ESTATE OFFICERversusCOLONEL H.V. MANKOTIA (RETIRED)

728                      [2021]REPORTS
               SUPREME COURT    8 S.C.R. 728                 [2021] 8 S.C.R.


A                              ESTATE OFFICER
                                         v.
                   COLONEL H.V. MANKOTIA (RETIRED)
                         (Civil Appeal No. 6223 of 2021)
B                              OCTOBER 07, 2021
                   [M.R. SHAH AND A.S. BOPANNA, JJ.]
             Legal Services Authority Act, 1987 – ss.19, 20 – Jurisdiction
      of Lok Adalat – Held: Jurisdiction of Lok Adalat is to determine
      and to arrive at a compromise or a settlement between the parties to
C
      a dispute – If no compromise/settlement is arrived at, the Lok Adalat
      has to return the case to the Court from which the reference was
      received for disposal in accordance with law – 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
D     – Impugned order passed by the Lok Adalat dismissing the writ
      petition filed by appellant on merits is set aside – Matter remanded
      to High Court to decide the writ petition on merits and in accordance
      with law.
            Allowing the appeal, the Court
E           HELD: 1.1 As per sub-section (5) of Section 19, Legal
      Services Authority Act, 1987 a Lok Adalat shall havejurisdiction
      to determine and to arrive at a compromise or a settlement
      between the parties to a dispute in respect of (i) any case pending
      before; or (ii) any matter which is falling within the jurisdiction
F     of, and is not brought before, any court for which the Lok Adalat
      is organised. As per sub-section (1) of Section 20 wherein any
      case referred to in clause (i) of sub-section (5) of Section19-(i)(a)
      the parties thereof agree; or (i)(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
G     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. It
      further provides that no case shall be referred to the Lok Adalat

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                                        728
    ESTATE OFFICER v. COLONEL H.V. MANKOTIA (RETIRED)                    729


under sub-clause (b) of clause (i) or clause (ii) by such court except   A
after giving a reasonable opportunity of being heard to the parties.
As per sub-section (3) of Section 20 where any case is referred
to a Lok Adalat under sub-section (1) or where a reference is
made to it under sub-section (2), the Lok Adalat shall proceed to
dispose of thecase or matter and arrive at a compromise or
                                                                         B
settlement between theparties. Sub-section (5) of Section 20
further provides that where no award is made by the Lok Adalat
on the ground that no compromise orsettlement could be arrived
at between the parties, the record of thecase shall be returned
by it to the court, from which the reference has been received
under sub-section (1) for disposal in accordance with law. The           C
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 caseto the Court from which the
                                                                         D
reference has been received for disposal inaccordance with law
and in any case, the Lok Adalat has no jurisdiction at all to decide
the matter on meris once it is found that compromise or
settlement could not be arrived at between the parties. [Paras
6.1, 6.2 and 7][733-G-H ; 734-A-F]
       State of Punjab and Ors. v. Ganpat Raj (2006) 8 SCC               E
       364 : [2006] 6 Suppl. SCR 25 – relied on.
                       Case Law Reference
[2006] 6 Suppl. SCR 25          relied on             Para 8
       CIVIL APPELLATE JURISDICTION: Civil Appeal No.6223 of             F
2021
     From the Judgment and Order dated 30.11.2013 of the High Court
of Madhya Pradesh Bench at Indore in Writ Petition No.8074 of 2011.
      Vikramjeet Banerjee, ASG, Arvind Kumar Sharma, Advs. for the
                                                                         G
Appellant.
       Vikrant Singh Bais, Yogesh Tiwari, Advs. for the Respondent.



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730             SUPREME COURT REPORTS                           [2021] 8 S.C.R.


