Nepal Opens Settlement Route for Related Offenses After Final Organized Crime Acquittal

A final acquittal can unlock settlement of a related case

Nepal's Office of the Attorney General has instructed district and high government attorney offices across the country to allow settlements in eligible criminal cases linked to an organized crime charge, once a court has rejected that charge and the appeal process concerning it is final. The change addresses cases in which offenses that permit settlement and offenses that bar settlement appear together in the same prosecution.

Deputy Attorney General Dasharath Pangeni explained the practical example: a defendant charged with both fraud and organized crime may be acquitted of organized crime while the court upholds the fraud charge. Under the circular, the fraud case can then move toward a settlement with the victim, provided the required legal conditions are met.

The victim's consent, an application by a government lawyer and an order from the court are central to that process. The government attorney's office must also confirm that the appeal proceedings concerning the rejected charge have concluded. For defendants and victims, the decisive point is therefore both the court's decision and its finality through the appeal process.

The circular addresses a practical obstacle affecting fraud, cooperative cases, dishonored checks and offenses connected with foreign employment, among other categories. Previously, adding an organized crime charge to an otherwise eligible case created uncertainty about whether settlement could proceed even after an acquittal on that charge.

The Office of the Attorney General issued the circular during the week preceding the October 14, 2026 account of the decision. Its exact issue date was not given. The instruction concerns partial settlement, meaning that an eligible offense within a prosecution involving several charges can be resolved through the prescribed agreement process.

What the settlement rule changes

Section 29(c) of the standards governing settlements in criminal cases brought by the Government of Nepal generally prevents settlement when an offense that permits it is joined with an offense that does not. A prosecution may contain several charges against the same person, each with different legal requirements and consequences.

The difficulty arose when a court rejected the charge that barred settlement but upheld another charge for which settlement was legally possible. Prosecutors needed a clear answer about whether the original combination of charges continued to block an agreement between the defendant and the victim.

The Office of the Attorney General has revised the Standards on Ordering Settlement in Criminal Cases in Which the Government of Nepal Is the Plaintiff, 2083, and issued instructions explaining how to handle that situation. The year 2083 refers to Nepal's Bikram Sambat calendar.

The circular allows the eligible part of the case to proceed toward settlement after the court finds the charge barring settlement unsubstantiated and the related appeal process becomes final. Pangeni described the purpose as removing obstacles by separating the treatment of offenses that permit settlement from those that do not.

Why one prosecution can have different outcomes

A defendant facing fraud and organized crime charges is answering two legal allegations within the same proceeding. Fraud concerns the underlying wrongdoing. The organized crime allegation concerns the organized involvement of several people in committing a qualifying offense. Each allegation must satisfy its own legal requirements.

Organized crime charges can arise where more than two people act together in an organized way to commit an offense punishable by more than three years in prison. The organized crime allegation can also expose the accused to additional punishment, making its outcome consequential beyond the underlying offense.

The Supreme Court clarified the organized crime requirements under the Organized Crime Prevention Act, 2070, in Decision No. 11233, concerning kidnapping, hostage-taking and organized crime. The judgment was delivered on 2080/03/25 in the Bikram Sambat calendar by a joint bench of Justices Ishwar Prasad Khatiwada and Hari Prasad Phuyal. Paragraph 26 holds that the involvement of three or more people in an offense does not automatically establish organized crime. Concrete evidence must show that a group of three or more people affiliated with a permanent structure established for criminal, economic or other material benefit knowingly committed a serious crime under the criminal group's direction, on its behalf, together with it, or as its founder or member.

Paragraph 25 further distinguishes an organized criminal group from a group assembled temporarily to commit a particular offense. A permanent institutional structure formed to commit crime must be evident; several people committing an offense together for a short-term or one-time benefit is not sufficient to classify them as organized crime offenders. The decision therefore requires a separate assessment of the evidence supporting organized crime, beyond proof of the underlying collective offense.

A court may find that fraud occurred while concluding that the organized crime allegation has not been substantiated. In Pangeni's example, the fraud charge remains upheld, while the organized crime charge ends in acquittal. The circular gives prosecutors a route for dealing with the surviving fraud case once the acquittal is final.

For a victim seeking resolution of a fraud complaint, that separation matters. The court's findings on each charge determine which part of the case may qualify for settlement. Eligibility then depends on the rules governing that particular offense and the required agreement with the victim.

