An Overview Of Lok Adalat Process In India - Trials & Appeals & Compensation - Litigation, Mediation & Arbitration (2024)

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3 May 2023

Lok Adalat is a method of alternate dispute resolution that is governed under Legal ServicesAuthorities Act, 1987 (hereinafter referred to as "Act").

India Litigation, Mediation & Arbitration

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A. Concept

Lok Adalat is a method of alternate dispute resolution that isgoverned under Legal Services Authorities Act, 1987 (hereinafterreferred to as "Act"). Lok Adalat orPeople's Courts is one of the forums that plays a vital role insettling disputes amicably thereby minimizing the burden onCourts.

The main purpose of establishment of Lok Adalat as an alternatedispute resolution is, "to provide free and competentlegal services to the weaker sections of the society to ensure thatopportunities for securing justice are not denied to any citizen byreason of economic or other disabilities and to organize Lok Adalatto secure that the operation of the legal system promotes justiceon a basis of equal opportunity"1 . Lok Adalathas the statutory status under the said Act. Lok Adalat has manyadvantages such as low cost involved, less hassle andconfidentiality of all proceedings2. It is important tonote that the decree passed in Lok Adalat is final and binding asthat of any civil court decree3.

The matters that can be settled in Lok Adalat are divided in twoparts.

  1. The Pre-litigation matters (means a dispute between the partieswhich is not filed before the Court/Authorities)4 suchas Negotiable Instrument Act Cases under Section 138, Bank RecoveryCases, Labour disputes cases, Electricity and water bills(excluding non-compoundable offences), other cases.
  2. The matters which are transferred by the Court to LokAdalats.

However, Lok Adalat cannot grant any bail or divorce by mutualconsent or take up any matter relating to an offence notcompoundable under any law. Lok Adalat is organized at differentlevels by State Authorities or District Authorities or SupremeCourt Legal Services Committee or High Court Legal ServicesCommittee. A Lok Adalat shall have jurisdiction to determine and toarrive at a compromise or settlement between the parties to adispute in respect of—

  1. any case pending before the courts; or
  2. any matter which is falling within the jurisdiction of, and isnot brought before, any Court for which the Lok Adalat isorganised;

B. Types of Lok Adalat

  • Permanent Lok Adalat - Permanent Lok Adalat can be establishedby Central or State Authority at such places and jurisdictions asspecified in the notification. Permanent Lok Adalat consists of:
    1. a Chairman who is current or ex-district or additional districtjudge or a person who is higher in rank as that of a districtjudge;
    2. two other persons of adequate experience in public utilityservices like transport service for the carriage of passengers orgoods by air, road or water, postal, telegraph or telephoneservice, supply of power, light or water to the public by anyestablishment, system of public conservancy or sanitation, servicein hospital or dispensary, insurance service. These officers arenominated by Central Government or by the State Government onrecommendation of Central Authority.
  • National Lok Adalat - Under National Lok Adalat, single day LokAdalat is conducted on a particular day throughout the Country(from Supreme Court to Taluk level courts). This method ofallotting a single day specially for Lok Adalat matters has helpedin disposing huge number of cases.

C. Procedure for Lok Adalat

Every Lok Adalat shall, while determining any reference beforeit under this Act, act with utmost expedition to arrive at acompromise or settlement between the parties and shall be guided bythe principles of justice, equity, fair play and other legalprinciples.

An Overview Of Lok Adalat Process In India - Trials & Appeals & Compensation - Litigation, Mediation & Arbitration (1)

D. Landmark Judgements

In a recent judgement New Okhla Industrial DevelopmentAuthority (Noida) V. Yunus & Ors., the question beforethe Court was whether the Award passed by the Lok Adalat undersection 20 of the Act can form the basis for redetermination ofcompensation as contemplated under Section 28A of the LandAcquisition Act, 1894?

The Supreme Court answered the question in negative and declaredthat an application under Section 28A of the Land Acquisition Actcannot be maintained based on an award passed by the Lok Adalat. AnAward passed by Lok Adalat is the culmination of a non-adjudicatoryprocess and a product of compromise as the Parties are persuaded toarrive at mutually agreeable compromise. The Hon'bleSupreme Court of India further held that, "The Lok Adalatby virtue of the express provisions is only a facilitator ofsettlement and compromise in regard to matters which are referredto it. It has no adjudicatory role".5

In another recent Supreme Court Judgement of Canara Bankv/s G.S. Jayarama6, the dispute arose from anapplication filed by the Bank before the Permanent Lok Adalat atMangalore under Section 22-C(1) of the Act. When notices wereissued to the Respondent, the notices were allegedly not claimed bythe respondent. Thereafter, no one participated in the proceedingson behalf of the respondent and the Permanent Lok Adalat passed anAward noting that the respondent ―appeared through anadvocate, but did not participate in the proceedings, while hisguarantor ―though served with notices...did not participatein the proceedings. Further, it also noted that noconciliation was reported. Hence, the Permanent Lok Adalat allowedthe application filed by the appellant (exparte). After a round oflitigation before the High Court, the Supreme Court set aside thisaward as the award of the Permanent Lok Adalat did not indicate anyattempt made by it to propose terms of settlement to the partiesand their rejection of such proposal and it also failed to followthe mandatory conciliation proceedings before adjudicating anydispute.

It was held that, a Permanent Lok Adalat established underSection 22B of the Act has the power to adjudicate a matterprovided that any such adjudication is subject to the Permanent LokAdalat following the mandatory conciliation proceedings asprescribed under the law.

E. Conclusion

The concept of Lok Adalat invites disputing parties to settletheir disputes in peaceful manner. It is necessary to educatepeople regarding Lok Adalat and advantages of the same. This methodmay help Courts and authorities for quick disposal of cases.Though, generally every award made by a Lok Adalat is final andbinding on all the parties to the dispute, and no appeal lies toany court against the award , it is also provided that an awardbased on settlement between the parties can be challenged onviolation of procedure prescribed in section 20 of the Act byfiling a petition under articles 226 and 227 of the Constitution ofIndia.

The upcoming National Lok Adalat 2022 will be held on August 13,2022.

* The article reflects the general work of the authors and theviews expressed are personal. No reader should act on any statementcontained herein without seeking detailed professional advice.

Footnotes

1 Legal Services Authorities Act, 1987

2 Rule 18 - The National Legal Services Authority (LokAdalat) Regulations, 2009, (as amended vide notification F.No.L/28/09/NALSA dated 28.08.2019 published in the Gazette of India on6.9.2019)

3 Section 21 – The Legal Services Authority Act,1987

4 Definition - The National Legal Services Authority (LokAdalat) Regulations, 2009, (as amended vide notification F.No.L/28/09/NALSA dated 28.08.2019 published in the Gazette of India on6.9.2019)

5 CA No. 901/2022 arising out of SLP (C) No.9927/2020

6 Civil Appeal No. 3872 of 2022

The content of this article is intended to provide a generalguide to the subject matter. Specialist advice should be soughtabout your specific circumstances.

An Overview Of Lok Adalat Process In India - Trials & Appeals & Compensation - Litigation, Mediation & Arbitration (2024)
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