K.N. Govindan Kutty
Menon Vs. C.D. Shaji
[Civil Appeal No.
10209 of 2011[
(Arising out of SLP
(C) No.2798 of 2010)
J U D G M E N T
P. Sathasivam, J.
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
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.
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.
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.
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 grants from the
Central Government. The Government is accordingly concerned with the programme
of legal aid as it is the implementation of a constitutional mandate.
But on a review of
the working of the CILAS, certain deficiencies have come to the fore. It is,
therefore, felt that it will be desirable to constitute statutory legal service
authorities at the National, State and District levels so as to provide for the
effective monitoring of legal aid programmes. The Bill provides for the
composition of such authorities and for the funding of these authorities by means
of grants from the Central Government and the State Governments.
Power has been also given
to the National Committee and the State Committees to supervise the effective
implementation of legal aid schemes. For some time now, Lok Adalats are being constituted
at various places in the country for the disposal, in a summary way and through
the process of arbitration and settlement between the parties, of a large number
of cases expeditiously and with lesser costs. The institution of Lok Adalats is
at present functioning as a voluntary and conciliatory agency without any statutory
backing for its decisions.
It has proved to be
very popular in providing for a speedier system of administration of justice. In
view of its growing popularity, there has been a demand for providing a statutory
backing to this institution and the awards given by Lok Adalats. It is felt that
such a statutory support would not only reduce the burden of arrears of work in
regular Courts, but would also take justice to the door-steps of the poor and the
needy and make justice quicker and less expensive."
"2. (aaa) "Court"
means a civil, criminal or revenue Court and includes any Tribunal or any other
authority constituted under any law for the time being in force, to exercise
judicial or quasi-judicial functions;""2(c) "legal service"
includes the rendering of any service in the conduct of any case or other legal
proceeding before any Court or other authority or Tribunal and the giving of
advice on any legal matter;""2(d) "Lok Adalat" means a Lok Adalat
organized under Chapter VI."
"21. Award of Lok
Adalat.- (1) Every award of Lok Adalat shall be deemed to be a decree of a Civil
Court or, as the case may be, an order of any other Court and where a compromise
or settlement has been arrived at, by a Lok Adalat in a case referred to it
under sub-section (1) of section 20, the Court-fee paid in such case shall be
refunded in the manner provided under the Court-Fee Act, 1870 (7 of 1870).(2) Every
award made by a Lok Adalat shall be final and binding on all the parties to the
dispute, and no appeal shall lie to any Court against the award."
legal aid to the poor and marginalized members of the society is now viewed as
a tool to empower them to use the power of the law to advance their rights and interests
as citizens and as economic actors. Parliament enacted the Legal Services
Authorities Act, 1987 in order to give effect to Article 39-A of the
Constitution to extend free legal aid, to ensure that the legal system promotes
justice on the basis of equal opportunity.
Those entitled to
free legal services are members of the Scheduled Castes and the Scheduled Tribes,
women, children, persons with disability, victims of ethnic violence, industrial
workmen, persons in custody, and those whose income does not exceed a level set
by the government (currently it is Rs 1 lakh a year in most States). The Act empowers
Legal Services Authorities at the District, State and National levels, and the different
committees to organize Lok Adalats to resolve pending and pre-litigation disputes.
It provides for permanent Lok Adalats to settle disputes involving public utility
Under the Act, "legal
services' have a meaning that includes rendering of service in the conduct of any
court-annexed proceedings or proceedings before any 6authority, tribunal and so
on, and giving advice on legal matters. Promoting legal literacy and conducing legal
awareness programmes are the functions of legal services institutions. The Act provides
for a machinery to ensure access to justice to all through the institutions of
legal services authorities and committees. These institutions are manned by Judges
and judicial officers. Parliament entrusted the judiciary with the task of implementing
the provisions of the Act.
21 of the Act, which we have extracted above, contemplates a deeming provision,
hence, it is a legal fiction that the "award" of the Lok Adalat is a
decree of a civil court. In the case on hand, the question posed for consideration
before the High Court was that "when a criminal case referred to by the Magistrate
to a Lok Adalat is settled by the parties and award is passed recording the settlement,
can it be considered as a decree of civil court and thus executable by that court?"
After highlighting the
relevant provisions, namely, Section 21 of the Act, it was contended before the
High Court that every award passed by the Lok Adalat has to be deemed to be a decree
of a civil court and as such executable by that court. Unfortunately, the said argument
was not acceptable by the High Court. On the other hand, the High Court has concluded
that when a criminal case is referred to the Lok Adalat and it is settled at
the Lok Adalat, the award passed has to be treated only as an order of that criminal
court and it cannot be executed as a decree of the civil court.
After saying so, the High
Court finally concluded "an award passed by the Lok Adalat on reference of
a criminal case by the criminal court as already concluded can only be construed
as an order by the criminal court and it is not a decree passed by a civil
court" and confirmed the order of the Principal Munsiff who declined the request
of the petitioner therein to execute the award passed by the Lok Adalat on reference
of a complaint by the criminal court.
