Allahabad High Court

Ayyub vs State Of U.P. And Another on 26 August, 2025





HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 


?Neutral Citation No. - 2025:AHC:148949
 

 
HIGH COURT OF JUDICATURE AT ALLAHABAD
 
APPLICATION U/S 528 BNSS No. - 21784 of 2025 (LEADING)
 
AND
 
APPLICATION U/S 528 BNSS No. - 21969 of 2025 (CONNECTED)
 
Court No. - 75
 
HON'BLE VIKAS BUDHWAR, J.

1. Heard Sri S.M. Faraz I. Kazmi, learned counsel for the applicant in leading as well as in the connection application and Sri S.P. Singh, learned State Law Officer for the State.

2. The facts of the leading application are that a complaint stood lodged on 25.08.2020 by O.P. No.2 against the applicant under Section 138 of the N.I. Act with an allegation that the applicant herein with respect to discharge of his liability had drawn a cheque bearing number '820294' dated 01.06.2020 for an amount of Rs.6,33,000/-, which on presentation in the bank in his Bank A/c No.0679000108105827 on 16.06.2020 came to be dishonoured on 17.06.2020 followed by a statutory demand notice dated 09.07.2020 and the complaint on 25.08.2020. Post summoning of the applicant, the applicant had put in appearance and the case was numbered as Complaint Case No.10191 of 2020, Sanawwar vs. Ayyub, which was later on re-numbered as Misc. Case No. 1346 of 2024 and the said matter was referred to the alternate dispute resolution mechanism for settlement through conciliation and mediation by sending it to Lok Adalat and thereafter the parties approached the Lok Adalat and entered into compromise on 20.03.2023, according to which Rs.1,00,000/- had already been paid and the residue amount was to be paid on 24.05.2023. Thereafter, the order came to be passed on 21.05.2023 by the Presiding Officer, Addl. Court, Saharanpur in Complaint Case No.10191 of 2020 and since the terms and conditions of the compromise was not complied with, an application came to be preferred for issuance of recovery warrants against the applicant and non-bailable warrant/ recovery warrant came to be issued on 15.07.2024, and the applicant was taken into judicial custody on 08.05.2025.

3. Questioning both the orders, the leading application came to be filed on 08.08.2025, on which date the following orders were passed:-

?1. Contention of the learned counsel for the applicant is that post lodging of the complaint under Section 138 of the NI Act with respect to dishonoring of a cheque of Rs. 6,33,000/-, the matter travelled to Lok Adalat and a compromise stood entered into between the parties. Since, the matter stands compromised, the applicant herein was to deposit Rs. 1,00,000/- and the rest Rs. 5,33,000/- is to be deposited within the stipulated time, however, the applicant did not deposit the said amount pursuant whereto the recovery warrants have been issued by Additional Court, Saharanpur in the proceedings under Section 138 of the NI Act and pursuant whereto the applicant has been taken in judicial custody. Learned counsel for the applicant has invited the attention of the Court towards the judgment of the Hon'ble Apex Court in K.N. Govindan Kutty Menon vs. C.D. Shaji, 2012 (2) SCC 51 so as to contend that the only remedy which is available to the opposite party no. 2 was to prefer an execution proceedings that too on the civil side and not under NI Act.

2. Matter requires consideration.

3. Before proceedings further, issue notice to the opposite party no. 2.

4. Since the applicant is in judicial confinement, thus, office is directed to take prompt steps for service.

5. Put up this case as fresh on 19.08.2025 at 2:00 P.M.

6. Office to treat the present matter to be urgent and to take appropriate steps for service. ?

5. There is an office report 19.08.2025, which reads as under:-

?Notice has been served upon O.P. No.2 as per report from Ld. CJM Saharanpur at Flag-'A'.

Put up for order.?

6. Thereafter on 19.08.2025, the following orders were passed:-

?Put up this case on 23.8.2025 at 2 p.m. in the additional cause list.?

7. There is an office report dated 23.08.2025, which read as under: -

"Notice service report is kept on record. (Flag'B').

Put up for order."

