Who gets the final say when criminal proceedings are sought to be quashed based on a settlement: the person who lodged the complaint or the person who actually suffered the alleged wrong? In Anand Kumar @ Sanjay Lalwani v. State of Madhya Pradesh and Others, 2026 INSC 928, the Supreme Court answered this question by holding that it is the real victim who can authorise the settlement. The Court clarified that a complainant or informant is not necessarily the victim, and the two cannot be treated as interchangeable merely because the informant set the criminal law in motion.
How the Dispute Began
The proceedings arose from a criminal complaint filed by Subhash Chandra Lalwani on October 18, 2011 before the Judicial Magistrate First Class, Bhopal.
The dispute related to 54.48 acres of agricultural land at Village Kanasaiya, Tehsil Huzur, District Bhopal, owned by Pradeep Singh Mehta. The complainant claimed that out of 15.18 acres situated in Khasra No. 562, Pradeep Singh Mehta had given 7.50 acres to him.
According to the complaint, Anand Kumar @ Sanjay Lalwani and the other accused attempted to usurp the property through a General Power of Attorney dated March 31, 1997, purportedly executed by Pradeep Singh Mehta.
The principal allegation was that Pradeep Singh Mehta’s signature on the Power of Attorney had been forged and fabricated.
A partnership deed was subsequently prepared on March 16, 2000 under which M/s Paradise Farms was constituted. Pradeep Singh Mehta was shown as a partner through the appellant acting as his Power of Attorney holder, and the 54.48 acres were shown as his contribution to the capital of the firm.
The complaint described the transaction as a planned attempt to grab Pradeep Singh Mehta’s property. The land was thereafter mutated in favour of M/s Paradise Farms pursuant to an order of the Assistant Settlement Officer dated June 7, 2000. The complainant alleged that the mutation also covered the 7.50 acres claimed by him and consequently caused loss both to himself and Pradeep Singh Mehta.
Cognizance Taken Against the Accused
During the complaint proceedings, Pradeep Singh Mehta gave a sworn statement on February 9, 2012 in which he stated that his signature on the Power of Attorney had been forged. He also stated that he had given 7.50 acres to the complainant.
The Judicial Magistrate took cognizance on May 28, 2012 after finding a prima facie case for offences under Sections 466, 467, 468, 471, 420, 406 and 120B IPC [Sections 335, 338, 336(3), 340(2), 318(4), 316(2) and 61 BNS]. An earlier attempt to secure quashing before the Madhya Pradesh High Court was unsuccessful.
However, while dealing with that round of proceedings, the High Court made an important observation regarding the complainant’s claim over 7.50 acres. It found that there was no documentary material showing that the land had actually been transferred to the complainant. There was no gift deed, sale deed or other transfer document supporting the claim.
The High Court therefore observed that merely on the basis of oral statements of the complainant and Pradeep Singh Mehta, it could not be assumed that the complainant had an interest in the disputed land.
The matter subsequently reached the Sessions Court and was registered as ST No. 459 of 2018.
A Settlement Changes the Course of the Case
The appellant approached the High Court once again in 2019, but on a materially different ground. This time, he relied upon a settlement with Pradeep Singh Mehta.
Pradeep Singh Mehta filed an affidavit stating that the 54.48 acres had been contributed to M/s Paradise Farms and that the formalities relating to the formation of the partnership and mutation had been undertaken by the appellant in accordance with his instructions.
His affidavit also addressed the complainant’s claim over the 7.50 acres. Pradeep Singh Mehta stated that Subhash Chandra Lalwani had approached him concerning that portion of land, but the arrangement had not matured and no consideration had been exchanged.
Most significantly, Pradeep Singh Mehta declared that he had no grievance against the accused and did not wish to continue with the criminal proceedings.
The genuineness of the compromise was examined by the Registrar of the High Court. The Registrar reported that Pradeep Singh Mehta and the appellant intended to end their disputes and that the compromise had been entered into voluntarily, without threat, inducement or compulsion.
Despite this, the High Court refused to quash the prosecution.
Why the High Court Refused Quashing
The High Court took the view that the original complainant, Subhash Chandra Lalwani, had not entered into any compromise with the appellant.
Referring to Section 320 CrPC (Section 359 BNSS), it observed that an offence under Section 406 IPC (Section 316 BNS) could be compounded by the owner of the property in respect of which breach of trust was committed, while an offence under Section 420 IPC [Section 318(4) of BNS] could be compounded by the person who was cheated.
The High Court treated Pradeep Singh Mehta as a witness rather than the complainant and held that the proceedings could not be terminated merely on the strength of a settlement between the accused and a witness.
