* THE HON’BLE SRI JUSTICE GHULAM MOHAMMED AND THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY + Writ Petition No.2267 of 2009 % 16-08-2010 # Smt. Chilukuru Umadevi W/o Anjaneyulu Visakhapatnam and another ….Petitioner Vs. $ Kalidindi Vijaya Lakhsmi W/o Rama Krishna Raju And others …. Respondents !Counsel for the Petitioners: Sri G.Ram Gopal Counsel for the Respondents: Sri B.Adinarayana Rao <Gist : >Head Note: ? Cases referred: (2006)1 Supreme Court Cases 442 AIR 1969 SUPREME COURT 73 (2000)3 Supreme Court Cases 581 2008 AIR SCW 1196 (2009)2 Supreme Court Cases 198 (2005) 6 Supreme Court Cases 478 THE HON’BLE SRI JUSTICE GHULAM MOHAMMED AND THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY Writ Petition No.2267 of 2009 (Dated : 16-08-2010) Between: Smt. Chilukuru Umadevi W/o Anjaneyulu Visakhapatnam and another …Petitioners A n d Kalidindi Vijaya Lakhsmi W/o Rama Krishna Raju And others …Respondents THE HON’BLE SRI JUSTICE GHULAM MOHAMMED AND THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY Writ Petition No.2267 of 2009 ORDER (Per Hon’ble Sri Justice B.Seshasayana Reddy) This writ petition under Article 226 of the Constitution of India is filed by Smt. Chilukuru Umadevi and Ganapatineedu Venkata Narayana seeking writ of Certiorari to quash the award dated 14.2.2008 passed in LSA 143 of 2008 on the file of District Legal Services Authority (Lok Adalat) at Visakhapatnam. 2. Background facts, in a nutshell, leading to filing of this writ petition by the third parties to the award dated 14.2.2008 passed in LSA 143 of 2008 are:- Ganta Babu Rao-4th respondent owned 1100 square yards in Block No.11, Patta No.18, Sy.No.2 in Balayya Sastry Layout bearing Dr.No.49-54-7/1, Assessment No.100003/30169. He executed a possessory Agreement of sale-cum-irrevocable power of Attorney dated 9.10.2006 conveying the land owned by him and delivered possession to the petitioners. While so, Kalidindi Vijaya Lakshmi and Kalidindi Viswanatha Raju-respondents 1 and 2 filed O.S.No.1359 of 2006 on the file of the II Additional Senior Civil Judge, Visakhapatnam against Mallu Dinish Kumar and Ganta Babu Rao-respondents 3 and 4 herein seeking for injunction. Respondents 1 and 2 claim to have purchased 600 square yards comprising Plot Nos.4 and 9 in Balayya Sastry Layout, Block No .2 of Allipuram, SRO, Dwarakanagar, Visakhapatnam under two registered sale deeds dated 10-7-1992 and 15-7-2000. 3. Respondent No.3 filed written statement in O.S.No.1359 of 2006 resisting the claim of the plaintiffs. Respondent No.3 pleaded in the written statement that one late Ganta Talapathi Rao father of Ganta Babu Rao (Fourth respondent herein) purchased Ac.1.21 ½ cents on 23.9.1959 under a registered sale deed from Saraswatula Kameswaramma D/o Balayya Sastry. Lay out of the entire land has been called as Balayya Sastry Layout. Ganta Talapathi Rao sold part of Ac.1.21 ½ cents while retaining the other part of the land. Ganta Babu Rao continued to be in occupation of the extents of land retained by his father-Ganta Talapathi Rao. He entered in to a sale agreement with Ganta Babu Rao for the left over portion in the land, vide Registered agreement of sale-cum-irrevocable power of attorney dated 9.10.2006. 4. The dispute between the plaintiff and defendants came to be referred to Lok Adalat. Both parties to the suit entered into compromise and accordingly, an award dated 14.2.2008 came to be passed. The terms and conditions of the compromise are:- “ 1. The defendants have agreed that the plaintiffs are the absolute owners, having right, title and possession over the plaint schedule property and the defendants are nothing to do with the said property. 2. The second defendant is specifically agreed that the property purchased by his adopted father, vide registered sale deed dt.23.9.1959 under Doc. No.2787/1959 is entirely different and distinct from the suit schedule property. 3. The second defendant also agreed to not press the suit filed by him in O.S.No.3/2008 on the file of the I Additional District Judge’s Court, Visakhapatnam as the said suit was filed by him seeking declaration in respect of the present suit schedule property. 4. Both the parties are hereby agreed that Plot Nos. of the above suit schedule property are 6 & 9 after approval by the V.U.D.A under L.P.No.5/80 and prior to the approval, their numbers are 4 & 9. In the registered sale deeds obtained by the plaintiffs herein, old numbers are only mentioned i.e. 4 & 9. 5. The …. Assured the plaintiffs that he never executed any agreement.. in respect of the suit schedule property to any third party. 6. The defendants have agreed to withdraw all the complaints lodged by them to the Visakhapatnam Municipal Corporation and also to other authorities such as District Collector, Visakhapatnam, Electrical Department, U.I.C etc., including the paper publication made by them in Eenadu dt.25.1.2008. 