The Supreme Court on Monday provided a huge impetus to cost-effective and litigant-friendly process under Lok Adalats, set up to settle disputes and pass unassailable decrees, by empowering them to find solutions in criminal cases including those relating to cheque bounce offences.
In allowing Lok Adalats to settle cheque bounce cases under Section 138 of Negotiable Instruments Act, a bench of Justices P Sathasivam and J Chelameswar set aside a judgment of the Kerala high court. The HC had held that a Lok Adalat decree in a criminal case could only be regarded as a trial court order which was appealable in higher courts.
The Supreme Court said the HC’s view went against the object and purpose of establishing Lok Adalats, which was to find an amicable solution to a dispute and record the settlement as a decree.
Lok Adalats were meant to reduce burden of arrears in regular courts as also to take justice to the doorsteps of the poor and needy and make justice quicker and less expensive. The Legal Services Authorities Act, 1987, says, “Every award made by a Lok Adalat shall be final and binding on all the parties to the dispute, and no appeal shall lie to any court against the award.”
This judgment would help ease the burden of 38 lakh cheque bounce cases pending in trial courts. Just two days ago, Chief Justice of India S H Kapadia had expressed concern over this type of cases clogging the justice delivery mechanism.
Justice Sathasivam, who authored the judgment for the bench, said, “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 courts, rent control courts, Consumer Redressal Forum, Motor Accidents Claims Tribunal and other forums of similar nature.” One K N Govindan Kutty Menon had complained against C D Shaji in 2007 before an Ernakulam magistrate when a cheque was dishonoured. The magistrate referred it to District Legal Services Authority for a settlement. The Lok Adalat settled the dispute and drew up a payment plan. But Shaji did not repay the agreed amount. Menon sought execution of the Lok Adalat decree, but the Munsif court declined terming it as a mere trial court order in a criminal case. When the HC upheld it, Menon had moved the SC.
The apex court termed the HC’s approach erroneous and said the Lok Adalats were empowered to settle and pass decree on matters referred to it by both a civil and a criminal court. “There is no restriction on the power of Lok Adalat to pass an award based on the compromise arrived at between parties in a case referred by a criminal court under section 138 of NI Act, and by virtue of the deeming provision it has to be treated as a decree capable of execution by a civil court,” it said.
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