Recently, the Supreme Court held that criminal proceedings involving non-compoundable offences can, in appropriate cases, be quashed on the basis of a settlement between the accused and the actual victim.

The Court clarified that where the person who lodged the FIR or complaint is not the real victim, their consent is not mandatory for quashing the criminal proceedings if the actual victim has categorically settled the dispute with the accused.

A Bench of Justice KV Viswanathan and Justice Arun Palli made the observation while setting aside a Madhya Pradesh High Court order that had refused to quash criminal proceedings solely because the original informant had not joined the settlement between the accused and the actual victim.

The Supreme Court cautioned that allowing informants who are not victims to control or block settlements could lead to serious consequences.

“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,” the Bench observed.

The Court stressed that, for a settlement-based quashing under Section 482 of the Code of Criminal Procedure, it is the real victim who must be a party to the settlement, provided the case falls within the categories where criminal proceedings can legally be quashed on the basis of compromise.

Informant Can Set Criminal Law in Motion, But Cannot Override Victim's Settlement

The Bench explained that although a person who is not the victim can set the criminal law in motion by filing a complaint or providing information to the police, such an informant cannot subsequently prevent the actual victim from settling the dispute with the accused.

The Court reiterated that the nature of the offence is also relevant. Proceedings may be quashed where the dispute has a predominantly civil or commercial character and the settlement between the accused and victim is genuine.

The case arose from a 2011 complaint filed by Subhash Chandra Lalwani, who alleged that the appellant and three others had conspired to usurp approximately 54.48 acres of land belonging to Pradeep Singh Mehta, the actual victim.

The allegations included forging Mehta's signature on a General Power of Attorney and preparing a partnership deed in the name of M/s Paradise Farms.

The Magistrate subsequently took cognizance of offences under Sections 466, 467, 468, 471, 420, 406 and 120B of the IPC.

After an earlier petition under Section 482 was dismissed by the Madhya Pradesh High Court in 2018, the appellant approached the High Court again after reaching a settlement with Mehta.

Mehta filed an affidavit before the Court stating that the disputed land had been contributed to the partnership at his instructions and that the necessary formalities had been completed accordingly. He also stated that he had no grievance against the accused and did not wish to pursue the complaint.

Despite this, the High Court declined to quash the proceedings on the ground that the original complainant had not been part of the settlement.

The Supreme Court disagreed with the High Court and held that the non-participation of the informant in the settlement could not, by itself, prevent quashing of the criminal proceedings.

Relying on its earlier decision in Gian Singh v. State of Punjab (2012), and the subsequent decision in Naushey Ali & Ors. v. State of Uttar Pradesh & Anr. (2025), the Bench reiterated that High Courts can quash criminal proceedings involving non-compoundable offences where the dispute has a predominantly civil flavour and the victim has genuinely settled the matter.

The Court noted that the allegations in the present case had a civil and commercial character and that, following the settlement, the possibility of conviction appeared bleak.

It observed that allowing such proceedings to continue despite the settlement could unnecessarily burden the judicial system.

“Ends of justice would be better served by weeding out these proceedings where the major protagonists in the drama who though originally were at daggers drawn, have buried their differences, shaken hands and moved on,” the Court said.

Accordingly, the Supreme Court allowed the appeal and quashed the pending criminal proceedings against the appellants in terms of the settlement reached with the actual victim.

Case: Anand Kumar @ Sanjay Lalwani v. State of Madhya Pradesh & Ors.