IMPORTANT POINT
Lok Adalat can dispose of a matter by way of a compromise or settlement between parties and if no compromise or settlement was or could be arrived at, no order can be passed by Lok Adalat.

Headnote:The Legal Services Authorities Act, 1987—Section 20—Cognizance of cases by Lok Adalat—Lok Adalat can dispose of a matter by way of a compromise or settlement between parties—”Compromise” means settlement of differences by mutual concessions and is bilateral—Respondent filed writ petition of mandamus to direct appellant to pay interest @ 18% on delayed payment of pension, arrears of pension and other retirement benefits—Writ petition was sent to Lok Adalat for settlement and matter was allowed without any settlement compromise between parties—Lok Adalat awarded 12% interest for delayed payments—Writ filed by appellant challenging Lok Adalat order was dismissed though High Court accepted that disposal by Lok Adalat was not the proper course—Appeal—Case did not involve compromise or settlement and could not have been disposed of by Lok Adalat—Impugned judgment was liable to be set aside and original writ to be restored and disposed of by High Court.
Held : The specific language used in sub-section (3) of Section 20 makes it clear that the Lok Adalat can dispose of a matter by way of a compromise or settlement between the parties. Two crucial terms in sub-sections (3) and (5) of Section 20 are "compromise" and "settlement". The former expression means settlement of differences by mutual concessions. It is an agreement reached by adjustment of conflicting or opposing claims by reciprocal modification of demands. As per Termes de la Ley, "compromise is a mutual promise of two or more parties that are at controversy. As per Bouvier it is "an agreement between two or more persons, who, to avoid a law suit, amicably settle their differences, on such terms as they can agree upon". The word "compromise" implies some element of accommodation on each side. It is not apt to describe total surrender. (See Re NFU Development Trust Ltd. (1973) 1 All ER 135 (Ch.D). A compromise is always bilateral and means mutual adjustment. "Settlement" is termination of legal proceedings by mutual consent. The case at hand did not involve compromise or settlement and could not have been disposed of by Lok Adalat. If no compromise or settlement is or could be arrived at, no order can be passed by the Lok Adalat. Therefore, the disposal of the Civil Writ Petition No. 943 of 2000 filed by respondent is clearly impermissible. Therefore, the disposal of the Civil Petition 943 of 2000 filed by respondent is clearly impermissible. (Para 7)

JUDGMENT

Arijit Pasayat, J.—Leave granted.

2. As noted by this Court in State of Punjab and Others v. Phulan Rani and Another (2004 (7) SCC 555), a simple matter has unnecessary been complicated as a result of which there has been inordinate delay in disposing of the matter.

3. Respondent filed Civil Writ Petition no.943 of 2000 in the Punjab and Haryana High Court praying, inter alia, to issue a writ in the nature of mandamus directing the present appellants to pay interest @ 18% on delayed payment of pension, arrears of pension, DGRC, computation of pension and arrears of GPF arrears and other retirement benefits. The writ petition was sent to Lok Adalats for settlement being a pension matter and the matter was allowed on 4.3.2003 without any settlement compromise between the parties. It is to be noted that the appellants contested the claim and filed written statement to the writ petition. Lok Adalat awarded 12% interest for the delayed payments. A writ petition was filed by the appellants before the Punjab and Haryana High Court challenging the order dated 4.2.2003 assed by the Lok Adalat in Civil No.943 of 2000. The same was dismissed holding that the petition was misconceived. Though the High Court accepted that the disposal by the Lok Adalat was not the proper course, yet it was held that on merits respondent was entitled to relief.

4. In support of the appeal, learned counsel for the appellant submitted that the matter could not have been disposed of by the Lok Adalat in view of the specific provisions contained in Section 20 of The Legal Services Authorities Act, 1987 (in short the Act).

5. Per contra learned counsel for the submitted that the High Court has rightly proceeded on the basis that even if the matter could not have been disposed of by the Lok Adalat, there is nothing wrong, in the ultimate result holding that the respondent was entitled to relief.

6. The matters which can be taken up by the Lok Adalat for disposal are enumerated in Section 20 of the Act which reads as follows:

"20. Cognizance of cases by Lok Adalats:-

(1) Where in any case referred to in clause (i) of sub-section (5) of Section 19-

(i)(a) the parties thereof agree; or

(b) one of the parties thereof makes an application to the Court, for referring the case to the Lok Adalat for settlement and if such Court is prima facie satisfied that there are chances of such settlement; or

(ii)the Court is satisfied that the matter is an appropriate one to be taken cognizance of by the Lok Adalat,

The Court shall refer the case to the Lok Adalat:

Provided that no case shall be referred to the Lok Adalat under sub-clause (b) of clause (i) or clause (ii) by such Court except after giving a reasonable opportunity of being heard to the parties.

(2) Notwithstanding anything contained in any other law for the time being in force, the Authority or Committee organizing the Lok Adalat under sub-section (1) of Section 19 may, on receipt of an application from any one of the parties to any matter referred to in clause (ii) of sub-section (5) of section 19 that such matter needs to be determined by a Lok Adalat, refer such matter to the Lok Adalat, for determination:

Provided that no matter shall be referred to the Lok Adalat except after giving a reasonable opportunity of being heard to the other party.

(3) Where any case is referred to a Lok Adalat under sub-section (1) or where a reference has been made to it under sub-section (2), the Lok Adalat shall proceed to dispose of the case or matter and arrive at a compromise or settlement between the parties.

(4) Every Lok Adalat shall, while determining any reference before it under this Act, act with utmost expedition to arrive at a compromise or settlement between the parties and shall be guided by the principles of justice, equity, fair play and other legal principles.

(5) Where no award is made by the Lok Adalat on the ground that no compromise or settlement could be arrived at between the parties, the record of the case shal

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2006 Supreme(SC) 836

IMPORTANT POINTLok Adalat can dispose of a matter by way of a compromise or settlement between parties and if no compromise or settlement was or could be arrived at, no order can be passed by Lok Adalat.

Cases Referred (1)

IMPORTANT POINT
Lok Adalat can dispose of a matter by way of a compromise or settlement between parties and if no compromise or settlement was or could be arrived at, no order can be passed by Lok Adalat.