Anand Kumar @ Sanjay Lalwani v. State of Madhya Pradesh: Non-Compoundable Criminal Proceedings Can Be Quashed After Settlement With Real Victim (2026)

Introduction

The Supreme Court has clarified an important distinction between compounding of an offence and quashing of criminal proceedings on the basis of settlement. In Anand Kumar @ Sanjay Lalwani v. State of Madhya Pradesh, 2026 INSC 928, the Court considered criminal proceedings arising from allegations of forged documents, a General Power of Attorney, partnership and mutation of agricultural land.

The proceedings involved allegations under Sections 466, 467, 468, 471, 420, 406 and 120-B of the IPC. The person who had suffered the principal legal injury, Pradeep Singh Mehta, entered into a settlement with the accused. However, the informant and complainant, Subhash Chandra Lalwani, did not agree to the settlement. The Supreme Court ultimately quashed the criminal proceedings against all the accused. We will look at the summary of the Supreme Court Judgment in this article.

Background of the Case

Pradeep Singh Mehta owned 54.48 acres of agricultural land in Bhopal. The complaint alleged that the accused had prepared a forged General Power of Attorney purportedly bearing the signature of Pradeep Singh Mehta. On the basis of the alleged Power of Attorney, a partnership firm named M/s Paradise Farms was subsequently constituted and the land was mutated in favour of the firm.

The complainant, Subhash Chandra Lalwani, claimed that 7.50 acres out of the land had been given to him by Pradeep Singh Mehta and alleged that the subsequent transactions deprived him of his interest in the property. Pradeep Singh Mehta had initially given a statement before the Magistrate stating that the signature on the Power of Attorney was forged. However, during the subsequent proceedings, he filed an affidavit stating that he had no grievance against the accused and did not want the criminal proceedings to continue.

High Court Had Earlier Refused To Quash Proceedings

The proceedings had a lengthy procedural history. In an earlier round, the High Court had refused to quash the proceedings against the appellant. Importantly, while doing so, the High Court observed that there was no documentary evidence establishing the transfer of 7.50 acres of land to Subhash Chandra Lalwani. The High Court held that merely on the basis of the oral statements of the complainant and Pradeep Singh Mehta, it could not be assumed that the complainant had any interest in the disputed land.  

Later, after Pradeep Singh Mehta entered into a compromise with the accused, the appellant again approached the High Court seeking quashing. The High Court rejected the petition on the ground that the complainant had not entered into the settlement. This led to the appeal before the Supreme Court.

Principle: Informant Is Not Always The Victim

The Supreme Court examined whether the objection of the informant could prevent quashing when the person who was actually affected by the alleged transaction had settled the dispute. The Court held that the identity of the victim is crucial. A person who sets the criminal law in motion does not automatically become the victim for every legal purpose.

Referring to Jagjeet Singh v. Ashish Mishra, the Court reiterated that the expressions “victim” and “complainant/informant” are distinct concepts in criminal jurisprudence. A person may provide information regarding an offence without himself being the person who suffered the loss or injury. Similarly, the actual victim need not necessarily be the person who lodged the complaint.

Only The Real Victim Can Authorize A Settlement

The Supreme Court went further and laid down an important principle. The Court observed that only the victim can authorize a settlement in a case where quashing is sought on the basis of settlement. The Court referred to Section 33 of the BNSS, corresponding to Section 39 of the CrPC, which recognizes that a person who is aware of the commission or intended commission of certain offences may provide information to the Magistrate or police.

Therefore, it is not necessary that the person who sets the criminal law in motion must himself be the victim. The Court cautioned that allowing an informant who is not the victim to settle a matter could lead to a situation where the real victim is left without any say in the settlement.

Who Is A “Victim” Under BNSS?

The Court also referred to the statutory definition of “victim”.

Under Section 2(y) of the BNSS, a victim means a person who has suffered loss or injury because of the act or omission of the accused and includes the guardian or legal heir of such victim. The corresponding definition under Section 2(wa) of the CrPC was also considered. The Supreme Court used these provisions to reinforce that the person who has actually suffered the loss or injury is the person whose settlement is relevant when quashing is sought on that basis.

