Case: Estate Officer Vs. Colonel H.V. Mankotia (Retired)

the court, from which the reference has been received under sub-section (1) for disposal in accordance with law. (6) Where no award is made by the Lok Adalat on the ground that no compromise or settlement could be arrived at between the parties, in a matter referred to in subsection (2), that Lok Adalat shall advice the parties to seek remedy in a court. (7) Where the record of the case is returned under subsection (5) to the court, such court shall proceed to deal with such case from the stage which was reached before such reference under sub-section (1). 6.1 As per sub-section (5) of Section 19, a Lok Adalat shall have jurisdiction to determine and to arrive at a compromise or a settlement between the parties to a dispute in respect of (i) any case pending before; or (ii) any matter which is falling within the jurisdiction of, and is not brought before, any court for which the Lok Adalat is organised. As per sub-section (1) of Section 20 where in any case referred to in clause (i) of sub-section (5) of Section 19- (i) (a) the parties thereof agree; or (i) (b) one of the parties thereof makes an application to the court, for referring the case to the Lok Adalat for settlement and if such court is prima facie satisfied that there are chances of such settlement or (ii) the court is satisfied that the matter is an appropriate one to be taken cognizance of by the Lok Adalat, the court shall refer the case to the Lok Adalat. It further provides that no case shall be referred to the Lok Adalat under sub-clause (b) of clause (i) or clause (ii) by such court except after giving a reasonable opportunity of being heard to the parties. 6.2 As per sub-section (3) of Section 20 where any case is referred to a Lok Adalat under sub-section (1) or where a reference is made to it under sub-section (2), the Lok Adalat shall proceed to dispose of the case or matter and arrive at a compromise or settlement between the parties. Sub-section (5) of Section 20 further provides that where no award is made by the Lok Adalat on the ground that no compromise or settlement could be arrived at between the parties, the record of the case shall be returned by it to the court, from which the reference has been received under sub-section (1) for disposal in accordance with law. 7. Thus, a fair reading of the aforesaid provisions of the Legal Services Authorities Act, 1987 makes it clear 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 and in any case, the Lok Adalat has no jurisdiction at all to decide the matter on meris once it is found that compromise or settlement could not be arrived at between the parties. 8. Identical question came to be considered by this Court in the case of State of Punjab and Ors. Vs. Ganpat Raj (supra) and after considering Section 20 of the Act, 1987, it is observed and held in paragraph 7 as under:- 7. The specific language used in sub-section (3) of Section 20 makes it clear that the Lok Adalat can dispose of a matter by way of a compromise or settlement between the parties. Two crucial terms in sub-sections (3) and (5) of Section 20 are compromise and settlement. The former expression means settlement of differences by mutual concessions. It is an agreement reached by adjustment of conflicting or opposing claims by reciprocal modification of demands. As per Termes de la Ley, compromise is a mutual promise of two or more parties that are at controversy. As per Bouvier it is an agreement between two or more persons, who, to avoid a law suit, amicably settle their differences, on such terms as they can agree upon. The word compromise implies some element of accommodation on each side. It is not apt to describe total surrender. (See NFU Development Trust Ltd., Re [(1973) 1 All ER 135 : (1972) 1 WLR 1548 (Ch D)] ). A compromise is always bilateral and means mutual adjustment. Settlement is termination of legal proceedings by mutual consent. The case at hand did not involve compromise or settlement and could not have been disposed of by the Lok Adalat. If no compromise or settlement is or could be arrived at, no order can be passed by the Lok Adalat. Therefore, the disposal of Civil Writ Petition No. 943 of 2000 filed by the respondent is clearly impermissible. 9. In view of the above, the impugned order passed by the Lok Adalat dismissing the writ petition on merits is unsustainable and deserves to be quashed and set aside. The submission made by the learned counsel appearing on behalf of the respondent that once the matter was placed before the Lok Adalat with consent, thereafter the entire matter is at large before the Lok Adalat and, therefore, the Lok Adalat is justified in disposing the matter on merits has no substance and the same is required to be rejected outright. The consent to place the matter before the Lok Adalat was to arrive at a settlement and or a compromise between the parties and not for placing the matter before the Lok Adalat for deciding the matter on merits. Once there is no compromise and/or a settlement between the parties before the Lok Adalat, as provided in sub-section (5) of Section 20, 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.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]7. Thus, a fair reading of the aforesaid provisions of the Legal Services Authorities Act, 1987 makes it clear 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 and in any case, the Lok Adalat has no jurisdiction at all to decide the matter on meris once it is found that compromise or settlement could not be arrived at between the parties.8. Identical question came to be considered by this Court in the case of State of Punjab and Ors. Vs. Ganpat Raj (supra) and after considering Section 20 of the Act, 1987, it is observed and held in paragraph 7 as under:-7. The specific language used in sub-section (3) of Section 20 makes it clear that the Lok Adalat can dispose of a matter by way of a compromise or settlement between the parties. Two crucial terms in sub-sections (3) and (5) of Section 20 are compromise and settlement. The former expression means settlement of differences by mutual concessions. It is an agreement reached by adjustment of conflicting or opposing claims by reciprocal modification of demands. As per Termes de la Ley, compromise is a mutual promise of two or more parties that are at controversy. As per Bouvier it is an agreement between two or more persons, who, to avoid a law suit, amicably settle their differences, on such terms as they can agree upon. The word compromise implies some element of accommodation on each side. It is not apt to describe total surrender. (See NFU Development Trust Ltd., Re [(1973) 1 All ER 135 : (1972) 1 WLR 1548 (Ch D)] ). A compromise is always bilateral and means mutual adjustment. Settlement is termination of legal proceedings by mutual consent. The case at hand did not involve compromise or settlement and could not have been disposed of by the Lok Adalat. If no compromise or settlement is or could be arrived at, no order can be passed by the Lok Adalat. Therefore, the disposal of Civil Writ Petition No. 943 of 2000 filed by the respondent is clearly impermissible.9. In view of the above, the impugned order passed by the Lok Adalat dismissing the writ petition on merits is unsustainable and deserves to be quashed and set aside. The submission made by the learned counsel appearing on behalf of the respondent that once the matter was placed before the Lok Adalat with consent, thereafter the entire matter is at large before the Lok Adalat and, therefore, the Lok Adalat is justified in disposing the matter on merits has no substance and the same is required to be rejected outright. The consent to place the matter before the Lok Adalat was to arrive at a settlement and or a compromise between the parties and not for placing the matter before the Lok Adalat for deciding the matter on merits. Once there is no compromise and/or a settlement between the parties before the Lok Adalat, as provided in sub-section (5) of Section 20, 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.