TaxTMI 
TaxTMI 
2023 (6) TMI 55
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....zari Courts, Delhi in Complaint Case No. 6780/2017, and dismiss the application under Section 145(2) of Negotiable Instruments Act, in CRL.M.C. 6028/2019; iii. Setting aside of orders dated 30.04.2019 and 03.12.2019 passed by learned Metropolitan Magistrate (NI Act), Central, Tis Hazari Courts, Delhi in Complaint Case No. 541812/2016, and dismiss the application under Section 145(2) of Negotiable Instruments Act, in CRL. M.C. 6602/2019. 2. Brief facts of the case, leading to the filing of present petitions, are that petitioner i.e. M/s. Khanuja Exports & Finance Pvt. Ltd. is a Private Limited Company, who was approached by the respondent in capacity of proprietor of M/s. South India Freight Carriers in July, 2012 for availing a loan of Rs. 1,00,00,000/-, which was granted by the petitioner on certain terms and conditions. Subsequently, disputes had arisen between the parties in relation to terms of payment and several Memorandum of Understanding / Settlement Agreements were executed. Later on, in the year 2016 and 2017, when the several cheques issued by the respondent/accused had got dishonored, the petitioner/complainant had filed complaints under Section 138 of Negotiable Ins....
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....tice, this court is of opinion that both the versions, i.e. of the complainant as well as the accused, need to be contested in due course through a proper trial and hence an opportunity should be afforded to the accused to cross examine the complainant. In view of the above, the application u/s 145(2) Nl Act is allowed subject to the condition that only two opportunities shall be given to the accused to cross examine the complainant's witnesses. None has appeared on behalf of the accused. However, no adverse order is being passed today in respect of the same. Be that as it may, no further adjournment shall be granted to the accused on any ground whatsoever if he fails to avail the two opportunities that are being granted today for the cross examination of the complainant. Put up for cross examination of the complainant on 04.11.2019 & 18.11.2019..." 5. In CRL.M.C. 6602/2019, the orders dated 30.04.2019 and 03.12.2019 passed by learned Metropolitan Magistrate (NI Act), Central, Tis Hazari Courts, Delhi in Complaint Case No. 54181/2016, impugned before this Court read as under: "CC No. 541812/16 30.04.2019 File received by way of transfer. It be checked and re....
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....ed to lead cross examination of complainant..." 6. Learned counsel for the petitioner submits that respondent is governed by the provisions of estoppel and he was not entitled to move an application under Section 145(2) of Negotiable Instruments Act seeking trial of the case as he had already entered into a settlement agreement before National Lok Adalat and had even partly honored the conditions thereof, before defaulting. It is stated that as per Section 21 of Legal Services Authorities Act, 1987, the award of Lok Adalat is deemed to be a decree of civil court and is final and binding on the parties and no appeal against the same is maintainable. It is argued that upon settlement even in case of Section 138 Negotiable Instruments Act, award of Lok Adalat has to be treated as a decree capable of execution by civil court and as such the Court holding the matter cannot proceed with the trial. 7. Learned counsel for the respondent, on the other hand, argues that the settlement before National Lok Adalat had happened in a fraudulent manner as the Memorandum of Understanding dated 08.09.2017 had already been prepared by the petitioner and the signature of respondent was obtained on t....
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.... Award of Lok Adalat shall be final 21. The Lok Adalat will passes the award with the consent of the parties, therefore there is no need either to reconsider or review the matter again and again, as the award passed by the Lok Adalat shall be final. Even as under Section 96(3) of C.P.C. that "no appeal shall lie from a decree passed by the Court with the consent of the parties". The award of the Lok Adalat is an order by the Lok Adalat under the consent of the parties, and it shall be deemed to be a decree of the Civil Court, therefore an appeal shall not lie from the award of the Lok Adalat as under Section 96(3) C.P.C. *** 23. The High Court of Andhra Pradesh held that, in Board of Trustees of the Port of Vishakhapatnam v. Presiding Officer, Permanent, Lok Adalat-cum-Secy, District Legal Services Authority, the award is enforceable as a decree and it is final. In all fours, the endeavour is only to see that the disputes are narrowed down and make the final settlement so that the parties are not again driven to further litigation or any dispute. Though the award of a Lok Adalat is not a result of a contest on merits just as a regular suit by a Court on a regular suit by a C....
