The Apex Court has observed that a complaint under Section 138 of the Negotiable Instruments Act for dishonor of cheque issued pursuant to Lok Sabha award is maintainable and enforceable.
In the case of Arun Kumar vs. Anita Mishra , as regards the first cheque issued by the accused, a criminal case preferred under section 138 of the Negotiable Instruments Act and it resulted in conviction and a sentence of fine. An appeal was preferred against the judgment of conviction and both the parties in Lok Adalat to withdraw pending litigation.
The High Court placed reliance on Lalit Kumar Sharma vs. State of Uttar Pradesh 2008(5) SCC 638.case while taking into account details of present case. There was a petition filed under Section 482 CrPC wherein the High Court quashed the second complaint on the basis or ground that it is a second complaint and that the cheque was not issued in discharge of debt or liability of the company rather only on account of settlememt arrived at between the parties.
In an appeal filed by the complainant, the Supreme Court bench comprising of Justice Indira Banerjee and Justice MR Shah noted that in the case of Lalit Kumar, the cheque had not been issued in discharge of any debt or liability of the Company of which the accused were said to be the Directors and that the cheque was found to have been issued for the purpose of arriving at a settlement. It held that the High Court have misconstrued the judgment and said that:
“the present case gave rise to fresh cause of action under Section 138 of the Negotiable Instruments Act.”
The Bench while referring to a recent judgment of KN Govindan Kutty Menon V. C D Shaji 2012 2 SCC 51, held that:
“The dishonor of the cheque gave rise to a cause of action under Section 138 of the Negotiable Instruments Act, setting aside the judgment of the High Court.
Therefore, the crux which was laid down is that every award of the Lok Adalat is, as held in deemed to a decree of a civil court and executable as a legally enforceable debt. The court of highest record held that a complaint under Section 138 of the Negotiable Instruments Actis maintainable against the dishonor of cheque issued pursuant to Lok Adalat Award.