Delve into the intricate legal analysis surrounding the adjudicatory powers of Permanent Lok Adalats in this case summary. The court’s examination of mandatory conciliation proceedings and the distinction between Lok Adalats and Permanent Lok Adalats provides valuable insights into alternative dispute resolution mechanisms. Stay informed about the complexities of ADR in the legal realm.
Facts
- Syndicate Bank filed an application before the Permanent Lok Adalat at Mangalore on 31 December 2012 under Section 22-C(1) of the Legal Services Authorities Act 1987.
- The Single Judge allowed the writ petition by a judgment dated 3 July 2019 without issuing notice to the appellant.
- The Division Bench of the Karnataka High Court upheld the judgment of the Single Judge and dismissed the writ appeal by the appellant in a judgment dated 6 March 2021.
- The Single Judge set aside an award of the Permanent Lok Adalat dated 19 November 2014 in favor of the respondent.
- Permanent Lok Adalat allowed the application filed by the appellant based on documentary evidence as respondent did not participate in proceedings
- Directed respondent and his guarantor to pay the appellant Rs 2,40,583 with 9% interest
- Appellant filed petition for execution of the award before Civil Judge and Judicial Magistrate First Class
- Respondent filed writ petition challenging the award dated 19 November 2014 under Article 226 of the Constitution
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Analysis
- Conciliation proceedings under Section 22-C of the LSA Act are mandatory in nature.
- Permanent Lok Adalats can conduct both conciliatory and adjudicatory functions.
- The Permanent Lok Adalat must follow the procedure outlined in Section 22-C before adjudicating a dispute.
- The Permanent Lok Adalat can pass awards based on terms of settlement agreed upon by the parties.
- The distinction between Lok Adalats and Permanent Lok Adalats lies in their adjudicatory functions.
- The Permanent Lok Adalat has wider powers compared to Lok Adalats.
- Lok Adalats have jurisdiction to arrive at a compromise and settlement for matters pending before a court or falling within its jurisdiction.
- Cases pending before a court can be referred to Lok Adalat for settlement if parties agree, one party applies, or the court deems it appropriate.
- In disposing of a case, Lok Adalat must be guided by principles of justice, equity, and fair play.
- The award of Permanent Lok Adalat is deemed to be a decree of a civil court.
- Permanent Lok Adalat awards, whether from a settlement agreement or deciding on merits, are final and binding on all parties.
- Permanent Lok Adalats are established for public utility services, with members appointed including a Chairperson with judicial experience and two others with public utility services experience.
- Permanent Lok Adalats can take cognisance of cases before approaching a court, with exceptions for non-compoundable offenses and property disputes under Rs 10 lakhs.
- LSA Amendment Act introduced Permanent Lok Adalats for alternative dispute resolution if parties fail to settle disputes.
- Lok Adalats, when unable to reach a settlement, can return the case to court or advise parties to approach the court.
- Awards of Lok Adalats are deemed as decrees of civil courts and are made after giving parties a chance to be heard.
- Permanent Lok Adalats can formulate settlement terms if they believe a settlement exists between parties.
- Permanent Lok Adalats must conduct proceedings guided by natural justice and other principles of justice, not bounded by CPC and Indian Evidence Act.
- Permanent Lok Adalat conducts conciliation proceedings to reach an amicable settlement before adjudication.
- If parties fail to reach agreement, Permanent Lok Adalat can then decide the dispute.
- Lok Adalats under Section 19 of LSA Act cannot perform adjudicatory functions, unlike Permanent Lok Adalats under Section 22-B.
- Even if opposite party does not appear, Permanent Lok Adalat must follow procedure of Section 22-C.
- Permanent Lok Adalat can adjudicate disputes at pre-litigation stage if parties fail to reach agreement.
- Permanent Lok Adalat proceeds to adjudicate dispute only after attempting and failing to generate a settlement between parties.
- Observations regarding the adjudicatory powers of Permanent Lok Adalats were incorrect
- Ultimate conclusion upheld due to Permanent Lok Adalat’s failure to follow mandatory conciliation proceedings
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Decision
- The court will proceed to adjudicate the dispute.
- The final judgment of the Division Bench setting aside the award of the Permanent Lok Adalat dated 19 November 2014 is upheld on this point only.
- No observations on the merits of the dispute between the parties have been made.
- All rights and contentions of the parties are kept open.
- No order as to costs in the circumstances of the case.
- Pending application(s) have been disposed of.
Case Title: CANARA BANK Vs. G.S. JAYARAMA (2022 INSC 597)
Case Number: C.A. No.-003872-003872 / 2022
