Lok Adalat has no jurisdiction to decide matter on merits in absence of settlement between parties: SC

Read Judgment: Estate Officer vs. Colonel H.v. Mankotia (retired)

Pankaj Bajpai

New Delhi, October 13, 2021: While quashing the Order passed by the Lok Adalat, the Supreme Court has ruled that said Forum has no jurisdiction to decide the matter on merits once it is found that compromise or settlement could not be arrived at between the parties. 

The Division Bench of Justice M.R. Shah and Justice A.S. Bopanna observed that once there is no compromise and/or a settlement between the parties before the Lok Adalat, as provided u/s 20(5) of Legal Services Authorities Act, 1987, 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. 

The observation came pursuant to filing a writ petition before the High Court.The matter was listed before the Lok Adalat. By the impugned order, the members of the Lok Adalat held by the High Court entered into the merits of the writ petition and dismissed the same on merits, which is the subject matter of the present appeal.

Thereafter, the appellant filed the restoration application before the Madhya Pradesh High Court to restore the main writ petition submitting that the order passed in the Lok Adalat is beyond the jurisdiction of the Lok Adalat and, therefore, the same is not legal in the eyes of law. However, the said application came to be dismissed by the High Court and hence the present appeal.

The question posed for consideration before the Apex Court was whether in the Lok Adalat held by the High Court, was it open for the members of the Lok Adalat to enter into the merits of the writ petition and to dismiss the same on merits, in absence of any settlement arrived at between the parties? 

After analyzing the provisions of the Legal Services Authorities Act, 1987, the Apex Court observed 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. 

Speaking for the Bench, Justice Shah noted that identical question came to be considered by this Court in the case of State of Punjab and Ors. vs. Ganpat Raj wherein after considering Section 20 of the Act, 1987, it was held that: “The specific language used in Section 20(3) makes it clear that the Lok Adalat can dispose of a matter by way of a compromise or settlement between the parties, and if no compromise or settlement is or could be arrived at, no order can be passed by the Lok Adalat”. 

Therefore, the Apex Court allowed the appeal and restored the Writ Petition to the file of the High Court for its decision on merits and in accordance with law.