NATIONAL LAW INSTITUTE UNIVERSITY

C.P.C. Project on-

Scope for Judicial Review of Lok Adalats and Permanent Lok
Adalats:

A Critical Study

Submitted to:
Mr. P.K.Gupta

Submitted by:
Akanksha Tambulkar
2008 B.A.LL.B 47
A-0821

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 TABLE OF CONTENTS

 INTRODUCTION

 LOK ADALATS IN INDIA

 PERMANENT LOK ADALATS

 SCOPE FOR JUDICIAL REVIEW : A CRITICAL STUDY

 CONCLUSION

 BIBLIOGRAPHY

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 INTRODUCTION

Section 89 of the Civil Procedure Code

New Section 89 and Rules 1-A, 1-B, & 1-C in order X in the Code of Civil Procedure which
provide for a compulsory settlement of disputes by ADR. The formal acceptance of ADR not
just as an ‘alternative’ means, but as an additional method utilized by the Courts has never
been more apparent than it is via Section 89 of the Code of Civil Procedure. The purpose of
bringing Section 89 in the body of the Code has been so stated in the object clause—“with
view to implement the 129th report of Law Commission of India and to make conciliation
scheme effective, it is proposed to make it obligatory for the Court to refer the dispute after
issues are framed, for settlement either by way of arbitration, conciliation, mediation, judicial
settlement or through Lok Adalat”.

Section 89 of CPC is a new provision and even though arbitration or conciliation has been in
place as a mode for settling the disputes, this has not really reduced the burden on the courts.
Supreme Court of India in Salem Advocate Bar Association, T.N. Vs. Union of India 1 had
observed that modalities have to be formulated for the manner in which section 89 of CPC
and, for that matter, the other provisions which have been introduced by way of amendments,
may have to be in operation. A Committee was constituted by Supreme Court so as to ensure
that the amendments made become effective and result in quicker dispensation of justice.

Section 89 of CPC has been inserted to try and see that all the cases which are filed in court
need not necessarily be decided by the court itself. Keeping in mind the law’s delays and the
limited number of judges which are available, it has now become imperative that resort
should be had to ADR mechanism with a view to bring to an end litigation between the
parties at any early date. The ADR mechanism as contemplated by section 89 of CPC is
arbitration or conciliation or judicial settlement including settlement through Lok Adalat or
mediation.

As can be seen from Section 89 of CPC, its first part uses the word “shall” when it stipulates
that the “court shall formulate terms of settlement”. The use of the word “may” in later part
of Section 89 of CPC is that where it appears to the court that there exists an element of a
1
[2005] SC 381

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settlement which may be acceptable to the parties, they, at the instance of the court, shall be
made to apply their mind so as to opt for one or the other of the four ADR methods
mentioned in the Section and if the parties do not agree, the court shall refer them to one or
the other of the said modes. In other words section 89 of CPC is provision in law to facilitate
introduction of court annexed ADR. The CPC has clear provisions regarding ADR and the
people have started to reap the benefits of the system. Civil court can introduce ADR under
the provisions of the Civil Code for settling the disputes.

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 LOK ADALATS IN INDIA

ADR has been an integral part of our historical past. The institution of Lok Adalat in India, as
the very name suggests, means, People's Court. "Lok" stands for "people" and the vernacular
meaning of the term "Adalat" is the court. India has a long tradition and history of such
methods being practiced in the society at grass roots level. These are called panchayat and in
the legal terminology, these are called arbitration. These are widely used in India for
resolution of disputes both commercial and non-commercial. Other alternative methods being
used are Lok Adalat (People's Court), where justice is dispensed summarily without too much
emphasis on legal technicalities. It has been proved to be a very effective alternative to
litigation. The salient features of this form of dispute resolution are participation,
accommodation, fairness, expectation, voluntariness, neighbourliness, transparency,
efficiency and lack of animosity.

Legislation pertaining to Lok Adalats

The advent of Legal Services Authorities Act, 1987 gave a statutory status to Lok Adalats,
pursuant to the constitutional mandate in Article 39-A of the Constitution of India, contains
various provisions for settlement of disputes through Lok Adalat. It is an Act to constitute
legal services authorities to provide free and competent legal services to the weaker sections
of the society to ensure that opportunities for securing justice are not denied to any citizen by
reason of economic or other disabilities, and to organize Lok Adalats to secure that the
operation of the legal system promotes justice on a basis of equal opportunity.

