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The Concept of Permanent Lok Adalat and the Legal Services Authorites Amendment Act, 2002*
by Justice K.A. Abdul Gafoor
Cite as : (2003) 5 SCC (Jour) 33
The greatest challenge that the justice delivery system faces today is the delay in disposal of cases and prohibitive cost of litigation. Alternative dispute resolution was thought of as a weapon to meet this challenge. Justice Malimath Committee in 1990 stressed the importance of alternate dispute resolution mechanism to supplement the legal forum with a view to relieve law courts of the burden of overflowing dockets. In December 1993, the conference of Hon'ble Chief Ministers of the States and the Hon'ble Chief Justices of the High Courts adopted a resolution emphasising its importance. The resolution reads:
"The Chief Ministers and Chief Justices were of the opinion that courts were not in a position to bear the entire burden of justice system and that a number of disputes lent themselves to resolutions by alternative modes such as arbitration, mediation and negotiation. They emphasised the desirability of disputants taking advantage of the alternative dispute resolution which provided procedural flexibility, saved valuable time and money and avoided the stress of conventional trial."
Of course, the resolution did not refer to Lok Adalats, perhaps, because the Legal Services Authorities Act, 1987 which gives it the statutory base making its award enforceable as a decree of a civil court had not been enforced at that time. Lok Adalat has now been widely accepted and recognised as an effective machinery for conciliating and settling disputes. The alternative modes of settlement of disputes have been given impetus by the recent amendments to the Code of Civil Procedure, 1908. Under Section 89 of the Code, courts have been empowered to explore the possibilities of settlement of disputes through Lok Adalats, arbitration and conciliation.
The Legal Services Authorities Act, 1987 envisages constitution of Legal Services Authorities to provide free and competent legal service to the weaker sections of the society to ensure that opportunities for securing justice are not denied to any citizen by reason of economic or other disabilities and to organise Lok Adalats (LA) to see that operation of the legal system promotes justice on the basis of equal opportunity.
Free legal aid is a right of the needy, so that opportunities for securing justice are not denied to any citizen on account of economic, social or other disabilities. The Act thus envisages statutory machineries to provide legal aid to the poor and also to organise Lok Adalats as a voluntary and conciliatory agency to settle the cases not only at the litigation stage, but even at the prelitigation stage. The LAs aim at taking justice to the doorsteps of the poor and needy and at enabling quicker dispensation of justice at lesser costs.
The Act is being implemented and administered successfully for the last few years providing legal aid and conduct of LAs and organising legal literacy projects. The entire society including the lawyer community has welcomed these activities of the Legal Services Authorities nationwide. Several thousands of cases pending in courts have been settled and crores of rupees have been distributed as compensation in motor accident cases avoiding the inconveniences of trials in court. Nobody did have any objection; and everyone encouraged the activities of the Legal Services Authorities nationwide.
The advent of Legal Services Authorities Act, 1987 gave a statutory status to Lok Adalats. Even before the enforcement of the Act, the concept of Lok Adalat has been getting wide acceptance as People's Courts as the very name signifies. Settlement of disputes at the hands of Panchayat Heads or tribal heads was in vogue since ancient times. When statutory recognition had been given to Lok Adalat, it was specifically provided that the award passed by the Lok Adalat formulating the terms of compromise will have the force of decree of a court which can be executed as a civil court decree.
During the last few years Lok Adalat has been found to be a successful tool of alternate dispute resolution in India. It is most popular and effective because of its innovative nature and inexpensive style. The system received wide acceptance not only from the litigants, but from the public and legal functionaries in general. In India, during the last few years Lok Adalat has been functioning continuously and permanently in every district centre. In taluk centres also sittings of Lok Adalats have been held successfully. Several thousands of pending cases and disputes which had not reached law courts have been settled through Lok Adalats.
