Mediation Settlement Doesn't Erase Criminal Liability, But Relevant For Bail: Delhi High Court Grants Relief

The Delhi High Court has granted anticipatory bail to an accused in a Cheating FIR, observing that while a mediation settlement does not absolve criminal liability, it remains a relevant factor while considering bail.

Justice Girish Kathpalia was hearing a plea seeking anticipatory bail in connection with an FIR registered under Sections 406 and 420 of the Indian Penal Code, arising out of a property transaction dispute.

According to the prosecution, the complainant had paid a total of ₹10 lakh to the accused for the purchase of a shop. It was alleged that despite receiving the money, the accused neither transferred the property nor refunded the amount.

The accused, on the other hand, contended that the dispute was essentially civil in nature and had been given a criminal colour to exert pressure for recovery of money. It was also submitted that both parties had agreed to resolve the dispute through mediation and had entered into a settlement before the Delhi High Court Mediation Centre. More than 50% of the settled amount had already been repaid.

Opposing the plea, the State argued that the mediation settlement could not absolve the accused of criminal liability if the allegations disclosed an offence. The complainant also submitted that despite the settlement, the remaining amount had not been paid.

Agreeing, the Court held, “The mediation settlement would not absolve the accused/applicant of his criminal liability, if the same is made out.”

However, it emphasised that the conduct of the parties, including their willingness to settle and partial compliance with the settlement terms, cannot be ignored while considering the question of liberty.

“since the accused/applicant and the complainant de facto were referred by the predecessor bench to the process of mediation, for present purposes of deliberating upon liberty of the accused/applicant, it cannot be ignored that the complainant de facto himself also requested before the predecessor bench for referral of the dispute to mediation and even participated in the process. There was not even a whisper of objection from prosecution side to the referral of the dispute to mediation process.”

Further taking into account that the accused had already repaid a substantial portion of the amount, the Court held that no purpose would be served by depriving the accused of liberty.

Accordingly, it directed that in the event of arrest, the accused shall be released on anticipatory bail upon furnishing a personal bond of ₹25,000 with one surety of like amount.

Appearance: Mr. Parth Chaturvedi, Advocate for Petitioner; Mr. Amit Ahlawat, APP for State with SI Rahul Ranjan. Mr. Nishant Kumar Tyagi, Advocate for R-2/complainant de facto (through videoconferencing).

Case title: Manish Yadav v. State

Case no.: BAIL APPLN. 436/2025

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