Supreme Court on Power of Lok Adalats to Decide Cases before it on Merits

 

INTRODUCTION 

 

Today, I will talk about the case of Estate Officer v. Colonel H.V. Mankotia (Retired), 2021 SCC OnLine SC 898, wherein the Hon’ble Supreme Court discussed the powers of the Lok Adalats to decide the cases before it on merits. 

 

CONTEXT 

 

Briefly speaking, a Writ Petition was dismissed on merits by a Lok Adalat held by a High Court. Against such dismissal, the matter traversed to the Supreme Court. Basically, dismissal on merits means dismissal of a case by taking into account the substantive considerations, grounds and claims made in that case. 

 

QUESTION OF LAW INVOLVED 

 

The question of law involved in this case was whether it is open for a Lok Adalat to enter into the merits of a case and to dismiss the same on merits, in absence of any settlement arrived at between the parties. 

 

RELEVANT LEGAL PROVISIONS 

 

In order to understand the matter, let us peruse the relevant provisions of the Legal Services Authorities Act, 1987.

 

S. 19 of the Legal Services Authorities Act, 1987, provides for organization of Lok Adalats by various courts and authorities. The Chapeau of S. 19 (5) states that: -

 

“A Lok Adalat shall have jurisdiction to determine and to arrive at a compromise or settlement between the parties to a dispute…”

 

Similarly, S. 20 (1) provides that only those matters where at least one of the parties to a case agree “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”, then the Court shall refer such case to the Lok Adalat. Thus, it obligatory upon the Court to refer a matter to the Lok Adalat, if the parties so desire.

 

Further, S. 20 (3) states that where any case is referred to the Lok Adalat, “the Lok Adalat shall proceed to dispose of the case or matter and arrive at a compromise or settlement between the parties” and S. 20 (5) states that “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.”

 

Thus, the mandate of the Lok Adalats is restricted to arriving at a settlement or compromise and when no compromise or settlement could be reached, the Lok Adalat is to return the case back to the Court whence it came from. In order to understand this conundrum in a better manner, let us go through the pertinent observations by the Court.

 

OBSERVATIONS BY THE COURT

 

Firstly, the Court observed that the logic that the Lok Adalat is justified to look into the merits of a matter since such matter is placed before the Lok Adalat with consent of parties is misplaced and misguided, as “the consent to place the matter before the Lok Adalat was to arrive at a settlement or a compromise between the parties and not for placing the matter before the Lok Adalat for deciding the matter on merits.”

 

Secondly, the Court cited the case of State of Punjab v. Ganpat Raj, (2006) 8 SCC 364, wherein it was held that “if no compromise or settlement is or could be arrived at, no order can be passed by the Lok Adalat.”

 

Thirdly, the Court emphasized that the jurisdiction of a Lok Adalat is to determine and to arrive at a compromise or a settlement between the parties to a dispute 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.”

 

And lastly, the Court opined that “once there is no compromise or settlement between the parties before the Lok Adalat…., the matter has to be returned to the Court from where the matter was referred to Lok Adalat for deciding the matter on merits by the concerned court.”

 

HELD BY THE COURT

 

Therefore, upon cumulative consideration of the matter, the Hon’ble Supreme Court quashed and set aside the impugned Order passed by the Lok Adalat and remanded the matter to the High Court for its just and proper disposal.

 

That was all about the case. So, what are my concluding remarks.

 

CONCLUDING REMARKS

 

The interpretative exercise carried on by the Supreme Court makes it amply clear that the Lok Adalats have no power whatsoever to go into the merits of a matter. The purpose of setting up Lok Adalats was to settle those disputes that have been pending before the Court for years but with the consent of the parties. Such settlement or compromise can never take place by forcing the parties to accept the Orders passed by the Lok Adalats. If the parties require a matter to be heard on merits, they can anyways ask the respective courts to take up the matter for hearing and adjudicate upon the same.