Why the appeal must be finished

An acquittal by the court hearing the case is one step in the process. An appeal allows a higher court to review a decision, so the circular requires the proceedings concerning the rejected charge to reach a final conclusion before settlement can be ordered on the eligible offense.

The government attorney's office must confirm that finality. A prosecutor considering an application therefore has to examine both the judgment and the status of any appeal concerning the charge that previously blocked settlement.

The appeal condition gives the process a defined sequence: the court rejects the relevant charge, the appeal proceedings on that finding conclude, and the remaining eligible offense can move toward a settlement application. The same condition applies even where the parties are already willing to reach an agreement.

The instruction does not provide a single timetable for all cases. The point at which a particular case becomes eligible will depend on its court decision and appeal history, followed by the steps required for the settlement itself.

Which offenses may qualify?

The decision identifies several categories in which settlement may become possible after the connected charge barring settlement has been finally rejected. These include cases involving financial losses, property damage, contractual work and foreign employment.

• Cooperative cases and other fraud offenses.
• Criminal nuisance offenses, including relevant cases involving arson or vandalism.
• Dishonored checks, commonly called bounced checks.
• Improper transactions.
• Criminal breach of trust causing property loss or damage.
• Damage to property belonging to members of the public.
• Offenses affecting work under a tender, contract or agreement.
• Offenses related to foreign employment.

A dishonored check is a check that a bank does not pay when presented. Criminal breach of trust concerns the misuse of money or property entrusted to someone. These terms describe different forms of wrongdoing, but an eligible case in either category may encounter the same procedural obstacle when joined with an organized crime charge.

The list identifies areas where the settlement route can apply. Prosecutors and courts still have to examine the particular offense, the judgment, the completed appeal process and the victim's agreement. For cooperative and foreign employment cases, this means that the legal position of each prosecution remains central to the next step.

How a settlement reaches the court

The victim's consent is required before the government lawyer submits an application for settlement to the court. A criminal case brought by the government involves public prosecutors as well as the defendant and the person harmed, which is why an agreement between the parties must pass through a formal legal process.

The government lawyer must establish that the case fits the circular's conditions. That includes checking whether the remaining offense permits settlement and whether the finding rejecting the connected charge has become final through the appeal process.

The court then considers the application and may issue the order allowing settlement. Implementation follows the required legal procedure. The sequence gives each participant a distinct role: the victim agrees, the prosecutor applies and the court authorizes the settlement.

The contents of any agreement will depend on the case and the applicable rules. The circular's described change concerns access to the settlement process; no standard payment amount or compensation formula was announced with it.

What changes for victims and defendants

Victims in eligible cases now have a clearer procedural route to consider an agreement after the charge barring settlement has been finally rejected. Defendants in the same position can seek resolution of the remaining eligible offense through that process.

The circular also gives government attorneys a common instruction for cases that previously produced uncertainty. Its nationwide distribution to district and high government attorney offices is intended to guide prosecutors handling the same combination of charges at different stages of proceedings.

Two cases involving fraud may still move at different speeds. In one, the organized crime acquittal and its appeal proceedings may already be final. In another, a challenge to that acquittal may still be pending. Their readiness for settlement depends on those procedural facts, alongside the victim's consent and the eligibility of the remaining charge.

The central change is precise: once the charge that barred settlement has been finally rejected, prosecutors can ask the court to allow settlement of a connected offense that qualifies. For affected parties, the judgment, appeal record and consent process now provide the practical basis for deciding whether to proceed.

Key Points

• The Office of the Attorney General has sent settlement instructions to district and high government attorney offices across Nepal.
• An eligible related offense may be settled after a court rejects the charge barring settlement and the appeal process concerning that finding is final.
• Deputy Attorney General Dasharath Pangeni gave the example of a fraud charge upheld alongside an organized crime acquittal.
• Supreme Court Decision No. 11233 requires concrete evidence of a permanent criminal structure and knowing involvement in a serious crime; the involvement of three or more people alone does not establish organized crime.
• The government attorney's office must confirm that the relevant appeal proceedings have concluded.
• The victim must consent, a government lawyer must apply and the court must authorize the settlement.
• Potentially eligible categories include fraud, cooperative cases, bounced checks, certain property offenses and offenses related to foreign employment.