Only the Victim, Not the Informant, Can Authorise a Settlement to Quash Criminal Proceedings

A Supreme Court bench of Justices K.V. Viswanathan and Arun Palli quashed a land-fraud prosecution after holding that only the real victim, not the informant, may settle to end criminal proceedings.

A criminal complaint filed in 2011 over an allegedly forged power of attorney and a fraudulent partnership deed has finally been put to rest by the Supreme Court, which quashed all proceedings against the accused in ST No. 459 of 2018 pending before the Second Additional Sessions Judge, Bhopal. The Court, in a judgment authored by Justice K.V. Viswanathan, did more than resolve a family land dispute. It drew a clear line in criminal jurisprudence: when quashment of proceedings is sought on the basis of a settlement, it is the real victim—not the informant or complainant—who must be party to that settlement. The ruling settles confusion between the compounding of offences under Section 320 of the Code of Criminal Procedure, 1973, and the exercise of inherent power under Section 482 to quash proceedings in the interest of justice.

The Dispute: A Forged Power of Attorney and a Partnership Firm

Pradeep Singh Mehta, Respondent No. 2, owned 54.48 acres of agricultural land in village Kanasaiya, Tehsil Huzur, District Bhopal. The complainant, Subhash Chandra Lalwani (Respondent No. 3), alleged that 7.50 acres out of a 15.18-acre parcel in Khasra No. 562 had been given to him by Pradeep Singh Mehta.

The complaint, filed on 18 October 2011 before the Judicial Magistrate First Class, Bhopal, alleged that the appellant, Anand Kumar alias Sanjay Lalwani, and three others conspired to usurp Mehta's land. The vehicle for the alleged fraud was a General Power of Attorney dated 31 March 1997, purportedly executed by Pradeep Singh Mehta in the appellant's favour. The complainant alleged the signature on the PoA was forged. On the strength of the PoA, a partnership deed was prepared on 16 March 2000 and a firm called M/s Paradise Farms was formed. Under that deed, Pradeep Singh Mehta was shown as having contributed all 54.48 acres as his capital. The partnership deed also stipulated that on the retirement or death of any partner, the legal heirs would receive no share in the firm.

An application for mutation was filed before the Assistant Settlement Officer, Anand Nagar, Bhopal, signed by the appellant in his own capacity and also as the PoA holder of Pradeep Singh Mehta. On 7 June 2000, the mutation was allowed in favour of M/s Paradise Farms, absorbing the 7.50 acres the complainant claimed had been given to him.

Pradeep Singh Mehta, in a sworn statement recorded on 9 February 2012 during the complaint proceedings, deposed that the signature on the power of attorney was forged and that he had indeed given 7.50 acres to the complainant. The Judicial Magistrate took cognizance on 28 May 2012 for offences under Sections 466, 467, 468, 471, 420, 406 and 120B of the Indian Penal Code, 1860.

Two Rounds in the High Court

The appellant and two co-accused first approached the High Court of Madhya Pradesh at Jabalpur under Section 482 of the Code. By an order dated 3 April 2018, the High Court dismissed the petitions of the appellant and co-accused Sneha Bhosle, while allowing the petition of Sunil Vishwakarma. The High Court, at that stage, recorded a significant finding: absent any documentary evidence of transfer, it could not be assumed solely on oral statements that the complainant had any interest in the disputed land. A Special Leave Petition filed by Sneha Bhosle against the 2018 order was dismissed by the Supreme Court on 26 July 2018. The complaint was thereafter committed to the Sessions Court and registered as ST No. 459 of 2018. Charges were framed under Sections 467, 468 and 471 IPC against the appellant.

In August 2019, the appellant filed a second petition—Misc. Criminal Case No. 33770 of 2019—this time seeking quashment on the ground that a compromise had been reached between the appellant and Pradeep Singh Mehta. Pradeep Singh Mehta filed an affidavit retracting his earlier sworn statement. He stated that he had voluntarily contributed the land to the partnership; that the appellant had carried out all formalities as per his instructions; that Respondent No. 3 had approached him for 7.50 acres but no consideration was transacted and nothing materialised; and that he had given his 2012 statement before the Magistrate under the influence of the complainant. He stated he had no grievance against any of the accused and sought quashment of the proceedings.

On 13 August 2019, the High Court directed its Registrar (J-II) to verify the genuineness of the compromise. The Registrar reported that the compromise was genuine, voluntary and authentic, and that Pradeep Singh Mehta was not under any pressure. Despite this, the High Court, by the impugned order dated 19 September 2024, dismissed the petition. It reasoned that Section 320 of the Code permitted compounding only by the person who suffered the offence; that the complainant, Subhash Chandra Lalwani, had not entered into any settlement; and that a compromise between the accused and a witness (Pradeep Singh Mehta) could not be a basis for quashment.

The Core Legal Question

Before the Supreme Court, Senior Counsel R. Basant for the appellant argued that the High Court had conflated two distinct concepts: compounding of offences and quashment based on settlement. He submitted that the real victim of the alleged crimes was Pradeep Singh Mehta, not the informant, and that given Mehta's affidavit, continuing the proceedings would be an abuse of process. Senior Counsel Meenakshi Arora for Pradeep Singh Mehta supported this position and emphasised that the informant's claim to 7.50 acres was unsupported by any documentary title. Counsel for the complainant countered that Mehta's affidavit contradicted his sworn statement before the Magistrate and that Mehta had not confirmed in the affidavit that the PoA signature was his.

