Sunday 3 December 2017

Whether award passed by Lok Adalat in criminal case can be executed by civil court?

 On the above analysis, the principles that emerge may be summarized as follows:

(1) Since the Act does not make out any distinction between the reference made by a civil Court or a criminal Court, every Award of the Lok Adalat, whether passed on a reference made by a civil Court or a criminal Court shall be deemed to be a decree of a civil Court and as such, it is executable.

(2) Even if a matter is referred by a criminal Court and the Award was passed by a Lok Adalat Bench of a criminal Unit, yet the Lok Adalat Award is capable of execution by a civil Court within the said Unit or within the District.

(3) If such civil Court is not authorized to execute such decree against any person or property outside the local limits of its jurisdiction, then the decree may be executed by the competent civil Court to which it is sent on the application of the decree holder.
IN THE HIGH COURT OF JUDICATURE AT HYDERABAD 

Civil Revision Petition No. 2030 of 2016

Decided On: 05.01.2017

Talluri Satish Chandra Vs. Thoram Venkateswara Rao and Ors.

Hon'ble Judges/Coram:
M. Seetharama Murti, J.
Citation: AIR 2017 HYD120

1. This Civil Revision Petition by the Decree Holder under Section 115 of the Code of Civil Procedure, 1908, (the Code) is directed against the order, dated 11.02.2016, of the learned II Additional District Judge, Ranga Reddy District, at L.B. Nagar, passed in E.P. No. 234 of 2015 in Lok Adalat Case No. 1127/2013 filed by the Decree Holder under Order XXI Rule 34 of the Code against the judgment debtors 1 to 3/respondents 1 to 3 herein to direct them to execute and register the sale deed in respect of decree A schedule property in favour of the Decree Holder and requesting the executing Court to execute the sale deed in favour of the Decree Holder on failure of the judgment debtors to comply with the Courts directions. I have heard the submissions of Sri K.V. Bhanu Prasad, learned counsel appearing for the revision petitioner/Decree Holder (herein after DHr) and Sri Vedula Venkata Ramana, learned senior counsel representing Sri Y. Ashok Raj, learned counsel appearing for the respondents/judgment debtors 1 to 3 (hereinafter, JDrs). I have perused the material record.

2. The facts, which are necessary to be stated as a prelude to this order, in brief, are as follows:

On the first information lodged by the DHr, a case in Crime No. 173 of 2013 was registered by the Police Station, Technical Team, the Central Crime Station, Hyderabad. Pursuant thereto, a Calendar Case (hereinafter, CC) was taken on file by the learned XII Additional Chief Metropolitan Magistrate, Hyderabad, for the offences punishable under Sections 406, 420 and 506 of the Indian Penal Code, 1860. At the request of the parties, the said CC was referred to the Lok Adalat for settlement in the presence of the informant and the accused. On such reference made to the Lok Adalat of Metropolitan Lok Adalat Bench, Hyderabad, and on the parties arriving at an amicable settlement, an Award under Section 21 of the Legal Services Authorities Act, 1987, (the Act, for brevity) was passed by the Lok Adalat Bench of Metropolitan Criminal Courts, Hyderabad. Both the parties and all the members of the Bench including the Judicial Member duly signed the Award. To the Award, the MOU, with the terms of settlement executed between the parties on 05.12.2013 at Hyderabad, was enclosed. Having thus obtained the Award, the DHr filed E.P. No. 234 of 2015 before the Principal District Court, Ranga Reddy District, vide SR No. 3353 of 2015. And, on 06.04.2015, the said EP was made over to the II Additional District Court, Ranga Reddy District, and was assigned the number E.P. No. 234 of 2015. The said EP was filed against the JDrs 1 to 3 to direct them to execute and register the sale deed in respect of decree A schedule property in favour of the Decree Holder. The EP was filed in the said Court as the A schedule property is situated within the local limits of the jurisdiction of the said Court. On receiving notices, the judgment debtors entered appearance and contended that the executing Court has no jurisdiction to entertain the Execution Petition filed for execution of the Lok Adalat Award.
3. On merits and by the orders impugned, the learned II Additional District Judge, Ranga Reddy, having observed that the award is related to a criminal case/CC originally on the file of the XII Additional Chief Metropolitan Magistrate, Hyderabad, and that the Decree Holder is a resident of Vijayawada and that except the judgment debtors 2 and 3, the others are residents of Bhimavaram of West Godavari District and that even the third judgment debtor is not residing within the limits of Hyderabad city, held that the Decree Holder used the Lok Adalat mechanism as a tool and is intending to execute the award illegally and contrary to the provisions of the Act, and therefore, dismissed the execution petition.

