Monday, April 13, 2009

Supreme Court on Lok Adalat orders

On 18th January, 2008, a three Judges Bench in State of Punjab & Anr. vs Jalour Singh & Ors. [Civil Appeal No.522 of 2008] held that "the Lok Adalats have no adjudicatory or judicial functions. Their functions relate purely to conciliation. A Lok Adalat determines a reference on the basis of a compromise or settlement between the parties at its instance, and put its seal of confirmation by making an award in terms of the compromise or settlement. When the Lok Adalat is not able to arrive at a settlement or compromise, no award is made and the case record is returned to the court from which the reference was received, for disposal in accordance with law. No Lok Adalat has the power to "hear" parties to adjudicate cases as a court does. It discusses the subject matter with the parties and persuades them to arrive at a just settlement. In their conciliatory role, the Lok Adalats are guided by principles of justice, equity, fair play. When the Legal Services Authorities Act, 1987 refers to 'determination' by the Lok Adalat and 'award' by the Lok Adalat, the said Act does not contemplate nor require an adjudicatory judicial determination, but a non adjudicatory determination based on a compromise or settlement, arrived at by the parties, with guidance and assistance from the Lok Adalat. The 'award' of the Lok Adalat does not mean any independent verdict or opinion arrived at by any decision making process. The making of the award is merely an administrative act of incorporating the terms of settlement or compromise agreed by parties in the presence of the Lok Adalat, in the form of an executable order under the signature and seal of the Lok Adalat."

"The endeavour and effort of the Lok Adalats should be to guide and persuade the parties, with
reference to principles of justice, equity and fair play to compromise and settle the dispute by
explaining the pros and cons, strength and weaknesses, advantages and disadvantages of
their respective claims", the Bench said.

"Where an award is made by Lok Adalat in terms of a settlement arrived at between the parties,
(which is duly signed by parties and annexed to the award of the Lok Adalat), it becomes final
and binding on the parties to the settlement and becomes executable as if it is a decree of a civil
court, and no appeal lies against it to any court. If any party wants to challenge such an award
based on settlement, it can be done only by filing a petition under Article 226 and/or Article 227
of the Constitution, that too on very limited grounds. But where no compromise or settlement is
signed by the parties and the order of the Lok Adalat does not refer to any settlement, but
directs the respondent to either make payment if it agrees to the order, or approach the High
Court for disposal of appeal on merits, if it does not agree, is not an award of the Lok Adalat. The
question of challenging such an order in a petition under Article 227 does not arise."

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