Lok Adalat Award: Supreme Court Rules on Legal Challenge Process
The case of Bhargavi Constructions & Anr. v. Kothakapu Muthyam Reddy & Ors. revolves around the legal framework of challenging awards passed by Lok Adalats in India. The Supreme Court, in its judgment dated September 7, 2017, addressed the issue of whether a person aggrieved by a Lok Adalat award can file a civil suit or whether the remedy lies in a writ petition under Article 226 or 227 of the Constitution of India. The Court reaffirmed the legal process for challenging Lok Adalat awards, emphasizing the role of writ courts.
Background of the Case
The dispute arose out of a compromise reached in a civil suit concerning land in the Rajendranagar Mandal, Ranga Reddy District, Hyderabad. Initially, T. Jagat Singh had filed a civil suit (O.S. No. 481 of 2007) for specific performance of a sale agreement. The case was settled through a written compromise on August 22, 2007, before a Lok Adalat. The settlement was then formalized into an award under Section 21 of the Legal Services Authorities Act, 1987.
However, in November 2009, some defendants filed a civil suit (O.S. No. 107 of 2010) seeking to challenge the award, alleging that it was obtained through fraud and misrepresentation. They claimed that they had been misled into signing the compromise and, therefore, the award was not binding. The trial court rejected the suit, invoking Rule 11(d) of Order 7 of the Code of Civil Procedure, which bars suits challenging an award made by a Lok Adalat. The High Court, however, ruled in favor of the plaintiffs, restoring the suit for adjudication on merits. The appellants challenged this order before the Supreme Court.
Legal Issues
- Can a civil suit be filed to challenge the validity of an award passed by Lok Adalat?
- What is the proper legal recourse for parties aggrieved by a Lok Adalat award?
- Does a writ petition under Article 226 or 227 provide the appropriate remedy in such cases?
Arguments by the Appellants (Defendants)
The appellants contended:
- That the civil suit challenging the award was barred under Rule 11(d) of Order 7 of the Code of Civil Procedure as the award had legal effect.
- The plaintiffs had no right to challenge the award through a civil suit, as their only remedy was a writ petition under Article 226 or 227 of the Constitution of India, as per the precedent set by this Court in previous rulings.
- That the writ court alone was empowered to adjudicate on the legality of the Lok Adalat award, as determined by the judicial review process.
Arguments by the Respondents (Plaintiffs)
The respondents countered:
- That the Lok Adalat award was obtained through fraudulent misrepresentation and was therefore not binding on them.
- That the High Court had rightly restored the suit for adjudication, as the fraudulence of the award was a matter of fact that could be determined in a civil court.
- That the remedy prescribed under Rule 11(d) of Order 7 did not preclude the right to file a civil suit based on fraud.
Supreme Court’s Analysis
On the Challenge to Lok Adalat Awards
The Supreme Court noted the specific legal nature of Lok Adalat awards and reviewed the process of their adjudication. It clarified the legal avenues available to parties seeking to challenge such awards:
“An award passed by a Lok Adalat under Section 21 of the Legal Services Authorities Act is binding on the parties unless it is challenged on very limited grounds in accordance with the law laid down by this Court in the case of State of Punjab v. Jalour Singh.”
On the Role of Writ Courts
The Court emphasized that judicial review of Lok Adalat awards is limited to writ petitions under Articles 226 or 227 of the Constitution. The Court stated:
“The jurisdiction of the civil court is excluded when it comes to challenging an award passed by the Lok Adalat. The only remedy available is to file a writ petition in the High Court, and that too on limited grounds such as fraud, misrepresentation, or violation of natural justice.”
On the Bar Under Rule 11(d) of Order 7
The Court explained that Rule 11(d) of Order 7 of the Code of Civil Procedure bars a civil suit if the suit is impliedly barred by any law, including judicial precedents. The Court referred to the precedent in State of Punjab v. Jalour Singh, where it was held:
“A suit to challenge a Lok Adalat award is barred, and the appropriate remedy is to file a writ petition under Articles 226 or 227 of the Constitution.”
Final Judgment
The Supreme Court allowed the appeal, setting aside the High Court’s order and restoring the trial court’s decision to reject the plaint under Order 7 Rule 11(d). The Court concluded:
“The impugned order of the High Court is set aside, and the order of the trial court is restored. The respondents (plaintiffs) are at liberty to challenge the legality of the award through the appropriate writ petition under Article 226 or 227 of the Constitution.”
Conclusion and Impact
This ruling is significant in clarifying the legal recourse available to parties aggrieved by Lok Adalat awards. The Court reinforced the principle that judicial review of such awards is available only through a writ petition and on limited grounds. The key takeaways from this judgment are:
- Lok Adalat awards are final and binding unless challenged on specific and limited grounds.
- The only remedy to challenge a Lok Adalat award is through a writ petition in the High Court, not a civil suit.
- The civil courts cannot entertain suits challenging Lok Adalat awards as they are excluded under Order 7 Rule 11 of the Code of Civil Procedure.
The decision sets a precedent on the scope of judicial intervention in Lok Adalat awards, ensuring that the legal process remains streamlined and efficient while also safeguarding the rights of the parties involved.
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Download Judgment: Bhargavi Constructio vs Kothakapu Muthyam Re Supreme Court of India Judgment Dated 07-09-2017.pdf
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