In an important judgment, the Supreme Court has ruled that Lok Adalats are not courts as it does not resort to judicial adjudication in resolving disputes and said that their settlement decrees cannot be cited as a precedent before a court of law to claim similar reliefs by others who were not party to the compromise before the Lok Adalat.
Noida had issued a notification in March 1983 for acquisition of lands in villages situated in Tehsil Dadri for planned industrial development. Land owners were given compensation at the rate of Rs 20 per square yard in November 1984. None of the land owners questioned the rate of compensation and all accepted the amounts due to them.
One Fateh Mohammed filed an application seeking reference against the Award of November 28, 1984 and it was made over to a Lok Adalat, where NOIDA settled with Fateh Mohammed in 2016 and agreed to pay Rs 297 per square yard, almost 15 times more than the original compensation more than 30 years later.
The other landowners saw the opportunity and successfully pleaded before the Allahabad HC for grant of compensation at the rate of Rs 297 per square yard on the ground that Lok Adalat awarded decrees had precedential value. NOIDA challenged the HC order in SC.
A bench of Justices K M Joseph and P S Narasimha framed the following question – “Whether the Award passed by a Lok Adalat under Section 20 of the Legal Services Authorities Act, 1987 can form the basis for redetermination of compensation as contemplated under Section 28A of the the Land Acquisition Act, 1894. By the impugned judgment, the HC has taken the view that the Award passed by the Lok Adalat can indeed form the foundation for exercising power under Section 28A of the Act.”
Writing the judgment, Justice Joseph disagreed with the HC view and said Lok Adalats do not employ any judicial scrutiny and under the legal services act only encourage the parties to settle amicably. It said even though the awad by Lok Adalat could be enforceable like a decree, it cannot in the judicial arena have a precedential value.
“It is clear beyond the shadow of any doubt that the jurisdiction of the Lok Adalat under Section 20 is to facilitate a settlement of disputes between the parties in a case. It has no adjudicatory role. It cannot decide a lis. All that it can do is to bring about a genuine compromise or settlement… The Lok Adalat by virtue of the express provisions is only a facilitator of settlement and compromise in regard to matters which are referred to it. It has no adjudicatory role,” the bench said.
The SC said, “The award which is passed by the Lok Adalat cannot be said to be an award passed under the Land Acquisition Act. It is the compromise arrived at between the parties before the Lok Adalat which culminates in the award by the Lok Adalat… The enhancement of the compensation is determined purely on the basis of compromise which is arrived at and not as a result of any decision of a ‘Court’ as defined in the Act.”
Allowing the appeal of NOIDA and setting aside the HC order, Justices Joseph and Narasimha said, “We declare that an application under Section 28A of the Land Acquisition Act cannot be maintained on the basis of an award passed by the Lok Adalat under Section 20 of Legal Services Authorities Act.”
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