The major defect of the mechanism of Lok Adalat is that it cannot take a decision, if one of the parties, is not willing for a settlement, though the case involves an element of settlement. The adamant attitude shown by one among the parties will render the entire process futile. Even if all the members of the Lok Adalat are of the opinion that the case is a fit one for settlement, under the present set-up, they cannot take a decision unless all the parties consent.
In his inaugural address at the second annual meet of the State Legal Services Authorities, 1999, the then Hon'ble Chief Justice Dr A.S. Anand airing him views stated thus:
"There will be no harm if Legal Services Authorities Act is suitably amended to provide that in case, in a matter before it, the Judges of the Lok Adalats are satisfied that one of the parties is unreasonably opposing a reasonable settlement and has no valid defence whatsoever against the claim of the opposite party, they may pass an award on the basis of the materials before them without the consent of one or more parties. It may also be provided that against such awards, there would be one appeal to the court to which the appeal would have gone if the matter had been decided by a court.... This course, I think, would give relief to a very large number of litigants coming to Lok Adalats at prelitigative stage as well as in pending matters."
The course thought of by that the Hon'ble Chief Justice has now been almost translated into the statute-book, when in 2002 Parliament brought about certain amendments to the Legal Services Authorities Act, 1987. The said amendment introduced Chapter VI-A with the caption PRELITIGATION CONCILIATION AND SETTLEMENT. Section 22-B envisages establishment of "PERMANENT LOK ADALATS (PLA)" at different places for considering the cases in respect of Public Utility Services (PUS).1
If there is a dispute with respect to PUS, as per Section 22-C(1), any party to such a dispute can, before bringing it to a court of law for adjudication, make an application to PLA for the settlement of that dispute. The party making such application need not be a party who raises a claim against a public utility service. If a claim is made by one against a public utility service, the establishment carrying out the public utility service can also raise that dispute before PLA to resolve it. The only limitation is that PLA shall not have jurisdiction to consider a dispute relating to an offence not compoundable under any law or any matter where the value of the property in dispute exceeds Rs 10 lakhs. But the Central Government can, by an appropriate notification, increase this limit. Once an application has been made to PLA by one party, no party to that application shall invoke the jurisdiction of any court in the same dispute.
PLA has to be established by the National Legal Services Authority or the State Legal Services Authorities. It shall have three members; the Chairman, who is or has been a District Judge or an Additional District Judge or has held a judicial office higher in rank than that of a District Judge and two other members having adequate experience in public utility service. Such persons shall be appointed by the State or the Central Authority, as the case may be, upon nomination by the respective Governments. But at the same time, such nomination shall be on the recommendation of the Central or the State Authority.
Section 22-C(3) provides that when an application is filed raising a dispute, the parties shall be directed to file written statements with appropriate proof, including documents and other evidence. Copies of documents produced and statements made by the parties shall be given to each other. Thereafter PLA shall conduct conciliation proceedings between the parties to bring about an amicable settlement to the dispute. It is the primary duty of PLA as per Section 22-C(4). While conducting such conciliation proceedings, it is incumbent on the members of PLA to assist the parties to reach an amicable settlement. The parties are also obliged to cooperate in good faith with PLA. If PLA is of the opinion that "there exist elements of settlement in such proceedings, which may be acceptable to the parties", it shall formulate the terms of possible settlement, communicate its observations to the parties and if the parties agree, the settlement shall be signed and an award shall be passed in terms of such settlement and copies of the award shall be furnished to the parties. See Section 22-C(7). It is also provided in sub-section (8) that in cases where there exist elements of settlement, but the parties fail to reach at an agreement, "the Permanent Lok Adalat shall, if the dispute does not relate to any offence, decide the dispute". "For the purpose of holding any determination" the Permanent Lok Adalat shall have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 while trying a suit, in respect of summoning and enforcing of attendance and examining of witnesses, discovery or production of documents, reception of evidence on affidavits, requisitioning of public records and documents and such other matter as the Government may prescribe. PLA can specify its own procedure for deciding the dispute coming before it and the proceedings shall be deemed to be judicial proceedings.2 The award of PLA, whether made on merit or on settlement shall be final and binding on parties and be deemed to be a decree of a civil court. It shall be executed as if it is a decree of a civil court having jurisdiction in respect of the dispute involved. But the award cannot be called in question in any "original suit, application or execution proceedings".3 This, in effect, is the scheme of the amendment establishing a Permanent Lok Adalat (PLA).