It therefore concluded that since Subhash Chandra Lalwani had not joined the settlement, the complaint could not be quashed.
The Supreme Court found that this approach overlooked two distinct principles of criminal law.
Compounding and Settlement-Based Quashing Operate Differently
The first issue addressed by the Supreme Court was the High Court’s reliance on the law governing compounding of offences.
The Court clarified that compounding of an offence and quashing of criminal proceedings because of a settlement cannot be treated as the same exercise.
Section 359 BNSS governs compounding, corresponding to Section 320 CrPC (Section 359 of BNSS). The power to compound is therefore circumscribed by the statutory provision.
Quashing stands on a different footing. Where quashing is sought because the underlying dispute has been settled, the relevant considerations include whether there is any realistic likelihood of conviction after the settlement and whether continuing the prosecution would amount to an abuse of the judicial process.
Relying upon Naushey Ali and Others v. State of Uttar Pradesh and Another and Gian Singh v. State of Punjab, the Court reiterated that quashing and compounding are “different and not interchangeable”. While a criminal court exercising the power of compounding is bound by the statutory framework, a High Court exercising inherent jurisdiction considers whether the ends of justice justify termination of the proceedings.
Who Matters: The Informant or the Victim?
The second and more important issue concerned the distinction between the person who reports an offence and the person who suffers from it. The Supreme Court relied on Jagjeet Singh and Others v. Ashish Mishra alias Monu and Another to reiterate that “victim” and “complainant/informant” are distinct concepts in criminal jurisprudence.
A person need not be the victim to set criminal law in motion. An offence may be reported by someone who has personally suffered no injury at all. Likewise, the person actually affected by the alleged offence may not be the person who lodged the complaint.
Thus, the procedural role of an informant cannot automatically be equated with the substantive position of a victim. This distinction assumed significance because the High Court had effectively treated the absence of the complainant’s consent as sufficient to defeat the settlement.
Only the Real Victim Can Authorise Settlement
The Supreme Court rejected the proposition that the informant must necessarily control a settlement merely because he initiated the criminal proceedings.
It held in categorical terms:
“It will only be the victim who can authorize a settlement.”
The Court explained that the law permits persons other than victims to provide information about criminal offences. If every such informant were given authority to settle the criminal case, a situation could arise where someone who had suffered no injury compromises the matter while the person who actually suffered the loss is left without a say.
The consequences of such an approach, the Court observed, could be “disastrous”. The principle flowing from the judgment is therefore that where quashing is sought on the basis of settlement, it is the real victim who must be a party to the settlement, not necessarily the person whose complaint or information originally triggered the proceedings.
The Court explained that the real victim cannot be left “in limbo” merely because someone else happened to be the informant.
Meaning of ‘Victim’ Under CrPC and BNSS
To identify who qualifies as a victim, the Supreme Court referred to the statutory definitions under both the old and new criminal procedure laws.
Section 2(wa) CrPC defines a victim as a person who has suffered loss or injury by reason of the act or omission for which the accused has been charged, and includes the person’s guardian or legal heir.
Similarly, Section 2(y) BNSS defines a victim as a person who has suffered loss or injury because of the act or omission of the accused and includes the guardian or legal heir of such person.
Thus, the Court’s test focuses upon the loss or injury resulting from the accused’s alleged conduct. The identity of the person who drafted, signed or instituted the complaint is not by itself determinative.
Compounding Provisions Also Follow the Victim-Centric Approach
The Court found support for this principle in Section 359 BNSS, which deals with compounding of offences. It noted that even where an offence is statutorily compoundable, the law ordinarily identifies the person who suffered the particular injury as the person entitled to compound it.
For example, voluntarily causing hurt may be compounded by the person who suffered the hurt; wrongful restraint by the person restrained; and certain forms of mischief by the person who suffered the loss or damage.
The statutory pattern therefore reinforces the principle that settlement rights ordinarily attach to the person who has suffered the relevant injury or loss.
The Court clarified that the offences involved in the present case were non-compoundable. The reference to Section 359 BNSS was therefore illustrative and was used to reinforce the distinction between a victim and a mere informant.
Settlement With the Victim Does Not Guarantee Quashing
The judgment also contains an important safeguard. Recognising the victim’s authority to settle does not mean that every criminal case can be terminated once the accused and victim arrive at an understanding.
The Court reiterated the principles in Gian Singh that crimes having serious consequences for society stand on a different footing from disputes essentially private in nature.
Offences such as murder, rape and dacoity, offences involving mental depravity, and certain offences under special statutes cannot ordinarily be quashed merely because the accused and victim have settled.
