Mansimran Kaur

New Delhi, May 19, 2022: Observing that the High Court could not have set aside the compromise decree in the absence of any conclusive proof as to fraud on the part of the objectors, the Supreme Court has held that a writ petition will be maintainable against an award of the Lok Adalat, especially when such a writ petition has been filed alleging fraud in the manner of obtaining the award of compromise

The Division Bench of Justice M.R. Shah and Justice B.V. Nagarthna asserted that when the Lok Adalat disposes cases in terms of a compromise arrived at between the parties to a suit, after following principles of equity and natural justice, every such award of the Lok Adalat shall be deemed to be a decree of a Civil Court and such decree shall be final and binding upon the parties.

Facts in brief for adjudication of the present appeals were that the plaintiffs instituted a suit for partition and separate possession before the Court of Civil Judge stating that the said schedule properties were acquired by their father M. Krishnappa and were in joint possession and enjoyment of the plaintiffs and defendants, until the demise of M. Krishnappa. It was the case of the plaintiffs that after the demise of M. Krisnappa , the first defendant attempted to alienate the properties without initiating partitio.  Subsequently, plaintiffs sought partition and separate possession of their shares in the suit schedule properties. 

During the pendency of the suit, a joint compromise petition was instituted by the plaintiffs and the defendants under Order XXIII Rule 3 of the Code of Civil Procedure and in pursuance of the compromise,the Lok Adalat, to whom the matter was referred to, decreed the suit for partition and separate possession.  However,the plaintiffs alleged that the defendants had played fraud on them and misled them to obtain their consent to the compromise. The Lok Adalat rejected this prayer. Aggrieved by the same, the fourth plaintiff instituted a writ petition before the Karnataka High Court and later, the matter was referred back to the Lok Adalat which confirmed its earlier order.Thereafter, the plaintiffs yet again filed the writ petitions before the High Court and when the matter was remanded to the Court of Civil Judge, then directions were issued to dispose of the matter in accordance with law, and to assume that there was no compromise made between the parties. Aggrieved by the judgment of the High Court, the second to fifth defendants preferred the present appeals.

The Apex Court after hearing the contentions of the parties stated that the High Court while recalling the order of the Lok Adalat passed on July 7, 2012 submitted no cogent reasons for the same. It was further observed that to recall a compromise that was already recorded requires strong reasons, reason being that the compromise would ultimately result in a decree of a Court which can be enforced just as a decree passed on an adjudication of a case. 

 Further, the Bench referred to Section 21 of the Legal Services Authorities Act, 1987 and said, “ Writ petition to be maintainable against an award of the Lok Adalat, especially when such a writ petition has been filed alleging fraud in the manner of obtaining the award of compromise, a writ court, cannot, in a casual manner, de hors any reasoning, set aside the order of the Lok Adalat”.  In furtherance of the above observations, the Court cited the legal maxim “cessante ratione legis cessat ipsa lex” meaning “reason is the soul of the law, and when the reason of any particular law ceases, so does the law itself” and also referred to the cases of  H H Sri Swamiji of Sri Admar Mutt vs. the Commissioner, Hindu Religious and Charitable Endowments Dept., Kranti Associates Private Limited & Anr. Vs. Masood Ahmed Khan & Ors, Ruby Sales and Services Pvt. Ltd. vs. State of Maharashtra & Pushpa Devi Bhagat (dead) through LR. Sadhna Rai vs. Rajinder Singh and Ors.

The Court stated that the High Court passed the impugned order in a mechanical manner without recording the reasons while passing the order. At last, the Court concluded by saying that passing the order in such a callous manner runs contrary to the established principles which seek to protect the sanctity and finality of orders based on compromise or consent between the parties.  

Hence, the impugned order of the High Court was set aside and the order of compromise recorded by the Lok Adalat dated July 7, 2012 was restored.  Accordingly, the appeals were allowed. 

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