Judgment Summarized by Delhi Law Academy – Jaipur
The appellants were the defendants in a suit for declaration and mandatory injunction. The pending second appeal was referred to the Lok Adalat organized by the Kerala High Court Legal Services Committee on 25.5.2007. Before the Lok Adalat, parties apparently arrived at a tentative settlement. Negotiations were unsuccessful and the Lok Adalat consisting of two retired Judges of the High Court sent the following failure report dated 3.4.2008 to the court:
“We have discussed the matter with the counsel and their parties and considering the nature of demand made by the appellants, there is no chance of settlement.”
The second appeal was thereafter listed for the final hearing on 19.8.2008 before a learned Single Judge. When the matter reached hearing in the post-lunch session, an advocate attached to the office of the appellants’ counsel submitted that the appeal was to be argued by his colleague Mrs. Santa, that due to personal inconvenience she could not be present during that session, and that therefore the matter may be adjourned to the next day. The learned Single Judge rejected the request and dismissed the appeal. The operative portion of the order dated 19.8.2008 is extracted below:
“I see no reason why any further adjournment is to be granted in the appeal of 2005 when the parties are wilfully abstaining from arriving at any settlement despite an award passed at the Adalath on agreement. In the result, I dismiss this appeal for default.”
Application for restoration of appeal was dismissed by the learned Single Judge on 29.8.2008.
“I see no reason to allow the MJC in the circwnstances, so as to enable a cantankerous litigant to continue prot racting the litigation even after an award is passed at the Adalat.”
It is unfortunate that the learned members of the Lok Adalat and the learned Single Judge totally lost sight of the purpose and scope of Lok Adalats. We may conveniently recall what this Court has said about the scope of Lok Adalats, (after referring to the relevant provisions of the Legal Services Authorities Act, 1987), in State of Punjab v. Jalour Singh [2008 SC]
“It is evident from the said provisions that Lok Adalats have no adjudicatory or judicial functions. Their functions relate purely to conciliation. A Lok Adalat determines a reference on the basis of a compromise or settlement between the parties at its instance, and put its seal of confirmation by making an award in terms of the compromise or settlement. When the Lok Adalat is not able to arrive at a settlement or compromise, no award is made and the case record is returned to the court from which the reference was received, for disposal in accordance with law. 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 LSA 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. The ‘award’ of the Lok Adalat does not mean any independent verdict or opinion arrived at by any decision making process. The making of the award is merely administrative act of incorporating the terms of settlement or compromise agreed by parties in presence of the Lok Adalat, in the form of an executable order under signature and seal of Lok Adalat.
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. When the Lok Adalat records the minutes of a proceeding referring to certain terms and directs the parties to draw a compromise deed or a memorandum of settlement and file it before the court, it means that there is no final or concluded settlement and the Lok Adalat is only making tentative suggestions for settlement; and such a proceeding recorded by the Lok Adalat, even if it is termed as an ‘award’, is not an ‘award of the Lok Adalat.
Although the members of Lok Adalats have been doing a commendable job, sometime they tend to act as Judges, forgetting that while functioning as members of Lok Adalats, they are only statutory conciliators and have no judicial role. Any overbearing attitude on their part, or any attempt by them to pressurize or coerce parties to settle matters before the Lok Adalat (by implying that if the litigant does not agree for settlement before the Lok Adalat, his case will be prejudiced when heard in court), will bring disrepute to Lok Adalats as an alternative dispute resolution process (for short ‘ADR process’) and will also tend to bring down the trust and confidence of the public in the Judiciary.
In this case the proceedings dated 25.5.2007 is termed as an ‘award’. It is also described as an ‘order’ and ‘directs’ the appellant to vacate certain buildings on or before 31.7.2007 and further directs that on such surrender, another portion shall belong to the appellants. Such an ‘award’ could have been made by the Lok Adalat only when there was a final settlement between the parties. The procedure adopted by the Lok Adalat on 25.5.2007, was clearly erroneous and illegal. The learned counsel for the respondent stated that the Lok Adalat followed the said procedure of passing an ‘Award dated 25.5.2007 and directing parties to file a compromise in the court, only to enable the appellants to get refund of court fee.