Procedure at Lok Adalat

The procedure followed at a Lok Adalat is very simple and shorn of almost all legal
formalism and rituals. The Lok Adalat is presided over by a sitting or retired judicial officer
as the chairman, with two other members, usually a lawyer and a social worker. It is revealed
by experience that in Lok Adalats it is easier to settle money claims since in most such cases
the quantum alone may be in dispute. One important condition is that both parties in dispute
should agree for settlement through Lok Adalat and abide by its decision. A Lok Adalat has
the jurisdiction to settle, by way of effecting compromise between the parties, any matter
which may be pending before any court, as well as matters at pre-litigative stage i.e. disputes
which have not yet been formally instituted in any Court of Law. Such matters may be civil
or criminal in nature, but any matter relating to an offence not compoundable under any law

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cannot be decided by the Lok Adalat even if the parties involved therein agree to settle the
same. Anyone, or more of the parties to a dispute can move an application to the court where
their matter may be pending, or even at pre-litigative stage, for such matter being taken up in
the Lok Adalat whereupon the Lok Adalat Bench constituted for the purpose shall attempt to
resolve the dispute by helping the parties to arrive at an amicable solution and once it is
successful in doing so, the award passed by it shall be final which has as much force as a
decree of a Civil Court obtained after due contest.

Finality of Lok Adalat award

One issue which raises its head often is the finality of the award of the Lok Adalat. During
the Lok Adalat, the parties agree to abide by the decision of the judge at the Lok Adalat.
However, it is often seen that later, the same order is challenged on several grounds. In
unequivocal terms, the Court has held that award of the Lok Adalat is as good as the decree
of a Court. The award of the Lok Adalat is fictionally deemed to be decrees of Court and
therefore the courts have all the powers in relation thereto as it has in relation to a decree
passed by itself.

Consent of Parties

The most important factor to be considered while deciding the cases at the Lok Adalat is the
consent of both the parties. It cannot be forced on any party that the matter has to be decided
by the Lok Adalat. However, once the parties agree that the matter has to be decided by the
Lok Adalat, then any party cannot walk away from the decision of the Lok Adalat. In several
instances, the Supreme Court has held that if there was no consent the award of the Lok
Adalat is not executable and also if the parties fail to agree to get the dispute resolved through
Lok Adalat, the regular litigation process remains open for the contesting parties.

Benefits of Lok Adalat

The benefits that litigants derive through the Lok Adalats are many.

1. There is no court fee and even if the case is already filed in the regular court, the fee
paid will be refunded if the dispute is settled at the Lok Adalat.
2. There is no strict application of the procedural laws and the Evidence Act while
assessing the merits of the claim by the Lok Adalat. The parties to the disputes though
represented by their advocate can interact with the Lok Adalat judge directly and

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 explain their stand in the dispute and the reasons therefore, which is not possible in a
regular court of law.
3. Disputes can be brought before the Lok Adalat directly instead of going to a regular
court first and then to the Lok Adalat.
4. The decision of the Lok Adalat is binding on the parties to the dispute and its order is
capable of execution through legal process. No appeal lies against the order of the
Lok Adalat whereas in the regular law courts there is always a scope to appeal to the
higher forum on the decision of the trial court, which causes delay in the settlement of
the dispute finally. The reason being that in a regular court, decision is that of the
court but in Lok Adalat it is mutual settlement and hence no case for appeal will arise.
5. Last but not the least, faster and inexpensive remedy with legal status.

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 PERMANENT LOK ADALATS

In India, during the last few years Lok Adalat has been functioning continuously and
permanently in every district centre. The major defect of the mechanism of Lok Adalat is that
it cannot take a decision, if one of the parties, is not willing for a settlement, though the case
involves an element of settlement.

In 2002, Parliament brought about certain amendments to the Legal Services Authorities Act,
1987. The said amendment introduced Chapter VI-A with the caption PRE LITIGATION
CONCILIATION AND SETTLEMENT. Section 22-B envisages establishment of
"PERMANENT LOK ADALATS (PLA)" at different places for considering the cases in
respect of Public Utility Services (PUS).

If there is a dispute with respect to PUS, as per Section 22-C(1), any party to such a dispute
can, before bringing it to a court of law for adjudication, make an application to PLA for the
settlement of that dispute. The party making such application need not be a party who raises a
claim against a public utility service. If a claim is made by one against a public utility service,
the establishment carrying out the public utility service can also raise that dispute before PLA
to resolve it. The only limitation is that PLA shall not have jurisdiction to consider a dispute
relating to an offence not compoundable under any law or any matter where the value of the
property in dispute exceeds Rs 10 lakhs. But the Central Government can, by an appropriate
notification, increase this limit. Once an application has been made to PLA by one party, no
party to that application shall invoke the jurisdiction of any court in the same dispute.