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....t too on very limited grounds. The case was accordingly remanded to the High Court for deciding the writ petition filed by the aggrieved person on its merits in accordance with law. 23. This is what Their Lordships held in Para 12: "12. It is true that where an award is made by the Lok Adalat in terms of a settlement arrived at between the parties (which is duly signed by parties and annexed to the award of the Lok Adalat), it becomes final and binding on the parties to the settlement and becomes executable as if it is a decree of a civil court, and no appeal lies against it to any court. If any party wants to challenge such an award based on settlement, it can be done only by filing a petition under Article 226 and/or Article 227 of the Constitution, that too on very limited grounds. But where no compromise or settlement is signed by the parties and the order of the Lok Adalat does not refer to any settlement, but directs the respondent to either make payment if it agrees to the order, or approach the High Court for disposal of appeal on merits, if it does not agree, is not an award of the Lok Adalat. The question of challenging such an order in a petition under Article 227 d....
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....l 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" (Emphasis supplied) 14. In Dayawati v. Yogesh Kumar Gosain 243 (2017) DLT 117 DB, the Hon'ble Division bench of this Court had analysed the impact of settlement of disputes under the Legal Services Authorities Act in case arising out of Section 138 NI Act. The relevant portion of the judgment is reproduced as under: "XII. Impact of settlement of disputes in a complaint under Section 138 Negotiable Instruments Act by virtue of Lok Adalat under the Legal Services Authorities Act, 1987 78. Given the reference under examination, it is therefore, necessary to examine what would be the impact of a settlement of disputes in a complaint under Section 138 of the NI Act before the Lok Adalat constituted under the Legal Services Authorities Act, 1987? This issue was the subject matter of consideration before the Supreme Court in the judgment reported at (2012) 2 SCC 51, K. Govindam Kutty Menon v. C.D. Shaji. The Kerala High Court had taken a view that when....
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.... as a decree capable of execution by a civil court." 79. The judgment of the Supreme Court reported at (2014) 10 SCC 690 Madhya Pradesh State Legal Services Authority v. Prateek Jain in Civil Appeal No. 8614/2014 decided on 10th September, 2014, also brings forth that even when cases under Section 138 of the NI Act were settled before the Lok Adalat, the guidelines in Damodar S. Prabhu are to be followed, with modifications, if any, qua reduction of costs if necessary. In para 23 of the judgment, the court stated the legal position thus: "23. Having regard thereto, we are of the opinion that even when a case is decided in the Lok Adalat, the requirement of following the Guidelines contained in Damodar S. Prabhu [Damodar S. Prabhu v. Sayed Babalal H., (2010) 5 SCC 663 : (2010) 2 SCC (Civ) 520 : (2010) 2 SCC (Cri) 1328] should normally not be dispensed with. However, if there is a special/specific reason to deviate therefrom, the court is not remediless as Damodar S. Prabhu [Damodar S. Prabhu v. Sayed Babalal H., (2010) 5 SCC 663 : (2010) 2 SCC (Civ) 520 : (2010) 2 SCC (Cri) 1328] itself has given discretion to the court concerned to reduce the costs with regard to specific facts....
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....Agreement a day prior i.e. on 08.09.2017. Thereafter, the matter was listed before the National Lok Adalat on 09.09.2017 and the settlement agreement dated 08.09.2017 was placed before the learned Presiding Judge, National Lok Adalat (Central), Delhi. It is not disputed that the learned Judge who was preceding over the National Lok Adalat had recorded the statements of both the parties on oath on 09.09.2017 and accordingly, in view of their own unequivocal statements on oath before the National Lok Adalat that they had entered into Memorandum of Understanding out of their own free will, the Memorandum of Settlement was exhibited. It is also to be noted that the Memorandum of Settlement was also duly signed by both the parties and both the parties had accepted that they had put their signature on the Memorandum of Settlement according to their own free will and without any coercion, pressure or threat. It is also to be noted that the statements were made on behalf of the persons competent to make such statements before the National Lok Adalat i.e. by the Director of the complainant company Sh. Kuljeet Singh on SA and also by the accused himself who had appeared in person, and both t....
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.... under: "...It is submitted by the counsel for the petitioner that all the disputes were settled between the parties before the National Lok Adalat vide an Award dated 9.9.2017. It is further submitted by the counsel that the respondent has started making payments under the said Award and has paid a sum of Rs. 40 lacs over a period of 1 1/2 years..." 20. It is, thus, clear that the parties had not only entered into an agreement, but had also acted upon it since some payment, as per settlement arrived at before the National Lok Adalat, was also made. This will lead to only one conclusion that the learned Judge, National Lok Adalat had no reason to record incorrect statements of the parties who appeared before him, made their statements on oath, signed their statements and thereafter also acted upon it. Had the settlement been involuntary or on the basis of fraud, there was no occasion of acting upon such settlement by making payments according to the Memorandum of Understanding signed by both the parties. Had that been so, the concerned parties would have made submission before the learned Trial Court either before the date of hearing fixed before the learned Trial Court that the....