Such strange orders by Lok Adalats are the result of lack of appropriate rules or guidelines. Thousands of Lok Adalats are held all over the country every year. Many members of Lok Adalats are not judicially trained. There is no fixed procedure for the LokAdalats and each Adalat adopts its own procedure. Different formats are used by different Lok Adalats when they settle the matters and make awards. We have come across Lok Adalats passing orders’, issuing directions’ and even granting declaratory relief, which are purely in the realm of courts or specified Tribunals, that too when there is no settlement. As an award of a Lok Adalat is an executable decree, It is necessary for the Lok Adalats to have an uniform procedure, prescribed Registers and standardized formats of awards and permanent record of the awards, to avoid misuse or abuse of the ADR process. We suggest that the National Legal Services Authority as the apex body, should issue uniform guidelines for the effective functioning of the Lok Adalats. The principles underlying following provisions in the Arbitration and Conciliation Act, 1996 relating to conciliators, may also be treated as guidelines to members of Lok Adalats, till uniform guidelines are issued S.67 relating to role of conciliators; S.75 relating to confidentiality; and S.86 relating to admissibility of evidence in other proceedings.
Lok Adalats should also desist from the temptation of finding fault with any particular litigant, or making a record of the conduct of any litigant during the negotiations, in their failure report submitted to the court, lest it should prejudice the mind of the court while hearing the case.
We may now turn to the role of courts with reference to Lok Adalats. Lok Adalats is an alternative dispute resolution mechanism. Having regard to section 89 of Code of Civil Procedure, it is the duty of court to ensure that parties have recourse to the Alternative Dispute Resolution (for short ADR’) processes and to encourage litigants to settle their disputes in an amicable manner. But there should be no pressure, force, coercion or threat to the litigants to settle disputes against their wishes. Judges also require some training in selecting and referring cases to Lok Adalats or other ADR processes. Mechanical reference to unsuited mode of ADR process may well be counter-productive. A plaintiff who comes to court alleging unlawful encroachment by a neighbour may well ask what kind of settlement he should have with an encroacher in a Lok Adalat. He cannot obviously be asked to sacrifice a part of his land for purposes of amicable settlement thereby perpetuating the illegality of an encroachment. A plaintiff alleging fraud and forgery of documents against a defendant may well ask what settlement he can have with a fraudster or forger through ADR process as any settlement may mean yielding to or accepting fraud or forgery.
When a case is to be heard and decided on merits by a court, the conduct of the party before the Lok Adalat or other ADR for, howsoever stubborn or unreasonable, is totally irrelevant. A court should not permit any prejudice to creep into its judicial mind, on account of what it perceives as unreasonable conduct of a litigant before the Lok Adalat. Nor can its judgment be affected’ by the cantankerous conduct of a litigant. It cannot carry ‘ill-will’ against a litigant, because he did not settle his case. It is needless to remind the oath of office, which a Judge takes when assuming office. He is required to perform his duties without fear or favour, affection or ill-will. Any settlement before the Lok Adalat should be voluntary. No party can be punished for failing to reach the settlement before the Lok Adalat. Section 20(5) of the Act statutorily recognizes the right of a party whose case is not settled before the Lok Adalat to have his case continued before the court and have a decision on merits. Any admission made, any tentative agreement reached, or any concession made during the negotiation process before the Lok Adalat cannot be used either in favour of a party or against a party when the matter comes back to the court on failure of the settlement process. To deny hearing to a party on the ground that his behaviour before the Lok Adalat was cantankerous or unreasonable would amount to denial of justice. When deciding a matter on merits of a case, if a court carries any prejudice against a party on account of his conduct before an ADR forum, it will violate the inviolable guarantee against prejudice or bias in decision making process. Such conduct can neither be permitted nor be tolerated and requires to be strongly deprecated. Every Judge should constantly guard against prejudice, bias and prejudging, in whatever form. Judges should not only be unbiased, but seem to be unbiased. Judiciary can serve the nation only on the trust, faith and confidence of the public in its impartiality and integrity.
When a counsel who is ready in the pre-lunch session, seeks accommodation the postlunch session on the ground of sudden illness or physical ailment, the court cannot refuse a short accommodation and dismiss the appeal on the ground that his client was cantankerous an unreasonable before the Lok Adalat. The two issues have no relation to each other and such dismissal can only be attributed to prejudice.
In view of the above, the appeals at allowed.