The Supreme Court has held that in proceedings sought to be quashed on the ground of settlement, “It will only be the victim who can authorize a settlement.”
The court clarified that a complainant or informant is not necessarily the victim and that criminal proceedings may be quashed where the real victim has settled the dispute with the accused and continuation of the case would amount to an abuse of process.
The judgment was delivered by a bench of Justice K. V. Viswanathan and Justice Arun Palli on an appeal filed by Anand Kumar @ Sanjay Lalwani against the State of Madhya Pradesh and others.
The appeal challenged the Madhya Pradesh High Court’s September 19, 2024 order refusing to quash criminal proceedings pending before the Second Additional Sessions Judge, Bhopal, Madhya Pradesh.
The case arose from a criminal complaint filed by Subhash Chandra Lalwani before the Judicial Magistrate First Class, Bhopal, against Anand Kumar @ Sanjay Lalwani, Sneha Bhosle, Shyam Sunder Joshi and Sunil Vishwakarma.
The complaint alleged that the accused had conspired to usurp 54.48 acres of land belonging to Pradeep Singh Mehta by preparing a forged General Power of Attorney and thereafter creating a partnership firm, M/s Paradise Farms, in which the land was shown as a capital contribution.
The complaint alleged offences under Sections 466, 467, 468, 471, 420, 406 and 120-B of the Indian Penal Code.
The Magistrate took cognizance of the offences on May 28, 2012. The proceedings were subsequently committed to the Sessions Court and registered as Sessions Trial No. 459 of 2018.
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Charges were framed against Anand Kumar under Sections 467, 468 and 471 of the IPC. There was no police-station FIR involved in the case, the proceedings originated from the private complaint filed before the Magistrate.
The dispute took a different turn when Pradeep Singh Mehta, whose signature was alleged to have been forged on the Power of Attorney, entered into a settlement with Anand Kumar.
In his affidavit, Mehta stated that the land had been contributed to M/s Paradise Farms, that the partnership and mutation formalities had been carried out by Anand Kumar on his instructions, and that he had no grievance against the accused.
He expressly stated that he did not want to continue with the proceedings. The High Court nevertheless refused to quash the case, holding that the complainant, Subhash Chandra Lalwani, had not entered into any settlement with the accused.
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The Supreme Court drew a clear distinction between compounding an offence and quashing criminal proceedings on the basis of settlement.
It observed that “compounding of offence and quashing of offence due to a settlement are two different concepts.” While compounding is governed by the statutory provisions, quashing on the basis of settlement depends upon whether there is any likelihood of conviction and whether continuation of the proceedings would constitute an abuse of process.
The bench further explained that the person who sets the criminal law in motion need not always be the victim.
Referring to the distinction between a victim and an informant, the court held that an informant who has not suffered loss or injury cannot be permitted to settle a matter while leaving the real victim without a remedy.
“Disastrous consequences will arise if such informants (who are not victims) are allowed to enter into settlement and the real victim is left in limbo.”
On the facts, the court found Pradeep Singh Mehta to be the real victim because the complaint itself alleged that his signature had been forged and that the partnership and mutation had been obtained on that basis.
The court noted that Mehta had subsequently disowned any grievance against the accused and would not support the prosecution.
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It therefore observed, “The writing is clearly on the wall. On this score, we are convinced that continuing the proceedings would be an abuse of process and wastage of judicial time.”
The court also held that the dispute had a civil flavour with commercial overtones and that the chances of conviction, in the face of the settlement, were bleak. It noted that continuing the case would only clog the judicial system.
The court further found that, even assuming Subhash Chandra Lalwani was a victim, the complaint did not establish that Anand Kumar was aware that 7.50 acres of land had allegedly been given to Lalwani.
Allowing the appeal, the Supreme Court set aside the High Court’s order and quashed Sessions Trial No. 459 of 2018 against all the accused.
It also held that nothing survived in the criminal revision pending before the High Court, which would consequently stand dismissed.
Case: Anand Kumar @ Sanjay Lalwani vs The State of Madhya Pradesh and Ors.
Date of Order: 31.08.2026
Status:Â Allowed