This will, certainly, prove to be very effective, litigant-friendly and less-expensive mechanism to resolve certain serious disputes. As PUS are rendered mainly by corporate bodies, this virtually will be a forum for ordinary men and women to ventilate their grievances against such corporate bodies. In the changing economic scenario of the country where insurance, communication and other services are thrown open to corporate giants, it is all the more necessary to provide for cost-effective and delay-free tools for resolution of disputes. PLA is a structured clubbing conciliatory mode with certain features of arbitration to arrive at decisions under given circumstances.
There is sharp criticism against this machinery—both in its constitution and its functioning—especially from lawyers.
The main opposition against the amendment is based on the following viz. (1) with regard to the constitution of PLA; (2) insofar as PLA is given the power to decide a dispute unlike the ordinary Lok Adalats (LA) envisaged as per Section 19 of the Act which only conciliates the dispute; and (3) absence of provision for appeal against the decision of PLA.
It is submitted that there is no basis for these criticisms. As the Government is nominating the members, there may be political consideration in their appointment, it is said. It is true that the members of PLA shall be nominated by the respective Governments. But such nomination shall be, in terms of Section 22-B(2)(b) of the Act, on recommendation by the Legal Services Authority concerned. After such nomination, they have to be appointed by the Legal Services Authority concerned. So there is no chance for the Government's nominee getting appointed.
There is a Central Authority called the "National Legal Services Authority". Its patron is the Hon'ble Chief Justice of India. Its Executive Chairman is the seniormost Judge of the Supreme Court of India. Two among the members are two Chairmen of the State Legal Services Authorities who are invariably sitting Judges of the High Courts concerned. Another member is the Secretary of the Department of Legal Affairs and there is a Member Secretary who is a District Judge. Apart from that, there are members like the Secretary, Department of Expenditure, and members appointed by the Government in consultation with the Chief Justice of India. Those persons shall be eminent persons in the field of law or persons of repute in the legal services schemes or eminent social workers.
So far as the State Legal Services Authorities are concerned, it is headed by a Patron-in-Chief who is none other than the Hon'ble Chief Justice of the High Court. In almost all the State Authorities, except perhaps one or two, a sitting Judge of the High Court functions as the Executive Chairman. A District Judge functions as the Member Secretary. So far as Kerala is concerned, the other members are the Registrar of the High Court, the Advocate-General, the Director General of Prosecutions, the Chairman of the Bar Council of Kerala, President of the Kerala High Court Advocates' Association, the Law Secretary, the Finance Secretary, Director of Health Services, Director General of Police, Chairman, Kerala State Women's Commission and persons having special knowledge and practical experience in social service etc. Other State Authorities also have similar constitution. It is these authorities with such eminent personalities which shall recommend the names of the members of PLA. It is a body consisting of the Chief Justice of the High Court and a sitting Judge who is the Executive Chairman of the State Authority, which consists of eminent persons in the legal field that recommends such members. Members so recommended shall have to be nominated by the Government. The members so nominated shall have to be appointed by the authority concerned as members of PLA. It cannot be taken that the members so recommended by the authority shall be on political consideration or incompetent to function as members of PLA. It cannot be taken that a body consisting of the Chief Justice and a sitting Judge or retired Judge and other persons with the status of a District Judge and Advocate-General, Chairman of Bar Council etc. will recommend incompetent persons to be members of PLA. These respectable persons, it is hoped, will always recommend only competent persons. It cannot be presupposed that these respectable bodies consisting of very eminent persons will recommend incompetent incumbents.