The parties are also obliged to cooperate in good faith with PLA. If PLA is of the opinion that
"there exist elements of settlement in such proceedings, which may be acceptable to the
parties", it shall formulate the terms of possible settlement, communicate its observations to
the parties and if the parties agree, the settlement shall be signed and an award shall be passed
in terms of such settlement and copies of the award shall be furnished to the parties. For the
purpose of holding any determination the Permanent Lok Adalat shall have the same powers
as are vested in a civil court under the Code of Civil Procedure, 1908 while trying a suit, in
respect of summoning and enforcing of attendance and examining of witnesses, discovery or
production of documents, reception of evidence on affidavits, requisitioning of public records
and documents and such other matter as the Government may prescribe. PLA can specify its
own procedure for deciding the dispute coming before it and the proceedings shall be deemed

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to be judicial proceedings. The award of PLA, whether made on merit or on settlement shall
be final and binding on parties and be deemed to be a decree of a civil court. It shall be
executed as if it is a decree of a civil court having jurisdiction in respect of the dispute
involved. But the award cannot be called in question in any "original suit, application or
execution proceedings.

This will, certainly, prove to be very effective, litigant-friendly and less-expensive

mechanism to resolve certain serious disputes. As PUS are rendered mainly by corporate
bodies, this virtually will be a forum for ordinary men and women to ventilate their
grievances against such corporate bodies. In the changing economic scenario of the country
where insurance, communication and other services are thrown open to corporate giants, it is
all the more necessary to provide for cost-effective and delay-free tools for resolution of
disputes.

There is sharp criticism against this machinery both in its constitution and its functioning
especially from lawyers. The main opposition against the amendment is based on the
following viz. (1) with regard to the constitution of PLA; (2) insofar as PLA is given the
power to decide a dispute unlike the ordinary Lok Adalats (LA) envisaged as per Section 19
of the Act which only conciliates the dispute; and (3) absence of provision for appeal against
the decision of PLA.

There is criticism that the persons so appointed will not have legal background. Presently, the
specialised tribunals are appointed with the representatives of social organisations or experts.
In the case of machineries set up to try disputes raised by consumers, members other than
Chairman are persons without legal background. Even in administrative tribunals, persons
without legal background, but only with administrative experience are appointed as members.
Along with persons with judicial background experts or experienced persons without legal
background are also appointed in other alternative dispute redressal forums.

The second criticism is with regard to the functioning of PLA insofar as it is given the power
to decide a dispute when the parties do not agree for a settlement. While deciding the dispute,
it is made clear that the provisions of the Code of Civil Procedure and the Indian Evidence
Act will not have application. In other words, the determination or decisions will be in a
summary manner. As already mentioned above, PLA is given ample power in the matter of
reception of evidence, examination of witnesses etc. the power that a civil court has. If the
parties do not come to a settlement, PLA shall decide the dispute. That means PLA is not

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given the power to decide every dispute coming before it. Only those disputes where there
exist elements of settlement can be decided by the Permanent Lok Adalat. The decision or the
opinion of the Permanent Lok Adalat as to whether there exist elements of settlement is also a
matter which can be subjected to judicial review under Article 226 of the Constitution of
India. PLA shall be guided by the "principles of natural justice, objectivity, fair play, equity
and other principles of justice". Thus, a fair procedure is always envisaged. Therefore, there
is no reason for any criticism on the power granted to PLA to decide the dispute in the event
of a settlement not being arrived at despite the existence of an element of settlement.

It cannot be said that there is no appeal against the decision of PLA. So far as the ordinary
Lok Adalats (LA) are concerned which is in existence even prior to the amendment and is
still being continued no appeal will lie against an award of that Lok Adalat. Under the civil
procedure law also no appeal shall lie from a decree passed on consent of the parties. This is
the reason the Act declares that "no appeal shall lie to any court against the award" of
ordinary Lok Adalat (LA) envisaged in Chapter VI of the Act.

But the award of Permanent Lok Adalat (PLA) envisaged in the newly introduced Chapter
VI-A is different. If it is an award upon consent of parties and is as a result of compromise,
necessarily, nobody will think of an appeal. When there is a decision by PLA, as the parties
did not agree for a compromise, it is possible that the aggrieved party may think of an appeal.
Every award of the Permanent Lok Adalat, whether it is based on consent of the parties, or on
compromise or upon the decision, "shall be deemed to be a decree of a civil court". Thus the
decision taken by PLA will have all the attributes of a decree of a civil court. It is not stated
anywhere in the Act that an award of a PLA shall not be called in question in any appeal, as
is done in the case of the award of an ordinary Lok Adalat (LA) in Section 21(2) of the Act.
Certainly, appeal will lie only if it is provided somewhere by law. Otherwise, one cannot file
an appeal. It seems that the provision of Section 96(1) CPC could be relied on to establish
that an appeal is not excluded.

