The Andhra Pradesh High Court has reiterated that award granted by Lok Adalat in a Cheque Dishonour Case recognizing the settlement between the parties should be treated as a decree of the Civil Court.

The Court was considering a Revision Petition against an order of the Principal Junior Civil Judge.

The single bench of Justice Subba Reddy Satti observed, "In K.N.Govindan Kutty Menon Vs. C.D.Shaji, the Hon’ble Apex Court considered a similar issue........Eventually, the Apex Court held.........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."

The Petitioner was represented by Advocate P. Nagendra Reddy.

Facts of the Case

The Respondent-Decree Holder had filed a case under Section 138 of the Negotiable Instruments Act against the petitioner-judgment debtor. The matter was referred to Lok Adalat and an award was passed under Section 21 of the Legal Services Authority Act, 1987. The decree-holder then filed Petition under Order XXI Rules 37 & 38 of CPC to commit the judgment debtor to the civil prison. In the affidavit filed in support of the Petition, it was contended that the judgment debtor failed to honour the award passed by the Lok Adalat and, as such, committed default in payment of the remaining amount of ₹4,50,000/-.

The judgment debtor filed a counter and contended that after the Lok Adalat Award, the decree-holder neither demanded nor issued any Notice to the judgment debtor demanding the amount and that the judgment debtor never refused to pay the award amount and he was ready to pay the amount after a lapse of some time. The Executing Court, after conducting an enquiry recorded a finding that the judgment debtor has movable and immovable properties and had the means to pay the amount, however, intentionally avoided paying the same. The Executing Court allowed the Petition and ordered the judgment debtor to be sent to civil prison for 3 months on the failure of the judgment debtor to pay the amount. Aggrieved by the same, the present revision was filed.

Counsel for the Petitioner submitted that the award passed in Lok Adalat was concerning a criminal case and hence, the Petition filed by the decree-holder under Order XXI Rule 37, 38 of CPC was not maintainable.

Reasoning By Court

The issue before the Court for its consideration was as to whether the award passed in Lok Adalat concerning the Criminal Case under Section 138 of the Negotiable Instruments Act, is executable by the Civil Court in case of default committed by the judgment debtor?

The Court referred to Supreme Court's decision in K.N.Govindan Kutty Menon Vs. C.D.Shaj wherein the issue was when a criminal case filed under Section 138 of the Negotiable Instruments Act, 1881, referred to by the Magistrate's Court to the 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?

It stated that it was held in the above case that 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

"......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," the Court re-iterated.

The Petition was accordingly dismissed.

Cause Title: Rathi Vasudeva Rao vs. P V R M Patnaik (APHC010403512024)

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Andhra Pradesh High CourtJustice Subba Reddy Satti

Sheetal Joon