Lok Adalat or People’s Court is an informal mechanism that was introduced by way of the Legal Services Authority Act, 1987 to provide for a forum for settling of disputes pending in the Courts or at the pre-litigation stage. The primary objective of the Lok Adalats is to provide for a forum for amicable settlement of a dispute. All disputes excluding those that are non-compoundable in nature can be sought for settlement before a Lok Adalat. Lok Adalats are only restricted to providing solutions for a settlement and not to adjudicate as a Court. This question was answered by the Chattisgarh High Court in KK Distributers vs. State of Chhattisgarh
challenging the decision of the Lok Adalat Bench which had passed the order on merit in a dispute referred to it by holding that the offence so sought to be compounded are non-compoundable and passed the orders on merits by dismissing the application for compounding.

The Hon’ble Court observed that when the Lok Adalat is not able to conclude a referred dispute by way of settlement, the matter is to be returned to the Courts from which the reference was received for disposal as per the procedure of law. The Court referred to the judgment of the Hon’ble Supreme Court in B.P. Moideen Sevamandir and another Vs. A.M. Kutty Hassan {(2009) 2 SCC 198} which stated that:

“No Lok Adalat has the power to “hear” parties to adjudicate cases as a court does. It discusses the subject matter with the parties and persuades them to arrive at a just settlement. In their conciliatory role, the Lok Adalats are guided by principles of justice, equity, fair play. When the Legal Services Authorities Act refers to ‘determination’ by the Lok Adalat and ‘award’ by the Lok Adalat, the said Act does not contemplate nor require an adjudicatory judicial determination, but a non-adjudicatory determination based on a compromise or settlement, arrived at by the parties, with guidance and assistance from the Lok Adalat.”

By concluding upon its findings, the Hon’ble Justice Goutam Bhaduri made clear reference to the Supreme Court’s decision in the judgment of B.P. Moideen Sevamandir on the scope of Lok Adalats:

“8. When a case is referred to the Lok Adalat for settlement, two courses are open to it : (a) if a compromise or a settlement is arrived at between the parties, to make an award, incorporating such compromise or settlement (which when signed by the parties and countersigned by the members of the Lok Adalat, has the force of a decree); or (b) if there is no compromise or settlement, to return the record with a failure report to the court. There can be no third hybrid order by the Lok Adalat containing directions to the parties by way of final decision, with a further direction to the parties to settle the case in terms of such directions. In fact, there cannot be an `award’ when there is no settlement. Nor can there be any `directions’ by the Lok Adalat determining the rights/obligations/title of parties, when there is no settlement. The settlement should precede the award and not vice versa.”


Image Link: https://bit.ly/2KsnvlD

Order Link: https://drive.google.com/file/d/17vjfwY3Swr4oJIL4jzYNs93AH_4QFKFx/view