Section 96(1) of the Code of Civil Procedure, 1908 provides:

Save where otherwise expressly provided in the body of this Code or by any other law
for the time being in force, an appeal shall lie from every decree passed by any court
exercising original jurisdiction to the court authorized to hear appeals from the
decisions of such court." When the award of PLA is treated as a decree of civil court
and as it is not otherwise provided in the Legal Services Authorities Act that no

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 appeal shall lie from such award, necessarily, that being deemed a civil court decree,
an appeal shall lie from that decree.

An award of PLA shall be executed by a civil court "having local jurisdiction" depending
upon the amount of the decree. Necessarily, an appeal shall also lie to a court depending upon
the quantum of the amount involved in the decree or to the High Court being a decision of a
body consisting of three persons of which a District Judge or a retired District Judge is the
Chairman. So there is possibility for a judicial review in an appeal.

The manifest difference in the provisions relating to the awards of PLA and LA is not
accidental. The difference really means that an appeal is possible against an award of PLA in
terms of Section 96(1) of the Code of Civil Procedure, when it is not specifically barred by
the Legal Services Authorities Act, 1987 and as the award has all the attributes of a decree of
a civil court. Even otherwise, the jurisdiction under Article 226 of the Constitution of India
cannot be ruled out, being one among the basic features of the Constitution of India.
Therefore, the criticism that the award of PLA cannot be called in question in a higher forum
has no force. Moreover, PLA is a machinery to settle or decide disputes relating to public
utility services.

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 SCOPE FOR JUDICIAL REVIEW: A CRITICAL STUDY

The large population of India and the illiterate masses have found the regular dispensation of
justice through regular courts very cumbersome and ineffective. The special conditions
prevailing in the Indian society and due to the economic structure, highly sensitized legal
service is required which is efficacious for the poor and ignorant masses. The Lok Adalat
movement is no more an experiment in India. It is now a success and but needs to be
replicated in certain matters. We have to analyze whether there is any need for a judicial
review in the current status and scenario of Lok Adalats .

As aforesaid mentioned the objective of the Lok Adalats, the intention of the legislator has
been to put an end to the disputes summarily and reduce the burden of the courts. Therefore,
the Lok Adalats decide the matters on a consent/ compromise basis. The Lok Adalat passes
the award after the parties have agreed on the settlement and have given consent over it. The
Lok Adalat will passes the award with the consent of the parties, therefore there is no need
either to reconsider or review the matter again and again, as the award passed by the Lok
Adalat shall be final. Even as under Section 96 of C.P.C. that "no appeal shall lie from a
decree passed by the Court with the consent of the parties". The award of the Lok Adalat is
an order by the Lok Adalat under the consent of the parties, and it shall be deemed to be a
decree of the Civil Court, therefore an appeal shall not lie from the award of the Lok Adalat
as under Section 96 C.P.C.

In Punjab National Bank v. Lakshmichand Rai 2 the High Court held that "The provisions of
the Act shall prevail in the matter of filing an appeal and an appeal would not lie under the
provisions of Section 96 C.P.C. Lok Adalat is conducted under an independent enactment and
once the award is made by Lok Adalat the right of appeal shall be governed by the provisions
of the Legal Services Authorities Act when it has been specifically barred under Provisions of
Section 21(2), no appeal can be filed against the award under Section 96 C.P.C." The Court
further stated that "It may incidentally be further seen that even the Code of Civil Procedure
does not provide for an appeal under Section 96 against a consent decree. The Code of Civil
Procedure also intends that once a consent decree is passed by Civil Court finality is attached
to it. Such finality cannot be permitted to be destroyed, particularly under the Legal Services
Authorities Act, as it would amount to defeat the very aim and object of the Act with which it
has been enacted; hence, we hold that the appeal filed is not maintainable.

2
 AIR 2000 MP 301

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The High Court of Andhra Pradesh held that, in Board of Trustees of the Port of
Visakhapatnam v. Presiding Officer3, Permanent Lok Adalat held that “The award is
enforceable as a decree and it is final.” The endeavour is only to see that the disputes are
narrowed down and make the final settlement so that the parties are not again driven to
further litigation or any dispute.

