Punjab and Haryana High Court Directs Lok Adalats To Pass Awards In Compliance With Regulation 17 Of NALSA Regulations

"The Lok Adalats in the States of Punjab, Haryana and U.T. Chandigarh are directed to pass the award in compliance with the provisions of Regulation 17 of the Regulations."

[NOTE: The National Legal Services Authority (Lok Adalats) Regulations, 2009, were framed in exercise of the powers conferred by Section 29 of the Act. Regulation 17 of the Regulations deals with Award.]

The Background of the Case

The Bench was hearing a petition filed challenging order of the Additional Civil Judge (Senior Division), Panchkula whereby execution application filed by the petitioner was dismissed.

It may be noted that the petitioner filed a suit for specific performance of agreement to sell dated 08^th June 2012 in respect of SCO No.370, Sector 8, Panchkula measuring 1053.42 square meters built upto triple storey and the plot underneath, agreed to be sold by respondent No.1 through respondent No.2 for sale consideration of Rs.9,95,00,000/-.

During pendency of the suit, parties arrived at settlement recorded, an application was filed for passing consent decree on the basis of compromise deed dated 09^th April 2014. The application was taken up in the Lok Adalat on 12^th April 2014.

The Lok Adalat accepted the compromise effected between the parties and even recorded statements of the parties in this regard but eventually the suit was ordered to be dismissed as withdrawn.

[NOTE: The Lok Adalat did not pass an award on the basis of compromise deed or statement of the parties recorded before the Court, to be treated as a decree of Civil Court and liable to be executed as such.]

The petitioner filed application for execution claiming that the JDs may be directed to comply with compromise deed and execute and register the sale deed as per compromise deed and statement made on oath before the Court.

However, the executing Court dismissed the execution application with the observations that neither there is any judgment nor any decree regarding which the execution has been filed. Since there was no decree, the execution application was said to be not maintainable and hence was dismissed.

Thereafter, petitioner filed the instant petition by invoking Article 227 of the Constitution of India praying for setting aside order dated 03^rd December 2016.

Arguments put forth

It was argued before the Court that Lok Adalat is a fora that can either record the settlement already arrived at between the parties or can assist the parties in arriving at a settlement.

The Lok Adalat cannot decide the case on merits and making an award by the Lok Adalat on the basis of settlement between the parties is an administrative act, therefore, the executing Court should have proceeded with execution in order to give finality to settlement.

The other party argued that the Lok Adalat passed an order with regard to dismissal of suit as withdrawn on the basis of statement made by the petitioner.

It was contended that as the Lok Adalat did not make an award under Section 21 of the Act, there was no award akin to a decree of civil Court that could be executed in the application filed by the petitioner.

It was also argued that under sub-regulation (6) of Regulation 17, Members of Lok Adalat should affix their signatures only in settlement reached before them and should avoid affixing signatures to settlement reached by the parties outside the Lok Adalat.

It was further argued that Lok Adalat is obligated to pass an award, specimen whereof is appended to the Regulations.

Lastly, it was also contended that since in the instant case, no award in view of Regulation 17 has been passed, order passed by the Executing Court dismissing the application couldn't be faulted with.

Court's Observations

In the given scenario, the Court concluded that the Court had committed no illegality or material irregularity by dismissing execution application filed by the petitioner.

Further, the Court said,

"The Act (Legal Services Authority Act, 1987) was enacted to provide legal aid to the litigants. The Lok Adalats have been set up for settlement of disputes at the pre-litigating and post litigating stage. The parties are referred to the Lok Adalat to reconcile their differences and settle their disputes without undergoing rigmarole of trial."

The Court also said,

"Undenyingly, Lok Adalat cannot decide dispute between the parties on merits and it can only facilitate settlement of dispute with its intervention or/and pass an award on the basis of out of Court settlement. As such, the object and purpose of setting up of Lok Adalats is to settle the dispute and not to regenerate the dispute already settled between the parties."

Lastly, the Court said that order passed by the Lok Adalat should be set aside and the matter be remitted to the said Court for passing an appropriate order in view of terms and conditions of settlement, application filed by the parties for passing a consent decree and statements made by the parties in respect of settlement.

Accordingly, order passed by the Lok Adalat was set aside and the matter was remitted to the said Court for passing an appropriate order, in accordance with law.

The parties through their counsel have been directed to appear before the Lok Adalat on 19^th January 2021. The Lok Adalat has been asked to dispose of the matter within one month of parties putting in appearance.

Case title - Robin Gupta v. M/s Stratford Educational Management Pvt. Ltd. and others [CR No.4701 of 2019(O&M)]

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