On going through the Statement
of Objects and Reasons, definition of `Court', `legal service' as well as Section
21 of the Act, in addition to the reasons given hereunder, we are of the view that
the interpretation adopted by the Kerala High Court in the impugned order is
is useful to refer some of the judgments of this Court and the High Courts which
have a bearing on the present issue.
Subhash Narasappa Mangrule (M/S) and Others vs. Sidramappa Jagdevappa Unnad, reported
in 2009 (3) Mh.L.J. 857, learned single Judge of the High Court of Bombay, considered
an identical question. In that case, on 22.06.2001, the respondent filed a Criminal
Complaint being S.C.C. No. 923 of 2001 in the Court of Judicial Magistrate, First
Class, Akkalkot under Section 138 of the N.I. Act. Later, the said criminal case
was transferred to Lok Adalat.
The matter was
compromised before the Lok Adalat and an award was passed accordingly for Rs. 4
lakhs. The respondent therein filed a Darkhast proceeding No. 17 of 2006 in the
Court of C.J.J.D. for execution of the award passed by the Lok Adalat in the
criminal case as there was no compliance of the compromised order/award. The learned
C.J.J.D., issued a notice under Order XXVII Rule 22 of the Code of Civil Procedure,
1908 (in short `the Code'). The petitioner therein raised an objection stating
that the Darkhast proceeding is not 9maintainable as the award has been passed
in criminal case.
By order dated 18.07.2007,
the learned Civil Judge, (Jr. Division) disposed off the objection and directed
to proceed with the execution by the Judgment and order. Aggrieved by the same,
the petitioners therein filed a revision before the High Court. After adverting
to Section 20 and other provisions of the Act, the learned single Judge has
concluded thus:- "16. The parties were fully aware that under the Act, the
District Legal Services Authority may explore the possibility of holding
pre-litigation Lok Adalats in respect of the cheque bouncing cases.
The compromise in such
cases would be treated as Award having force of a decree. All objections as raised
with regard to the execution in view of above statutory provisions itself is
rightly rejected. Having settled the matter in Lok Adalat and now after more
than 3 years raising such plea is untenable. Having obtained the award from Lok
Adalat, the party is not permitted to resile from the same. It attains finality
to the dispute between the parties finally and binds all. Therefore, the order in
this regard needs no interference. 17. Once the parties entered into compromise
before the Lok Adalat, & at that time no question of any pecuniary jurisdiction
raised and or required to be considered by the Lok Adalat. Therefore, once the award
is passed, it is executable under C.P.C....."
In M/s Valarmathi Oil Industries & Anr. vs. M/s Saradhi Ginning Factory, AIR
2009 Madras 180, the admitted facts were that C.C. No. 308 of 2006 was taken on
10file by the learned Judicial Magistrate No. I, Salem on the complaint given by
the respondent therein that the cheque was issued by the second petitioner therein
on behalf of the first petitioner as partner of the firm, however, the same was
dishonoured by the bank due to insufficient funds. According to the respondent,
after issuance of the legal notice to the petitioner, the complaint was given under
Section 138 of the N. I. Act against the petitioners.
During the pendency of
the criminal case, at the request of both the parties, the matter was referred to
Lok Adalat for settlement. Both the parties were present before the Lok Adalat
and as per the award, they agreed for the settlement and accordingly, the petitioner/accused
agreed to pay Rs. 3,75,000/- to the respondent on or before 03.09.2007. It was signed
by the respondent/complainant, petitioners/accused and their respective counsel.
In view of the compromise
arrived at between both the parties, the amount payable was fixed at Rs. 3,75,000/-
towards full quit of the claim and that the petitioners therein agreed to pay
the above-said amount on or before 03.09.2007 and accordingly, the award was
passed and placed before the Judicial Magistrate Court for further orders. When
the said award was placed before the learned Judicial Magistrate, by judgment dated
17.10.2007, based on the award held that the petitioners therein guilty and convicted
under Section 138 of N.I. Act, accordingly, imposed sentence of one year simple
imprisonment and directed the petitioners therein to pay a sum of Rs.
3,75,000/- as compensation to the respondent.
Aggrieved by which, the
petitioners/accused preferred appeal in C.S.No.167 of 2007 before the Sessions Judge,
Salem. Learned Sessions Judge, while suspending the sentence of imprisonment till
16.12.2007, directed the petitioners/accused to deposit the sum of Rs. 3,75,000/-
before the trial court and clarified that in case of failure of depositing the amount,
the order of suspension of sentence would stand cancelled automatically and the
petitioners were also directed to execute a bond for Rs. 10,000/- with two sureties
each for the like sum to the satisfaction of the trial court.
