NIKHIL MERCHANT vs C.B.I.

The Supreme Court held that under Section 120B read with Sections 420, 467, 468, 471 IPC and Sections 5(2) and 5(1)(d) of the Prevention of Corruption Act, 1947, the criminal proceedings against the appellant should be quashed due to a prior compromise between the parties, which included a clause withdrawing all claims. The Court emphasized that the compromise effectively amounted to compounding the offence of cheating, as established in Central Bureau of Investigation vs. Duncans Agro Industries Ltd., [1996 (5) SCC 591]. The appeal was allowed, and the order of the Special Judge was set aside, leading to the discharge of the appellant from the criminal complaint.