Kashmir Impulse Desk

Srinagar, April 28 

The High Court of Jammu and Kashmir and Ladakh has upheld a Lok Adalat award in a cheque dishonour case, ruling that such settlements are final and binding, and cautioning against attempts to undermine alternative dispute resolution mechanisms.

In an order on Tuesday, Justice Wasim Sadiq Nargal said awards passed by Lok Adalats based on mutual settlements “attain finality” and are enforceable as civil court decrees.

The court dismissed a petition filed by a litigant seeking to quash a March 2025 Lok Adalat award and subsequent execution proceedings, including coercive measures initiated after failure to comply with the settlement.

“No appeal lies against such an award,” the court said, adding that challenges are limited to specific grounds such as lack of consent, jurisdictional error or fraud under constitutional writ jurisdiction.

The case arose from a cheque dishonour complaint under Section 138 of the Negotiable Instruments Act, in which the petitioner had agreed before a Lok Adalat to pay 380,000 rupees in full settlement but later failed to honour the commitment.

The court said the petitioner had voluntarily entered into the agreement and benefited from avoiding criminal prosecution, and could not subsequently challenge the same settlement.

It also held that settlement terms may include deterrent clauses, such as enhanced liability in case of default, provided they are lawful.

At the same time, the court said Lok Adalat awards must be clear and enforceable, cautioning that vague or impractical terms could render settlements ineffective.

Emphasising the role of Lok Adalats as facilitators rather than adjudicators, the court said all settlements must be voluntary and free from coercion.

The judge expressed concern over a growing trend of litigants challenging such awards, warning that it undermines the purpose of the system and adds to the burden on higher courts.

Lok Adalats are designed to provide speedy and cost-effective resolution of disputes through mutual agreement, the court said, urging both parties and facilitators to ensure that settlements are entered into in good faith and are legally sound.