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2011 Supreme(SC) 1106

2011 (8) Supreme 292
SUPREME COURT OF INDIA
P. Sathasivam and J. Chelameswar, JJ.
K.N. Govindan Kutty Menon — Appellant(s)
versus
C.D. Shaji — Respondent(s)
Civil Appeal No. 10209 of 2011
(Arising out of SLP (C) No.2798 of 2010)
Decided on : 28-11-2011

IMPORTANT POINTS
1. In view of the unambiguous language of Section 21 of Legal Services Authorities Act, 1987 , every award of the Lok Adalat shall be deemed to be a decree of a civil court and as such it is executable by that Court.
2. Even if a matter is referred by a criminal court under Section 138 of the Negotiable Instruments Act, 1881 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.

Headnote:Legal Services Authorities Act, 1987- Section 21 - Negotiable Instruments Act, 1881-Section 138-Criminal case filed under Section 138 of the Negotiable Instruments Act, 1881 referred to by Magistrate Court to Lok Adalat settled by parties and an award is passed recording the settlement-Whether it can be considered as a decree of a civil court and thus executable- High Court held that “an award passed by Lok Adalat on reference of a criminal case by criminal court as already concluded can only be construed as an order by criminal court and it is not a decree passed by a civil court” – Instantly the Courts below erred in holding that only if the matter was one which was referred by a civil court it could 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 Act- The Act does not make out any such distinction between the reference made by a civil court and criminal court- There is no restriction on the power of Lok Adalat to pass an award based on the compromise arrived at between the parties in a case referred by a criminal court under Section 138 of the N.I. Act, and by virtue of the deeming provision it has to be treated as a decree capable of execution by a civil court-Impugned orders of Courts below set aside-Appeal allowed (Paras 14, 17 to 20)

       Facts of the Case :

        Present appeal raises an important question as to the interpretation of Section 21 of the Legal Services Authorities Act, 1987 .The question posed for consideration was that when a criminal case filed under Section 138 of the Negotiable Instruments Act, 1881 referred to by the Magistrate Court to Lok Adalat is settled by the parties and an award is passed recording the settlement, can it be considered as a decree of a civil court and thus executable?

       Findings of the Court :

        A-In view of the unambiguous language of Section 21 of the Act, every award of the Lok Adalat shall be deemed to be a decree of a civil court and as such it is executable by that Court.

        B. The Act does not make out any such distinction between the reference made by a civil court and criminal court.

        C. 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 Redressal Forum, Motor Accidents Claims Tribunal and other Forums of similar nature.

        D. Even if a matter is referred by a criminal court under Section 138 of the Negotiable Instruments Act, 1881 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.

       

Judgement Key Points

Certainly. Based on the provided legal document, here are the key points:

  • Section 21 of the Legal Services Authorities Act, 1987, contains a deeming provision that treats every award of a Lok Adalat as a decree of a civil court, making it executable as such (!) (!) (!) .
  • The Act does not differentiate between references made by civil courts and criminal courts; awards passed by Lok Adalats on cases referred by either type of court are deemed to be decrees capable of execution (!) (!) (!) .
  • There is no restriction on the authority of Lok Adalats to pass awards based on compromises in cases referred by various courts, tribunals, or forums, including criminal courts under specific provisions (!) (!) (!) .
  • Even in criminal cases, such as those under Section 138 of the Negotiable Instruments Act, if settled through Lok Adalat, the award must be considered a decree capable of enforcement by a civil court (!) (!) (!) .
  • The interpretation that awards from Lok Adalats in criminal cases are only orders of the criminal court and not decrees of a civil court is incorrect; such awards are to be treated as decrees under the deeming provision (!) (!) .
  • The courts below erred in holding that awards passed by Lok Adalats in criminal cases are not decrees, and accordingly, the orders denying enforcement should be set aside, with directions to proceed with execution in accordance with law (!) .
  • The final judgment emphasizes that awards by Lok Adalats are to be regarded as decrees of civil courts and are fully enforceable as such, regardless of whether the case was originally civil or criminal (!) (!) .
  • The appeal is allowed, and the matter is remanded to the appropriate execution court to proceed with the enforcement of the award as a decree of a civil court (!) .