Aggrieved by the
same, the accused preferred criminal revision case before the High Court. It was
contended on behalf of the petitioners before the High Court that as per 12Section
21 of the Act, every award of the Lok Adalat shall be deemed to be a decree of
a civil court and, therefore, after the award passed by the Lok Adalat, the
respondent/complainant was entitled to execute the award like a decree of the civil
court, however, in the instant case, the learned Magistrate, by his Judgment has
found the petitioners guilty under Section 138 of N.I. Act and also convicted and
sentenced them to undergo simple imprisonment for one year and to pay the compensation
of Rs. 3,75,000/-.
formulated by the High Court is whether the Magistrate can convict the petitioners/accused
under Section 138 of N.I. Act after the award was passed in the Lok Adalat. Learned
single Judge, after adverting to Section 21(1) of the Act and the order of the learned
Magistrate has concluded as under:- "13. Had there been no settlement in the
Lok Adalat, the learned Magistrate could have proceeded with the trial and deliver
his Judgment, for which, there is no bar. In the instant case, as admitted by
both the learned Counsel, there was an award passed in the Lok Adalat, based on
the consensus arrived at between the parties.
As per the award, the
petitioners/accused had to pay Rs. 3,75,000/- to the respondent/complainant on
or before 03.09.2007. As it is an award made by Lok Adalat, it is final and binding
on the parties to the criminal revision and as contemplated under Section 21(2)
of the Act, no appeal shall lie to any court against the award. 13 14. In such circumstances,
the petitioners could have filed the Execution Petition before the appropriate
court, seeking the award amount to be paid with interest and costs.
In such circumstances,
it is clear that the learned Judicial Magistrate became functus officio, to decide
the case after the award passed by Lok Adalat, to convict the accused under
Section 138 of Negotiable Instruments Act, hence, the impugned order passed by the
learned Sessions Judge is also not sustainable in law, however, it is clear that
the petitioners/accused herein after having given consent for Lok Adalat award
being passed and also the award amount agreed to pay Rs. 3,75,000/- on or
before 03.09.2007 to the respondent, have not complied with their undertaking
made before the Lok Adalat, which cannot be justified.
However, the order passed
by the learned Judicial Magistrate under Section 138 of Negotiable Instruments Act
has to be set aside, in view of the Lok Adalat award passed under Section 20(1)(i)(b),
20(1)(ii) of Legal Services Authorities Act (Act, 39/1987), as the Judicial
Magistrate became functus officio and the award is an executable decree in the
eye of law, as per Section 21 of the Act."After arriving at such
conclusion, learned single Judge made it clear that as per the award passed by the
Lok Adalat, the respondent/complainant is at liberty to file Execution Petition
before the appropriate court to get the award amount of Rs. 3,75,000/-
reimbursed with subsequent interest and costs, as per procedure known to law.
Bhavnagar University vs. Palitana Sugar Mill (P) Ltd. and Others, (2003) 2 SCC 111,
it was held that the purpose and object of creating a legal fiction in the
statute is 14well known and when a legal fiction is created, it must be given
its full effect.
Ittianam and Others vs. Cherichi @ Padmini (2010) 8 SCC 612, it was held that when
the Legislature uses a deeming provision to create a legal fiction, it is
always used to achieve a purpose.
statutory support as evidenced in the statement of Objects and reasons of the Act
would not only reduce the burden of arrears of work in regular courts, but would
also take justice to the door steps of the poor and the needy and make justice
quicker and less expensive. In the case on hand, 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 will 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 15under 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. In this
regard, the view taken in Subhash Narasappa Mangrule (supra) and M/s Valarmathi
Oil Industries (supra) supports this contention and we fully accept the same.
is useful to refer the judgment of this Court in State of Punjab & Anr. vs.
Jalour Singh and Ors. (2008) 2 SCC 660. The ratio that decision was that the
"award" of the Lok Adalat does not mean any independent verdict or opinion
arrived at by any decision making process. The making of the award is merely an
administrative act of incorporating the terms of settlement or compromise agreed
by the parties in the presence of the Lok Adalat, in the form of an executable
order under the signature and seal of the Lok Adalat. This judgment was
followed in B.P. Moideen Sevamandir and Anr. vs. A.M. Kutty Hassan (2009) 2 SCC
P.T. Thomas vs. Thomas Job, (2005) 6 SCC 478, Lok Adalat, its benefits, Award
and its finality has been extensively discussed.
the above discussion, the following propositions emerge:
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
b. The Act does not make
out any such distinction between the reference made by a civil court and criminal
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
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.
view of the above discussion and ultimate conclusion, we set aside the order dated
23.09.2009 passed by the Principal Munsiff Judge in an unnumbered execution
petition of 2009 in CC No. 1216 of 2007 and the order of the High Court dated
24.11.2009 in Writ Petition (C) No. 33013 of 2009. Consequently, we direct the execution
court to restore the execution petition and to proceed further in accordance with
parting with this case, we would like to record our deep appreciation for the
valuable assistance rendered by the learned amicus curiae.
civil appeal is allowed. There shall be no order as to costs.