7. The defendants also agreed to get the Tax Pass Books obtained by them in their name to the property covered under Plot No.6, cancelled so as to enable the plaintiffs to obtain tax pass books in their name. 8. The second defendant further assured that property covered under Registered Agreement of Sale cum Irrevocable Power of Attorney dated 9.10.2006 under document No.24/07 executed by him in favour of Smt. Chilukuri Umadevi and Ganapathineedi Venkata Narayana is no way concerned with the plaint schedule property herein. 9. The second defendant further agreed and confirmed that the property which was purchased by his adopted father covered under registered sale deed dated 23.9.1959 under document No.2787/59 is in the RADHA KRISHNA NAGAR LAYOUT, whereas the suit schedule property owned by the plaintiffs herein is in the BALAYYA SASTRY LAYOUT. 10.The defendants declared that they will not claim any right over the suit schedule property in future. 11.Both parties do bear their own costs. The Award is passed accordingly as stated above”. Hence, this writ petition by the agreement-cum-irrevocable power of attorney holders under a registered document dated 9.10.2006, with a prayer stated supra. 5. It is stated in the affidavit filed in support of the writ petition that the respondents 1 to 4 colluded together to defeat the rights of the petitioners in respect of the property of an extent of 1100 sq. yards in Block No.11, Patta No.18, Sy.No.2 in Balayya Sastry Layout bearing Dr.No.49-54-7/1, Assessment No.100003/30169 covered by possessory Agreement of Sale-cum-Irrevocable Power of Attorney dated 9.10.2006 (Doc.No.24/2007). 6. For better understanding of the grievance of the petitioners, we deem it appropriate to refer para 5 of the affidavit filed in support of the writ petition, which reads as hereunder:- “5. In the said suit, a Written Statement was filed by the defendants therein and ultimately the suit OS 1359/2006 was referred to Lok Adalat, the 5th Respondent herein. I submit that OS 1359/2006 being a suit for injunction simplicitor, if at all the Defendants wanted to concede for the relief sought by the plaintiff in the suit, the suit can be allowed as prayed for in OS 1350/2006 (sic…). But the parties to OS 1359/2006 in order to play fraud on us, they entered into an alleged compromise and in the terms of the compromise, a collusive and fraudulent terms were incorporated saying that the property that was sold under Document dated 9.10.2006 (Doc.No.24/2007), is not situated in Balayya Sastry Layout. I submit that though my property as per the Document dated 9.10.2006 Doc.No.24/2007) is situated in Balayya Sastry Layout, so as to create some document for the purpose of indulging in fraudulent transactions with respect to our property. I submit that basing the fraudulent and collusive compromise the 5th Respondent passed an award dated 14.2.2008 in terms of the compromise. I submit that the Award dated 14.2.2008 is beyond the scope of OS 1359/2006 itself. I submit that when the alleged compromise referred to and affecting the rights of the third parties, the 5th Respondent ought to have directed the parties to OS 1359/2006 to implead the affecting parties also, but no such steps were taken before passing the Award by the 5th Respondent. On the face o f the conditions of compromise, in the Award dated 14.2.2008, shows that the terms and conditions are collusive and fraudulent. It is further submitted that if at all the parties to OS 1359/2006 are compromised, then the only relief that can be granted by any Court is to allow the suit as prayed for and restraining the defendants therein from interfering with the alleged suit schedule property in OS 1359/2006. But there is no occasion to the parties to the said Suit to record any other terms and conditions more particularly referred to my Sale Deed dated 9.10.2006 and the parties wanted to dispute the identity of my property and also says that the property sold to me under Document dated 9.10.2006 is in Radhakrishna Nagar Layout, but no tin Balayya Sastry Layout, shows the fraudulent intention of the Respondents 1 to 4.” 7. Rule nisi came to be ordered on 10.02.2009. An interim order suspending the award dated 14.2.2008 in LSA 143 of 2008 came to be passed on the even date, vide W.P.M.P.No.2889 of 2009. Respondents 1 and 2 entered appearance through a counsel and moved W.V.M.P.No.966 of 2009 with a prayer to vacate the interim order dated 10.2.2009 passed in W.P.M.P.No.2889 of 2009. 