8. The report of the Chief Judicial Magistrate, Saharanpur dated 25.08.2025 accompanied by the supporting documents is there, wherein the following was asserted:

???????? ???? ????? ?? ?? ?????? ??????? ???????? ????????? ???? ( ???????? ???? 528) ??. 21784/2025 ??? 21969/2025 ??? ?????? ???? ????????, ???????? ???? ?? ??????? ??? ??????????? ??????? ?? ????? ????????? ?????????? ?? ????? ????? ???? ???? ??????? ???? ??? ?

???? ????? ?? ??????? ????????? -

????????? 2. ?????? ????? ??????? ??? ???? ????? ???? ???? ?? ???? ??????? ????? ????? ?? ????? ????? ???, ??????????? ?? ???? ?? ???? ???? ?? ???? ????? ??. ?. 9758623123 ?? ?? ??? ? ??????? ?????? ? ???? ??????? ?? ???? ??????? ????? ????? ???? ?????? ????? ????? ??? ??? ???? ????? ?? ????? ???? ????? ?????? ????? ??? ?? ?????? ? ???? ????? ??? ??? ???? ??? ????? ?? ?? ???? ??? ???? ??? ?? ??? ????? | ??????? ?????? ?????? ?? 13.08.2025 ?? 8445770386?? 16.38 ???? ?? ? ???? ?? 9758728386 ?? 23.28 ???? ?? ??? ?? ????? ?? ???? ????? ?? ???? ??? ????? ??? ????? ?????? ????? ?? ??? ????

9. As regards the connected application is concerned, the facts are more or less identical pertaining to the fact that the complaint has been lodged by O.P. No.2 on 25.08.2020 with relation to dishonouring of a cheque bearing number ?820292? of Rs.3,00,195/- dated 01.06.2020, which on presentation in the bank came to be dishonoured on 02.06.2020, which was again presented in the bank on 16.06.2020, which was again dishonoured on 17.06.2020 followed by Statutory Demand Notice dated 09.07.2020 and the complaint on 25.08.2020 and thereafter, the applicant came to be summoned under Section 138 of the N.I. Act. The said case was numbered as Case no.10193 of 2020, Waseem vs. Ayyub and was later numbered as '1348 of 2024' and the case was referred to alternate dispute resolution mechanism for settlement through conciliation and mediation by sending it to Lok Adalat and the parties approached the Lok Adalat and entered into compromise on 20.03.2023, according to which the applicant already Rs.30,000/- has been deposited by the applicant and the rest of the amount was to be paid by 25.05.2023 and thereafter an order came to be passed on 21.05.2023 by the Court of Presiding Officer, Addl. Court, Saharanpur and since the terms and conditions of the compromise was not complied with, an application came to be preferred for issuance of Recovery Warrant against the applicant and non-bailable warrants/recovery warrants were issued on 15.07.2024. The applicant was taken in judicial custody on 08.05.2025.

10. Questioning both the orders, the connected application came to be filed. On 08.08.2025, the following orders were passed:-

?1. Contention of the learned counsel for the applicant is that post lodging of the complaint under Section 138 of the NI Act with respect to dishonoring of a cheque of Rs. 6,33,000/-, the matter travelled to Lok Adalat and a compromise stood entered into between the parties. Since, the matter stands compromised, the applicant herein was to deposit Rs. 1,00,000/- and the rest Rs. 5,33,000/- is to be deposited within the stipulated time, however, the applicant did not deposit the said amount pursuant whereto the recovery warrants have been issued by Additional Court, Saharanpur in the proceedings under Section 138 of the NI Act and pursuant whereto the applicant has been taken in judicial custody. Learned counsel for the applicant has invited the attention of the Court towards the judgment of the Hon'ble Apex Court in K.N. Govindan Kutty Menon vs. C.D. Shaji, 2012 (2) SCC 51 so as to contend that the only remedy which is available to the opposite party no. 2 was to prefer an execution proceedings that too on the civil side and not under NI Act.

2. Matter requires consideration.

3. Before proceedings further, issue notice to the opposite party no. 2.

4. Since the applicant is in judicial confinement, thus, office is directed to take prompt steps for service.

5. Put up this case as fresh on 19.08.2025 at 2:00 P.M.

6. Office to treat the present matter to be urgent and to take appropriate steps for service.?

11. There is an office report dated 19.08.2025, which reads as under followed by report dated 23.08.2025:-

?19.08.2025

Notice has been served upon O.P. No.2 as per report from Ld. CJM Saharanpur at Flag-'A'.