The Court identified the central question as: whether, in light of the compromise affidavit of Pradeep Singh Mehta, continuation of the proceedings would constitute an abuse of process warranting quashment.

Compounding Versus Quashing: A Distinction the High Court Missed

Justice Viswanathan began the analysis by restating the distinction between compounding and quashing—a distinction the High Court had, in the Court's view, missed entirely. Compounding is governed by Section 320 of the Code (now Section 359 of the Bharatiya Nagarik Suraksha Sanhita, 2023). Quashing on account of settlement is an exercise of inherent power guided by whether, in the teeth of the settlement, there is any likelihood of conviction and whether continuing the proceedings would be an abuse of process.

The Court drew on its earlier decision in Naushey Ali and Others v. State of Uttar Pradesh and Anr., (2025) 4 SCC 78, which had in turn relied on Gian Singh v. State of Punjab, (2012) 10 SCC 303. From Gian Singh, the Court quoted the key passage: “Quashing of offence or criminal proceedings on the ground of settlement between an offender and victim is not the same thing as compounding of offence.” The Court also noted the Gian Singh caveat: offences with harmful public effect—such as serious crimes against society—cannot be quashed merely because the accused and victim have settled.

The Court then turned to the distinction between “victim” and “informant” drawn in Jagjeet Singh and Others v. Ashish Mishra alias Monu and Another, (2022) 9 SCC 321. That case had held that a complainant or informant is not automatically a victim; a stranger to the crime can be an informant, and a victim need not be the complainant. From this, the Court derived its core holding: it is only the victim who can authorise a settlement to support quashment. Allowing an informant who is not the victim to block quashment—or conversely allowing such an informant's settlement to carry the same weight—would produce “disastrous consequences” and leave the real victim without recourse. The definition of “victim” under Section 2(wa) of the Code and Section 2(y) of the BNSS—a person who has suffered any loss or injury caused by reason of the act or omission for which the accused has been charged—was also considered to reinforce this conclusion.

Applying the Principles: Who Was the Real Victim?

The Court held without hesitation that Pradeep Singh Mehta was indeed a victim. The substratum of the complaint was that it was Mehta's signature that had been forged, and it was Mehta's land that had been absorbed into the partnership and mutated without his genuine consent. The loss and injury described in the complaint was Mehta's. That finding was determinative.

On Mehta's affidavit, the Court examined both the 2012 sworn statement and the later affidavit carefully. The Court was satisfied that Mehta's affidavit was categoric and voluntary—confirmed by the Registrar's verification report. Mehta had stated he authorised the appellant to form the partnership and carry out the mutation; that the firm had operated to his satisfaction for years; that Respondent No. 3 had never completed any transaction for the 7.50 acres; and that he no longer wished to participate in the prosecution. The Court concluded: “the writing is clearly on the wall.” Mehta, as the star witness, would be of no support to the prosecution, and continuing the proceedings would be an abuse of process and a waste of judicial time.

The Court further found that the settlement fell within the category identified in Gian Singh as appropriate for quashment. The dispute was purely personal, with no broader societal repercussions. The offences alleged had a civil flavour with commercial overtones—a partnership, a mutation, a power of attorney—arising from what the Court described as a family and business relationship spanning decades. Chances of conviction, in the face of the settled position of the key witness, were bleak.

Was the Informant, Subhash Chandra Lalwani, Also a Victim?

The Court did not stop at Pradeep Singh Mehta. It separately examined whether Subhash Chandra Lalwani, Respondent No. 3, was himself a victim whose absence from the settlement would be fatal to quashment.

First, the Court noted the High Court's own 2018 finding that there was no documentary evidence to support the complainant's claim to 7.50 acres, and that it could not be assumed on the basis of oral statements alone that the complainant had any interest in the land.

Second, and more significantly, the Court reasoned that even taking the complainant's case at its highest—accepting that Mehta had given him 7.50 acres—the complainant's grievance was derivative of Mehta's position. His case was that the 7.50 acres given to him was dragged into the partnership because the accused forged Mehta's signature and manufactured the partnership deed. Once Mehta, the original owner, had affirmed that the partnership was genuine and authorised, and that the complainant had no completed transaction with him, Respondent No. 3 had no independent basis to prosecute the appellant.

The Court observed that nowhere in the complaint was it averred that the appellant even knew that 7.50 acres had been given by Mehta to the complainant. The only reference was that the appellant used to look after farming for both the complainant and Mehta's family. At best, Mehta could have known of any such arrangement. Pradeep Singh Mehta was not an accused. In these circumstances, allowing the complainant to continue the prosecution would itself be an abuse of process.

Outcome

The Supreme Court allowed the appeal and set aside the High Court's order dated 19 September 2024 in Misc. Criminal Case No. 33770 of 2019. The criminal proceedings in ST No. 459 of 2018 pending before the Second Additional Sessions Judge, Bhopal, stand quashed against all arrayed accused. The Court further held that in view of its judgment, nothing survives in CRR No. 2747 of 2019—the complainant's revision seeking additional charges—pending before the High Court, and that revision also stands dismissed.