8. The sum and substance of the counter affidavit filed on behalf of respondents 1 and 2 (Plaintiffs in O.S.No.1359 of 2006) is:- The writ petition under Article 226 of the Constitution of India questioning the Award dated 14.2.2008 on the file of the District Legal Services Authority, Visakhapatnam is not maintainable. The petitioners are not parties in OS.No.1359 of 2006 on the file of II Additional Senior Civil Judge’s Court, Visakhapatnam and since the dispute between the parties to the proceedings in O.S.No.1359 of 2006 has been settled in Lok Adalat, the petitioners being third parties to the proceedings in O.S.No.1359 of 2006 have no locus standi to question the award passed by the Lok Adalat. The award passed by the Lok Adalat is final and binding on all the parties thereto and the persons claiming under the Act. The agreement of sale-cum-general power of attorney dated 9.10.2006 pressed into service by the petitioners does not convey any right in their favour in respect of the property in dispute. If the petitioners have any grievance, they are at liberty to enforce the said agreement of sale-cum-general power of attorney dated 9.10.2006 against the 4th respondent (2nd defendant in O.S.No.1359 of 2006). But they cannot invoke the jurisdiction of this Court under Article 226 of the Constitution of India to question the award passed in the said suit. The award of the Lok Adalat has been based on the consent of the parties, and the same cannot be reopened at the instance of third parties. The same cannot be called in question in a writ petition filed under Article 226 of the Constitution of India, in view of Section 22-E of the Legal Services Authority Act, 1987. The 1st respondent is the absolute owner and possessor of 300 square yards and the 2nd respondent is the owner and possessor of 300 square yards in Plot No.4 of the approved lay out called Balayya Sastry Lay Out, situate in Block No.2, Survey No.2 of Allipuram Ward, Seethammadhara North Extension, Visakhapatnam having purchased under two different sale deeds dated 10.7.1992. They had also purchased an extent of 300 square yards each constituting plot No.9 of the aforesaid layout under two different sale deeds dated 15.7.2000 and 17.7.2000 respectively. Thus, respondents 1 and 2 are owners and possessors of 1200 square yards in approved layout, vide L.P.No.5/80. When respondents 1 and 2 were constructing compound wall, respondents 3 and 4 obstructed the construction and thereby respondents 1 and 2 were compelled to file O.S.No.1359 of 2006 on the file of the II Additional Senior Civil Judge, Visakhapatnam. Respondents 3 and 4 had taken the plea in the said suit that the father of the 4th respondent purchased an extent of Ac.1.21 ½ cents under registered sale deed dated 23.9.1959 and sold part of the land while retaining the part of it. The subject matter of the suit forms part of the land retained by their father. Thereafter, respondents 1 and 2 approached Municipal Corporation, Visakhapatnam for localizing the plots in view of the dispute raised by respondents 3 and 4 and after conducting the required survey, municipal corporation had certified that respondents 1 and 2 are the owners of the land under registered sale deeds and whereas the plot claimed by respondents 3 and 4 based on the registered sale deeds dated 23.9.1959 standing in the name of the 4th respondent does not form part of Balayya Sastry Layout. Respondent No.4 has no right to execute an agreement of sale in respect of the property situate in Balayya Sastry Layout approved in L.P.No.5/80. Respondents 1 and 2 filed the suit against respondents 3 and 4 as the respondents 3 and 4 interfered with construction of a compound wall around the site purchased by them. The said suit was filed in October, 2006. Respondent No.3 herein filed written statement in the suit contending that he had purchased property under an agreement of sale from respondent No.4 herein. When such is the defence of respondent No.3 in the said suit, the contention of the petitioners that they purchased the land in question under agreement of sale does not stand to reason. Had the petitioners got any right over the suit schedule property, they should have contested the suit getting themselves impleaded as parties. The petitioners having not chosen to come on record as party defendants in the suit, cannot be permitted to challenge the award on the ground of alleged fraud. The admission of respondents 3 and 4 that the property belonging to them is not covered by Balayya Sastry Layout is consequent upon the survey conducted by the Municipal Corporation Authorities on the application filed by respondents 1 and 2. The land claimed under the registered sale deed is far away from Balayya Sastry layout and it is no way connected with the land claimed by the petitioners. The patta number of the land for which the layout was sanctioned is different from patta number of the land claimed by respondents 3 and 4. The land claimed by respondents 3 and 4 forms part of another layout in Radhakrishna Nagar Layout. The Lok Adalat considered the joint memo filed by the parties and recorded compromise and passed the award accordingly. The petitioners, if aggrieved by the award or the conduct of the 4th respondent, they are at liberty to institute appropriate legal proceedings to assert their right, and they cannot be permitted to challenge the award by invoking the jurisdiction of this Court under Article 226 of the Constitution of India. 