The Supreme Court has held that only the person who suffered loss or injury can authorise a settlement under Section 482 CrPC, and once the star witness turns hostile, dragging the accused to trial is an abuse of process. The Court laid down that quashing of criminal proceedings on the ground of settlement between the offender and the victim is conceptually distinct from compounding of offences, and the power of the High Court under Section 482 CrPC is not circumscribed by Section 320 CrPC.
The Apex Court further clarified that only the real victim, and not a mere informant, can be the party to a settlement on the basis of which quashment is sought, and that offences which bear a civil, mercantile, commercial, financial or partnership flavour, where the wrong is essentially to the victim and the parties have settled their disputes, can be quashed even if they are non-compoundable. The Court also held that where the real victim has settled and the informant’s claim to victimhood is unsupported by documentary evidence, continuation of proceedings would constitute an abuse of the process of law.
A Two-Judge Bench comprising Justice K.V. Viswanathan and Justice Arun Palli observed at the outset that ‘compounding of offence’ and ‘quashing of offence due to a settlement’ are two distinct concepts in criminal law i.e., compounding is governed by Section 359 of the BNSS (erstwhile Section 320 CrPC), while quashing on settlement is governed by the inherent power of the High Court under Section 482 CrPC, guided by whether continuation of proceedings would be an abuse of process.
The Court emphasised that ‘victim’ and ‘complainant/informant’ are two distinct connotations in criminal jurisprudence, and that it is only the real victim, the person who has suffered loss or injury, who can authorise a settlement on the basis of which quashment can be sought. The Court further noted that even for compoundable offences, the third column of Section 359 BNSS consistently identifies the compounding person as the one who has suffered the loss or injury.
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Applying these principles to the facts of the case, the Court held that Pradeep Singh Mehta was undoubtedly a victim, since the substratum of the complaint was that his signature on the Power of Attorney was forged and his land was siphoned into the partnership. The Court further observed that Pradeep Singh Mehta, being the star witness, had turned hostile through his affidavit, and that continuing the proceedings in such circumstances would be an abuse of process and a waste of judicial time.
On the question whether Subhash Chandra Lalwani (Respondent No. 3) was also a victim, the Apex Court noted that the High Court itself had earlier recorded a finding that there was no documentary evidence of any transfer of 7.50 acres to him, and that the complaint nowhere averred that the appellant was aware of any such transfer. The Court further observed that even assuming Subhash Chandra Lalwani was a victim, his grievance was derivative, he claimed deprivation of 7.50 acres that had allegedly been given to him by Pradeep Singh Mehta, and once Pradeep Singh Mehta himself had conceded the correctness of the partnership and mutation, Respondent No. 3 had no independent basis to prosecute.
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Briefly, the case arises from a criminal complaint filed on 18 October 2011 by Subhash Chandra Lalwani (Respondent No. 3) before the Judicial Magistrate First Class, Bhopal, against Anand Kumar @ Sanjay Lalwani (the appellant) and three others, alleging offences under Sections 466, 467, 468, 471, 420, 406 and 120B of the Indian Penal Code, 1860. The gravamen of the complaint was that Pradeep Singh Mehta (Respondent No. 2) owned 54.48 acres of land in village Kanasaiya, Tehsil Huzur, District Bhopal, out of which 7.50 acres in Khasra No. 562 had been given to the complainant. The appellant and his co-accused were alleged to have forged a General Power of Attorney dated March 31, 1997 purportedly executed by Pradeep Singh Mehta, and on its basis prepared a Partnership Deed dated March 16, 2000 forming M/s Paradise Farms, into which the entire 54.48 acres of land was contributed as capital. A mutation order was thereafter obtained in the name of the partnership firm.
Cognizance was taken and the matter was committed to the Court of Sessions. In the first round of proceedings, the High Court declined to quash the proceedings against the appellant and one co-accused, holding that the complainant had no documentary basis to claim 7.50 acres. In the second round, the appellant filed a criminal case seeking quashment on the ground of a compromise arrived at with Pradeep Singh Mehta, whose affidavit was verified by the Registrar (J-II) as genuine and voluntary. The High Court, however, dismissed the petition, holding that the complainant (Subhash Chandra Lalwani) was not a party to the compromise and that Section 320 CrPC did not permit compounding on the basis of a settlement between the accused and a witness.