Quashing Is Different From Compounding

Compounding is governed by the statutory framework identifying which offences may be compounded and by whom. Under Section 359 of the BNSS, the person who has suffered the relevant loss or injury is identified as the person entitled to compound the specified offence.

Quashing, on the other hand, is an exercise of the High Court’s inherent jurisdiction where continuation of the criminal proceeding would amount to abuse of process or where the ends of justice require intervention. The Supreme Court therefore emphasized that non-compoundability does not by itself prevent quashing of criminal proceedings on the basis of a genuine settlement.  In the present case, the proceedings had originally been challenged under Section 482 of the CrPC, the provision corresponding to the present Section 528 of the BNSS.

Gian Singh Principles Continue To Apply

The Court relied upon Gian Singh v. State of Punjab, (2012) 10 SCC 303, as reiterated in Naushey Ali v. State of Uttar Pradesh, (2025) 4 SCC 78. The Supreme Court explained that quashing based on settlement is conceptually different from statutory compounding. While considering such a request, the Court must examine whether, in view of the settlement:

• there is any real likelihood of conviction; and
• continuation of the proceedings would amount to an abuse of the process of law.

However, settlement cannot be used as a basis for quashing offences which have serious ramifications for society.

Serious Offences Cannot Be Quashed Merely Because Parties Settled

The Supreme Court reiterated the limitation laid down in Gian Singh. Offences involving serious crimes against society cannot ordinarily be quashed merely because the accused and the victim have settled the dispute. The Court specifically referred to serious offences such as murder, rape and dacoity, as well as offences involving mental depravity, moral turpitude, corruption and offences committed by public servants in that capacity. The reason is that such offences have a wider societal impact and cannot be treated merely as private disputes between two individuals.

On the other hand, offences having an overwhelmingly civil, commercial, mercantile, partnership or family character may, depending on the facts, be quashed where the dispute has genuinely been settled and continuation of the proceedings would serve no useful purpose.

Why Was Pradeep Singh Mehta Considered The Victim?

The Supreme Court specifically examined whether Pradeep Singh Mehta was actually the victim. The Court found that the complaint itself showed that the alleged forged Power of Attorney purportedly bore Pradeep Singh Mehta’s signature. The alleged partnership and subsequent mutation were also based upon that transaction. Therefore, according to the Supreme Court, the complaint itself demonstrated that Pradeep Singh Mehta was the person who had suffered the alleged loss and injury. Therefore, court identified Pradeep Singh Mehta as the real victim.

Pradeep Singh Mehta’s Subsequent Affidavit Was Material

The Supreme Court also considered the apparent contradiction between Pradeep Singh Mehta’s earlier statement before the Magistrate and his subsequent affidavit. In his affidavit, Pradeep Singh Mehta stated, among other things, that:

• he had contributed the land to the partnership;
• the formalities relating to the partnership and mutation were carried out by the appellant pursuant to his instructions;
• the firm had been functioning for several years;
• the alleged transaction concerning 7.50 acres with Subhash Chandra Lalwani had never matured and no consideration had been exchanged;
• he had no grievance against the accused; and
• he did not want to continue as part of the complaint.

The Supreme Court found this affidavit significant because Pradeep Singh Mehta was a star witness for the prosecution. In the Court’s assessment, his subsequent position meant that he would provide no support to the prosecution, making the likelihood of conviction bleak. The Court therefore held that continuation of the proceedings would amount to an abuse of process and wastage of judicial time.

The Dispute Had A Civil And Commercial Flavour

Another important factor was the nature of the dispute. The Supreme Court found that the allegations had a civil flavour with commercial overtones. The dispute arose around agricultural land, a partnership firm, alleged transactions concerning the property and the subsequent mutation. The Court found that the dispute was essentially personal and had no repercussions on society in general. In such circumstances, once the principal victim had settled the dispute and the chances of conviction had become bleak, continuing the criminal prosecution would only add to the burden on the judicial system.

What If The Informant Was Also A Victim?

