Patna High Court Clarifies Jurisdictional Limitations on Lok Adalat Awards

Keywords: Patna High Court, Lok Adalat, Debts Recovery Tribunal, Recovery of Debts and Bankruptcy Act, jurisdiction, appeal

In a significant ruling, the Patna High Court allowed an appeal challenging the refusal of a learned Single Judge to intervene in the proceedings initiated by a bank against an order of the Lok Adalat. The appeal was filed under Section 19(25) of the Recovery of the Debts and Bankruptcy Act, 1993, seeking to set aside the proceedings that had been brought before the Debts Recovery Tribunal (DRT). The court clarified that the mere presence of a sitting judicial officer in the Lok Adalat does not grant the court the authority to challenge the Lok Adalat’s award.

Case Background

The appellant, Sri Praveen Anand, approached the Patna High Court after the learned Single Judge declined to interfere in the bank’s proceedings before the DRT. The petitioner was aggrieved by the recovery proceedings initiated against him, which he argued were in contravention of a settlement reached at the Lok Adalat. Initially, a settlement of ₹27 lakhs was agreed upon, but the petitioner failed to comply with the terms. Subsequently, the DRT, in response to miscellaneous applications filed by the petitioner, granted further time for compliance, a move contested as impermissible.

Appellant’s Contentions

The appellant’s counsel, Mr. Arbind Kumar Jha, contended that the Lok Adalat’s order could only be challenged under the High Court’s writ jurisdiction (Articles 226/227 of the Indian Constitution). He argued that the impugned order by the DRT was without jurisdiction, as it exceeded its powers by granting additional time after a Lok Adalat settlement.

Respondents’ Contentions

The respondents, represented by Mr. Kaushlendra Kumar Sinha, argued that the settlement before the Lok Adalat was vitiated by fraud and misrepresentation. They alleged that the bank’s officer, perhaps not fully informed of the facts, agreed to a settlement for a significantly lower amount despite a pending recovery certificate for a much larger sum against the petitioner. The respondents maintained that these fraudulent actions warranted revisiting the settlement.

Court’s Observations

The court noted that the appellant’s conduct was questionable, as he failed to comply with the Lok Adalat’s initial order and repeatedly sought extensions from the DRT. However, the court emphasized that issues of jurisdiction or lack thereof must be determined independently of the parties’ conduct. The court observed that the mere involvement of a sitting judicial officer in the Lok Adalat does not confer jurisdiction on the court to challenge its award. Furthermore, once a matter is referred to the Lok Adalat and a settlement is reached, the referring court becomes “functus officio,” or devoid of any further authority over the case.

The court stressed that, similar to a judicial decision, Lok Adalat awards should carry finality. If the settlement terms are not honored, the order based on compromise becomes ineffective, and no further settlement can be ordered by the referring court or tribunal without the consent of both parties.

Court’s Decision

The Patna High Court, in allowing the appeal, ruled that the impugned order by the DRT was unsustainable in law. It reinforced the principle that the jurisdiction to challenge an award by the Lok Adalat lies solely with the High Court under its writ jurisdiction.

Case Details

• Case Title: Sri Praveen Anand vs. The Asst. General Manager & Anr.
• Coram: Hon’ble Chief Justice K. Vinod Charan and Hon’ble Justice Partha Sarthy
• Case No.: Letters Patent Appeal No. 1688 of 2019
• Advocate for the Appellant: Mr. Arbind Kumar Jha
• Advocate for the Respondents: Mr. Kaushlendra Kumar Sinha

This ruling is significant as it delineates the boundaries of jurisdiction concerning Lok Adalat awards and emphasizes the finality of settlements reached under its auspices. For ongoing updates and detailed coverage of this case and other legal developments, visit Kanishk Social Media. If you found this article informative, please share it with others interested in legal and political affairs.