IN THE HIGH COURT OF DELHI AT NEW DELHI
Prathiba M. Singh, J.
Rachana – Appellant
Versus
Shreeram General Insurance Co. Ltd. & Ors. – Respondents
W.P.(C) 3722 of 2023 and CM APPL. 14401 of 2023
Decided On : 10-05-2023
Lok Adalat - Challenge to Award - Legal Services Authorities Act, 1987, Section 21 - The court upheld the Lok Adalat award as it deemed to be a decree of a civil court and final and binding on all parties unless serious allegation of fraud or coercion is alleged. The Supreme Court's decision in K. Srinivasappa & Ors. v. M. Mallamma & Ors. highlighted the finality and enforceability of a compromise decree recorded before a Lok Adalat.
Fact of the Case:
The petitioner sought to set aside an award passed by the Lok Adalat, which settled a dispute with an insurance company for a sum of Rs. 85,00,000. The MACT dismissed the petition, citing the finality of the Lok Adalat award as per the Legal Services Authorities Act, 1987.
Finding of the Court:
The court rejected the petitioner's application to set aside the Lok Adalat award, upholding the finality and enforceability of the award unless serious allegation of fraud or coercion is alleged.
Issues: Challenge to Lok Adalat award, applicability of Legal Services Authorities Act, 1987, Section 21, and the grounds for setting aside the award.
Ratio Decidendi: The court emphasized the finality and enforceability of a Lok Adalat award as per the Legal Services Authorities Act, 1987, and the Supreme Court's decision in K. Srinivasappa & Ors. v. M. Mallamma & Ors. regarding the enforceability of a compromise decree recorded before a Lok Adalat.
Final Decision: The petition to set aside the Lok Adalat award was rejected, and the award was upheld by the court.
JUDGMENT
Prathiba M. Singh, J. (Oral)
1. This hearing has been done through hybrid mode.
2. None appears for the Petitioner.
3. The present petition has been filed seeking the setting aside of the order dated 10th November 2022 passed by the Presiding Officer,(MACT)- 02 South West, Dwarka Courts in MISC No. 117/2022 titled `Rachna v. Shriram Gen Insurance Co. ltd.'. By the impugned order, the application filed by the Petitioner seeking cancellation of award dated 12th March 2022 passed in the Lok Adalat, wherein the dispute with the Insurance Company was settled for a sum of Rs. 85,00,000/- was dismissed. The prayers in this petition are extracted below.
"a) To quash the impugned order dated 10.11.2022
b) To quash the proceedings of the LOK ADALAT dated 12.03.2022
c) To direct the Respondent no. 2 and 3 to share the claim award amount equally among the Petitioner and Respondent No. 2 & 3.
d) Any further order which the Hon'ble Court may deem fit and proper"
4. In the said proceedings an application was filed by the Petitioner for setting aside the award dated 12th March 2022 passed by the Lok Adalat. In the said award which was passed during the proceedings in the Lok Adalat held on 12th March, 2022 at the Dwarka Court Complex, the dispute with the insurance company has been resolved for a total sum of Rs.85,00,000/-. Even the manner in which the amount is to be divided between the Petitioner who is the wife of the deceased and the parents has also been set out in the award as under:
"In view of the facts of the case, the circumstances of the petitioner(s) and in view of the ongoing COVID 19 pandemic, the compensation to the Petitioner(s) be distributed as follows-
| S. No. | Name of Petitioner/Claimant | Age (Yrs) | Relation with Injured/Deceased | Amount of Award | Amount to be released | Amount Kept in FDR | Period of FDR | Mode:Cash/Cheque/DD |
| 1. | Ms. Rachna | About 33 Years | Wife | Rs. 21,00,000/- | Rs.7,.00,000/- | Rs.14,50,000/- | Fourteen yearly FDRs of Rs.1,00,000/- for a period from one year to fourteen years with cumulative interest and FDR of Rs.50,000/- for a period of one year i.e. the fifteenth year with cumulative interest | RTGS |
| 2. | Shri Balreet Singh | About 63 Years | Father | Rs.31,75,000/- | Rs. 10,75,000/- | Rs. 21,00,000/- | Twenty one yearly FDRs of Rs.1,00,000/- for a period from one year to twenty one years with cumulative interest | RTGS |
| 3. | Shrimati Sheela | About 61 years | Mother | Rs.31,75,000/- | Rs. 10,75,000/- | Rs. 21,00,000/ | Twenty one yearly FDRs of Rs.1,00,000/- for a period from one year to twenty one years with cumulative interest | RTGS |
| Total | Rs. 85,00,000/- | Rs. 28,50,000/- | Rs.56,50,000/- | |||||
5. The Petitioner, however, moved a protest petition before the MACT seeking the setting aside of the said award. The said petition has been dismissed vide case no. MISC NO.117/2022. The relevant observations of the MACT Court are as under:
"The present MACT petition No. 1476/16, was disposed of vide order dated 12.03.2022 before the Lok Adalat, being settled. The applicant/petitioner No.1 has not disputed the fact that she has not remarried. The petitioner No.2 and 3 are parents of the deceased of accident. The applicant/petitioner No.1 has no where disclosed in her application the dates on which she has contacted her counsel but she could not contacted. Her Counsel Sh Sudhir Shokeen used to appear regularly in the present case. A fact has also not being disputed that she had not appeared alongwith her present husband for recording statement of financial needs and liabilities. Her statement could not be recorded, as talks of compromise were going on. So prima facie it is there on record that counsel for petitioner/ applicant were in touch with each other and settlement arrived at with her (applicant) own consent.
The law laid down in State of Punjab @ Anr Vs Jalour Singh @ Ors by Hon'ble Supreme Court where it is held that "Where an award is made by Lok Adalat in terms of a settlement arrived at between the parties, (which is duly signed by parties and annexed to the award of the Lok Adalat),it beco
The finality and enforceability of a Lok Adalat award as per the Legal Services Authorities Act, 1987, and the requirement of extraordinary circumstances to set aside such an award.
A writ petition challenging a compromise decree entered before Lok Adalat by non-impleaded necessary parties is maintainable due to allegations of fraud and procedural irregularity.
Awards passed by Lok Adalat can be challenged in writ jurisdiction where fraud is alleged, despite limitations on appeals.
The award of Lok Adalat is final and binding, challengeable only through writ petitions under Articles 226 and 227, not in Civil Court.
The main legal point established in the judgment is the finality and binding nature of Lok Adalat awards, and the limited grounds on which they can be challenged under Article 226 and/or Article 227 ....
The Lok Adalat lacked jurisdiction to entertain property disputes, rendering its Award invalid due to improper consent and unequal distribution of property.
Objection to execution of decree – Statutory finality attached to Lok Adalat award leaves no room for appellate or plenary civil remedy against the award treated as a decree – Award may be executed a....
The limited grounds for challenging Lok Adalat awards as established by previous Supreme Court judgments.
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