4. Aggrieved thereby, the Decree Holder filed this revision petition.

5. The learned counsel for the Decree Holder would submit as follows:

The award of a Lok Adalat is an Award whether passed by the Lok Adalat Bench of the Criminal Courts or the Lok Adalat Bench of the Civil Courts. Under Section 21 of the Act, every award shall be deemed to be a decree of a Civil Court or, as the case may be an order of any other Court. Every Award made by the Lok Adalat shall be final and binding on the parties to the disputes. As the A schedule immovable property is situated within the local limits of the jurisdiction of the Court at Ranga Reddy District, the execution petition for execution of the Award is correctly instituted in that District Court. The said Court without raising any objection received the proceeding on file and made it over to the II Additional District Court. After registering the execution petition, the II Additional District Court (hereinafter, Executing Court) rightly took up the matter for disposal. However, the JDrs raised untenable contentions and the issue of lack of jurisdiction. And, the Executing Court erroneously accepted the contentions and dismissed the Execution Petition. When an issue of jurisdiction was raised, the Executing Court ought to have decided the said issue of jurisdiction only and ought not to have made any observations on the merits of the matter. If the Executing Court felt that it has no jurisdiction to execute the decree, it ought to have returned the proceeding for presentation before proper Court instead of dismissing the same by making unwarranted and uncalled for observations. There is no restriction on the power of the Lok Adalat Bench to pass an award based on the agreement arrived at between the parties even in a case referred by the criminal Court and the Award passed by the Lok Adalat being a decree of a Civil Court, the Executing Court ought to have disposed of the execution petition on its merit, instead of dismissing it. The observations of the Court below to the effect that the Award was passed by a Lok Adalat Bench on a reference of a criminal case made by a Criminal Court and that the Award related to immovable properties and hence, the Execution Petition cannot be entertained by it and that the Decree Holder used the Lok Adalat mechanism as a tool and is intending to execute the award illegally and contrary to the provisions of the Act demonstrate that the executing Court is prejudiced in the matter.
6. Per contra, the learned Senior Counsel supported the orders of the Executing Court to the effect that it has no jurisdiction to execute the award of the Lok Adalat passed by the Adalat Bench of the City Criminal Courts Unit on a reference of a criminal case made by a Criminal Court. He further submitted that the terms of the Award show that it is not executable. He also submitted that in his opinion, the remedy open to the Decree Holder is to file a suit for specific performance, but not an execution petition of the present nature. He also added that it is for the DHr to pursue the remedy, which the law permits and it is not for the JDrs to suggest any remedy.

7. I have given earnest consideration to the facts and the submissions.

8. Before proceeding further, it is apt to encapsulate the factual matrix. The DHr lodged first information with the police concerned alleging that the JDrs committed offences punishable under the provisions of the Indian Penal Code. Eventually, a Calendar Case was taken on file by the learned XII Additional Chief Metropolitan Magistrate, within the Metropolitan Sessions Unit, Hyderabad. At the request of the parties, the said CC was referred to the Lok Adalat for settlement in the presence of the informant and the accused The Lok Adalat Bench of the City Metropolitan Unit consisting of three members including a Judicial Member took up the case as Lok Adalat Case No. 1127 of 2015. On the parties arriving at an amicable settlement, the said Bench passed the Award dated 05.12.2013. The terms of settlement were reduced into writing in the form of Memorandum, of Understanding (MOU) dated 05.12.2013 and the said MOU is annexed to the Award. Thus, the Award was passed by the Lok Adalat Bench of City Metropolitan Unit in a Calendar Case on a reference made by a Magistrate. Some of the terms of the settlement, which have become part of the Award, relate to immovable properties more fully described in A and B schedule of the said MOU. Be that as it may, the present EP was filed by the DHr for a direction to the JDrs to execute and register the sale deed in favour of the Decree Holder in respect of A schedule property. In view of the fact that the said immovable property is situated within the local limits of the jurisdiction of the Court at Ranga Reddy District, the DHr filed the Execution Proceedings before the Principal District Court, Ranga Reddy District. The same was made over to the II Additional District Court/Executing Court and was numbered as E.P. No. 234 of 2015. When the issue of jurisdiction was raised by the JDr, the EP was dismissed; however by making certain observations, which are unnecessary and unwarranted in the facts and circumstances of the case.

