Yes, the decision of the Panchayat was correct and fair. The Panchayat used wisdom and clever reasoning to outsmart the cunning neighbour. By accepting the neighbour's own argument that he had sold only the well and not the water, they turned it against him. If the water truly belonged to the neighbour, he had no right to store it in someone else's well. The judgment protected the honest farmer from being cheated and taught the neighbour that dishonesty does not succeed. The additional punishment of a fine and apology reinforced that cheating is unacceptable in society.