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2023 Supreme(Online)(KAR) 1329
HIGH COURT OF KARNATAKA
MOHAMMAD NAWAZ, J
SRI SHREENATH HEGDE – Appellant
Versus
SMT. VIJAYALAXMI – Respondent
CRL.P No. 100911 of 2019 | CRL.P No. 100912 of 2019 | CRIMINAL PETITION NO. 100908 OF 2019 | CRIMINAL PETITION NO. 100909 OF 2019 | CRIMINAL PETITION NO. 100910 OF 2019
For the Appellants/Petitioners: SRI. PRASHANTH U T.
For the Respondents: SRI. SANTOSH B MALAGOUDAR.
A Lok-adalath award constitutes a civil decree, and the trial court cannot entertain further proceedings for non-compliance post-settlement.
Headnote:(A) Negotiable Instruments Act - Section 138 - This petition under Section 482 of Cr.P.C seeks to quash proceedings against the accused for dishonor of cheques settled in a Lok-adalath. The act of issuing Non-Bailable Warrant after settlement is outside jurisdiction. A Lok-adalath award is executable as a civil decree. (Paras 4, 10, 12)
(B) Jurisdiction - Once an award is passed in a Lok-adalath, the Court becomes functus officio to revisit the matter for subsequent non-compliance. The High Court noted that provisions of Section 21 of the Karnataka Legal Services Authorities Act support this view. (Paras 5, 8, 12)
Facts of the case:
Multiple complaints were filed for dishonored cheques. The parties had reached a settlement in a Lok-adalath, and the complainant later contested non-compliance leading to the issuance of Non-Bailable Warrants against the accused.
Findings of Court:
The issuance of Non-Bailable Warrant was declared unsustainable because the Court ceases jurisdiction after an award.
Issues: The central issue is whether a Lok-adalath award functions as a civil decree and if the Court retains any authority afterward.
Ratio Decidendi: The Court reasoned that once a settlement is reached and an award issues, the trial Court’s role in that matter concludes, preventing further criminal proceedings for non-compliance.
Result: Petitions are allowed.
| Table of Content |
|---|
| 1. the fundamental issue surrounding the dishonored cheques. (Para 2 , 3) |
| 2. details on the settlement and subsequent legal proceedings. (Para 4 , 5) |
| 3. arguments made by both parties regarding compliance. (Para 6 , 7) |
| 4. legal principles regarding the effect of lok-adalath decisions. (Para 8 , 9 , 10 , 11) |
| 5. final reasoning and jurisdictional conclusions. (Para 12) |
ORDER
In all these petitions, the parties are one and the same and the question involved is also same and therefore they are disposed of by this common order.
2. Petitioner is an accused in CC Nos.90, 91, 92, 94 and 105/2017 pending on the file of the Court of 7th JMFC, Belagavi, registered for the offence punishable under Section 138 of Negotiable Instruments Act (for short ‘NI Act’). The said proceedings are initiated at the instance of respondent / complainant.
3. Five complaints were filed in respect of five different cheques issued by the accused for a sum of Rs.10,00,000/- each, which were dishonored for insufficient funds in his account.
4. The matter came to be settled before the Lok-adalath on 10.02.2018 and the cases were closed as per the settlement. Thereafter, the complainant filed an CRL.P No. 100911 of 2019, CRL.P No. 100912 of 2019 application stating that the accused has not complied the conditions of settlement arrived at before Lok-adalath. The case was once again taken on board and by an order dated 22.12.2018, on the said application filed by the complainant, the learned Magistrate proceeded to issue NBW to the accused for not having paid the amount to the complainant as per settlement. The petitioners are aggrieved by the said order passed by the trial Court.
5. It is contended that once the parties have arrived at a settlement and an award is passed, the Court becomes functus officio to pass any order and therefore, issuance of NBW against the accused is without any jurisdiction. It is also contended that when an award is passed in terms of the settlement, the same is executable by the Civil Court as it will be considered as a decree as per Section 21 of the Karnataka Legal Services Authorities Act , 1987.
6. The learned counsel for respondent/complainant has contended that inspite of entering into a compromise in the year 2018, the accused has been dodging the matter without paying the settled amount. He contends that there is no illegality committed by the learned Magistrate as even in cases before Lok Adalath, if the accused fails to comply the terms of the settlement, there would be no impediment for the Court to deal with the matter.
7. Material on record would disclose that two joint memos dated 10.02.2018 were filed by the parties, one in respect of CC No. 91, 92 and 94 of 2017 wherein the accused agreed to pay Rs.15,30,000/- in four installments and another dated 10.02.2018 in respect of CC No.90 and 105/2017 agreeing to pay a sum of Rs.19,30,000/- in five installments. Based on the said settlement arrived before the Lok-adalath a decree/award was passed. However, since the conditions of settlement were not complied by the accused, complainant filed an application for issuance CRL.P No. 100911 of 2019, CRL.P No. 100912 of 2019 of NBW to the accused, which was allowed and the learned Magistrate issued NBW to the accused.
8. The learned Magistrate has relied on a decision of this Court in the case of K.R.Venugopal V/s R.Madhusudhan in Crl.P.No.1822/2016, wherein it is held that there would be no impediment for the Court to deal with the matter if, the accused fails to comply the terms of settlement even in the cases before the Lok- Adalath.
9. In K.N.Govindan Kutty Menon V/s C.D Shaji (Civil A.No.10209/2011 decided on 28.11.2011) under similar circumstances, where there was an award passed in the Lok-adalath based on the consensus arrived at between the parties, the Hon’ble Apex Court has held that the petitioners could have filed execution petition before the appropriate Court seeking award amount to pay with interest and cost