A           The Judgment of the Court was delivered by
            M. R. SHAH, J.
             1. Feeling aggrieved and dissatisfied with the impugned order dated
      30.11.2013 passed by the High Court of Madhya Pradesh, Bench at
      Indore in Writ Petition No. 8074 of 2011 by which in a Lok Adalat held
B     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 preferred by
      the appellant on merits, the original writ petitioner has preferred the
      present appeal.
             2. That the appellant herein filed a writ petition before the High
C     Court being Writ Petition No.8074 of 2011. The matter was listed on
      30.11.2013 before the Lok Adalat. By the impugned order, the members
      of the Lok Adalat held by the High Court entered into the merits of the
      writ petition and dismissed the same on merits, which is the subject
      matter of the present appeal.
D            2.1 That thereafter the appellant filed the restoration application
      before the High Court to restore the main writ petition submitting that
      the order passed in the Lok Adalat is beyond the jurisdiction of the Lok
      Adalat and, therefore, the same is not legal in the eyes of law. However,
      the said application came to be dismissed by the High Court and hence
      the present appeal.
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             3. Shri Vikramjit Banerjee, learned ASG appearing on behalf of
      the appellant has vehemently submitted that the impugned order has
      been passed in the Lok Adalat and the Lok Adalat, Madhya Pradesh
      High Court has considered the case on merits and dismissed the same
      on merits, which is wholly impermissible in view of the relevant provisions
F     of the Legal Services Authorities Act, 1987 (hereinafter referred to as
      “the Act, 1987”). Shri Banerjee, learned ASG has heavily relied upon
      Section 19(5), Section 20(3) and Section 20(5) of the Act, 1987 in support
      of his submission that a Lok Adalat shall have jurisdiction to determine
      and to arrive at a compromise or a settlement between the parties to a
G     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. It is
      submitted, therefore, that the impugned order passed by the Lok Adalat,
      Madhya Pradesh High Court is wholly without jurisdiction. Reliance is
      placed upon the decision of this Court in the case of State of Punjab
      and Ors. Vs. Ganpat Raj (2006) 8 SCC 364.
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    ESTATE OFFICER v. COLONEL H.V. MANKOTIA (RETIRED)                        731
                       [M. R. SHAH, J.]

       3.1 Learned counsel appearing on behalf of the respondent while       A
opposing the present appeal has submitted that the matter was placed
before the Lok Adalat with the consent of the learned counsel for the
appellant. It is submitted that, therefore, once the matter was placed
before the Lok Adalat with the consent, entire matter would be at large
before the Lok Adalat and, therefore, having found no substance in the
                                                                             B
petition, the members of the Lok Adalat have rightly dismissed the writ
petition, which in the facts and circumstances of the case is not required
to be interfered with by this Court in exercise of power under Article
136 of the Constitution.
       4. Heard the learned counsel for the respective parties at length.
       5. The short question which is posed for consideration of this        C
Court is 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
settlementarrived at between the parties?
       6. While answering the aforesaid question, the relevant provisions    D
of the Legal Services Authorities Act, 1987, which would have been a
bearing on the jurisdiction of the Lok Adalat are required to be referred
to, which read as under:-
       “19. Organization of Lok Adalats—(1) Every State Authority
       or District Authority or the Supreme Court Legal Services             E
       Committee or every High Court Legal Services Committee or, as
       the case may be, Taluk Legal Services Committee may organise
       Lok Adalats at such intervals and places and for exercising such
       jurisdiction and for such areas as it thinks fit.
              (2) Every Lok Adalat organised for an area shall consist of
                                                                             F
       such number of :-
              (a) serving or retired judicial officers; and
              (b) other persons,
       of the area as may be specified by the State Authority or the
       District Authority or the Supreme Court Legal Services Committee      G
       or the High Court Legal Services Committee, or as the case may
       be, the Taluk Legal Services Committee, organising such Lok
       Adalats.
            (3) The experience and qualifications of other persons
      referred to in clause (b) of sub-section (2) for Lok
      Adalats organised by the Supreme Court Legal Services                  H
732      SUPREME COURT REPORTS                            [2021] 8 S.C.R.


A     Committee shall be such as may be prescribed by the
      Central Government in consultation with the Chief Justice of India.
             (4) The experience and qualifications of other persons
      referred to in clause (b) of sub-section (2) for Lok Adalats
      other than referred to in sub-section (3) shall be such as may be
B     prescribed by the State Government in consultation with the Chief
      Justice of the High Court.
             (5) A Lok Adalat shall have jurisdiction to determine and to
      arrive at a compromise or settlement between the parties to a
      dispute in respect of :-
C            (i) any case pending before; or
             (ii) any matter which is falling within the jurisdiction of, and
             is not brought before,
      any court for which the Lok Adalat is organised.
D     Provided that the Lok Adalat shall have no jurisdiction in respect
      of any case or matter relating to an offence not compoundable
      under any law.
      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)
E            (i) (a) the parties thereof agree; or
             (i) (b) one of the parties thereof makes an application to
             the court,
             for referring the case to the Lok Adalat for settlement and
F            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:
G
             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 organising
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    ESTATE OFFICER v. COLONEL H.V. MANKOTIA (RETIRED)                            733
                       [M. R. SHAH, J.]

