Civil Appeal No. 8614 of 2014 (Arising out of Special Leave Petition (Civil) No. 38519 of 2012). Case: Madhya Pradesh State Legal Services Authority Vs Prateek Jain. Supreme Court (India)

Case NumberCivil Appeal No. 8614 of 2014 (Arising out of Special Leave Petition (Civil) No. 38519 of 2012)
JudgesJasti Chelameswar and Arjan Kumar Sikri, JJ.
IssueNegotiable Instruments Act, 1881 - Sections 138, 147; Legal Services Authorities Act, 1987 - Sections 2, 19, 21; Code of Civil Procedure, 1908 (CPC) - Section 89; Code of Criminal Procedure, 1973 (CrPC) - Section 320; Constitution of India - Articles 39A, 141, 142, 227
Judgement DateSeptember 10, 2014
CourtSupreme Court (India)


Arjan Kumar Sikri, J.

1. Leave granted.

2. Madhya Pradesh State Legal Services Authority, the Appellant herein, has filed the instant appeal challenging the propriety of orders dated February 27, 2012 passed by the High Court of Madhya Pradesh in Writ Petition No. 1519 of 2012, which was filed by one Rakesh Kumar Jain (Respondent No. 2 herein) impleading Prateek Jain (Respondent No. 1 herein) as the sole Respondent. Essentially the lis was between Respondent Nos. 1 and 2. Respondent No. 1 had filed a complaint Under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the 'Act') against Respondent No. 2. Matter reached before the Additional Sessions Judge in the form of criminal appeal. During the pendency of the said appeal, the matter was settled between the parties. On their application, the matter was referred to Mega Lok Adalat. However, the concerned Presiding Officer in the Lok Adalat did not give his imprimatur to the said settlement in the absence of deposit made as per the direction given in the judgment of this Court in Damodar S. Prabhu v. Sayed Babalal H. (2010) 5 SCC 663. Against the order of Additional Sessions Judge, a writ petition was filed by Respondent No. 2 but the same is also dismissed by the High Court, accepting the view taken by the Additional Sessions Judge.

3. From the aforesaid, it would be clear that the matter in issue was between Respondent Nos. 1 and 2. The Appellant comes in picture only because the parties had approached the Mega Lok Adalat organised by the Appellant. The reason for filing the present appeal is the apprehension of the Appellant that if the settlement arrived at in the Lok Adalats are not accepted by the Courts, one of the essential function and duty of Legal Services Authority cast upon by the Legal Services Authorities Act, 1987 (hereinafter referred to as the '1987 Act') would be greatly prejudiced and, therefore, it is necessary to straighten the law on the subject matter. Acknowledging the significance of the issue involved, permission was granted to the Appellant to file the special leave petition and notice was issued in the special leave petition on December 06, 2012. Operation of the impugned order of the High Court was also stayed in the following words:

In the meantime, having regard to the objects to be achieved by the provisions of the Legal Services Authorities Act, 1987, the operation of the order passed by the Lok Adalat-I, Gwalior, Madhya Pradesh, on 30th July, 2011, and that of the High Court impugned in this petition, shall remain stayed.

4. Notice has been duly served upon both the Respondents, but neither of them have put in appearance. Be that as it may, since we are concerned with the larger question raised in this appeal, we hard the learned Counsel for the Appellant in the absence of any representation on the part of the Respondents.

5. With the aforesaid gist of the controversy involved, we now proceed to take note of the relevant facts in some detail.

6. As pointed out above, there was some dispute between Respondent Nos. 1 and 2. Nature of the dispute is not reflected from the papers filed by the Appellant. However, since it pertains to a complaint filed Under Section 138 of the Act, one can safely infer that the complaint was filed because of dishonour of the cheque. It also appears from the record that this complaint was filed by Respondent No. 1 against Respondent No. 2 and had resulted in some conviction/adverse order against Respondent No. 2, though exact nature of the orders passed by the learned Magistrate is not on record. Be that as it may, Respondent No. 2 had filed the appeal against the order of the Magistrate in the Court of Additional Sessions Judge.

7. During the pendency of this appeal, a joint application was filed by both the parties stating that a compromise had taken place between them with mutual consent and they have reestablished their relationship and wanted to maintain the same cordial relation in future as well. On that basis it was stated in the application that Respondent No. 1 herein did not want to proceed against Respondent No. 2 and wanted the appeal to be disposed of on the basis of compromise by filing a compromise deed in the appeal. This application was filed Under Section 147 of the Act which permits compounding of such offences. We would like to point out at this stage that on what terms the parties had settled the matter is not on record as compromise deed has not been filed.

8. When this application came up for hearing on July 30, 2011 before the learned appellate Court, counsel for both the parties requested that the matter be forwarded to the Mega Lok Adalat which was being organized on the same date. On this application, following order was passed by the learned Additional Sessions Judge:



An application Under Section 147 Negotiation of Instrument Act filed on behalf of both sides for compromise and request is made to direct the matter be taken up before the Lok Adalat organized today's date.

In view of the facts mentioned in the application, for abrogation of the compromise application, the matter be taken up today before the concerned bench of Lok-Adalat.

9. When the matter was placed before the Lok Adalat, the Presiding Officer refused to act upon the settlement recorded between the parties on the ground that the accused person had not deposited 15% amount of the cheque for compounding of matter at the appeal stage as per "The Guidelines" contained in the judgment of this Court in the case of Damodar S. Prabhu (supra). The exact order passed is reproduced below:


The matter produced before the bench of Lok Adalat No. 1.

Appellant along with Shri N.S. Yadav, Advocate.

Non-Applicant along with Shri Mohan Babu Mangal Advocate.

The instant...

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