There is criticism that the persons so appointed will not have legal background. Presently, the specialised tribunals are appointed with the representatives of social organisations or experts. In the case of machineries set up to try disputes raised by consumers, members other than Chairman are persons without legal background. Even in administrative tribunals, persons without legal background, but only with administrative experience are appointed as members. Along with persons with judicial background experts or experienced persons without legal background are also appointed in other alternative dispute redressal forums.
The second criticism is with regard to the functioning of PLA insofar as it is given the power to decide a dispute when the parties do not agree for a settlement. While deciding the dispute, it is made clear that the provisions of the Code of Civil Procedure and the Indian Evidence Act will not have application. In other words, the determination or decisions will be in a summary manner. As already mentioned above, PLA is given ample power in the matter of reception of evidence, examination of witnesses etc. the power that a civil court has. A decision is possible only in those cases where in the opinion of the Permanent Lok Adalat "there exist elements of settlement". In such cases, PLA formulates the terms of a possible settlement and gives such terms to the parties concerned for their observations. These observations will be considered on the basis of evidence produced by the parties. If they do not come to a settlement, PLA shall decide the dispute. That means, PLA is not given the power to decide every dispute coming before it. Only those disputes where there exist elements of settlement can be decided by the Permanent Lok Adalat. The decision or the opinion of the Permanent Lok Adalat as to whether there exist elements of settlement is also a matter which can be subjected to judicial review under Article 226 of the Constitution of India. Therefore, there shall be a check in that respect as well.
It is further ensured in the Act that while deciding the dispute on merit, PLA shall be guided by the "principles of natural justice, objectivity, fair play, equity and other principles of justice". Thus, a fair procedure is always envisaged. Therefore, there is no reason for any criticism on the power granted to PLA to decide the dispute in the event of a settlement not being arrived at despite the existence of an element of settlement.
It cannot be said that there is no appeal against the decision of PLA. So far as the ordinary Lok Adalats (LA) are concerned—which is in existence even prior to the amendment and is still being continued—no appeal will lie against an award of that Lok Adalat.4 The ordinary LA adopts only a conciliatory method and does not decide a dispute. Therefore, disputes are settled on consent of the parties. When a dispute is settled based on consent, no appeal need lie from any such order or award even if there is a settlement in court. Under the civil procedure law also no appeal shall lie from a decree passed on consent of the parties.5 This is the reason the Act declares that "no appeal shall lie to any court against the award" of ordinary Lok Adalat (LA) envisaged in Chapter VI of the Act.
But the award of Permanent Lok Adalat (PLA) envisaged in the newly introduced Chapter VI-A is different. If it is an award upon consent of parties and is as a result of compromise, necessarily, nobody will think of an appeal. When there is a decision by PLA, as the parties did not agree for a compromise, it is possible that the aggrieved party may think of an appeal. Every award of the Permanent Lok Adalat, whether it is based on consent of the parties, or on compromise or upon the decision, "shall be deemed to be a decree of a civil court". Thus the decision taken by PLA will have all the attributes of a decree of a civil court. It will be taken and considered in all respects, as a decree of a civil court. Every decree, unless it is appealed against and so long as it is allowed to continue, will be final and binding on the parties. Same is the case of an award of PLA. It is true that there is no provision for appeal. But appeal is not expressly excluded, in the case of award of PLAs. It is not stated anywhere in the Act that an award of a PLA shall not be called in question in any appeal, as is done in the case of the award of an ordinary Lok Adalat (LA) in Section 21(2) of the Act.
Certainly, appeal will lie only if it is provided somewhere by law. Otherwise, one cannot file an appeal. It seems that the provision of Section 96(1) CPC could be relied on to establish that an appeal is not excluded. As already mentioned above, the award of PLA has all the attributes of a civil court decree and it is deemed as a decree of a civil court. Section 96(1) of the Code of Civil Procedure, 1908 provides:
"Save where otherwise expressly provided in the body of this Code or by any other law for the time being in force, an appeal shall lie from every decree passed by any court exercising original jurisdiction to the court authorized to hear appeals from the decisions of such court."
