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2025 Supreme(Online)(KAR) 2957
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
S.R.KRISHNA KUMAR, J
SRI PRAKASH NAIDU – Appellant
Versus
SMT. V. SHASHIKALA – Respondent
WRIT PETITION NO. 2576 OF 2025 (GM-RES) | C.C.NO.55018/2014 | Criminal Appeal No.1216 of 2015
For the Appellants/Petitioners: SRI. VENKATESH PRASAD R
For the Respondents: SRI. LOKESHA M Y.
A party's failure to comply with settlement terms in a Lok Adalat renders the settlement void, allowing restoration of original proceedings under Section 138 of the Negotiable Instruments Act.
Headnote:(A) Negotiable Instruments Act, 1881 - Section 138 - Writ petition filed under Section 482 Cr.P.C. to set aside order closing proceedings due to breach of settlement terms - Joint memo filed in Lok Adalat directing payment of Rs.15 lakhs, which was not complied with - Court found the reference to Lok Adalat erroneous as no deposit was made as per Apex Court guidelines. (Paras 10-12)
(B) Fraud - If a party obtains a decree/order through fraud, the settlement may be unraveled, restoring original proceedings. Court emphasized that deviation from settlement terms warrants restoration of original proceedings. (Paras 14-15)
Facts of the case:
Petitioner filed a criminal case under Section 138 against the respondent for cheque dishonor, which was settled at Lok Adalat with a payment agreement. Respondent defaulted, leading to the petition for restoration of the case.
Findings of Court:
Court quashed the Lok Adalat award, restored the original criminal proceedings due to the respondent's non-compliance with settlement terms.
Issues: The legality of the Lok Adalat reference and the consequences of non-compliance with settlement terms.
Ratio Decidendi: The court ruled that the absence of compliance with settlement terms, especially regarding the mandatory deposit, invalidates the Lok Adalat's decision and justifies restoring original proceedings.
Result: Petition allowed, original case restored.
| Table of Content |
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| 1. petitioner's request for restoration of criminal proceedings. (Para 2 , 3) |
| 2. details of previous court orders and agreements. (Para 4 , 5) |
ORAL ORDER
In this petition, petitioner seeks for the following reliefs:-
“ (a) Set aside the order dated: 16.06.2017 in C.C.No.55018/2014 on the file of the 33rd Additional Chief Metropolitan Magistrate Mayohall at Bangalore and consequently, restore the Criminal case in C.C.No. 55018/2014 on the file of 33rd Additional Chief Metropolitan Magistrate Mayohall at Bangalore to its original file for permitting the Petitioner/Complaint to continue the proceedings of the case; and
(b) To pass any such other order or direction as this Hon’ble Court might deem fit in the facts and circumstances of the case, in the interest of justice.”
2. Heard learned counsel for the petitioner and learned counsel for the respondent and perused the material on record.
3. A perusal of the material on record will indicate that the petitioner instituted the aforesaid proceedings in C.C.No.55018/2014 against the respondent – accused for an offence punishable under Section 138 of N.I.Act. The matter was referred to Lok Adalat, in which, a joint memo was filed directing the respondent to pay a sum of Rs.15 lakhs to the petitioner on or before 16.01.2018. In pursuance of the said memo, the trial court disposed of the proceedings vide impugned order dated 16.06.2017. Subsequently, the petitioner is before this Court interalia contending that the respondent having committed default / breach of the terms and conditions of the joint memo and having not paid the amount as agreed to in the said joint memo to the petitioner, the aforesaid order dated 16.06.2017 closing the proceedings deserves to be set aside and the proceedings be restored to the file of the trial court. Under identical circumstances, the co-ordinate Bench of this Court in the case ofHemchandra M.Kuppalli vs. M/s. R.B.Green Field & others – W.P.No.12619/2023 dated 28.02.2024, held as under:-
“ 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 `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 `29,10,000/- and in default to undergo simple imprisonment for a period of ten months. It was further ordered that a sum of `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.
