Introduction:

In a significant ruling, the Andhra Pradesh High Court has reaffirmed that awards passed by Lok Adalats in criminal cases under Section 138 of the Negotiable Instruments Act (NI Act) are executable by civil courts. This decision aligns with the Supreme Court’s stance in K.N. Govindan Kutty Menon v. C.D. Shaji, emphasizing the enforceability of such awards as civil decrees.

Case Background:

The dispute originated when the respondent filed a complaint against the petitioner for non-payment of dues, leading to proceedings under Section 138 of the NI Act, which addresses cheque dishonor due to insufficient funds. The matter was referred to the Lok Adalat, where an award was passed directing the petitioner to pay ₹5 lakh as a settlement amount. Upon the petitioner’s failure to comply, the respondent initiated execution proceedings in a civil court. The petitioner contested the maintainability of these proceedings, arguing that an award from a criminal case cannot be executed by a civil court.

Court’s Analysis and Judgment:

Justice Subba Reddy Satti, presiding over the case, referenced the Supreme Court’s decision in K.N. Govindan Kutty Menon v. C.D. Shaji, which clarified that under Section 21 of the Legal Services Authorities Act, 1987, every award of a Lok Adalat is deemed to be a decree of a civil court and is executable as such. The Act does not distinguish between references made by civil or criminal courts, thereby granting Lok Adalats the authority to pass awards based on compromises in cases referred by various courts, including those under Section 138 of the NI Act. Consequently, the High Court dismissed the petitioner’s revision plea, upholding the trial court’s order for execution.