LOK ADALAT CANNOT DECIDE A CASE ON MERITS

[Mr. M. GOVINDARAJAN]

Lok Adalat

Lok Adalat is one of the alternative dispute redressal mechanisms, it is a forum where disputes/cases pending in the court of law or at pre-litigation stage are settled/ compromised amicably. Lok Adalats have been given statutory status under the Legal Services Authorities Act, 1987 (‘Act’ for short).   There is no court fee payable when a matter is filed in a Lok Adalat. If a matter pending in the court of law is referred to the Lok Adalat and is settled subsequently, the court fee originally paid in the court on the complaints/petition is also refunded back to the parties.

Organization of Lok Adalat

Section 19(1) of the Act provides that every State Authority or District Authority or the Supreme Court Legal Services Committee or every High Court Legal Services Committee or, as the case may be, Taluk Legal Services Committee may organize Lok Adalats at such intervals and places and for exercising such jurisdiction and for such areas as it thinks fit.

Section 19(5) of the Act provide that a Lok Adalat shall have jurisdiction to determine and to arrive at a compromise or settlement between the parties to a dispute in respect of-

• any case pending before; or
• any matter which is falling within the jurisdiction of, and is not brought before,

any Court for which the Lok Adalat is organized.  The Lok Adalat shall have no jurisdiction in respect of any case or matter relating to an offence not compoundable under any law.

Types of Lok Adalats

The following are the various types of Lok Adalats-

• At the State Authority level- The Member Secretary of the State Legal Services Authority organizing the Lok Adalat would constitute benches of the Lok Adalat, each bench comprising of a sitting or retired judge of the High Court or a sitting or retired judicial officer and any one or both of- a member from the legal profession; a social worker engaged in the upliftment of the weaker sections and interested in the implementation of legal services schemes or programmes.
• At High Court level - The Secretary of the High Court Legal Services Committee would constitute benches of the Lok Adalat, each bench comprising of a sitting or retired judge of the High Court and any one or both of- a member from the legal profession; a social worker engaged in the upliftment of the weaker sections and interested in the implementation of legal services schemes or programmes.
• At District level - The Secretary of the District Legal Services Authority organizing the Lok Adalat would constitute benches of the Lok Adalat, each bench comprising of a sitting or retired judicial officer and any one or both of either a member from the legal profession; and/or a social worker engaged in the upliftment of the weaker sections and interested in the implementation of legal services schemes or programmes or a person engaged in para-legal activities of the area, preferably a woman.
• National Lok Adalat - National Level Lok Adalats are held for at regular intervals where on a single day Lok Adalats are held throughout the country, in all the courts right from the Supreme Court till the Taluk Levels wherein cases are disposed off in huge numbers. From February 2015, National Lok Adalats are being held on a specific subject matter every month.
• Permanent Lok Adalat - Permanent Lok Adalats have been set up as permanent bodies with a Chairman and two members for providing compulsory pre-litigative mechanism for conciliation and settlement of cases relating to Public Utility Services like transport, postal, telegraph etc. Here, even if the parties fail to reach to a settlement, the Permanent Lok Adalat gets jurisdiction to decide the dispute, provided, the dispute does not relate to any offence. Further, the Award of the Permanent Lok Adalat is final and binding on all the parties. The jurisdiction of the Permanent Lok Adalats is up to ₹ 10 Lakhs.  If the parties fail to reach to a settlement, the Permanent Lok Adalat has the jurisdiction to decide the case. The award of the Permanent Lok Adalat is final and binding upon the parties. The Lok Adalat may conduct the proceedings in such a manner as it considers appropriate, taking into account the circumstances of the case, wishes of the parties like requests to hear oral statements, speedy settlement of dispute etc.
• Mobile Lok Adalat -  These Lok Adalats travel from one location to another to resolve disputes in order to facilitate the resolution of disputes through this mechanism.

Reference of case to Lok Adalat by Court

Section 20(1) of the Act provides that the Court may refer a case to Lok Adalat if-

• the parties thereof agree; or  one of the parties thereof makes an application to the Court, for referring the case to the Lok Adalat for settlement and if such court is prima facie satisfied that there are chances of such settlement; or
•  the court is satisfied that the matter is an appropriate one to be taken cognizance of by the Lok Adalat.

No matter shall be referred to the Lok Adalat except after giving a reasonable opportunity of being heard to the other party.

Pre litigation

The State Legal Services Authority or District Legal Services Authority as the case may be on receipt of an application from any one of the parties at a pre-litigation stage may refer such matter to the Lok Adalat for amicable settlement of the dispute for which notice would then be issued to the other party.