Please let me know if you need further clarification or assistance.


JUDGMENT

P. Sathasivam, J.

1) Leave granted.

2) This appeal raises an important question as to the interpretation of Section 21 of the Legal Services Authorities Act, 1987 (in short ‘the Act’). The question posed for consideration is that when a criminal case filed under Section 138 of the Negotiable Instruments Act, 1881 referred to by the Magistrate Court to Lok Adalat is settled by the parties and an award is passed recording the settlement, can it be considered as a decree of a civil court and thus executable?

3) This appeal is directed against the final judgment and order dated 24.11.2009 passed by the High Court of Kerala at Ernakulam in Writ Petition (C) No. 33013 of 2009 whereby the High Court dismissed the petition filed by the appellant herein.

4) Brief facts:

(a) The appellant herein filed a complaint being C.C. No. 1216 of 2007 before the Judicial Ist Class Magistrate Court No.1, Ernakulam against the respondent herein under Section 138 of the Negotiable Instruments Act, 1881 (in short ‘the N.I. Act’). The Magistrate referred the said complaint to the Ernakulam District Legal Service Authority for trying the case for settlement between the parties in the Lok Adalat.

(b) On 08.05.2009, both parties appeared before the Lok Adalat and the matter was settled and an award was passed on the same day. As per the award, out of Rs. 6,000/-, the respondent herein paid Rs.500/- on the same day and agreed to pay the balance amount of Rs.5,500/- in five equal instalments of Rs.1,100/- per month on or before the 10th day of every month starting from June, 2009 and, in case of default, the appellant herein can recover the balance amount due from the respondent in lump sum.

(c) As the respondent did not pay any of the installments as per the settlement, the appellant filed execution petition being E.P. No..... of 2009 in C.C. No. 1216 of 2007 in the Court of Principal Munsiff, Ernakulam for seeking the execution of the award. On 23.09.2009, the Principal Munsiff Judge, Ernakulam dismissed the petition holding that the award passed by the Lok Adalat on reference from the Magistrate Court cannot be construed as a “decree” executable by the civil court.

(d) Aggrieved by the said order, the appellant filed writ petition being Writ Petition (C) No. 33013 of 2009 before the High Court of Kerala. The High Court, vide order dated 24.11.2009, dismissed the writ petition.

(e) Against the said order, the appellant filed the above appeal by way of special leave before this Court.

5) The respondent, though duly served by this Court, has not chosen to contest the matter either by appearing in person or through counsel. Heard Mr. Prashanth P., learned counsel for the appellant and Mr. V. Giri, learned senior counsel, who, on our request, assisted this Court as amicus curiae.

6) In order to find out the answer to the question raised, it is useful to refer the Statement of Objects and Reasons and certain provisions of the Act applicable to the question posed before us.

“Statement of objects and Reasons.- Article 39-A of the Constitution provides that the State shall secure that the operation of the legal system promotes justice on the basis of equal opportunity, and shall, in particular, provide free legal aid, by suitable legislation or schemes or in any other way, to ensure that opportunities for securing justice are not denied to any citizen by reason of economic or other disabilities.

2. With the object of providing free legal aid, Government had, by Resolution dated the 26th September, 1980 appointed the “Committee for Implementing Legal Aid Schemes” (CILAS) under the Chairmanship of Mr. Justice P.N. Bhagwati (as he then was) to monitor and implement legal aid programmes on a uniform basis in all the States and Union territories. CILAS evolved a model scheme for legal aid programme applicable throughout the country by which several legal aid and advice boards have been set up in the States and Union territories. CILAS is funded wholly by gran































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