IN THE HIGH COURT OF JUDICATURE AT HYDERABAD FOR THE STATE OF TELANGANA AND THE STATE OF ANDHRA PRADESH
C.V. NAGARJUNA REDDY, GUDISEVA SHYAM PRASAD, JJ.
Nellore Sujanamma - Petitioner
Versus
Attipalli Nagi Reddy and others - Respondents
W.P. Nos. 121, 294, 380 of 2017
Decided On : 21-08-2017
Legal Services Authorities Act, 1987 - Section 21(1) -Petitioner alleged fraud against the private respondents in obtaining the impugned Lok Adalat Awards - Section 21(1) of the Legal Services Authorities Act, 1987, award of the Lok Adalat shall be deemed to be a decree of civil court. Under sub-section (2) thereof, every award made by the Lok Adalat shall be final and binding on all the parties to the dispute and no appeal shall lie to any court against the award. An identical issue came to be decided by a Division Bench of this Court in Kothakapu Muthyam Reddy and others v. Bhargavi Constructions, 2015 (5) ALT 476. In that case, the suit was filed for a declaration that paragraph 18 of the compromise recorded in the suit by the Lok Adalat insofar as it related to a certain piece of land was concerned as nonest in law for having been obtained by fraud and collusion- Held, questions whether the person who allegedly signed the compromise petition and the Lok Adalat award was duly authorised by the petitioner or not, or whether the Lok Adalat award is binding on the petitioner or not, fall within the realm of the disputed questions of fact. Such disputes cannot be resolved in the Writ Petition by this Court in exercise of its writ jurisdiction. Though under the Legal Services Authority Act, 1987, the Lok Adalat awards are final, if such awards are obtained by fraud, the civil Courts jurisdiction is not barred. Therefore, if the Lok Adalat award was obtained by playing fraud on the petitioner, he is entitled to oppose the Execution Petition besides availing any other remedy available to him seeking invalidation of award – Petition allowed
Certainly. Here are the key points based on the provided legal document:
The legal document pertains to writ petitions filed against three Lok Adalat awards, which the petitioner alleges were obtained through fraud (!) (!) .
The petitioner initially filed separate suits in a civil court to challenge the validity of the Lok Adalat awards, but these suits were rejected at the case-filing stage, primarily relying on prior case law (!) (!) .
Under the Legal Services Authorities Act, 1987, Lok Adalat awards are deemed to be equivalent to decrees of a civil court and are final and binding on all parties, with no appeal permissible against such awards (!) .
However, awards obtained through misrepresentation, fraud, or without proper compliance with statutory provisions can be challenged in a writ petition under Article 226 of the Constitution of India. The scope of judicial review in such cases is limited to these grounds (!) (!) .
The courts have clarified that disputes over whether a Lok Adalat award was obtained by proper authority, with valid consent, or through genuine settlement are questions of fact. Such disputes cannot be resolved solely through writ petitions and may require civil court proceedings (!) (!) .
If it is established that an award was obtained by playing fraud on a party, the civil court's jurisdiction remains intact to seek invalidation of the award, despite the finality generally accorded to Lok Adalat awards under the Act (!) (!) .
The courts emphasized that fraud vitiates all judicial acts, rendering any order obtained by fraudulent means null and void. Such awards can be challenged at any time through appropriate proceedings (!) (!) .
Based on subsequent judgments, the court found the previous rejection orders by the civil court to be incorrect and directed the civil court to register the suits and decide them on merits, thereby allowing the petitioner to pursue the matter further (!) (!) .
The writ petitions were ultimately allowed, permitting the petitioner to challenge the Lok Adalat awards on the grounds of fraud and to seek their invalidation through civil proceedings (!) .
Please let me know if you need further analysis or specific legal advice related to this document.
C.V. Nagarjuna Reddy, J.
These writ petitions are filed by the same petitioner feeling aggrieved by three separate Lok Adalat Awards in three separate pre-litigation cases.
2. For disposal of these writ petitions, the facts need not be discussed in detail. It will suffice to note that the petitioner alleged fraud against the private respondents in obtaining the impugned Lok Adalat Awards. Before approaching this Court by way of the present writ petitions, the petitioner filed three separate suits in the Court of the Principal District Judge, Nellore. These three suits were rejected at C.F. Stage by the District Court, mainly placing reliance upon the judgment in Batchu Subba Lakshmi v. Sannidhi Srinivasulu, (2010) 1 ALD 277 (DB).
3. Under section 21(1) of the Legal Services Authorities Act, 1987, award of the Lok Adalat shall be deemed to be a decree of civil court. Under sub-section (2) thereof, every award made by the Lok Adalat shall be final and binding on all the parties to the dispute and no appeal shall lie to any court against the award. An identical issue came to be decided by a Division Bench of this Court in Kothakapu Muthyam Reddy and others v. Bhargavi Constructions, 2015 (5) ALT 476. In that case, the suit was filed for a declaration that paragraph 18 of the compromise recorded in the suit by the Lok Adalat insofar as it related to a certain piece of land was concerned as nonest in law for having been obtained by fraud and collusion. Defendant Nos.31 and 32 in the said suit filed I.A. No.894 of 2010 for rejection of the plaint. The civil court has accordingly rejected the plaint on the ground that in view of the judgment in Batchu Subba Lakshmi (1 supra) a suit for declaration to set aside the Lok Adalat Award by a party to the earlier suit is not maintainable. After a detailed discussion, the Division Bench held as follows:
"The award passed by the Lok Adalat in a pending litigation, or in a pre-litigation case, is not, ordinarily, amenable to judicial review. But when an award of the Lok Adalat is obtained by misrepresentation, fraud or without due compliance with the provisions of the Act and that it was not preceded by a compromise/settlement, it can be challenged in a Writ Petition [Sri Durga Malleswari Educational Society v. District Legal Services Authority (Lok Adalat), Vijayawada, 2012 (3) ALT 211 (DB)]. The challenge to the award of the Lok Adalat, in proceeding under Article 226 of the Constitution of India, can be entertained only at the behest of parties to the settlement/compromise before the Lok Adalat, and not by anyone else [Sanjay Kumar v. Secretary, City Civil Court Legal Services Authority, Hyderabad, 2010 (3) ALT 289 (DB)]. The parties to the compromise or settlement, which is the basis for the award of a Lok Adalat, are entitled to challenge the award. Ordinarily, a third party cannot challenge the award in a writ petition, even if such an award causes prejudice. The remedy of such party would be to institute a separate suit within the period of limitation prescribed under law for necessary redressal, and seek an appropriate decree. As a Civil Court can even declare that an earlier decree of the Court is not binding on the party before it, there can be no objection for a third party to institute a suit in a Civil Court seeking a declaration that the award of Lok Adalat is not binding on him. There may, however, be extraordinary cases where a third party is meted with injustice at the behest of two or more conniving and colluding parties who may have obtained an award of the Lok Adalat by fraud or misrepresentation only to defeat the rights of a third party. In such cases, such a third party may maintain a Writ Petition. In such cases, there should be prima facie evidence of fraud or misrepresentation or collusion in obtaining the award of the Lok Adalat. Even if such allegations are made, and the question involves complicated questions of fact requiring voluminous evidence, the third part
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