The Supreme Court has held that where criminal proceedings are sought to be quashed on the basis of a settlement, it is the real victim of the alleged offence—and not necessarily the complainant or informant—who must authorise the settlement.
The bench of Justice K.V. Viswanathan and Justice Arun Palli clarified that an informant who has not suffered any loss or injury cannot prevent the quashing of proceedings merely because they have not joined the settlement.
The Court allowed the appeal challenging a September 19, 2024 order of the Madhya Pradesh High Court, which had refused to quash the proceedings because the original complainant had not entered into a compromise with the accused.
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The dispute concerned 54.48 acres of agricultural land situated at village Kanasaiya, Tehsil Huzur, District Bhopal, which was owned by Pradeep Singh Mehta. The complainant, Subhash Chandra Lalwani, claimed that 7.50 acres out of the property had been given to him.
According to the criminal complaint filed in October 2011, the accused had conspired to usurp the land by preparing a forged general power of attorney dated March 31, 1997, purportedly executed by Mehta in favour of Anand Kumar alias Sanjay Lalwani.
The complaint alleged that a partnership firm named M/s Paradise Farms was subsequently constituted through a partnership deed dated March 16, 2000. Mehta was shown as having contributed the entire 54.48 acres to the firm through the alleged power-of-attorney holder.
It was further alleged that an application was filed before the Assistant Settlement Officer for mutation of the property in the name of the partnership firm. The mutation was allowed on June 7, 2000, allegedly affecting both Mehta’s land and the 7.50 acres claimed by the complainant.
A Judicial Magistrate First Class at Bhopal took cognisance in May 2012 of offences under Sections 406, 420, 466, 467, 468, 471 and 120B of the Indian Penal Code. The matter was subsequently committed to the Sessions Court, where charges under Sections 467, 468 and 471 were framed against the appellant.
During an earlier round of litigation, the Madhya Pradesh High Court declined to quash the case. However, it recorded that the complainant had failed to produce any transfer deed, gift deed, sale deed or family settlement document establishing his interest in the disputed 7.50 acres.
The High Court observed at that stage that an interest in immovable property could not be presumed solely on the basis of oral statements made by the complainant and Mehta.
In 2019, the appellant once again approached the High Court under Section 482 of the Code of Criminal Procedure after reaching a settlement with Mehta.
In an affidavit filed before the High Court, Mehta stated that he had contributed the property to M/s Paradise Farms and that the formalities concerning the partnership and mutation had been undertaken by the appellant under his instructions.
Mehta further stated that the firm had been carrying on agricultural and plantation activities, filing income-tax returns, maintaining a bank account and depositing land revenue. He asserted that his capital account had been settled annually to his satisfaction.
He also claimed that although the complainant had approached him regarding 7.50 acres of land, the proposed transaction never matured and no consideration was exchanged.
Mehta expressly stated that he had no grievance against the appellant or the other accused and did not want to continue participating in the criminal proceedings. A Registrar of the High Court verified the compromise and reported that it was genuine, voluntary and free from threat, inducement or compulsion.
Despite this verification, the High Court refused to quash the proceedings. It reasoned that Mehta was only a witness and that the complainant had not joined the settlement.
Setting aside that decision, the Supreme Court said the High Court had failed to appreciate the fundamental distinction between compounding an offence and quashing criminal proceedings on the basis of a settlement.
The Court explained that compounding is governed and restricted by Section 320 of the CrPC, now Section 359 of the Bharatiya Nagarik Suraksha Sanhita, 2023. The High Court’s inherent power to quash proceedings, however, is guided by broader considerations, including whether there remains any likelihood of conviction and whether continuation of the case would amount to an abuse of the judicial process.
Referring to Gian Singh v. State of Punjab and Naushey Ali v. State of Uttar Pradesh, the Bench reiterated that compounding and quashing are “different and not interchangeable” concepts.
While a criminal court’s power to compound an offence is confined to the statutory provisions, a High Court may quash proceedings in exercise of its inherent jurisdiction if the material on record shows that such action is necessary to secure the ends of justice.
The Supreme Court cautioned that serious and heinous offences having wider consequences for society cannot be quashed merely because the accused and the victim have reached a private settlement. Crimes such as murder, rape, dacoity, offences involving mental depravity, corruption and offences committed by public servants in their official capacity stand on a different footing.
However, disputes predominantly having a civil, commercial, financial, partnership, matrimonial or family character may be quashed after a genuine settlement if the possibility of conviction has become remote and continuation of the proceedings would defeat the ends of justice.
The Bench then examined whether the consent of the complainant was indispensable. Relying upon Jagjeet Singh v. Ashish Mishra, the Court stressed that a “victim” and a “complainant or informant” are distinct concepts in criminal jurisprudence.
A person who sets the criminal law in motion need not necessarily be the person who suffered the alleged loss or injury. Similarly, the actual victim need not always be the person who lodged the complaint.
“It will only be the victim who can authorize a settlement,” the Court declared.
The Bench warned that disastrous consequences could follow if an informant who was not the victim were allowed to settle a case while leaving the real victim without a remedy. Therefore, for quashing based on settlement, the person who suffered the loss or injury must ordinarily be a party to the arrangement.
Examining the complaint, the Court found that Mehta was unquestionably the victim of the alleged offences. The entire foundation of the complaint was that his signature had been forged, his land had been introduced into the partnership firm without authority and mutation had been obtained on that basis.
The alleged loss and injury, therefore, were primarily suffered by Mehta. Once Mehta acknowledged the partnership and mutation, stated that the formalities had been carried out with his authorisation, and confirmed that he had no grievance against the accused, the principal foundation of the prosecution ceased to exist.
The Court also noted that Mehta was the prosecution’s star witness. In view of his affidavit, he was unlikely to support the prosecution during trial. Consequently, the chances of securing a conviction had become bleak.
“The writing is clearly on the wall,” the Bench remarked, holding that continuation of the proceedings would amount to an abuse of process and a waste of judicial time.
The Court found that the dispute was purely personal, with civil and commercial overtones, and had no wider repercussions for society. The controversy arose from land ownership, a family arrangement, formation of a partnership and mutation of property.
Addressing the complainant’s claim over 7.50 acres, the Court referred to the earlier High Court finding that no documentary evidence existed to establish that the land had been transferred to him.
The Supreme Court further observed that even if the complainant were assumed to be a victim, his alleged grievance would arise from Mehta’s act of contributing the land to the partnership. Mehta, however, was not an accused in the criminal complaint.
The complaint also did not contain a clear allegation that the accused knew the disputed 7.50 acres had been given to the complainant. In these circumstances, the Bench concluded that the complainant had not made out a sustainable criminal case against the appellant and the other accused.
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