It is quite clear that, a matter of consent decree need not go on an appeal. However, the power
of judicial review in a given case is implicit under the Constitution unless expressly excluded
by a provision of the Constitution. This power is available to correct any order passed by a
statutory authority which is violative of any of the provisions of the statute. The Lok Adalat
is a creation of statute and gets jurisdiction from it and hence this Court is competent to go
into an order passed by it, to decide whether the order in question is valid in law. The writ
jurisdiction of the High Court cannot be circumscribed by provisions of any enactment as is
to be found in Section 21 of the Act and it can always exercise its jurisdiction if an order, left
alone, would amount to abrogating the rule of law.

The question of appeal and judicial review in the case of a PLA is however different. It
cannot be said that there is no appeal against the decision of PLA. If it is an award upon
consent of parties and is as a result of compromise, necessarily, nobody will think of an
appeal. When there is a decision by PLA, as the parties did not agree for a compromise, it is
possible that the aggrieved party may think of an appeal. Every award of the Permanent Lok
Adalat, whether it is based on consent of the parties, or on compromise or upon the decision,
"shall be deemed to be a decree of a civil court". Thus the decision taken by PLA will have
all the attributes of a decree of a civil court. Every decree, unless it is appealed against and so
long as it is allowed to continue, will be final and binding on the parties. Same is the case of
an award of PLA. It is true that there is no provision for appeal. But appeal is not expressly
excluded, in the case of award of PLAs. It is not stated anywhere in the Act that an award of a
PLA shall not be called in question in any appeal, as is done in the case of the award of an
ordinary Lok Adalat (LA) in Section 21(2) of the Act.

An award of PLA shall be executed by a civil court "having local jurisdiction" depending
upon the amount of the decree. Necessarily, an appeal shall also lie to a court depending upon
the quantum of the amount involved in the decree or to the High Court being a decision of a

3
[2000] 5 A.L.T 577

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body consisting of three persons of which a District Judge or a retired District Judge is the
Chairman. So there is possibility for a judicial review in an appeal.

In the case of the awards of ordinary Lok Adalat (LA), the statute the very same legislature
did not legislate such a provision when it dealt with the award of PLA. The manifest
difference in the provisions relating to the awards of PLA and LA is not accidental. The
difference really means that an appeal is possible against an award of PLA in terms of
Section 96(1) of the Code of Civil Procedure, when it is not specifically barred by the Legal
Services Authorities Act, 1987 and as the award has all the attributes of a decree of a civil
court. Even otherwise, the jurisdiction under Article 226 of the Constitution of India cannot
be ruled out, being one among the basic features of the Constitution of India. The question of
appeal in case of Lok Adalat and Permanent Lok Adalat is therefore clear.

There is always the scope to go for a writ petition to challenge the award in case of any grave
illegality. The probability of fraud, misrepresentation, force etc while arriving at the consent
or compromise cannot be ruled out. There is again a chance that the one of the parties may
not be in a position to understand the nature of the legality of the proceedings and an award
has been passed due to the sheer negligence of the judge. The likelihood of such events
cannot be ruled out. In Mansukhlal Vithaldas Chauhan v. State of Gujarat 4, it was held that;
the duty of the Court is to confine itself to the question of legality. Its concern should be, (i)
whether the decision-making authority exceeded its powers; (ii) committed an error of law;
(iii) committed a breach of the rules of natural justice; (iv) reached a decision which no
reasonable Tribunal would have reached; or (v) abused its powers.

4
[1997] SC 701

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 CONCLUSION

The right of judicial review or appeal is fundamental in all legal matters and making the
decision of the permanent Lok Adalats final, without the right of appeal, will vest unrestricted
power in the hands of a tribunal in which two non-officials can dominate, it will impair the
administration of justice. There are no unreviewable discretions under the constitutional
dispensation. The overall constitutional function to ensure that constitutional authorities
function within the sphere of their respective constitutional authority is that of the Courts.
The enunciation by the Apex Court making even an order by a constitutional authority
reviewable should leave no doubt in any one's mind that a discretion exercised by a statutory
authority would be well-within the reviewable discretion of this Court. But one tends to
forget the forum of judicial review is always open for the parties through the writ petitions.
This is a basic feature of the Constitution and cannot be ruled out. Denial of it would be
unfair and unwarranted. The ultimate result would be that all these matters will come
knocking at the doors of the High Court, thus suffocating an already overloaded High Court.

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 BIBLIOGRAPHY

1. C.K. Takwani, ‘Civil Procedure’, 5th Edition, Eastern Book Company.

2. Sarkar, ‘The Code of Civil Procedure, 1908’, Sudipto Sarkar, V.R. Manohar, 11th
Edition, Wadhwa Publications Nagpur
3. AIR Commentaries, ‘The Code of Civil Procedure, 1908’, Vol.1, The AIR Ltd. 1977
4. www.vakilno1.com

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