Who Can Settle a Criminal Case? Supreme Court Says Only the Victim, Not a Non-Victim Informant

Case at a glance: The Supreme Court has quashed a forgery and cheating prosecution over land placed in a partnership firm in Bhopal after the person whose signature was allegedly forged settled with the accused. It held that quashing on settlement is distinct from compounding, that only the real victim can authorise a settlement, and that an informant who is not the victim cannot block it. The Madhya Pradesh High Court’s refusal to quash was set aside.

The complainant alleged that a 1997 power of attorney in the name of another person was forged, and that land was then brought into a partnership firm, M/s Paradise Farms, and mutated in its name. Cognizance was taken in 2012 for offences including forgery, cheating and criminal conspiracy, and charges under Sections 467, 468 and 471 IPC were framed against the appellant.

The person whose signature was allegedly forged later filed an affidavit saying he had contributed the land to the firm, the mutation was done on instructions and he had no grievance against the accused. The Registrar found the compromise genuine. The High Court nevertheless dismissed the quashing petition on 19 September 2024, holding that the complainant’s consent was necessary.

The Key Question Before the Court

When parties seek quashing on the basis of settlement, whose consent matters: the informant who set the law in motion, or the person who actually suffered the loss?

Victim, Informant and the Settlement Route

The Court explained that compounding under Section 320 CrPC (Section 359 BNSS) and quashing on settlement under inherent powers are different concepts; quashing asks whether conviction is likely and whether continuing the case is an abuse of process (Gian Singh v. State of Punjab, (2012) 09 SC CK 0145, Naushey Ali, (2025) 02 SC CK 0693). Relying on the definition of “victim” in Section 2(wa) CrPC and Section 2(y) BNSS and on Jagjeet Singh v. Ashish Mishra, (2022) 04 SC CK 0040, it held that an informant need not be a victim and that it is only the victim who can authorise a settlement.

The person whose signature was allegedly forged was the victim. In view of his affidavit, he would no longer be a useful prosecution witness, so continuing the trial would waste judicial time. The complainant was not shown to be a victim of the appellant: the complaint did not allege that the appellant knew of the land transfer on which he relied. The dispute arose out of partnership dealings with a predominantly civil flavour, falling within the Gian Singh category.

What the Court Actually Held

• The High Court’s order of 19 September 2024 was set aside.
• The complaint pending as ST No. 459 of 2018 before the Second Additional Sessions Judge, Bhopal, was quashed against all arrayed accused.
• The complainant’s revision seeking additional charges (CRR No. 2747 of 2019) was dismissed.
• Only the real victim can authorise a settlement; a non-victim informant cannot.

Why This Judgment Matters

• It sharpens the line between compounding and quashing on settlement.
• It ties the right to settle to the statutory definition of victim.
• It warns against informants who are not victims using prosecutions as leverage.

What Should Advocates Take Away From the Judgment?

For Defence Counsel

• Identify who actually suffered loss and secure that person’s settlement and affidavit.
• Show the dispute’s civil or commercial character under Gian Singh.

For Complainants

• Plead specifically how the complainant personally suffered loss from the accused’s act.
• Remember that serious offences remain outside the settlement route.

Key Takeaways

Frequently Asked Questions

Not if the informant is not the victim; the Court said only the victim can authorise a settlement.

No. The Court applied the Gian Singh categories, which exclude serious offences.

The person whose signature on the power of attorney was allegedly forged.

Conclusion

Read the full judgment on CourtKutchehry: View judgment →