Lok Adalat has no jurisdiction to decide a matter on merits

The Lok Adalat is a dispute resolution procedure used as an alternative to the traditional court system. To put it another way, it is one method of settling disagreements. It is a venue for the peaceful resolution of disputes/cases pending in a court of law or at the pre-trial stage. Lok Adalats have been accorded legal recognition under the Legal Services Act passed in 1987. A judgment made by Lok Adalats is considered a public court decision and is final and enforceable by all parties. A Lok Adalat verdict cannot be challenged in a court of law because of the Act's provisions.

The Apex Court, in Estate Officer vs Colonel HV Mankotia (Retired) in Civil Appeal No. 6223 of 2021, delivered a clear and convincing judgement on October 7, 2021, stating unequivocally that Lok Adalat has no authority to rule on the merits if the parties are unable to achieve a compromise or agreement between the parties. It should be noted that an Apex Court bench comprised of Justice MR Shah and Justice AS Bopanna said that the Lok Adalat's jurisdiction would be to determine and reach a compromise or settlement between the parties to a dispute. Following an examination of the provisions of the Legal Services Authorities Act, 1987, the Apex Court also observed that the Lok Adalat's jurisdiction would be limited to determining and reaching a compromise or settlement among parties to a dispute, and that if the aforesaid settlement/compromise fails and no compromise or settlement can be reached between the parties, the Lok Adalat must return the case to the Court from which the reference has been received for disposal, i.e. the High Court.

The original writ petitioner filed this appeal in light of his dissatisfaction with the impugned order dated 30.11.2013 passed by the Madhya Pradesh High Court, Indore Bench in Writ Petition No. 8074 of 2011, in which the Lok Adalat members considered the merits of the writ petition and dismissed it on those grounds.

The following is stated in para 2.1: "Following that, the appellant filed a restoration appeal before the High Court, contending that the order made in the Lok Adalat is beyond the Lok Adalat's authority and, thus, is not valid in the eyes of the law." However, the High Court denied the application, resulting in the current appeal.

The Bench addresses the issue in para five, stating that: "The brief question before this Court is whether, in the Lok Adalat convened by the High Court, was it permissible for the Lok Adalat members to consider the merits of the writ petition and to dismiss it on those grounds in the absence of any settlement between the parties? The Bench states in para six that: In determining the question mentioned above, the relevant sections of the Legal Services Authorities Act, 1987, which would have had an impact on the Lok Adalat's jurisdiction, must be resorted to, which are as follows: -

Following Section 19, sub-section (5), a Lok Adalat has the authority to determine and reach a compromise or settlement between the parties to a dispute in respect of any case pending before it; or any matter falling within the jurisdiction of, but not filed in any court for which the Lok Adalat is responsible;

Sub-section (1) of Section 20 provides that, in any case referred to in clause I of sub-section (5) of Section 19: I (a) the parties agree, or I (b) one of the parties makes an application to the Court for referring the case to the Lok Adalat for dispute settlement, and the Court is prima facie satisfied that there is a possibility of settlement; or I (ii) the Court is satisfied that the matter is appropriate for the Lok Adalat to take cognizance, the Lok Ad

Furthermore, the Act states that no matter shall be submitted to the Lok Adalat under sub-paragraph (b) of clause I or clause II by such Court unless and until the parties have been given a fair and timely chance to be heard.

According to sub-section (3) of Section 20, when a case is referred to a Lok Adalat according to sub-section (1) or when a referral is made under sub-section (2), the Lok Adalat shall proceed to resolve the case or issue and reach a compromise or settlement between the parties. Additionally, sub-section (5) of Section 20 provides that if the Lok Adalat does not make an award because no compromise or settlement could be reached between the parties, it shall return the case record to the Court from which the reference was received under sub-section (1) for disposition in accordance with the law.

According to the provisions of the Act, the Lok Adalat's jurisdiction would be to determine and reach an agreement on a compromise or settlement between the parties to a dispute, and once the settlement above / compromise fails or if no agreement on a compromise or settlement could be reached between the parties, the Lok Adalat would be required to return the case to the Court from which the reference had been received for disposal in accordance with the law.

Accordingly, the Bench concluded in paragraph 9 that, "In light of the above, the challenged decision rendered by the Lok Adalat rejecting the writ petition on merits is unsustainable and needs to be overturned and set aside." According to the experienced counsel appearing on behalf of the respondent, once the case was referred to the Lok Adalat with permission, the Lok Adalat was justified in disposing of the matter on merits. However, his contention is devoid of substance and must be dismissed entirely by the Court. The agreement to bring the case before the Lok Adalat was made to facilitate settlement and/or compromise between the parties, rather than to bring the matter before the Lok Adalat to adjudicate it on its merits. As indicated in Section 20's sub-section (5), if the parties fail to reach a compromise and/or settlement before the Lok Adalat, the case must be remanded to the Court from whence the matter was referred to Lok Adalat for determination on the merits.

As a result, the impugned judgement of the Lok Adalat, Madhya Pradesh High Court dated 30.11.2013 in Writ Petition No.8074 of 2011 is quashed and set aside. The matter has been remanded to the High Court, which will decide the merits of Writ Petition No. 8074 of 2011 in accordance with the law. As a consequence, the appeal before us is allowed. No costs order will be made based on the facts and circumstances of the case. Any outstanding petitions must also be dealt with.

Finally, the inevitable conclusion from the above reasoning is that the Lok Adalat lacks jurisdiction to hear the issue on its merits if the parties cannot negotiate a compromise or settlement. This is precisely what the Apex Court Bench of Justices MR Shah and AS Bopanna declared unequivocally, as previously discussed in detail above.