Cognizance of cases by Lok Adalat

Section 20 (3) of the Act provides that where any case is referred to a Lok Adalat or where a reference has been made to it, the Lok Adalat shall proceed to dispose of the case or matter and arrive at a compromise or settlement between the parties.

Disposal of application

Every Lok Adalat shall, while determining any reference before it under this Act, act with utmost expedition to arrive at a compromise or settlement between the parties and shall be guided by the principles of justice, equity, fair play and other legal principles.  Where no award is made by the Lok Adalat on the ground that no compromise or settlement could be arrived at between the parties, the record of the case shall be returned by it to the court, from which the reference has been received for disposal in accordance with law.   Where no award is made by the Lok Adalat on the ground that no compromise or settlement could be arrived at between the parties, the Lok Adalat shall advice the parties to seek remedy in a court.   Where the record of the case if sent to the court, such court shall proceed to deal with such case from the stage which was reached before such reference.

Order in merit

The Lok Adalat can dispose of a matter by way of a compromise or settlement between the parties.  The Lok Adalat shall not decide the case on merits.  No jurisdiction is vested on Lok Adalat to decide the case on merits.

In ‘ESTATE OFFICER VERSUS COLONEL H.V. MANKOTIA (RETIRED) [2021 (10) TMI 377 - SUPREME COURT] the appellant in the present appeal filed a writ petition before the High Court in WP 8074 of 2011.  The High Court allotted this case to Lok Adalat.  The case was listed before the Lok Adalat on 30.11.2013.  The Lok Adalat entered into the merits of the case and dismissed the writ petition.  Therefore the appellant filed a restoration application to restore the main petition.  The appellant contended before the High Court that the order passed by the Lok Adalat is beyond the jurisdiction of Lok Adalat.  The High Court dismissed the application.  Against the order of the High Court, the appellant filed the present appeal before the Supreme Court.

The appellant contended the following before the Supreme Court-

• The Lok Adalat, Madhya Pradesh High Court, has considered the case on merits and dismissed the same on merits which is impermissible in law.
• The Lok Adalat shall have jurisdiction to determine and arrive at a compromise or settlement between the parties to the dispute and has no jurisdiction to enter into the merits of the case and decide the case on merits.
• The order passed by the Lok Adalat is without jurisdiction.

The respondent contended the following before the Supreme Court-

• The matter was placed before the Lok Adalat with the consent of the Counsel for the appellant.
• Once the matter was placed before the Lok Adalat with the consent, the entire matter would be at large before the Lok Adalat.
• Having found no substance in the petition the Lok Adalat has rightly dismissed the petition.
• The order is not to be interfered by the Supreme Court.

The Supreme Court heard the contentions of both the parties to the appeal.

The main question framed by the Supreme Court for its decision as to whether in the Lok Adalat held by the High Court, was it open to the members of the Lok Adalat to enter into the merits of the writ petition to dismiss the same on merits, in the absence of any settlement arrived at between the parties.

The Supreme Court analyzed the provisions of Act, 1987-

• Section 19 – Organization of Lok Adalat;
• Section 20 – Cognizance of cases by Lok Adalat;

The Supreme Court observed that according to section 19(5) of the Act a Lok Adalat shall have jurisdiction to determine and to arrive at a compromise or a settlement between the parties to a dispute in respect of-

• any case pending before; or
• any matter which is falling within the jurisdiction of, and is not brought before, any court for which the Lok Adalat is organized.

A fair reading of the aforesaid provisions of the Act makes it clear that the jurisdiction of the Lok Adalat would be to determine and to arrive at a compromise or a settlement between the parties to a dispute and once the aforesaid settlement / compromise fails and no compromise or settlement could be arrived at between the parties, the Lok Adalat has to return the case to the Court from which the reference has been received for disposal in accordance with law and in any case, the Lok Adalat has no jurisdiction at all to decide the matter on merits once it is found that compromise or settlement could not be arrived at between the parties.

In view of the above and for the reasons stated above, the impugned order passed by the Lok Adalat, Madhya Pradesh High Court dated 30.11.2013 in Writ Petition No.8074 of 2011 is hereby quashed and set aside by the Supreme Court. The matter is remanded to the High Court to decide the Writ Petition No.8074 of 2011 on merits and in accordance with law. The Writ Petition No.8074 of 2011 is ordered to be restored to the file of the High Court for its decision on merits and in accordance with law. The present appeal is accordingly allowed.