The Supreme Court set aside the High Court’s order dismissing a Section 482 petition and quashed the criminal complaint pending against Anand Kumar @ Sanjay Lalwani and co-accused, holding that a settlement can only be effected by the victim and that compounding and quashing are distinct concepts.
Background & Facts
The Dispute
The appellant, Anand Kumar @ Sanjay Lalwani, along with co-accused Sneha Bhosle, Shyam Sundar Joshi and Sunil Vishwakarma, were charged in Misc. Criminal Case No. 33770 of 2019 and ST No. 459 of 2018 for alleged forgery, fraud and offences under Sections 466, 467, 468, 471, 420, 406 and 120-B of the IPC. The complaint stemmed from a purportedly forged General Power of Attorney dated 31.03.1997 and a Partnership Deed dated 16.03.2000 that created M/s Paradise Farms, purportedly holding 54.48 acres of land belonging to Pradeep Singh Mehta (Respondent No. 2).
Key Facts
- 31.03.1997: General Power of Attorney (GPA) purportedly executed by Pradeep Singh Mehta.
- 16.03.2000: Partnership Deed executed, forming M/s Paradise Farms; Pradeep Singh Mehta contributed the land as capital.
- 07.06.2000: Assistant Settlement Officer, Anand Nagar, Bhopal, allowed mutation of the land in favour of the partnership.
- 18.10.2011: Subhash Chandra Lalwani (Respondent No. 3) filed a criminal complaint before the Judicial Magistrate First Class, Bhopal, alleging forgery and fraud.
- 09.02.2012: Pradeep Singh Mehta gave a sworn statement before the magistrate that the GPA signature was forged.
- 28.05.2012: Magistrate took cognizance of the case, finding a prima facie case for the listed offences.
- 07.03.2013: Accused filed a revision challenging the cognizance order; it was dismissed as time-barred.
- 03.04.2018: High Court dismissed the Section 482 petition filed by the appellant and Sneha Bhosle, allowing it only for Sunil Vishwakarma.
- 26.07.2018: Supreme Court dismissed a Special Leave Petition filed by Sneha Bhosle.
- 08.08.2019: Appellant filed Misc. Criminal Case No. 33770 of 2019 seeking quashment of the proceedings on the ground of a compromise with Pradeep Singh Mehta.
- 17.08.2019: Affidavit by Pradeep Singh Mehta asserting a settlement and stating he had no grievance against the accused.
- 13.08.2019: High Court directed the Registrar to verify the genuineness of the compromise.
- 19.09.2024: High Court order (impugned) dismissed the Section 482 petition, holding that only the informant, not the victim, could settle.
- 31 August 2026: Supreme Court delivered the present judgment.
Procedural History
- 18.10.2011: Criminal complaint filed (Complaint No. 33770 of 2019).
- 28.05.2012: Cognizance taken by Judicial Magistrate First Class, Bhopal.
- 07.03.2013: Revision dismissed as time-barred.
- 03.04.2018: High Court dismissed Section 482 petition (partial relief).
- 26.07.2018: Supreme Court dismissed SLP of Sneha Bhosle.
- 08.08.2019: Misc. Criminal Case No. 33770 of 2019 filed seeking quashment.
- 13.08.2019: High Court ordered verification of compromise.
- 19.09.2024: High Court order dismissing Section 482 petition (impugned).
- 31 August 2026: Supreme Court judgment allowing the appeal.
The Parties' Positions
- Appellant (Anand Kumar @ Sanjay Lalwani): Argues that the settlement with the victim, Pradeep Singh Mehta, renders continuation of the criminal proceedings an abuse of process; contends that compounding and quashing are distinct and that only the victim can settle.
- Respondent No. 1 (State of Madhya Pradesh): Maintains that the informant/sub-complainant, Subhash Chandra Lalwani, is not a victim and therefore cannot effect a settlement; relies on Section 320 of the CrPC (now Section 359 BNSS) which limits compounding to the victim.
- Respondent No. 2 (Pradeep Singh Mehta): Through his affidavit, confirms the settlement and expresses no desire to continue the proceedings.
- Respondent No. 3 (Subhash Chandra Lalwani): Claims to have been given 7.50 acres but provides no documentary evidence; argues he is merely an informant.
Relief Sought
The appellant sought quashment of the criminal proceedings pending in ST No. 459 of 2018 and dismissal of the revision (CR R No. 2747 of 2019) on the ground of the settlement with the victim.
The Legal Issue
Whether a settlement between the accused and the victim, without the consent of the informant, can be a ground for quashing criminal proceedings under Section 482 of the Code of Criminal Procedure, and whether the concepts of compounding and quashing are interchangeable.