Put up for order.?

"23.08.2025

Notice service report is kept on record. (Flag'B').

Put up for order."

12. The report of the Chief Judicial Magistrate, Saharanpur dated 25.08.2025 accompanied by the supporting documents is there, wherein the following was asserted:

???????? ???? ????? ?? ?? ?????? ??????? ???????? ????????? ???? ( ???????? ???? 528) ??. 21784/2025 ??? 21969/2025 ??? ?????? ???? ????????, ???????? ???? ?? ??????? ??? ??????????? ??????? ?? ????? ????????? ?????????? ?? ????? ????? ???? ???? ??????? ???? ??? ?

???? ????? ?? ??????? ????????? -

????????? 2. ?????? ????? ??????? ??? ???? ????? ???? ???? ?? ???? ??????? ????? ????? ?? ????? ????? ???, ??????????? ?? ???? ?? ???? ???? ?? ???? ????? ??. ?. 9758623123 ?? ?? ??? ? ??????? ?????? ? ???? ??????? ?? ???? ??????? ????? ????? ???? ?????? ????? ????? ??? ??? ???? ????? ?? ????? ???? ????? ?????? ????? ??? ?? ?????? ? ???? ????? ??? ??? ???? ??? ????? ?? ?? ???? ??? ???? ??? ?? ??? ????? | ??????? ?????? ?????? ?? 13.08.2025 ?? 8445770386?? 16.38 ???? ?? ? ???? ?? 9758728386 ?? 23.28 ???? ?? ??? ?? ????? ?? ???? ????? ?? ???? ??? ????? ??? ????? ?????? ????? ?? ??? ????

13. Till the dictation of the order, nobody has put in appearance on behalf of the O.P. No.2. Treating the service of the notice upon the O.P. No.2 to be sufficient, the Court is proceeding with the matter.

14. Learned counsel for the applicant has sought to argue that the order dated 15.07.2024 impugned in the leading and the connected applications passed by the Court of Addl. Judge, Saharanpur in Complaint Case No.1346 of 2024 in leading and the order dated 15.07.2024 passed by the Addl. Judge, Saharanpur in Complaint Case no.1348 of 2024 seeking to issue non-bailable warrant/ recovery warrant against the applicant, cannot be sustained for the simple reason that once the parties themselves entered into compromise and that became the award of the Lok Adalat in terms of the Legal Services Authority Act, 1987, then the same is executable as a decree of the Civil Court and cannot be made a basis for issuance of non-bailable warrants or Recovery Warrants in the proceedings treating it to be a criminal case under Section 138 of the N.I. Act by the court below. Reliance has been placed upon the decision of the Hon?ble Apex Court in K.N. Govindan Kutty Menon vs. C.D. Shaji, 2012(2) SCC 51.

15. The submission of learned counsel for the applicant is that merely because the proceedings under Section 138 of the N.I. Act is a criminal proceeding and the complaint was pending before the criminal court, would not divest or exclude the executability by the civil court of an order passed by the Lok Adalat in terms of the Legal Services Authority Act, 1987. He submits that order dated 15.07.2024 impugned in the present application in so far as it issues non-bailable warrants/ recovery warrants as well as the order confining the applicant in judicial custody cannot be sustained.

16. Learned State Law Officer on the other hand submits that once the applicants have resiled from the terms and conditions so set out in the compromise, which was binding upon them, then the applicants have to face the music, however, he could not dispute the proposition laid down by the Hon?ble Apex Court in K.N. Govindan Kutty Menon (supra). He submits that the order be set aside.

17. I have heard the submissions so made across the Bar and perused the records carefully.

18. Apparently, post-lodging of the complaint under Section 138 of N.I. Act, the applicant came to be summoned. Thereafter the parties entered into compromise and the said settlement came to be filed when the matter stood referred to the Lok Adalat and on the basis of the same, an order came to be passed on 21.05.2023, however, alleging non-compliance of the terms an conditions of the settlement, an application came to be preferred by O.P. No.2 in the leading and the connected applications on 15.07.2024 for issuance of non-bailable warrants/ recovery warrants, pursuant whereto now, the orders came to be passed on 15.07.2024 issuing non-bailable warrant/ recovery warrants, pursuant whereto applicant came to be taken in judicial custody on 08.05.2025.