9. Heard Sri G.Ram Gopal, learned counsel appearing for the petitioners and Sri B.Adinarayana Rao, learned counsel appearing for the respondents 1 and 2. 10. Learned counsel appearing for the petitioners submits that the agreement of sale-cum-general power of attorney executed by G.Babu Rao-respondent No.4 is coupled with interest, therefore, it cannot be terminated unilaterally. A further submission has been made that an award has been obtained by the parties to O.S.No.1359 of 2006 by colluding together and playing fraud on the Court, and therefore, the award passed by the Lok Adalat in L.S.A.No.143 of 2008 is liable to be set aside and the suit be restored to file. He would also contend that respondent No.4 having executed agreement of sale-cum- irrevocable power of attorney asserting that the property covered under agreement of sale situates in Balayya Sastry layout cannot be permitted to say that the property covered under agreement of sale-cum-irrevocable power of attorney is situates in Radhakrishna Nagar Layout, and more particularly, without impleading the petitioners herein as parties to the proceedings. The rights of the petitioners have been adversely affected by the terms and conditions of the award passed in L.S.A.No.143 of 2008 since the award binds not only on the parties thereto and also on the persons claiming under them. Since the petitioners happen to be the persons claiming under agreement of sale-cum- irrevocable power of attorney executed by the 4th respondent, there is no other remedy to assail the award except invoking jurisdiction of this Court under Article 226 of the Constitution of India. Learned counsel laid much emphasis on Section 22-E of the Legal Services Authority Act, 1987 (for short, ‘the Act’), which reads as hereunder:- “22E Award of Permanent Lok Adalat to be Final (1) Every award of the Permanent Lok Adalat under this Act made either on merit or in terms of a settlement agreement shall be final and binding on all the parties thereto and on persons claiming under them. (2) Every award of the Permanent Lok Adalat under this Act shall be deemed to be a decree of a Civil Court (3) The award made by the Permanent Lok Adalat under this Act shall be by a majority of the persons constituting the Permanent Lok Adalat. (4) Every award made by the permanent Lok Adalat under this Act shall be final and shall not be called in question in any original suit, application or execution proceeding. (5) The permanent Lok Adalat may transmit any award made by it to a civil Court having local jurisdiction and such civil Court shall execute the order as if it were a decree made by that Court”. 11. In support of his submissions, reliance has been placed on the following decisions:- 1. Tashi Delek Gaming Solutions Ltd. v. State of Karnataka[1] 2. Seth Loon Karan Sethiya v. Ivan E.John[2] 3. United India Insurance Co. Ltd. v. Rajendra Singh[3] 4. State of Punjab v. Jalour Singh [4] 5. B.P.Moideen Sevamandir v. A.M.Kutty Hassan[5] 12. In Tashi Delek Gaming Solutions Ltd. case (1 supra), the Supreme Court held that under Section 202 of the Contract Act, agent coupled with interest has a right to sue and he may in certain situations be sued as regards his own liabilities independent of his principal. Section 202 of the Contract Act provides that where the agent has himself an interest in the property which forms the subject-matter of the agency, the agency cannot, in the absence of an express contract, be terminated to the prejudice of such interest. Much emphasis has been laid by the learned counsel on paras 24 and 25, which reads as hereunder:- “24. 'Agent' has been defined in Section 182 of the Indian Contract Act, 1872, to mean a person employed to do any act for another or to represent another in dealings with third persons. The person for whom such act is done, or who is so represented, is called the 'principal'. Section 185 of the contract Act postulates that no consideration is necessary to create an agency. The authority of an agent may be express or implied in terms of Section 186 thereof. Section 202 of the Contract Act provides that where the agent has himself an interest in the property which forms the subject-matter of the agency, the agency cannot, in the absence of an express contract, be terminated to the prejudice of such interest. The right of an agent to sue or be sued in its own name, is governed by Section 230 of the Contract Act, which reads as under: "230. Agent cannot personally enforce, nor be bound by, contracts on behalf of principle.