Every award of a lok adalat, including an order recording a settlement between the parties in a ‘cheque bouncing case' under Section 138 of the Negotiable Instruments Act, is deemed a civil court decree, and as such it is executable by a civil court, the Supreme Court ruled on Monday.
A Bench of Justices P. Sathasivam and J. Chelameswar said: “Section 21 of the Legal Services Authorities Act does not make out any such distinction between the reference made by a civil court and a criminal court. There is no restriction on the power of the lok adalat to pass an award based on the compromise arrived at between the parties in respect of cases referred to by various courts (both civil and criminal), tribunals, family court, rent control court, consumer redress forum, the motor accidents claims tribunal and other [similar] forums.”
Writing the judgment, Justice Sathasivam said: “Even if a matter is referred by a criminal court under Section 138 of the Negotiable Instruments Act and by virtue of the deeming provisions, the award passed by the lok adalat based on a compromise has to be treated as a decree capable of execution by a civil court.”
The question posed for the Supreme Court's consideration in an appeal (against a Kerala High Court order) was that when a criminal case filed under Section 138 of the Negotiable Instruments Act, referred by the magistrate court to the lok adalat, was settled by the parties and an award recording settlement was passed, could it be considered a decree of a civil court and thus executable.
In the instant case, K.N. Govindan Kutty Menon and C.D. Shaji arrived at a compromise. On a reference from the Legal Services Authority, the lok adalat in Ernakulam passed an award of Rs. 6,000. Mr. Shaji paid Rs.500 on the same day and agreed to pay the rest in five instalments of Rs.1,100 a month. As he id not pay any more, Mr. Menon filed an execution petition before the Principal Munsif Judge, Ernakulam, who dismissed it. The Kerala High Court upheld this order. The present appeal is directed against this judgment.
During the hearing of the appeal, the Bench appointed senior counsel V. Giri as amicus curiae and counsel P. Prasanth appeared for the appellant.
Allowing the appeal, the Bench held that Parliament tasked the judiciary with implementing the provisions of the Legal Services Authorities Act. “Section 21 of the Act contemplates a deeming provision, hence it is a legal fiction that the ‘award' of the lok adalat is a decree of a civil court,” it said.
The Bench held that the courts below erred in holding that only if the matter was referred by a civil court could it be a decree and if the matter was referred by a criminal court it would only be an order of the criminal court and not a decree under Section 21 of the Legal Services Authorities Act.
The Bench set aside the judgment and restored the execution petition. It asked the execution court to proceed further as per law.