The Supreme Court did not stop after finding Pradeep Singh Mehta to be the victim. It separately considered whether Subhash Chandra Lalwani, the informant, could also be regarded as a victim. The Court noted that the complainant claimed that 7.50 acres had been given to him and that he had consequently suffered loss. However, the earlier High Court order had already recorded that there was no documentary evidence establishing his interest in the land. The Supreme Court therefore considered the matter even on the assumption that Subhash Chandra Lalwani was a victim.

No Sustainable Case Against The Accused Even On The Informant’s Own Case

The Supreme Court found an additional reason for quashing the proceedings. The complaint itself alleged that the accused were attempting to grab Pradeep Singh Mehta’s land. It also stated that Pradeep Singh Mehta continued to occupy his 54.48 acres of land. Significantly, the complaint did not allege that the appellant was aware that the 7.50 acres had allegedly been given by Pradeep Singh Mehta and his father to Subhash Chandra Lalwani. According to the Supreme Court, at the highest, the complaint indicated that Pradeep Singh Mehta could have known about such an alleged transfer. Pradeep Singh Mehta was also not an accused in the case.

Considering the overall circumstances and his subsequent affidavit, the Court held that allowing Subhash Chandra Lalwani to continue prosecuting the accused would itself amount to an abuse of process.

Supreme Court Quashes Proceedings On Two Grounds

The Court ultimately quashed the criminal proceedings on two grounds.

First, there was a genuine settlement between the appellant and Pradeep Singh Mehta, who was the victim of the alleged acts. Second, even on the assumption that Subhash Chandra Lalwani was a victim, the facts of the case did not disclose a sustainable case against the accused warranting continuation of the prosecution. The Supreme Court accordingly set aside the High Court’s order and quashed ST No. 459 of 2018 against all the arrayed accused. The connected criminal revision pending before the High Court was also held to have become infructuous and was dismissed.

Conclusion

A settlement does not automatically terminate criminal proceedings. However, the fact that an offence is non-compoundable does not by itself prevent the High Court from exercising its inherent jurisdiction to quash the proceedings. The Court must examine who the real victim is, whether that victim has genuinely settled the dispute, the nature of the allegations, the societal impact of the offence, the likelihood of conviction and whether continuation of the proceedings would amount to an abuse of process. The judgment also makes clear that an informant and a victim are not necessarily the same person.

Where the genuine victim has settled a predominantly private or civil dispute and continuation of the prosecution would serve no legitimate criminal-law purpose, the High Court may exercise its inherent jurisdiction to quash the proceedings. At the same time, such power cannot be invoked merely to terminate serious offences having wider societal ramifications.

Case: Anand Kumar @ Sanjay Lalwani v. State of Madhya Pradesh, 2026 INSC 928

Date of Judgment: 31 August 2026

Read more on Quashing here.

FAQs

1. Can non-compoundable offences be quashed after settlement?
Yes. Non-compoundability does not by itself prevent the High Court from quashing criminal proceedings on the basis of settlement in appropriate cases.

2. Is an informant always treated as the victim?
No. The Supreme Court held that “victim” and “complainant/informant” are distinct concepts. The person who provides information to the police or Magistrate need not necessarily be the person who suffered the loss or injury.

3. Who can authorize a settlement for quashing criminal proceedings?
The Supreme Court held that it is the real victim who can authorize a settlement on the basis of which quashing is sought.

4. What is the difference between compounding and quashing?
Compounding is governed by the statutory provisions identifying compoundable offences and the persons entitled to compound them. Quashing is an exercise of the High Court’s inherent jurisdiction where continuation of proceedings would amount to abuse of process or where the ends of justice require intervention.

5. Can a criminal case involving a property dispute be quashed after settlement?
It can be quashed in an appropriate case where the dispute has a predominantly civil or commercial character, the genuine victim has settled the matter, the chances of conviction are bleak and continuation of the proceedings would amount to an abuse of process.

6. Can serious offences be quashed merely because the accused and victim have settled?
No. Offences having serious societal ramifications, such as murder, rape, dacoity and certain offences involving corruption or moral turpitude, cannot ordinarily be quashed merely on the basis of a private settlement.