Execution petition arising from Lok Adalat award under Section 138 NI Act maintainable; Criminal-Civil reference distinction immaterial, holds Justice Subba Reddy Satti
In a recent pronouncement reinforcing the enforceability of compromise-based dispute resolution, the Andhra Pradesh High Court has held that an award passed by a Lok Adalat in a criminal complaint under Section 138 of the Negotiable Instruments Act, 1881 (NI Act) is executable before a Civil Court under Order XXI of the Code of Civil Procedure (CPC).
Justice Subba Reddy Satti, while dismissing a revision petition challenging the execution of a Lok Adalat award, ruled that such an award is legally treated as a civil decree irrespective of the origin of the dispute—civil or criminal. The court firmly rejected the contention that only criminal courts can enforce such awards, stating:
“Thus, given the authoritative pronouncements, the contention of learned counsel for the petitioner, that the execution petition filed by the decree-holder is not maintainable, lacks merit. This Court holds that the Execution Petition filed by the Decree holder, in pursuance of the award of the Lok Adalat, referred to supra, is maintainable.”
A private complaint filed under Section 138 NI Act led to a reference to the Lok Adalat by the trial court in Srikakulam. During conciliation, the parties arrived at a compromise where the accused agreed to pay ₹5 lakh in total—₹50,000 upfront and the balance ₹4.5 lakh in nine monthly instalments.
The compromise terms included a clause for execution of the award with 24% interest in case of default. As the accused failed to honour this settlement, the complainant approached the Civil Court under Order XXI Rules 37 and 38 CPC seeking civil imprisonment.
The executing court, after inquiry, found that the judgment debtor had sufficient means but had willfully defaulted, and consequently directed civil imprisonment for three months. Aggrieved by this, the judgment debtor moved the High Court, arguing that such execution was impermissible and that the complainant ought to have invoked Section 421 of the CrPC for recovery.
Rejecting the petitioner’s argument, the High Court observed that the legal issue was no longer res integra. Citing the binding precedent of K.N. Govindan Kutty Menon v. C.D. Shaji (2012), the Court recalled the Supreme Court’s exposition that:
“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. The Act does not make out any such distinction between the reference made by a civil court and a criminal court.”
The Court reiterated that the Legal Services Authorities Act, 1987, under Section 21, creates a statutory fiction whereby a Lok Adalat award is treated as a civil decree, enforceable through the machinery of civil execution.
Addressing the debtor’s claim of willingness to pay after some delay, the Court noted that the executing court had rightly recorded a finding of “intentional avoidance” despite the debtor possessing assets. Upholding the civil court’s finding, the High Court held:
“This Court does not find any perversity or illegality in the order passed by the Court below. There are no merits in the Revision, and the same is liable to be dismissed.”
Accordingly, the Court dismissed the Civil Revision Petition and closed all pending interlocutory applications.
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