Lok Adalat settlement in a cheque dishonour matter was binding, barring a later Section 145(2) request.

A settlement recorded before a National Lok Adalat in a Section 138 Negotiable Instruments Act matter was treated as final and binding under Section 21 of the Legal Services Authorities Act, and the award was executable as a civil decree. Because the parties had signed and acted upon the settlement, and no permissible challenge was pursued on recognised grounds, the accused was barred from seeking permission under Section 145(2) of the Negotiable Instruments Act. The trial court was therefore wrong to allow that application, and the impugned orders were liable to be set aside.

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Issues: Whether the settlement arrived at before the National Lok Adalat and the award passed thereon barred the accused from seeking permission under Section 145(2) of the Negotiable Instruments Act, 1881 and whether the trial court was justified in allowing that application.

Analysis: The settlement recorded before the National Lok Adalat was acted upon by the parties, and the award of the Lok Adalat was treated as final and binding under Section 21 of the Legal Services Authorities Act, 1987. An award based on settlement in a complaint under Section 138 of the Negotiable Instruments Act, 1881 is executable as a civil decree, and a challenge to such an award lies only on limited grounds through appropriate writ proceedings. On the facts, the parties had signed and affirmed the settlement before the Lok Adalat, payments had been made in furtherance of it, and the accused did not pursue a permissible challenge to the award on recognised grounds.

Conclusion: The trial court erred in allowing the application under Section 145(2) of the Negotiable Instruments Act, 1881 despite the binding Lok Adalat settlement, and the impugned orders were liable to be set aside in favour of the appellant.

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