9. In this backdrop and setting of admitted facts, now the important questions that arise for determination are Whether the Executing Court, that is, the II Additional District Court at Ranga Reddy District, is having jurisdiction to entertain the EP? And, if not, which is the Court competent to entertain the EP for Execution of the Award in question?

10. The undisputed legal position is that the Award of a Lok Adalat is a decree of a Civil Court. The Award of the Lok Adalat shall be deemed to be a decree of the civil Court in view of the provision of Section 21 of the Act, which reads as follows:-

21. Award of Lok Adalat. (1) Every award of the Lok Adalat shall be deemed to be a decree of a civil court or, as the case may be, an order of any other court and where a compromise or settlement has been arrived at, by a Lok Adalat in a case referred to it under sub-section (1) of Section 20, the court-fee paid in such case shall be refunded in the manner provided under the Court Fees Act, 1870 (7 of 1870).

(2) Every award made by a Lok Adalat shall be final and binding on all the parties to the dispute, and no appeal shall lie to any court against the award.

As per sub-section (2) of the said Section, the Award made by the Lok Adalat shall be final and binding on all the parties to the dispute and no appeal shall lie to any Court against the Award. In-fact, it is not in dispute that the subject Award, which shall be deemed to be a Decree of a Civil Court, has become final.

11. Since the Award was one passed in a criminal case by a Lok Adalat bench of the Metropolitan Unit of the Metropolitan Sessions Division of Hyderabad, the first incidental and short question is as to whether the said facts would make any critical difference and would be sufficient not to deem the Award in question as a decree of the Civil Court. This question appears to be no longer res integra in view of the decision of the Supreme Court in K.N. Govindan Kutty Menon v. C.D. Shaji MANU/SC/1412/2011 : 2012 (3) ALD 28 (SC) : 2012 (5) ALT 10.3 (DN SC). The facts of this cited case which gave rise to an important question as to the interpretation of Section 21 of the Act are as follows: "The appellant therein filed a complaint (C.C. No. 1216 of 2007) before the Judicial Magistrate of First Class (Court No. 1, Ernakulam) against the respondent therein under Section 138 of the Negotiable Instruments Act, 1881. The Magistrate referred the said complaint to Ernakulam District Legal Services Authority for trying the case for settlement between the parties in the Lok Adalat. On appearance of the parties, an Award was passed for payment of the balance amount in five equal installments as stipulated therein giving liberty to the appellant therein to recover the entire balance amount in lump sum in case of default of payment of the said amount as per the schedule of installments. As the installments were not paid as settled and as per the Lok Adalat Award, an execution petition in C.C. No. 1216 of 2007 was filed in the Principal Munsif Court, Ernakulam, seeking the execution of the Award. The Judge of the Principal Munsif Court dismissed the petition holding that the Award passed by the Lok Adalat on the reference from the Magistrate cannot be construed as a decree executable by the Civil Court. Aggrieved thereof, the DHr approached the High Court of Kerala by way of a writ petition. The High Court dismissed the writ petition. The Supreme Court while allowing the Criminal Appeal and setting aside the orders of the Courts below directed the executing Court to restore the execution petition and proceed further in accordance with law. In the said decision, after referring to the provisions of law and the precedents, the position that emerged was summarized as follows:

(1) In view of the unambiguous language of Section 21 of the Act, every award of the Lok Adalat shall be deemed to be a decree of a civil court and as such it is executable by that Court.

(2) The Act does not make out any such distinction between the reference made by a civil court and criminal court.

(3) There is no restriction on the power of the Lok Adalat to pass an award based on the compromise arrived at between the parties in respect of cases referred to by various Courts (both civil and criminal), Tribunals, Family court, Rent Control Court, Consumer Redressal Forum, Motor Accidents Claims Tribunal and other Forums of similar nature.

(4) Even if a matter is referred by a criminal 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.

From the ratio in the decision it is clear that the Act does not make out any distinction between the reference made by a civil court and criminal court and that 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. Therefore, following the precedential guidance, which squarely applies to the facts of the case, it can safely be held that the Award in question can be construed as a decree of a civil Court. In the cited case the execution petition was directed to be entertained by the Principal Munsif concerned though the award was made on a reference of a criminal case by a Magistrate. From the precedential guidance, it is thus also clear that even though the Award was passed pursuant to a reference of a criminal case made by a criminal Court, the Award being a decree of a civil Court can be executed by Civil Court.