       the Lok Adalat under sub-section (1) of Section 19 may, on receipt        A
       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         B
       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        C
       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            D
       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 shall be returned by it to the court,
       from which the reference has been received under sub-section              E
       (1) for disposal in accordance with law.
       (6) Where no award is made by the Lok Adalat on the ground
       that no compromise or settlement could be arrived at between the
       parties, in a matter referred to in sub-section (2), that Lok Adalat
       shall advice the parties to seek remedy in a court.                       F
       (7) Where the record of the case is returned under sub-section
       (5) to the court, such court shall proceed to deal with such case
       from the stage which was reached before such reference under
       sub-section (1).”
       6.1 As per sub-section (5) of Section 19, a Lok Adalat shall have         G
jurisdiction to determine and to arrive at a compromise or a settlement
between the parties to a dispute in respect of (i) any case pending
before; or (ii) any matter which is falling within the jurisdiction of, and is
not brought before, any court for which the Lok Adalat is organised. As
per sub-section (1) of Section 20 where in any case referred to in clause
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734            SUPREME COURT REPORTS                           [2021] 8 S.C.R.


A     (i) of sub-section (5) of Section 19- (i) (a) the parties thereof agree; or
      (i) (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
B
      Lok Adalat. It further provides 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.
             6.2 As per sub-section (3) of Section 20 where any case is referred
      to a Lok Adalat under sub-section (1) or where a reference is made to it
C
      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. Sub-section (5) of Section 20 further provides that 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
D     case shall be returned by it to the court, from which the reference has
      been received under sub-section (1) for disposal in accordance with law.
              7. Thus, 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
E     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 Lok Adalat has no jurisdiction
      at all to decide the matter on meris once it is found that compromise or
F     settlementcould not be arrived at between the parties.
            8. Identical question came to be considered by this Court in the
      case of State of Punjab and Ors. Vs. Ganpat Raj (supra) and after
      considering Section 20 of the Act, 1987, it is observed and held in
      paragraph 7 as under:-
G
            “7. 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
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    ESTATE OFFICER v. COLONEL H.V. MANKOTIA (RETIRED)                         735
                       [M. R. SHAH, J.]

      differences by mutual concessions. It is an agreement reached           A
      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
                                                                              B
      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 NFU Development Trust Ltd.,
      Re [(1973) 1 All ER 135 : (1972) 1 WLR 1548 (Ch D)] ). A
      compromise is always bilateral and means mutual adjustment.
      “Settlement” is termination of legal proceedings by mutual consent.     C
      The case at hand did not involve compromise or settlement and
      could not have been disposed of by the 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 Civil Writ
      Petition No. 943 of 2000 filed by the respondent is clearly
                                                                              D
      impermissible.”
       9. In view of the above, the impugned order passed by the Lok
Adalat dismissing the writ petition on merits is unsustainable and deserves
to be quashed and set aside. The submission made by the learned counsel
appearing on behalf of the respondent that once the matter was placed
before the Lok Adalat with consent, thereafter the entire matter is at        E
large before the Lok Adalat and, therefore, the Lok Adalat is justified in
disposing the matter on merits has no substance and the same is required
to be rejected outright. The consent to place the matter before the Lok
Adalat was to arrive at a settlement and or a compromise between the
parties and not for placing the matter before the Lok Adalat for deciding     F
the matter on merits. Once there is no compromise and/or a settlement
between the parties before the Lok Adalat, as provided in sub-section
(5) of Section 20, the matter has to be returned to the Court from where
the matter was referred to Lok Adalat for deciding the matter on merits
by the concerned court.
                                                                              G
      10. In view of the above and for the reasons stated above, the
impugned order passed by the Lok Adalat, Madhya Pradesh High Court
dated 30.11.2013 in Writ Petition No.8074 of 2011 is hereby quashed
and set aside. The matter is remanded to the High Court to decide the
Writ Petition No.8074 of 2011 on merits and in accordance with law.
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736             SUPREME COURT REPORTS                         [2021] 8 S.C.R.


A     The Writ Petition No.8074 of 2011 is ordered to be restored to the file of
      the High Court for its decision on merits and in accordance with law.
      The present appeal is accordingly allowed. In the facts and circumstances
      of the case, there shall be no order as to costs.
            Pending applications, if any, also stand disposed of.
B
      Divya Pandey                                                  Appeal allowed.




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