2015 (2) TMI 1250 - HC - Indian Laws

Offence under NI Act - respondent-accused has failed to honour the mediated settlement of 26th July, 2013 and came up with an application for reconsideration after three months of mediated settlement - Held that - Since, question of fact are being raised regarding voluntariness of the mediated settlement, therefore, it would be appropriate that an opportunity is granted by trial court to respondents to lead evidence to show that the mediated settlement was not a voluntary one. In view of aforesaid, impugned order of 25th July, 2014 is hereby quashed and petitioner-complainant s application for acting upon mediated settlement be revived for hearing by the trial court, who shall decide it after giving an opportunity to respondents to lead evidence on the petitioner s application. Let needful be done by the trial court expeditiously and in any case within 16 weeks from the date of hearing, so fixed on the application. The petitions and applications accordingly disposed of. Trial court be apprised of this order forthwith.

Summary

Issues:
1. Petitioner filed complaints under Section 138 of The Negotiable Instruments Act, 1881.
2. Respondent failed to honor the mediated settlement.
3. Trial court erroneously allowed the application for reconsideration.
4. Quashing of the impugned order of 25th April, 2014.
5. Mediated settlement to be treated as an executable decree.
6. Question of the voluntariness of the mediated settlement.

Analysis:

1. The petitioner filed complaints under Section 138 of The Negotiable Instruments Act, 1881, stating that the respondent failed to honor the mediated settlement of 26th July, 2013. The respondent came up with an application for reconsideration after three months, which was erroneously allowed by the trial court. The petitions were heard together due to identical grounds and disposed of by a common order.

2. The petitioner contended that the mediated settlement should be honored and not defeated as done by the trial court. The respondent argued that the authorized representative's signatures on the settlement were obtained forcibly, making the settlement non-binding. The respondent claimed that there was no illegality in the impugned order and distinguished the cited decisions.

3. The court, after hearing both parties and examining the impugned order, found that a mediated settlement should be treated as an executable decree. Citing the Apex Court's dictum in K.N.Govindan Kutty Menon v. C.D.Shaji (2012) 2 SCC 51, the court emphasized that every award of the Lok Adalat shall be deemed a decree of a civil court, irrespective of the court's nature that made the reference.

4. As questions regarding the voluntariness of the mediated settlement were raised, the court deemed it appropriate for the trial court to grant an opportunity to the respondents to lead evidence showing that the settlement was not voluntary. Consequently, the impugned order of 25th July, 2014, was quashed, and the petitioner's application for acting upon the mediated settlement was revived for hearing by the trial court.

5. The court directed the trial court to decide on the petitioner's application after giving the respondents an opportunity to present evidence. The trial court was instructed to take necessary actions expeditiously, within 16 weeks from the date of the hearing fixed on the application. The petitions and applications were accordingly disposed of, and the trial court was to be informed of the order promptly.