Lok Adalats and Permanent Lok Adalats

1. Background

Lok Adalats (“people's courts”) began as camps organised by legal aid boards in the early 1980s, Gujarat holding one of the first in 1982. They were given statutory status by Chapter VI (sections 19 to 22) of the Legal Services Authorities Act, 1987, which came into force on 9 November 1995. The Act implements Article 39A. Chapter VIA (sections 22A to 22E), inserted by the amending Act of 2002, created Permanent Lok Adalats.

2. Organisation (section 19(1) to (4))

• Lok Adalats may be organised by the State Authority, District Authority, Supreme Court Legal Services Committee, High Court Legal Services Committee or Taluk Legal Services Committee, at such intervals and places and for such jurisdiction as it thinks fit.
• Each Lok Adalat consists of serving or retired judicial officers and other persons of the area as specified by the organising authority (section 19(2)), with qualifications prescribed by the Central or State Government in consultation with the Chief Justice concerned.
• National Lok Adalats are now held on fixed days across the country under NALSA's calendar.

3. Jurisdiction (section 19(5))

A Lok Adalat has jurisdiction to determine and to arrive at a compromise or settlement between the parties in respect of (i) any case pending before, or (ii) any matter falling within the jurisdiction of and not brought before, any court for which it is organised. The proviso excludes any case or matter relating to an offence not compoundable under any law. Compoundable offences can therefore be settled in a Lok Adalat.

4. How a case reaches a Lok Adalat (section 20)

• Pending case (section 20(1)): the court refers it if (i)(a) the parties agree, or (i)(b) one party applies and the court is prima facie satisfied that there are chances of settlement, or (ii) the court is satisfied that the matter is appropriate for the Lok Adalat. Under (i)(b) and (ii), the parties must first be given a reasonable opportunity of being heard.
• Pre-litigation matter (section 20(2)): the organising authority may refer a matter on the application of any one party, after hearing the other party.
• The Lok Adalat must act with utmost expedition and be guided by the principles of justice, equity, fair play and other legal principles (section 20(4)).
• If no settlement: in a referred case, the record is returned to the court (section 20(5)), which proceeds from the stage reached before the reference (section 20(7)); in a pre-litigation matter, the parties are advised to seek a remedy in court (section 20(6)).

5. Award and its finality (section 21)

• Every award is deemed to be a decree of a civil court or an order of any other court (section 21(1)).
• Where a settlement is reached in a case referred by a court, the court fee is refunded under the Court-fees Act, 1870.
• Every award is final and binding on all parties, and no appeal lies to any court against it (section 21(2)). The remedy against an award obtained without consent or by fraud is a writ petition under Article 226 or 227.

6. Powers (section 22)

For the purposes of its determination a Lok Adalat has the powers of a civil court under the CPC to summon witnesses and examine them on oath, require discovery and production of documents, receive evidence on affidavit and requisition public records. It may specify its own procedure. Its proceedings are judicial proceedings for the purposes of the offences of false evidence and contempt of a public servant in a judicial proceeding (the section still refers to sections 193, 219 and 228 of the Indian Penal Code; the corresponding provisions are now in the Bharatiya Nyaya Sanhita, 2023).

7. Permanent Lok Adalats (sections 22A to 22E)

• Public utility services (section 22A(b)): transport of passengers or goods by air, road or water; postal, telegraph or telephone service; supply of power, light or water; public conservancy or sanitation; hospital or dispensary service; insurance; and any service notified by the Government. Housing and banking have been notified in several States.
• Composition (section 22B(2)): a chairman who is or has been a district judge or held higher judicial office, and two other persons with experience in public utility service.
• Jurisdiction (section 22C(1)): any party may apply before the dispute is brought before a court. No jurisdiction over non-compoundable offences, and a pecuniary limit on the value of the property in dispute, which the Central Government may raise by notification. Once an application is made, no party may go to court on the same dispute (section 22C(2)).
• Procedure: written statements, then conciliation; if elements of settlement exist, the Permanent Lok Adalat formulates terms, and if the parties agree and sign, passes an award in those terms (section 22C(7)). If they do not agree, it decides the dispute on merits, provided the dispute does not relate to an offence (section 22C(8)). It is guided by natural justice, objectivity, fair play and equity, and is not bound by the CPC or the Evidence Act (section 22D).
• Award (section 22E): final and binding, deemed a decree, made by majority, not to be called in question in any original suit, application or execution, and executable by the civil court to which it is transmitted.

