Court overturns dismissal based on Lok Adalat settlement as 'decree.' Respondent's non-compliance scrutinized.

The High Court set aside the appellate court's decision to dismiss the appeal based on a Lok Adalat settlement being considered a 'decree.' The court found that the Lok Adalat had not issued an 'award' but had outlined terms for settlement, which the respondent failed to comply with. Emphasizing that the respondent should not benefit from non-compliance, the court directed the appellate court to proceed with the appeal on its merits. The court distinguished a previous case cited by the respondent and instructed proper resolution based on legal requirements, allowing the revision petition.

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Issues:
Challenge to legality and correctness of order declining to proceed with disposal of appeal due to settlement before Lok Adalat.

Analysis:
The petitioner challenged the order of the appellate court, which declined to proceed with the disposal of the appeal due to a settlement reached at Lok Adalat. The respondent had been convicted under Section 138 of the Negotiable Instruments Act and was sentenced accordingly. Despite seeking permission to deposit the required amount in installments, the respondent did not comply with the orders. The matter was then referred to National Lok Adalat for settlement, where both parties agreed on payment terms. However, the respondent failed to make the payments as agreed, leading to the dismissal of the appeal by the appellate court based on the Lok Adalat settlement being considered a 'decree.'

The High Court found that the Lok Adalat had not passed an 'award' based on the recorded statements but had only outlined terms for compounding the matter before the concerned court upon payment. Since the respondent did not make the agreed payments, the appeal should have been decided on its merits. The court emphasized that the respondent should not benefit from their non-compliance and should not have been acquitted without the appeal being decided. The court set aside the impugned order and directed the appellate court to proceed with the appeal on its merits, requiring the parties to appear before the appellate court on a specified date.

The court distinguished a previous case cited by the respondent, emphasizing that in the present case, the respondent was required to compound the offence by settlement upon making the agreed payment. As the offence was not compounded by the petitioner, there was no basis for the appellate court to dismiss the appeal and direct the petitioner to seek execution of the Lok Adalat 'award' as a 'decree.' The court allowed the revision petition and instructed the appellate court to proceed with the appeal on its merits, highlighting the need for proper resolution based on the facts and legal requirements of the case.

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