- In the absence of any contract to that effect an agent cannot personally enforce contracts entered into by him on behalf of his principal, nor is he personally bound by them. " 25. The second part of the said provision does not envisage a situation where the right of an agent is protected in terms of section 202 of the Contract Act. We have noticed hereinbefore that Section 4 (c) of the Act envisages appointment of agents, which empowers the State Government to sell the tickets either itself or through distributors or selling agents. Such distributors or selling agents may also be companies or body corporates. Section 7 (3) of the Act, as noticed hereinbefore, provides for a penal consequence. If any person acts as an agent or promoter or trader in any lottery, he may be subjected to punishment if he sells, distributes or purchases tickets of such lottery in contravention of the provisions of the said Act, which may include any notification issued under Section 5 of the Act”. 13. In United India Insurance Co. Ltd. case (3 supra), the Supreme Court held that a party complaining of fraud having been practiced on him as well as on the court by another party resulting in a decree, can avail himself of the remedy of review or even the writ jurisdiction of the High Court, as there is no alternative remedy available to him. 14. In State of Punjab v. Jalour Singh’s case (4 supra), the Supreme Court held that no appeal lies against an award made by Lok Adalat in terms of a settlement arrived at between the parties and if any party wants to challenge such an award, it can be done only by filing a petition under Article 226 of the Constitution of India. For better appreciation, we may refer paragraph 12 of the cited judgment, which reads as hereunder:- “( 12 ) IT is true that where an award is made by Lok Adalat in terms of a settlement arrived at between the parties, (which is duly signed by parties and annexed to the award of the Lok Adalat), it becomes final and binding on the parties to the settlement and becomes executable as if it is a decree of a civil court, and no appeal lies against it to any court. If any party wants to challenge such an award based on settlement, it can be done only by filing a petition under Article 226 and/or Article 227 of the Constitution, that too on very limited grounds. But where no compromise or settlement is signed by the parties and the order of the Lok Adalat does not refer to any settlement, but directs the respondent to either make payment if it agrees to the order, or approach the High Court for disposal of appeal on merits, if it does not agree, is not an award of the Lok Adalat. The question of challenging such an order in a petition under Article 227 does not arise. As already noticed, in such a situation, the High Court ought to have heard and disposed of the appeal on merits”. 15. In B.P.Moideen Sevamandir’s case (5 supra), the Supreme Court suggested the National Legal Services Authority as the apex body, should issue uniform guidelines for the effective functioning of the Lok Adalats. As an Award of a Lok Adalat is an executable decree, it is necessary for the Lok Adalts to have a uniform procedure, prescribed registers and standardized formats of awards and permanent record of the award to avoid misuse or abuse of the ADR process. The principles underlying following Sections 67, 75 and 86 in the Arbitration and Conciliation Act, 1996 relating to conciliators may also be treated as guidelines to members of Lok Adalats till uniform guidelines are issued. Each Adalat adopts its own procedure. Strange orders by the Lok Adlats are the result of lack of fixed/appropriate rules or guidelines. Many members of the Lok Adalats are not judicially trained. Lok Adalats even pass “orders” issuing “directions” and even granting declaratory relief, which are purely in the realm of courts or specified tribunals, that too when there is no settlement”. 16. Learned counsel appearing for the respondents contends that the petitioners are only agreement holders in respect of the property claimed by them and no title has been transferred to them by the 4th respondent and in which case, the writ petition filed by them invoking jurisdiction under Article 226 of the Constitution of India to set aside the Award dated 14.2.2008 passed in LSA No.143 of 2008 cannot be entertained. In support of his submissions, reliance has been placed on the