When the award of PLA is treated as a decree of civil court and as it is not otherwise provided in the Legal Services Authorities Act that no appeal shall lie from such award, necessarily, that being deemed a civil court decree, an appeal shall lie from that decree.
An award of PLA shall be executed by a civil court "having local jurisdiction" depending upon the amount of the decree. Necessarily, an appeal shall also lie to a court depending upon the quantum of the amount involved in the decree or to the High Court being a decision of a body consisting of three persons of which a District Judge or a retired District Judge is the Chairman. So there is possibility for a judicial review in an appeal.
In the case of the awards of ordinary Lok Adalat (LA), the statute specifically provides that it shall not be challenged in an appeal. But the very same legislature did not legislate such a provision when it dealt with the award of PLA. The manifest difference in the provisions relating to the awards of PLA and LA is not accidental. The difference really means that an appeal is possible against an award of PLA in terms of Section 96(1) of the Code of Civil Procedure, when it is not specifically barred by the Legal Services Authorities Act, 1987 and as the award has all the attributes of a decree of a civil court.
Even otherwise, the jurisdiction under Article 226 of the Constitution of India cannot be ruled out, being one among the basic features of the Constitution of India. Therefore, the criticism that the award of PLA cannot be called in question in a higher forum has no force.
Moreover, PLA is a machinery to settle or decide disputes relating to public utility services. In the changing economic scenario, the establishments rendering public utility services, enumerated in the Act might be run by corporate sectors. Common people may have claims against these corporates. If they are given a speedy and inexpensive remedy to resolve their grievances, it should be welcomed.
Lawyers can very well apprise the client of the demerits, if any, of the machinery of PLA. In spite of that, if the party is inclined to resort to the cheaper remedy, it cannot be said that the legislation is antilitigant, as there is no compulsion that one shall first approach PLA before approaching a court of law.
Of course, as already mentioned, the party other than the claimant also can raise the dispute before PLA and it is likely that PLA may render a decision, if no settlement is arrived at, in spite of the existence of elements of settlement. Thus an award may come against a person who really did not desire to avail of this remedy in respect of his claims. In such circumstances, he can either resort to an appeal, or at any rate, to proceedings under Article 226 of the Constitution of India.
It cannot be argued that the members of PLA will be biased in their decision and that they may even defeat the decision of the Chairman by forming a majority on extraneous considerations. Even if it happens so in a rare situation, certainly it can be corrected either in a proceeding under Article 226 of the Constitution of India or in an appeal as mentioned above.
There shall be some definite qualifications for the other members of PLA. Presently what is required is that they shall have "adequate experience in public utility service". This is too vague a phraseology. It is always advisable to spell out definite qualifications, so that the litigants will have confidence that the persons deciding their disputes are sufficiently qualified and able.
As already mentioned above, it is possible, if somebody raises a claim against public utility services, the latter can bring that dispute before PLA. PLA may take some time to render a decision. In case no compromise is arrived at, and if the case involves no element of settlement what will happen, if in the meantime the period of limitation is over, so far as the claimant party is concerned? Can it be taken that he has been "prosecuting with due diligence in civil proceedings" in a court? Because, so far as PLA is concerned, he was not the party initiating the dispute. The Lok Adalat is not treated as a court, but only vested with certain powers of a civil court or shall be deemed to be a civil court for the purpose of Section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973. These aspects require consideration.
Anyhow, there is no basis for the controversy now centred around the amendment to the Act. Let us experiment the machinery and, if necessary, we can correct it, based on our experience.
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- PUS mean, as defined in Section 22-A(b), transport service for carriage of passengers or goods by air, road or water; postal telegraph or telephone services; supply of power, light or water to the public; system of public conservancy or sanitation; services in hospital or dispensary and insurance services. The Central or the State Government is also given power to issue notification declaring any other service also as a PUS in public interest.
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- See Section 22
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- Ibid.
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- See Section 21(2) of the Act.
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- See Section 96(3) of the Code of Civil Procedure.
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