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2014 (10) TMI 528

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....between the parties. On their application, the matter was referred to Mega Lok Adalat. However, the concerned Presiding Officer in the Lok Adalat did not give his imprimatur to the said settlement in the absence of deposit made as per the direction given in the judgment of this Court in Damodar S. Prabhu v. Sayed Babalal H., (2010) 5 SCC 663. Against the order of Additional Sessions Judge, a writ petition was filed by respondent No.2 but the same is also dismissed by the High Court, accepting the view taken by the Additional Sessions Judge. 3) From the aforesaid, it would be clear that the matter in issue was between respondent Nos. 1 and 2. The appellant comes in picture only because the parties had approached the Mega Lok Adalat organised by the appellant. The reason for filing the present appeal is the apprehension of the appellant that if the settlement arrived at in the Lok Adalats are not accepted by the Courts, one of the essential function and duty of Legal Services Authority cast upon by the Legal Services Authorities Act, 1987 (hereinafter referred to as the '1987 Act') would be greatly prejudiced and, therefore, it is necessary to straighten the law on the subje....

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....t at this stage that on what terms the parties had settled the matter is not on record as compromise deed has not been filed. 8) When this application came up for hearing on July 30, 2011 before the learned appellate Court, counsel for both the parties requested that the matter be forwarded to the Mega Lok Adalat which was being organized on the same date. On this application, following order was passed by the learned Additional Sessions Judge: "30.07.2011 xx xx xx An application under section 147 Negotiation (sic) Instrument Act filed on behalf of both sides for compromise and request is made to direct the matter be taken up before the Lok Adalat organized today's date. In view of the facts mentioned in the application, for abrogation of the compromise application, the matter be taken up today before the concerned bench of Lok-Adalat." 9) When the matter was placed before the Lok Adalat, the Presiding Officer refused to act upon the settlement recorded between the parties on the ground that the accused person had not deposited 15% amount of the cheque for compounding of matter at the appeal stage as per "The Guidelines" contained in the judgment of this Court in the case....

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....Legal Services Authority, or such authority as the Court deems fit. (c) Similarly, if the application for compounding is made before the Sessions Court or a High Court in revision or appeal, such compounding may be allowed on the condition that the accused pays 15% of the cheque amount by way of costs. (d) Finally, if the application for compounding is made before the Supreme Court, the figure would increase to 20% of the cheque amount." 12) The question of consideration in the aforesaid backdrop is as to whether directions/guidelines given by this Court in the aforesaid judgment are inapplicable in cases which are resolved/settled in Lok Adalats. 13) What was argued before us by the learned counsel for the appellant was that these guidelines containing the schedule of costs should not be made applicable to the settlements which are arrived at in the Lok Adalats inasmuch as provision for imposition of such costs would run contrary to the very purpose of Lok Adalats constituted under Section 19 of the 1987 Act. It was emphasized that Lok Adalats were constituted to promote the resolution of disputes pending before Court by amicable settlement between the parties and in order to ....

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.... counsel with utmost intensity of thought. It appears to be of substance in the first blush when this submission is to be considered in the context of the purpose and objective with which Lok Adalats have been constituted under Section 19 of the 1987 Act. No doubt, the manifest objective is to have speedy resolution of the disputes through these Lok Adalats, with added advantage of cutting the cost of litigation and avoiding further appeals. The advent of the 1987 Act gave a statutory status to Lok Adalats, pursuant to the constitutional mandate in Article 39-A of the Constitution of India, contains various provisions of settlement of disputes through Lok Adalat. It is an Act to constitute legal services authorities to provide free and competent legal services to the weaker sections of the society to ensure that opportunities for securing justice are not denied to any citizen by reason of economic or other disabilities, and to organize Lok Adalats to secure that the operation of the legal system promotes justice on a basis of equal opportunity. In fact, the concept of Lok Adalat is an innovative Indian contribution to the world jurisprudence. It is a new form of the justice dispens....

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....dalat when the parties had settled the matter between themselves and application to this effect was filed in the Court. In such a situation, the Court could have passed the order itself, instead of relegating the matter to the Lok Adalat. We have ourselves highlighted the importance and significance of the Institution of Lok Adalat. We would be failing in our duty if we do not mention that, of late, there is some criticism as well which, inter alia, relates to the manner in which cases are posted before the Lok Adalats. We have to devise the methods to ensure that faith in the system is maintained as in the holistic terms access to justice is achieved through this system. We, therefore, deprecate this tendency of referring even those matters to the Lok Adalat which have already been settled. This tendency of sending settled matters to the Lok Adalats just to inflate the figures of decision/settlement therein for statistical purposes is not a healthy practice. We are also not oblivious of the criticism from the lawyers, intelligentsia and general public in adopting this kind of methodology for window dressing and showing lucrative outcome of particular Lok Adalats. 19) Be that as i....

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.... to the offence of dishonour of cheques, it is the compensatory aspect of the remedy which should be given priority over the punitive aspect. There is also some support for the apprehensions raised by the learned Attorney General that a majority of cheque bounce cases are indeed being compromised or settled by way of compounding, albeit during the later stages of litigation thereby contributing to undue delay in justice-delivery. The problem herein is with the tendency of litigants to belatedly choose compounding as a means to resolve their dispute. Further more, the writen submissions filed on behalf of the learned Attorney General have stressed on the fact that unlike Section 320 of the CrPC, Section 147 of the Negotiable Instruments Act provides no explicit guidance as to what stage compounding can or cannot be done and whether compounding can be done at the instance of the complainant or with the leave of the court. As mentioned earlier, the learned Attorney General's submission is that in the absence of statutory guidance, parties are choosing compounding as a method of last resort instead of opting for it as soon as the Magistrates take cognizance of the complaints. One e....

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.... to discourage litigants from unduly delaying the composition of the offence in cases involving Section 138 of the Act. The graded scheme for imposing costs is a means to encourage compounding at an early stage of litigation. In the status quo, valuable time of the Court is spent on the trial of these cases and the parties are not liable to pay any Court fee since the proceedings are governed by the Code of Criminal Procedure, even though the impact of the offence is largely confined to the private parties. Even though the imposition of costs by the competent court is a matter of discretion, the scale of costs has been suggested in the interest of uniformity. The competent Court can of course reduce the costs with regard to the specific facts and circumstances of a case, while recording reasons in writing for such variance. Bona fide litigants should of course contest the proceedings to their logical end. Even in the past, this Court has used its power to do complete justice under Article 142 of the Constitution to frame guidelines in relation to subject-matter where there was a legislative vacuum." 24) It is clear from the reading of the aforesaid para that the Court made it clea....