Source: Rajasthan High Court 

Why in News? 

A bench of Justice Anoop Kumar Dhand held that an award by the Lok Adalat can be assailed only if the same is passed without jurisdiction or is obtained through impersonation or playing fraud with the Court.      

• The Rajasthan High Court held this in the case of Virendra Singh v. Rajasthan State Road Transport Corporation.  

What was the Background of Virendra Singh v. Rajasthan State Road Transport Corporation Case? 

• Virendra Singh was appointed to the post of conductor on compassionate grounds on probation for a period of two years. 
• His services were terminated on 26th December 2014 on the ground that certain passengers were found travelling without ticket at the time of inspection despite that fact though the requisite amount for tickets were collected by the workman from the passengers.  
• Aggrieved by the termination the Court filed a writ petition but the same was dismissed on the ground of availability of alternate remedy of raising a dispute under the Industrial Disputes Act, 1947 (IDA). 
• The above order was challenged before the Division Bench and the same was allowed. 
• This order was upheld by the Supreme Court, and it was held that the order of termination of the workman was stigmatic, and the principles of natural justice was violated. 
• Thus, the termination order was quashed and set aside, and the direction was issued to the RSRTC to reinstate the workman in service without back wages. 
• The RSRTC was granted liberty to hold a proper disciplinary inquiry against the workman if advised. 
• The petitioner RSRTC was not satisfied with the order of the Division Bench and on the basis of consent given by both the parties the matter was referred to the National Lok Adalat to explore the possibility of settlement. 
• RSRTC has assailed the impugned award on the technical ground of absence of counsels.  

What were the Court’s Observations? 

• The impugned award in question indicated that the same was passed in the terms of the RSRTC Office order/policy decision. 
• The awards passed on the basis of the office order and on the basis of the consent given by the RSRTC’s standing counsel. 
• Such consent awards act as estoppel against the RSRTC and the same are binding on the parties from which the RSRTC cannot wriggle out by taking an afterthought plea that the lawyer was not authorized to enter into settlement. 
• Hence, the petitioner cannot be allowed to assail the validity of the awards passed by the National Lok Adalat unless it is established on record that any fraud or mischief has been played with the petitioner.

What is a Lok Adalat?

About:  

• ‘Lok Adalat’ is an ancient old form of adjudicating system that was prevalent in ancient India and was part of the traditional Indian Culture and social life. 
• The ‘Lok Adalat’ means “People’s Court”. ‘Lok’ stands for “people” and the term ‘Adalat’ means “Court”. 
• Lok Adalat is one of the alternative dispute redressal mechanisms established under the Legal Services Authorities Act, 1987 (LSA). 
• It is a forum where disputes/ cases pending before the Court of Law are settled/ compromised amicably. 
• Lok Adalat aims to provide cost-effective, timely and amicable resolutions of disputes, reducing the case load of the Courts and promoting social harmony. 
• The Lok Adalat is a way where both parties win, and no one loses.

Award Passed by Lok Adalat:

• Section 21 of LSA provides for the award of Lok Adalat. 
• Section 21 (1) provides that: 
  • Every award passed by the Lok Adalat shall be deemed to be a decree of Civil Court or as the case may be an order of any other Court 
  • Where a compromise or settlement has been arrived at by the Lok Adalat the court fee paid in such case shall be refunded in the manner provided under the Court fees Act, 1870. 
• Section 21 (2) provides that every award made by a Lok Adalat shall: 
  • Be final and binding on all parties to the dispute.  
  • No appeal shall be made to any court against the award.

What are the Case Laws on the Enforceability of an Award Passed by the Lok Adalat? 

• K. Srinivasappa & Ors v. M. Mallamma & Ors. (2022):  
  • The Court held that a writ petition is maintainable against the award passed by the Lok Adalat especially when such a petition has been filed alleging fraud in the manner of obtaining the award of compromise. 
  • A writ court cannot in a casual manner de hors any reasoning set aside the order of the Lok Adalat. 
  • The award of a Lok Adalat cannot be reversed or set aside without setting aside the facts recorded in such award as being fraudulent arrived at. 
• P.T. Thomas v. Thomas Job (2005): 
  • When the Lok Adalat disposes cases in terms of a compromise arrived at between the parties to a suit, after following principles of equity and natural justice, every such award of the Lok Adalat shall be deemed to be a decree of a Civil Court, and such decree shall be final and binding upon the parties. 
  • No appeal under Section 96 of Civil Procedure Code, 1908 (CPC) shall lie against the award given the finality attached to an award.