8. The leading cases

• State of Punjab v. Jalour Singh, 2008 INSC 66, (2008) 2 SCC 660. A Lok Adalat enhanced compensation in a motor accident appeal without the consent of the insurer. Held: a Lok Adalat can only make an award on a compromise; an “award” without consent is without jurisdiction, and such an award is open to challenge in a writ petition, since no appeal lies.
• B.P. Moideen Sevamandir v. A.M. Kutty Hassan, 2008 INSC 1432, (2009) 2 SCC 198. Section 20(5) gives a party whose case is not settled the right to have it decided on merits, whatever his behaviour in the Lok Adalat. The High Court was wrong to dismiss a second appeal because the party had been unreasonable before the Lok Adalat.
• Estate Officer v. Colonel H.V. Mankotia (Retired), 2021 INSC 635. A Lok Adalat dismissed a writ petition on merits. Held: once no compromise is reached, the Lok Adalat has no jurisdiction at all to decide the matter and must return it to the court.

Section 26 of the Mediation Act, 2023 (in force from 9 October 2023) provides that the Mediation Act does not apply to proceedings before Lok Adalats and Permanent Lok Adalats.

9. Problem

Venkatesh and Sanjay illegally earned Rs. 5,000. They differ over how to divide it and wish to settle the matter in the Lok Adalat. Advise. (June 2019)

Issue. Whether a Lok Adalat can settle a dispute over the division of money obtained illegally.

Law. A Lok Adalat may settle any dispute within the jurisdiction of a court (section 19(5)), except a matter relating to a non-compoundable offence, and must be guided by justice, equity, fair play and legal principles (section 20(4)). Its award is a decree (section 21). Under section 23 of the Indian Contract Act, 1872 an agreement whose object is unlawful, or which would defeat the provisions of any law, is void, and no court enforces it; the parties are in pari delicto.

Application. The “dispute” is a claim to share the proceeds of an illegal act. Neither party has a right that a civil court would recognise, so there is no matter “falling within the jurisdiction of a court” to compromise. A Lok Adalat bound by legal principles cannot put its stamp on such a division, and an award in those terms would itself be a decree enforcing an unlawful object. If the money was earned by an offence that is not compoundable, the proviso to section 19(5) bars the Lok Adalat outright.

Conclusion. The Lok Adalat should decline the matter. Venkatesh and Sanjay have no enforceable claim against each other, and the source of the money may expose both to prosecution.

Second problem: X caused simple hurt to Y and wants to settle the dispute. Advise. (November 2021)

Voluntarily causing hurt is punishable under section 115(2) of the Bharatiya Nyaya Sanhita, 2023 (old section 323 IPC). Under the table to section 359(1) of the Bharatiya Nagarik Suraksha Sanhita, 2023 (old section 320 CrPC) it may be compounded by the person to whom the hurt is caused, without the court's permission. Because the offence is compoundable, the proviso to section 19(5) does not bar a Lok Adalat, and a pending case can be referred under section 20(1). X should offer Y compensation and an apology; if Y agrees, the compromise is recorded and the composition has the effect of an acquittal (section 359(8) BNSS). Under the first proviso to section 6(1) of the Mediation Act, 2023, a court may also refer a compoundable offence to mediation once that provision is in force, but the outcome then goes back to the criminal court for orders. Settlement depends on Y's consent; X cannot force it.

How this is examined

“Explain the provisions relating to Lok Adalat” (December 2019) is answered in the order of sections 19, 20, 21 and 22, then Permanent Lok Adalats, then Jalour Singh and Mankotia. The June 2019 problem on illegally earned money and the November 2021 problem on simple hurt are answered as above; the key in both is the proviso to section 19(5) on non-compoundable offences.