In the rarest of rare instance, the High Court of Karnataka has set aside an amicably settled cheque dishonour case before the Lok Adalat and restored the criminal proceeding against the convicted person, who used Lok Adalat platform to overcome his conviction through the settlement, has not only failed to pay ₹29 lakh to the complainant but been “absconding” from past six years.
It is a case in which “an accused who is convicted for an offence is moving free and the victim/complainant who holds a decree is struggling to get his money arising out of such compromise,” the court observed.
Justice M. Nagaprasanna passed the order while partly allowing a petition filed by 80-year-old Hemachandra M. Kuppalli.
Criminal proceeding restored
The High Court has restored criminal proceeding against Rakshith, proprietor of M/s R.B. Green Field Agro Infra Pvt. Ltd., and resident of RMV Extension, Sadashivanagar in Bengaluru in an appeal filed by him before the Sessions Court against the Bengaluru metropolitan magistrate’s 2015 order. The magistrate had convicted his and he was directed to pay ₹29.1 lakh to the complainant failing which he had to undergo imprisonment for a period of 10 months.
The Sessions Court had referred the appeal for settlement before the Lok Adalat as the complainant too had agreed for settlement as it would have benefited the convict to overcome the conviction. The duo had reached settlement before the Lok Adalat in May 2016 as Rakshith undertakes to pay ₹29 lakh in instalments by November 2016. As per the agreement, Rakshith was to pay ₹30 lakh with 12% interest from date of award if he had failed to pay the amount by November 2016.
Fraud on court
As not a single penny was paid, the petitioner approached the Sessions Court in 2017 for execution of settlement reached in the Lok Adalat. However, Rakshith neither responded to the court’s notices nor he could be brought before the court during past six years though the warrants, including non-bailable arrest warrants, as the police said that he had left the premises, address of which was provided to the court.
Justice Nagaprasanna said that the conduct of Rakshith on the face of it, amounts to playing fraud on the court, and the court is required to step in as “fraud unravels everything” as settlement before the Lok Adalat was used only to get away with the conviction as he had no intention of adhering to the amicably agreed settlement.
Reference was illegal
Meanwhile, the High Court said that reference of appeal filed against his conviction by Rakshith for settlement before the Lok Adalat by the Sessions Court was erroneous as the appeal was referred for settlement in breach of the guidelines issued by the apex court for compounding of offence of cheque dishonour under Section 138 of the Negotiable Instruments Act, 1881.
As per the guidelines, it was mandatory for accused/convict to pay 15% of cheque amount as a condition precedent for even considering the application for compounding offence, the High Court said while pointing out that Sessions Court had referred the case of settlement sans adhering to this guideline as 15% of cheque amount was neither paid nor deposited in the court.
