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Yesterday, the Supreme Court has ruled that a Lok Adalat has no jurisdiction at all to decide the matter on merits once it is found that compromise or settlement could not be arrived at between the parties.

The Court noted that it had considered an identical question in State of Punjab and Ors. Vs. Ganpat Raj (2006) 8 SCC 364 wherein it had held that "If no compromise or settlement is or could be arrived at, no order can be passed by the Lok Adalat. Therefore, the disposal of Civil Writ Petition No. 943 of 2000 filed by the respondent is clearly impermissible.”

In the instant case, the original writ petitioner had preferred the present appeal challenging the order passed by the High Court of Madhya Pradesh, Bench at Indore by which in a Lok Adalat held on 30.11.2013, the members of the Lok Adalat has entered into the merits of the writ petition and has dismissed the said writ petition on merits.

ASG Vikramjit Banerjee, appearing for the appellant, submitted that  considering a case on merits by the Lok Adalat was wholly impermissible in view of the relevant provisions of the Legal Services Authorities Act, 1987.

While heavily relying upon Section 19(5), Section 20(3) and Section 20(5) of the Act, 1987 in support of his submission, Banerjee stated that a Lok Adalat shall have jurisdiction to determine and to arrive at a compromise or a settlement between the parties to a dispute and has no jurisdiction to enter into the merits of the case and decide the matter on merits, in case the settlement is not arrived at.

The Court then went through the provisions under the said Act of 1987 to decide whether in the Lok Adalat held by the High Court, was it open for the members of the Lok Adalat to enter into the merits of the writ petition and to dismiss the same on merits, in absence of any settlement arrived at between the parties?

A Bench of Justices MR Shah and AS Bopanna thus held,

"....a fair reading of the aforesaid provisions of the Legal Services Authorities Act, 1987 makes it clear that the jurisdiction of the Lok Adalat would be to determine and to arrive at a compromise or a settlement between the parties to a dispute and once the aforesaid settlement / compromise fails and no compromise or settlement could be arrived at between the parties, the Lok Adalat has to return the case to the Court from which the reference has been received for disposal in accordance with law and in any case...."

The Court further found that the submission made by the respondent that once the matter was placed before the Lok Adalat with consent, thereafter the entire matter is at large before the Lok Adalat and, therefore, the Lok Adalat is justified in disposing the matter on merits had no substance and the same was required to be rejected outright.

Accordingly, the matter has been remanded to the High Court to decide the same on merits and in accordance with law.

The Court ordered for the writ to be restored to the file of the High Court for its decision while allowing the appeal.

Cause Title: Estate Officer v. Colonel H.V. Mankotia (Retired)

Click here to access a copy of the Judgment.