law laid down by the Supreme Court in the cases where the parties have entered into a settlement for criminal proceeding arising out of the commercial transactions, an interim bail is required to be granted to the Petitioner Nos. 1 and 2, during the pendency of the Quashing Petition.

23. Having considered the facts and circumstances of the case, the present applications are allowed and Petitioner Nos. 1 and 2 are released on interim bail during the pendency of the Quashing Petition on the following conditions:

24. In the event of there being any violation of stipulated conditions, it would be open to Respondent No. 1 State to seek redressal by filing an application seeking cancellation of the interim bail.

25. There shall also be a stay of further investigation in relation to the FIR till the final disposal of the Quashing Petition.

26. Accordingly, the present applications are allowed in the aforesaid terms.

This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 24/06/2025 at 12:32:15

27. A copy of this order shall be forwarded to the concerned Jail Superintendent for compliance.

28. List before the Roster Bench on the date already fixed i.e., 14.07.2025.

TEJAS KARIA, J (VACATION JUDGE) JUNE 13, 2025/'KG' Click here to check corrigendum, if any This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 24/06/2025 at 12:32:15