They went to Abu Bakr and the person who won the dispute said, "We went to the Prophet (SAW) with our dispute and he issued a decision in my favor." Abu Bakr said, "Then the decision is that which the Messenger of Allah (SAW) issued." The person who lost the dispute still rejected the decision and said, "Let us go to 'Umar bin Al-Khattab." When they went to 'Umar, the person who won the dispute said, "We took our dispute to the Prophet (SAW) and he decided in my favor, but this man refused to submit to the decision."
'Umar bin Al-Khattab asked the second man and he concurred. 'Umar went to his house and emerged from it holding aloft his sword. He struck the head of the man who rejected the Prophets decision with the sword and killed him. Consequently, Allah revealed, [فَلا وَرَبِّكَ لَا يُؤْمِنُونَ حَتَّى يُحَكِّمُوكَ فِيمَا شَجَرَ بَيْنَهُمْ] (But no, by your Lord, they can have no Faith, until they make you judge in all disputes between them... (An-Nisa 4:65)).
[Tafseer Ibn Katheer (2/351-352)]
Note: During the time of Prophet Muhammad pbuh, any action done (right or wrong) by a companion (رضی اللہ عنھا) could be identified as wrong or right by Prophet Muhammad pbuh and in some cases verses of Quraan were revealed by Allah regarding the issue, as Deen was not yet completed.
Now, since the Deen is completed and the courts are there to decide in the light of Quran and Sunnah, no individual is allowed to take law in their hands.
Lesson Learned: If we ever come across any religious matter, where there is a conflict we should refer the issue to Quran and Sunnah (authentic Hadeeths), if an authentic Hadeeth is presented by other party which helps in resolving the issue than regardless of our religious background or affiliation with any school of thought we should accept the decision of Prophet Muhammad pbuh whole heartedly and find in our souls no resistance against Prophet's pbuh decisions, but accept them with the fullest conviction.