Arguments Presented
For the Appellant
- Contended that the High Court misinterpreted the scope of Section 482, conflating compounding (governed by Section 320/359) with quashing, which is a broader inherent power.
- Relied on Naushey Ali v. State of Uttar Pradesh (2025) and Gian Singh v. State of Punjab (2012) to emphasise the distinction between compounding and quashing.
- Asserted that Pradeep Singh Mehta is the true victim under Section 2(wa) CrPC and Section 2(y) BNSS, and his affidavit demonstrates a genuine settlement, making further prosecution an abuse of process.
- Highlighted that the offences alleged are of a civil-commercial flavour with no serious public impact, satisfying the test laid down in Gian Singh for quashment on settlement.
For the Respondent
- Submitted that only the person who suffered loss - the victim - may settle, and the informant (Subhash Chandra Lalwani) is not a victim; therefore the settlement is ineffective.
- Cited Section 320 of the CrPC (now Section 359 BNSS) which permits compounding only by the victim or his legal heir.
- Emphasised that the High Court’s finding of no documentary evidence of land transfer precludes any inference of a valid settlement.
- Warned that allowing settlement by a non-victim would undermine the protective purpose of criminal law.
The Court's Analysis
The Court began by reaffirming that compounding of offence and quashing of criminal proceedings are distinct legal concepts. It quoted the earlier authority:
"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. They are different and not interchangeable." The Court noted that Section 320 of the CrPC (now Section 359 of the BNSS) expressly limits compounding to the victim or his legal heir. However, the power under Section 482 is an inherent jurisdiction of the High Court to prevent abuse of process and to secure the ends of justice.
The Court then examined the definition of victim under Section 2(wa) CrPC and Section 2(y) BNSS, concluding that Pradeep Singh Mehta satisfies the statutory criteria - he suffered loss and injury as a result of the alleged forgery and fraudulent partnership formation. The Court rejected the respondent’s contention that the informant could settle, relying on Jagjeet Singh v. Ashish Mishra (2022) which distinguishes “victim” from “informant”.
Next, the Court evaluated the nature of the offences. While some of the IPC sections (e.g., 420, 406) are compoundable, others (e.g., 467, 468, 471) are not. The Court applied the test from Gian Singh that non-compoundable offences may still be quashed if they are of a civil-commercial nature and the settlement eliminates any realistic prospect of conviction. It observed that the disputed land transaction, partnership formation, and alleged forgery are essentially commercial disputes with no broader societal harm.
The Court gave weight to the affidavit of settlement filed by Pradeep Singh Mehta, noting its voluntary nature, lack of coercion, and the Registrar’s report confirming its genuineness. It held that continuing the prosecution would amount to an abuse of process and a waste of judicial resources.
Finally, the Court addressed the claim of Subhash Chandra Lalwani. It found that he had not produced any documentary evidence of a transfer of 7.50 acres and that his grievance was merely that he was denied a share in the partnership. Consequently, he could not be treated as a victim, and his lack of participation in the settlement did not bar quashment.
"For the reasons stated above, we quash the proceedings both on the ground of settlement between the appellant and Pradeep Singh Mehta as well as on the ground that on the facts of the case, Respondent No. 3 has made out no case against the appellant and other accused."
The Verdict
The Supreme Court allowed the appeal, set aside the High Court’s order dated 19 September 2024, and quashed the criminal proceedings pending in ST No. 459 of 2018 against all accused. It also dismissed the pending revision (CR R No. 2747 of 2019). No monetary damages or costs were awarded; the operative relief is the complete termination of the criminal complaint.
What This Means For Similar Cases
Victim-Only Settlement Is Controlling
- Only the person who has suffered loss or injury, as defined in Section 2(wa) CrPC/Section 2(y) BNSS, can effect a settlement that may justify quashment under Section 482.
- An informant or third-party complainant cannot unilaterally settle the case; their consent is irrelevant for quashment.
Distinguish Compounding from Quashing
- Compounding remains confined to the statutory list in Section 359 BNSS and requires the victim’s consent.
- Quashing under Section 482 is a discretionary power focused on abuse of process and the ends of justice; it may be invoked even for non-compoundable offences if the dispute is essentially civil-commercial.
Practical Checklist for Practitioners
- Verify the statutory definition of “victim” before relying on a settlement.
- Obtain a clear, voluntary affidavit from the victim confirming the settlement.
- Anticipate the High Court’s scrutiny of documentary evidence; oral statements alone are insufficient.
- Prepare to argue the civil-commercial nature of the offence and the futility of continuation.
- Ensure that any settlement does not involve offences that threaten public order or morality, as those cannot be quashed.