12. The next important question is as to whether the execution proceedings for the execution of the subject Award can straight away be instituted before the Court situated within Ranga Reddy District on the ground that the subject matter is an immovable property situated within the local limits of the District Court of Ranga Reddy District.

12.1 On giving earnest consideration to the facts, this Court finds that the answer to the question presents two possible and probable views. Hyderabad District (Judicial District) has two units: (i) City Civil Court Unit, dealing with civil jurisdiction; and (ii) Metropolitan Criminal Courts Unit dealing with the criminal jurisdiction. Since the Award was passed by a Lok Adalat Bench of the Metropolitan Criminal Courts Unit of Hyderabad District, the first possible view is that the execution proceedings shall be filed before the City Civil Court and a transfer of the proceedings to the Ranga Reddy District Court shall be sought as the A schedule property is situated within the local limits of the District Court at Ranga Reddy District. The other possible view is that the execution proceedings can straight away be filed before the District Court, Ranga Reddy District, as the property is situated within the local limits of the jurisdiction of the said Court. In the considered view of this Court, when the decree is deemed to be a decree of the Civil Court, the normal procedure of Execution which would be applicable to any decree of a Civil Court would likewise be applicable to the Award of the Lok Adalat also. Under Section 38 of the Code the Decree may be executed by the Court which passed it or by the Court to which it is sent for execution. Under Section 39 of the Code, the Court which passed a Decree may on the application of the DHr send it for execution to another Court of competent jurisdiction. Further, under Section 39(2) of the Code the Court which passed a decree may of its own motion send it for execution to any Subordinate Court of Competent Jurisdiction. Generally, no Court which passed the Decree is authorized to execute such decree against property outside the local limits of its jurisdiction.

12.2 On the above analysis, the principles that emerge may be summarized as follows:

(1) Since the Act does not make out any distinction between the reference made by a civil Court or a criminal Court, every Award of the Lok Adalat, whether passed on a reference made by a civil Court or a criminal Court shall be deemed to be a decree of a civil Court and as such, it is executable.

(2) Even if a matter is referred by a criminal Court and the Award was passed by a Lok Adalat Bench of a criminal Unit, yet the Lok Adalat Award is capable of execution by a civil Court within the said Unit or within the District.

(3) If such civil Court is not authorized to execute such decree against any person or property outside the local limits of its jurisdiction, then the decree may be executed by the competent civil Court to which it is sent on the application of the decree holder.

In the instant case, as the Award was passed by a Lok Adalat Bench of the Metropolitan Legal Services Authority of Hyderabad District, the execution petition ought to have been filed before the competent civil Court within the City Civil Court Unit of Hyderabad District. However, since the A schedule immovable property is situated outside the local limits of the jurisdiction of the Courts within City Civil Court Unit and as the said property is situate within the local limits of the jurisdiction of the Civil Court, Ranga Reddy District, the Decree Holder ought to have filed an appropriate application before the competent civil Court within the City Civil Court Unit of Hyderabad District seeking transfer of the decree to a competent civil Court within Ranga Reddy District.

12.3 Viewed thus, this Court accordingly holds that the DHr ought to have first filed the execution petition before a competent Civil Court of the City Civil Court Unit of the Hyderabad District and ought to have sought transfer of the decree to the competent Civil Court of Ranga Reddy District as the A schedule property is situated within the local limits of the District Court at Ranga Reddy District. Be that as it may, as the Execution proceedings are already instituted in the competent Executing Court at Ranga Reddy District, this Court, while exercising its suo motu powers of transfer and the supervisory jurisdiction, deems it appropriate to permit the DHr to continue to proceed with the execution proceedings in the said Executing Court instead of driving the Decree Holder from pillar to post.

13. On the above analysis, this Court finds that the order impugned is unsustainable and is liable to be set aside. In the result and for the reasons afore-stated, the order impugned is set aside and the learned Judge of the II Additional District Court, Ranga Reddy District, is directed to entertain the E.P. No. 234 of 2015 in Lok Adalat Case No. 1127/2013 filed by the Decree Holder and dispose of the same in strict accordance with the procedure established by law, however, uninfluenced by the observations in the order, which is now set aside, nevertheless after giving a reasonable and fair opportunity to both the sides to advance their respective contentions, which the law permits.

There shall be no order as to costs.

Pending miscellaneous applications, if any, shall stand closed.



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