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2024 Supreme(Kar) 112

IN THE HIGH COURT OF KARNATAKA AT BENGALURU
M. Nagaprasanna, J.
Mr. Hemachandra M.Kuppalli S/o Late K.B.Manappa - Petitioner
Versus
M/S R.B.Green Field Agro Infra Pvt Ltd. And Ors. – Respondents
Writ Petition No.12169 OF 2023 (GM-RES)
Decided On : 28-02-2024

Advocates:
Advocate Appeared:
For the Petitioner:Sri P.P.Hedge, Senior Advocate For Smt. Sharadi S.Shetty, Advocate
For the Respondent: Smt. K.P.Yashodha, HCGP

IMPORTANT POINT
The main legal point established in the judgment is that the accused's failure to adhere to the terms of settlement amounted to playing fraud on the Court, leading to the unravelling of the settlement and restoration of the original proceedings.

Headnote:

Mandamus - Execution of Judgment - Negotiable Instruments Act, 1881 - Section 138 - Section 357 - Section 255(2) of Cr.PC - Section 374 of Cr.P.C - Section 147 of the Act - Settlement before Lok Adalat - Fraud on the Court

Fact of the Case:

The petitioner seeks expeditious disposal of Execution Case No.640 of 2017 and restoration of the order of conviction and sentence dated 26-08-2015 passed against the respondent No.1/accused No.2 in C.C.No.15698 of 2014. The respondent failed to adhere to the terms of settlement before the Lok Adalat, leading to the petitioner's struggle to recover the amount.

Finding of the Court:

The Court found that the reference of the case to the Lok Adalat was erroneous as the accused did not deposit the required amount as a condition precedent for the reference. The accused's conduct amounted to playing fraud on the Court, and the settlement was unraveled. The Court allowed the writ petition in part, quashed the Lok Adalat's award, and restored the proceedings before the Sessions Judge.

Issues: The issues involved the expeditious disposal of the execution case, restoration of the order of conviction, and the accused's fraudulent conduct in the settlement before the Lok Adalat.

Ratio Decidendi: The Court held that the accused's failure to adhere to the terms of settlement amounted to playing fraud on the Court, leading to the unravelling of the settlement. The Court also emphasized the need for Courts to make it mandatory to observe that deviation from the terms of the compromise will automatically efface the compromise and restore the proceedings on the original side.

Final Decision: The writ petition was allowed in part, the Lok Adalat's award was quashed, and the proceedings before the Sessions Judge were restored.

ORDER :

The petitioner is before this Court seeking a direction by issuance of a writ in the nature of mandamus for expeditious disposal of Execution Case No.640 of 2017 pending before the City Civil and Sessions Judge, Bengaluru and has also sought further slew of prayers including restoration of the order of conviction and sentence dated 26-08-2015 passed against the respondent No.1/accused No.2 in C.C.No.15698 of 2014 by the XXI Additional Chief Metropolitan Magistrate, Bengaluru.

2. Facts adumbrated are as follows:-

The petitioner is the complainant and respondent No.1 is accused No.2. The 1st respondent is the firm represented by its proprietor the 2nd respondent. For the sake of convenience both these respondents would be referred to as ‘respondent’ in this order. Both the petitioner and the respondent have a transaction and the transaction leads to issuance of a cheque by the respondent in favour of the petitioner for an amount of Rs.49/-lakhs drawn on Axis Bank Limited. The cheque when presented for realization was dishonoured for want of sufficient funds on 21-01-2014. The petitioner takes up legal proceedings against the respondent/accused before the learned Magistrate invoking Section 200 of the Cr.P.C., for offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (‘the Act’ for short). The learned Magistrate by order dated 26-08-2015 convicts the respondent in C.C.No.15698 of 2014 holding him to be guilty of the offence punishable under Section 138 of the Act and sentences him to pay a fine of Rs.29,10,000/-and in default to undergo simple imprisonment for a period of ten months. It was further ordered that a sum of Rs.29,00,000/-was to be paid to the complainant by way of compensation under Section 357 of the Cr.P.C., out of the fine amount.

3. The respondent immediately prefers an appeal before the Principal City Civil and Sessions Judge at Bengaluru invoking the provisions under Section 374 of the Cr.P.C., in Criminal Appeal No.1216 of 2015. During the pendency of the appeal, the Court refers the matter to the Lok Adalat for settlement of dispute between the petitioner and the respondent on 05-05-2016. The matter gets settled before the Lok Adalat on that day and an award is drawn up by the Lok Adalat whereby the accused undertook to pay sum of Rs.29,00,000/-in installments, failing which the petitioner was at liberty to recover Rs.30,00,000/-with 12% interest from the date of the award. The accused fails to make any payment or fails to adhere to the conditions of settlement. The petitioner then files an execution petition before the concerned Court in Execution Case No.640 of 2017 on 03-03-2017 and the present writ petition is preferred on 07-06-2023, 6 years after filing of the execution case alleging that there is no progress in the execution case. Therefore, a direction to the concerned Court to expedite the execution case and secure the presence of the respondents 1 and 2 is sought. The matter was heard, reserved and posted for its pronouncement on 18-11-2023, at which point in time, it was noticed that the 2nd respondent though had been absconding, effort to serve him was not directed to be made. Therefore, this Court on 18-11-2023 had passed the following order:

    “The matter was heard, reserved and is also listed for pronouncement of order today. Notice was not issued to the accused in C.C.15698 of 2014. Though, the accused has been evading the process of law for the last 6 years and no NBWs issued against him by the concerned Court are executed, as every attempt of execution has been returned as addressee left, in those circumstances, hearing or issuing notice to the accused was in the considered view of the Court an exercise in futility. But then, since the conviction has been set aside on account of a settlement between the petitioner and the accused before the Lok Adalath, this Court thought it fit to make an attempt to serve on the accused.

Therefore, the order is not pronounced, but the

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