Dear All,
The following appeared in "Times of India", Mumbai Edition on January 30,2009, page no. 07.
May be useful for future references.
Keep Smiling ... HemantAgarwal
Lok Adalat verdict is final in cheque bouncing cases: HC
Mumbai: In an important judgment, the Bombay high court has held that Lok Adalats can decide cheque bouncing cases, and their verdict is final in such matters. Dismissing a petition that challenged the application filed by a creditor seeking implementation of the award passed by the Lok Adalat, Justice Anoop Mohta said that parties cannot go back on their word once the tribunal grants an order.
“Having obtained an award from Lok Adalat, the party is not permitted to resile from the same. It attains finality to the dispute between the parties finally and binds all,’’ said the judge.
Legal experts say the order is welcome given the large number of cases of cheque bouncing pending before the criminal courts. Under section 138 of the Negotiable Instruments Act, a person held guilty for a dishonoured cheque can be imprisoned for up to a year and/or fined twice the amount of the cheque. Though such cases have to be decided within six months, at last count, there were over 5.6 lakh cheque bouncing cases in courts across Maharashtra. Efforts to bring down the backlog with exclusive courts have yielded little result.
Further, the government’s recent decision to hike court fees payable on cheque bouncing cases from Rs 200 to a maximum of Rs 1.5 lakh, makes it more difficult for victims. In such cases, taking the matter before alternative tribunals like the Lok Adalat’s can lessen the burden of the existing courts.
Under the law, matters, including that of cheque bouncing cases, can be heard by the Lok Adalat if both the parties in the dispute voluntarily agree to settle the issue.
The present case relates to a dispute between Solapur resident S J Unnad who had lent Rs 5 lakh to a garment firm M/s Subhash Narasappa Mangrule. When a cheque issued by the firm to repay the money bounced, Unnad approached the courts in 2001. Two years later in July 2003, the matter was transferred to the Lok Adalat, where the parties reached a compromise and the firm agreed to pay Rs 4 lakh to Unnad. The firm however failed to keep its end of the bargain, forcing Unnad to approach the civil court for executing the Lok Adalat’s award.
The firm challenged Unnad’s application on the ground that the it was not maintainable as the award was passed in a criminal case. When the issue reached the HC, it dismissed the firm’s contentions.
The judge cited section 21 of the Legal Services Authorities Act which mandates that “every award of the Lok Adalat shall be deemed to be a decreed of Civil Court and the same shall be final and binding on all the parties. “Such order is not even appealable,’’ said the judge.
“The parties were fully aware that under the Act, the District Legal Services Authority may explore the possibility of holding pre-litigation Lok Adalats in respect of the cheque bouncing cases. The compromise in such cases would be treated as Award having force of a decree,’’ said the judge, adding that objections now raised by the debtor was “untenable’’.
