1. This revision petition has been preferred against the order, dated 14.11.2007 made in C.M.P No. 4686 of 2007 in C.A No. 167 of 2007 on the file of the Principal District and Sessions Judge, Salem.
2. It is an admitted fact that the case in C.C No. 308 of 2006 was taken on file by the learned Judicial Magistrate No. 1, Salem on the complaint given by the respondent herein that the cheque was issued by the second petitioner herein 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 Negotiable Instruments Act against the petitioners. During the pendency of the criminal case, at request of both the parties, the matter was referred to Lok Adalat for settlement. It is seen that the matter was referred to Lok Adalat under Section 20(1)(i)(b), 20(1)(ii) of Legal Services Authorities Act (Act 39/1987). Both the parties were present before Lok Adalat and as per the award, they agreed for the settlement and accordingly, the petitioner/accused, agreed to pay Rs. 3,75,000/- (Rupees three lakhs and seventy five thousand only) to the respondent herein 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 by the accused/respondent was fixed at Rs. 3,75,000/- towards full quit of the claim and that the petitioners herein agreed to pay the abovesaid amount on or before 03.09.2007 and accordingly, the award was passed and placed before the Judicial Magistrate Court for further orders.
3. It is seen that on 03.03.2007, the award was passed by the learned Judge and two other members by affixing their signatures, however, the learned Judicial Magistrate, by his Judgment, dated 17.10.2007, based on the award held that the petitioners herein guilty and convicted under Section 138 of Negotiable Instruments Act, accordingly, imposed sentence of one year simple imprisonment and directed the petitioners herein 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.
4. The learned Sessions Judge, Salem, by order, dated 14.11.2007 suspended the sentence of imprisonment till 16.12.2007 and 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 which, this criminal revision has been preferred.
5. Mr. Ilanthiraian, learned counsel appearing for the petitioners submitted that as per Section 21 of the Legal Services Authorities Act, 1987, every award of the Lok Adalat shall be deemed to a decree of 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 Negotiable Instruments Act and also convicted and sentenced them to undergo one year simple imprisonment and to pay the compensation of Rs. 3,75,000/-.
6. Section 21(2) of the Legal Services Authorities Act, 1987 reads as follows:
“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.”
7. In the instant case, admittedly after the case was referred to Lok Adalat, there was a consensus between the parties, accordingly, the petitioners herein had agreed to pay Rs. 3,75,000/- to the respondent on or before 03.09.2007 Though the award was signed by both the parties, their counsel and the Judge along with two other members, it was wrongly referred to the Magistrate again. Considering the non-compliance of the award, the Magistrate convicted the second petitioner, who was also a partner of the first respondent-firm, under Section 138 of Negotiable Instruments Act and sentenced him to undergo one year simple imprisonment and to pay a fine of Rs. 3,75,000/- as compensation to the respondent.
8. The question of law involved in this criminal revision petition is whether the Magistrate can convict the petitioners/accused under Section 138 of Negotiable Instruments Act, after the award was passed in the Lok Adalat.
9. By the impugned order, dated 14.11.2007, the learned Sessions Judge, considering the award passed by the Lok Adalat has granted only limited stay, directing the petitioners to pay Rs. 3,75,000/- as a condition precedent.
10. As per Section 21(1) of the Legal Services Authorities Act, 1987, the award passed by a Lok Adalat is final and binding on all the parties to the dispute and no appeal shall lie. In this case, it is not in dispute that there was an award passed by the Lok Adalat, based on the consensus arrived at between the parties and for which, the parties and their respective counsel have signed. Then the award was signed by the Judge and the members of the Lok Adalat, therefore, the award could be construed as contemplated under Section 21 of the Legal Services Authorities Act a decree, passed by a civil court. As per the award, it is seen that the petitioners/accused had agreed to pay the said award amount on or before 03.09.2007, but subsequently, fail to pay the amount. In such circumstances, the remedy available to the respondent is similar to that of decree-holder, who obtained a decree through civil court, his remedy is executing a decree passed by a civil court.
11. Learned Magistrate, without considering the mandate of Section 21 of the Legal Services Authorities Act, 1987, has convicted the petitioners/accused under Section 138 of Negotiable Instruments Act and sentenced the second petitioner to undergo one year rigorous imprisonment, apart from directing him to pay Rs. 3,75,000/- as compensation to the respondent.
12. 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. 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.
14. 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.
15. In the result, this criminal revision petition is allowed and the impugned order passed by the learned Sessions Judge, confirming the Judgment of the learned Judicial Magistrate No. 1, Salem made in C.C No. 308 of 2006 is set aside.
16. However, it is made 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 Rs. 3,75,000/- (Rupees Three lakhs and seventy five thousand only) reimbursed with subsequent interest and costs, as per procedure known to law.
17. Petition allowed.
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