Saturday, 12 January 2019

Whether court should adjourn case for reasonable time to allow parties to fulfill terms of agreement entered in mediation?

Then, the question is what the Criminal Court will have to do in such cases namely whether the Court has to wait for the period mentioned in the agreement so as to enable the parties to fulfill the terms of the agreement and if it is not fulfilled proceed with the case. It is true that it is a difficult position to be answered in cases under Sections 138 of Negotiable Instruments Act. The cases under this Act has to be disposed of within six months from the date of filing of the complaint as per Section 143(3) of the Act. Further, this aspect was considered by the Hon'ble Supreme Court in the decision reported in Indian Bank Association & Others v. Union of India & Ors. (MANU/SC/0387/2014 : 2014 (2) KLT 788 (SC) : ILR 2014 (2) Ker. 469), and gave guidelines as to how the criminal courts have to proceed with the cases filed under Section 138 of the above Act. So, it is clear from the above decision that the effort must be made by the Magistrate to dispose of the cases expeditiously. Further, in the decision reported in Damodar S. Prabhu v. Sayed Babalal H (MANU/SC/0319/2010 : 2010 (2) KLT 587 (SC) : 2010 (2) KHC 428), the Hon'ble Supreme Court has held that in cases where the accused in 138 cases are unnecessarily prolonging the case, though, it is a compoundable offence and if the compounding was not done at the earliest point of time, then the Court can record compounding at the subsequent stages before the Magistrate court by imposing 10% of the cheque amount as costs and if it is allowed in the Sessions Court or High Court 15% of the cheque amount to be imposed as costs and if it is before the Supreme Court 20% has to be imposed as costs to be paid and to be deposited with the Legal Services Authority. Further, in the same decision, some discretion was given to the courts to reduce the amount to be imposed as cost or even dispense with payment of me costs in appropriate cases. This was intended to prevent the unnecessary delay in disposing me case filed under Section 138 of the Negotiable Instruments Act by the accused in the case. So, under the said circumstances, if the unreasonable longer periods were provided in the agreement for payment of the amount, then the court cannot be blamed for insisting for adducing evidence by the complainant in view of the dictum laid down in me above decisions. But, at the same time, in order to promote mediation as a process for an Alternative Disputes Resolution in monitory transactions as in the cases under Section 138 of the Act as it was really a civil dispute which was converted into a criminal prosecution with a view to make the drawer of the cheque to honour the cheque than to send them to prison as mentioned in the decision reported in Damodar S. Prabhu's case (supra), Court can allow reasonable time to parties to fulfill the terms of the agreement so as to avoid prolonged litigation for realisation of the amount So, under the said circumstances, in order to promote the settlement arrived at in the mediation if a reasonable time is provided in the mediation agreement namely, up to 6 months and if the parties are willing to abide by the condition, then it is always better that court can wait for that much time to allow the parties to honour the settlement that has been arrived in the mediation and the purpose of the mediation is to restore the relationship between the parties and that can be achieved by that and that will give a boost for a process of mediation to be used by the parties to resolve their disputes amicably. If the accused did not pay the amount and it was referred for mediation at the request of the accused only as a method of delaying the matter, then the court must take it as a serious one and later in the course of trial, if he wants to compound a case on the basis of the settlement agreement and even if, the complainant is prepared for the same, that can be allowed only strictly in accordance with the guidelines provided by the Hon'ble Supreme Court in Damodar S. Prabhu's case (supra) as it will, give a message to the defaulting accused and making him to understand that if he has agreed to pay the amount within the particular time as a party to the settlement in the mediation, he should honour the same in letters and spirit of the agreement, otherwise he will have to pay the penalty for the same. So, under the circumstances, this court feels that since six months period is provided will be over by 17.08.2014, the learned Magistrate is directed to keep the case till that date without insisting for evidence so as to allow the parties to honour the settlement which has been arrived in the mediation process and if the amount is not paid and the application for compounding is not filed within that time, then the learned Magistrate is directed to proceed with the case, considering the principles laid down in this decision regarding the mediation agreement which has not been honoured by the accused and dispose of the case in accordance with law. If a compounding application is filed on the basis of the same agreement later, then that can be taken only as a delaying process by the accused and it can be accepted only in terms of the guidelines provided in Damodar S. Prabhu's case (supra).

IN THE HIGH COURT OF KERALA

Crl. M.C. No. 1864 of 2014

Decided On: 10.07.2014

 Sreelal  Vs.  Murali Menon

Hon'ble Judges/Coram:
K. Ramakrishnan, J.
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