The Office of the Attorney General, Nepal has allowed partial settlements in certain criminal cases involving organised-crime charges, saying that the parties may settle other offences if the court rejects the organised-crime charge.

The circular, issued under Attorney General Narayan Datta Kandel, clarifies how cases involving both compoundable and non-compoundable offences should be handled. It does not allow organised-crime charges themselves to be settled.

The directive was sent to all high, special, and district government attorney offices on October 7.

The Attorney General’s Office had earlier issued guidelines for settling criminal cases prosecuted by the government. But the rules were unclear about cases in which an accused faced both an offence that could be settled with the victim’s consent and another offence that could not.

The revised guidelines address that ambiguity.

Under the new provision, a settlement may be allowed if the court convicts the accused guilty of an offence that is legally eligible for settlement but does not uphold the related organised-crime charge. However, the court’s ruling on the organised-crime charge must be final, with all appeal proceedings already exhausted.

For example, a person charged with both fraud and organised crime may be able to settle the fraud case if the court upholds the fraud charge but dismisses the organised-crime allegation. The settlement cannot proceed until the decision rejecting the organised-crime charge becomes final.

An organised-crime charge can be brought when three or more than three people act together in an organised way to commit an offence punishable by more than three years in prison. In such cases, prosecutors can seek an additional sentence equal to one and a half times the punishment for the main offence.

The revised guidelines do not make organised crime a compoundable offence. They allow settlements only for other offences that the law permits to be settled.

Dinesh Prasad Ghimire, spokesperson for the Office of the Attorney General, said the circular was intended to remove confusion over cases involving multiple charges. “The decision allows partial settlements by separating out offences that cannot be settled. Only offences that the law allows to be settled can be resolved this way. Serious organised-crime cases cannot be settled,” Ghimire said.

He added that defendants not charged with organised crime could seek settlements if the offence in question was legally eligible.

The guidelines allow settlements in several types of cases, including cooperative fraud and other fraud cases, cheque dishonour, unlawful lending, criminal breach of trust causing financial loss, arson, vandalism, damage to public property, contract-related offences, and offences related to foreign employment.

The authority to facilitate settlements has been delegated to the heads of the relevant government attorney offices. A government prosecutor must submit the settlement request to the court, which must approve it before the case can be concluded.

Ghimire said the change would help victims recover their money without waiting years for criminal proceedings to end.

He gave the example of a person charged with both a banking offence and organised crime. If the organised-crime charge is not upheld, he said, the victim should be able to settle the banking offence if the law permits it.

The circular has, however, raised concerns about how prosecutors might use their discretion when deciding whether to allow settlements, and the possibility that the settlement process could be misused.

Former judges warn of misuse

Former Supreme Court justice Balram KC said allowing settlements in such cases could weaken the principles of criminal justice and expose victims to pressure. 

“Organised crime involves serious offences committed by several people. It is a form of crime carried out on a large scale, and allowing such cases to be settled is wrong,” KC said.

He said criminal cases that reach court should be decided on the basis of evidence and facts rather than simply ended because the parties reach an agreement.

KC acknowledged that settlements could help victims recover money in cases such as cooperative fraud. But he warned that extending the same approach to more serious offences could allow accused people to exploit legal loopholes. He also questioned whether the guidelines adequately protected victims from pressure or coercion.

KC said authorities should monitor how the circular is applied before deciding whether it needs to be revised or suspended. “Where the law prohibits a settlement and the offence is serious, both the courts and victims must remain alert to the possibility of misuse,” he said.

Former attorney general and criminal law expert Raman Kumar Shrestha also criticised the way criminal charges are sometimes filed and later withdrawn or settled.

He said organised-crime charges were sometimes added even when there were insufficient grounds for other allegations. In his view, the same approach could extend to settlements. “Cases are filed depending on who the accused is, and settlements are also allowed depending on who the person is,” Shrestha said.

He argued that serious criminal cases should be decided by judges after examining the evidence, rather than being settled merely because the parties agree. Shrestha also warned that victims might not always be free from pressure when agreeing to a settlement. He said the new guidelines could be misused, even though the law already allows settlements in certain cases.

What the Supreme Court has said

The Supreme Court has previously clarified that a crime does not automatically become organised crime simply because several people commit it together.

In a judgment issued on July 10, 2023, justices Ishwar Prasad Khatiwada and Hari Prasad Phuyal said a group formed to commit an offence for a one-off or short-term gain could not automatically be classified as an organised criminal group.

The ruling came in a case involving Sitaram Giri, who was being held at Nakkhu Prison.

The court said judges must examine whether the group had a plan and an organisational structure designed to commit crimes. They should also consider whether the group had a leader, whether secrecy was maintained, whether government employees were involved and whether influential people provided protection.

An enduring structure established to carry out criminal activities was an important factor in determining whether an offence amounted to organised crime, the court said.

The judgment also made clear that the involvement of three or more people was not, by itself, enough to establish an organised-crime offence.