On the other hand, criminal cases arising predominantly from civil, commercial, financial, partnership, matrimonial or family disputes may be considered for quashing where the wrong is essentially private, the parties have genuinely settled, and the possibility of conviction has become remote.
Therefore, the victim’s consent is relevant to settlement-based quashing, but the Court retains the responsibility to examine the character and seriousness of the offence.
Pradeep Singh Mehta Was a Victim, Not Merely a Witness
On the facts before it, the Supreme Court had little difficulty in concluding that Pradeep Singh Mehta was a victim. The Court looked at the very foundation of the complaint. The principal accusation was that Pradeep Singh Mehta’s signature had been forged on the Power of Attorney and that the alleged forged document was then used for the creation of the partnership and mutation of his property.
Accordingly, the allegations themselves showed that Pradeep Singh Mehta was the person who had suffered the alleged loss and injury.
The Court therefore concluded that there was “no manner of doubt” that he was a victim. This substantially altered the significance of his subsequent affidavit. His compromise could not be dismissed as an agreement between the accused and an unrelated witness.
Continuation of Trial Would Be an Abuse of Process
The Court then examined what remained of the prosecution after Pradeep Singh Mehta’s affidavit. He had accepted the contribution of the land to the partnership, stated that the partnership and mutation formalities were undertaken according to his instructions, denied having any grievance against the accused and expressly sought an end to the proceedings.
The Supreme Court observed that Pradeep Singh Mehta was the star witness of the prosecution. In view of his categorical affidavit, he was no longer likely to support the prosecution case.
The Court remarked that the “writing is clearly on the wall” and concluded that continuing the prosecution would amount to an abuse of process and wastage of judicial time.
Nature of the Dispute Favoured Quashing
The Court also found that the case fell within the category of disputes where settlement-based quashing could legitimately be considered. It characterised the controversy as a purely personal dispute having no repercussions on society in general.
The allegations arose from transactions involving land, a partnership arrangement, Power of Attorney and mutation. The offences therefore had a civil flavour with commercial overtones.
Given the settlement and the consequent bleak chances of conviction, the Court held that allowing the prosecution to continue would merely add another case to an already burdened judicial system.
Could the Original Complainant Also Claim to Be a Victim?
The Supreme Court did not stop after finding that Pradeep Singh Mehta was a victim. It separately examined whether Subhash Chandra Lalwani could also claim victim status because of the alleged 7.50 acres.
The Court noted that the Madhya Pradesh High Court had already observed in the earlier proceedings that there was no documentary evidence establishing the complainant’s interest in that land.
Nevertheless, the Supreme Court considered the matter even on the assumption that Subhash Chandra Lalwani could be treated as a victim.
His case, at its highest, was that 7.50 acres given to him had subsequently been included in the partnership property.
However, the person from whom that alleged entitlement originated, Pradeep Singh Mehta, had accepted the formation of the partnership and the mutation and had stated that he had no grievance against the accused.
The Court also found no allegation in the complaint showing that the appellant knew that the 7.50 acres had allegedly been given to Subhash Chandra Lalwani. In those circumstances, permitting the complainant to continue the prosecution would itself amount to an abuse of process.
Supreme Court Quashes Proceedings Against All Accused
The Supreme Court ultimately quashed the criminal proceedings on two grounds.
- The appellant had settled the dispute with Pradeep Singh Mehta, who was a victim of the alleged acts forming the foundation of the prosecution.
- On the facts of the case, Subhash Chandra Lalwani had failed to make out a case warranting continuation of the proceedings against the appellant and the other accused.
The appeal was consequently allowed, and the High Court’s September 19, 2024 judgment was set aside. The Supreme Court directed that the complaint pending as ST No. 459 of 2018 before the Second Additional Sessions Judge, Bhopal would stand quashed against all the accused. The connected criminal revision pending before the High Court was also dismissed.
Conclusion
The decision provides an important clarification for courts dealing with petitions seeking quashing on the basis of compromise.
The person who initiates criminal proceedings and the person who suffers the criminal wrong may sometimes be different. The Court has made clear that these roles should not be conflated.
For purposes of a settlement relied upon for quashing, courts must therefore first identify who actually suffered the loss or injury alleged against the accused.
At the same time, the judgment does not reduce quashing to a private contractual arrangement between the accused and the victim. Even after a genuine settlement, the court must determine whether the offence is essentially private in character, whether it carries wider societal consequences, whether the possibility of conviction has become remote and whether continuation of the prosecution would serve any meaningful purpose.
The ruling in Anand Kumar @ Sanjay Lalwani v. State of Madhya Pradesh thus establishes a clear victim-centric principle: an informant may set the criminal law in motion, but when quashing is sought on the strength of a settlement, it is the real victim’s settlement that matters.
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