19. The core and fundamental question, which would arise for determination is whether post-entering into compromise, which became a part of the order and non-honouring of covenants of the compromise would be whether executable by resorting to procedure of the CrPC or CPC 1908. The said issue is no more res-integra, as the Hon?ble Apex Court in the case of K.N. Govindan Kutty Menon (supra) had the occasion to consider the said aspect of the matter and with relation to the circumstances, which are akin to the present case in the matters pertaining to Section 138 of the N.I. Act. It was held as follows:-

?14) A statutory support as evidenced in the statement of Objects and reasons of the Act would not only reduce the burden of arrears of work in regular courts, but would also take justice to the door steps of the poor and the needy and make justice quicker and less expensive. In the case on hand, the Courts below erred in holding that only if the matter was one which was referred by a civil court it could be a decree and if the matter was referred by a criminal court it will only be an order of the criminal court and not a decree under Section 21 of the Act. The Act does not make out any such distinction between the reference made by a civil court and criminal court. There is no restriction on the power of Lok Adalat to pass an award based on the compromise arrived at between the parties in a case referred by a criminal court under Section 138 of the N.I. Act, and by virtue of the deeming provision it has to be treated as a decree capable of execution by a civil court. In this regard, the view taken in Subhash Narasappa Mangrule (supra) and M/s Valarmathi Oil Industries (supra) supports this contention and we fully accept the same.

15) It is useful to refer the judgment of this Court in State of Punjab & Anr. vs. Jalour Singh and Ors (2008) 2 SCC 660.

The ratio that decision was that the "award" of the Lok Adalat does not mean any independent verdict or opinion arrived at by any decision making process. The making of the award is merely an administrative act of incorporating the terms of settlement or compromise agreed by the parties in the presence of the Lok Adalat, in the form of an executable order under the signature and seal of the Lok Adalat. This judgment was followed in B.P. Moideen Sewamandir and Anr. vs. A.M. Kutty Hassan (2009) 2 SCC 198.

16) In P.T. Thomas vs. Thomas Job, (2005) 6 SCC 478, Lok Adalat, its benefits, Award and its finality has been extensively discussed.

17) From the above discussion, the following propositions emerge:

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.

18) In view of the above discussion and ultimate conclusion, we set aside the order dated 23.09.2009 passed by the Principal Munsiff Judge in an unnumbered execution petition of 2009 in CC No. 1216 of 2007 and the order of the High Court dated 24.11.2009 in Writ Petition (C) No. 33013 of 2009.?.

20. The aforesaid judgment came to be relied upon by the Hon'ble Apex Court in Arun Kumar vs. Anita Mishra, Crl. Appeal No. Nil of 2019, arising out of Special Leave Petition (Cr) No.8827/2016 decided on 18.10.2019.

21. Applying the said principles of law as culled out in the above noted decision, an irresistible conclusion stood drawn that every award of the Lok Adalat is deemed to be a decree of the civil court and the Legal Services Authority act, 1987 does not make out any distinction between the reference made by a civil court or a criminal court, thus there remains no restriction on the power of Lok Adalat to pass an order based on compromise arrived at in between the parties in respect of the cases referred by it, both civil and criminal etc and if a matter referred by a criminal court under Section 138 of the N.I. Act the award passed by the Lok Adalat based on compromise has to be treated as a decree capable of execution by the civil court. Since the said decree which resulted into a compromise is to be executed as a decree of a civil court, thus the Court of Presiding Officer, Additional Court, Saharanpur was denuded of its power to pass the impugned orders for issuance of N.B.W./ recovery warrants.

22. Accordingly, the application is decided in following terms:

(a) The orders dated 15.07.2024 and 08.05.2025 passed by Presiding Officer, Additional Court, Saharanpur in Misc. Case Nos.1346/2024 and 1348 of 2024 (Sanawwar Vs. Ayyub), under Section 138 of N.I. Act are set aside.