(Prayer: This writ petition is filed under Articles 226 and 227 of the Constitution of India praying to a) issue a writ of Certiorari quashing the impugned judgment and decree passed by district legal service authority, Belagavi, before Lok Adalat by its order dated. 07-04- 2018 in plc no. 185/2018 vide annexure-c; b) issue any other incidental and consequential relief as deemed fit, in the facts and circumstances of the case and in aid of the main relief sought for, in the interest of justice and equity.)
Cav Order:
1. The petitioner is before this Court calling in question the judgment and decree dated 07-04-2018 passed by the Lok Adalat, Belagavi in P.L.C.No.185 of 2018.
2. Heard Smt. Vaibhavi Inamdar, learned counsel appearing for the petitioner.
3. Facts, in brief, germane are as follows:
The father of the petitioner one Sri Ganpatrao Chavan is said to have purchased the property measuring 7 acres and 34 guntas in Sy.No.102/1, out of which, CTS No.673, Plot No.19A measuring 296.10 sq. mtrs. situated at Sambhaji Nagar, Vadgaon, Belgavi is the subject property. After the death of his father, the petitioner and his siblings are said to be in possession and peaceful enjoyment of the said property and that petitioner is the owner of the property by virtue of inheritance. At a later point in time, in the year 2025, when petitioner got the records verified, he comes to know about the compromise decree entered into between two individuals without the petitioner being a party to the compromise decree, while the property of the petitioner being its subject matter. On coming to know of the said compromise decree without the knowledge of the petitioner, the petitioner is before this Court in the subject petition.
4. The learned counsel Smt. Vaibhavi Inamdar appearing for the petitioner would vehemently contend that all the documents and statutory records stand in the name of the petitioner in respect of the subject property. The compromise decree is entered on a property belonging to the petitioner, without the petitioner being made a party and extract from the property card that becomes the subject matter of compromise decree shows nil transaction. With all these, the learned counsel would submit that the petitioner who has served the Army for more than 30 years has now been at the mercy of some miscreants who have taken over his property, without him being made a party to the proceedings. The learned counsel would submit that the judgment and decree of the Lok Adalat be quashed and the petitioner be left with peaceful possession of the property.
5. The respondents though served have remained unrepresented throughout. Several opportunities for appearance were granted but they did not appear and on 09-01-2026 this Court passed the following order:
“Heard the learned counsel appearing for the petitioner Smt Vaibhavi Inamdar.
All the respondents are now served by way of hand summons and an acknowledgment of such service is also placed before the Court by the learned counsel for the petitioner. Therefore, I deem it appropriate to grant one opportunity to the respondents to get themselves represented or appear before the Court. In the event they would not appear, appropriate orders would be passed on hearing the learned counsel appearing for the petitioner.
List the matter on 23.01.2026.
Interim order, granted earlier, is extended till the next date of hearing.”
Even on the next date there was no appearance of the respondents. Therefore, the learned counsel for the petitioner was heard.
6. I have given my anxious consideration to the submissions made by the learned counsel for the petitioner and have perused the material on record.
7. The afore-narrated facts are a matter of record. The petitioner being the owner of the property is not in dispute, as plethora of documents are produced along with the petition itself to show that the petitioner is the owner of the property. A compromise petition is filed before the Lok Adalat in P.L.C.No.185 of 2018. The compromise petition reads as follows:
“…. ….. …. III] DESCRIPTION OF SUIT PROPERTY :
All that piece and parcel of property bearing CTS No. 673, old Plot No.19 A out of R S No.102/1, measuring 296.10 Sq Mtrs., and two old AC sheet rooms measuring 300 sq fts each situated at Sambhaji Nagar Vadgaon, Belagavi.
The suit property is well identifiable by its separate CTS extract hence boundaries are not mentioned.
1] The petitioner is a public trust which is registered under No. A4862/BGM with Assistant Charity Commissioner Belagavi, and trust was registered in order to achieve the aims and objects of the Trust Pooja functions. Utsav, Cultural activities etc That the petitioner trust is in possession and enjoyment of the suit property since more than 30 years. The name of the petitioner is duly mutated to CTS records as Holder and absolute owner of the suit property. The petitioner trust is having two rooms of ac sheet measuring 300 sq fts each and running Anganwadi school at the premises. And also the petitioner regularly carrying and performing all cultural and social and devotional activities time being.
2] The Plaintiff/petitioner submits the Respondents without having any right interest over the suit property claiming ownership right over the suit property. It is submitted by the petitioner that since from more than 30 years the petitioner trust in possession and carrying all devotional and cultural activities and no one have objected the possession of the trust petitioner and ownership of the petitioner over the suit property was admitted ed by the citizens of locality.
3] Further Petitioner submits that the Respondents started objecting the ownership of the petitioner over suit property hence in this regard the elders of the locality conducted the meeting and in that meeting the respondents agreed not to object the ownership of trust over suit property. But after long period now the respondents started disturbing the possession of the petitioner. It is submitted that the respondents are having no right and have not produced single documents regarding their rights and title.
4] Further Plaintiff/petitioner submits that now it is become necessary to declare the Plaintiff as absolute owner of suit property and hence Plaintiff having no other alternative approached this Hon’ble Court to declare its as absolute owner. Hence Plaintiff/petitioner constrained present petition for Declaration.
5] The cause of action arose for filling this petition when the defendants are trying to disturbing the possession of the petitioner trust in the month of January 2018 and same is continued till today.
PRAYER:
Therefore the Plaintiff most humbly prays that:
a) To Declare the Plaintiff/petitioner absolute owner and holder of the suit property.
b) Any other relief which deems fit and proper be given in favor of the Plaintiff.
c) Permission to amend the petition as and when deem necessary may kindly be granted.
The description of the property shown is old Plot No.19A in R.S.No.102/1 measuring 296.10 sq. mtrs. If the said description is juxtaposed with the documents produced by the petitioner to demonstrate ownership, there is only Plot No.19 and no Plot No.19A which is the subject matter of compromise petition. The extract of the property record is as follows:
The encumbrances are completely free from transfer. There is nothing from the compromise petition that is filed. Based upon the aforesaid compromise petition, the compromise decree is obtained by two persons describing the property to be Plot No 19A. Admittedly all other indications are clear that the property is of the petitioner and the petitioner is not a party to the proceedings in which compromise is recorded.
8. Whether the writ would be maintainable against the said ex-parte decree of a property belonging to a person need not detain this Court for long or delve deep into the matter. This Court in GURAMMA v. SMT.NAGAMMA NAGALAPURA (W.P.No.101962 of 2025 decided on 15-12-2025) , has held as follows:
“…. …. ….
ISSUE NO.1:
Whether the drawing up of a decree on the award of the Lok Adalat, can be challenged in a writ petition?
9. The Apex Court has time and again held that an award of the Lok Adalat can only be challenged by filing a writ petition under Article 226 or 227 of the Constitution of India on limited grounds of fraud.
9.1 In the case of STATE OF PUNJAB v. JALOUR SINGH [(2008) 2
SCC 660] , the Apex Court has held as follows:
“…. …. ….
“7. A reference to relevant provisions will be of some assistance, before examination of the issues involved. Section 19 of the Legal Services Authorities Act, 1987 (“the LSA Act”, for short) provides for organisation of the Lok Adalats. Section 19(5)(i) of the LSA Act provides that 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 any case pending before any court for which the Lok Adalat is organised. Section 20 relates to cognizance of cases by the Lok Adalats. Sub-section (1) refers to the Lok Adalats taking cognizance of cases referred to by courts and sub-section (2) refers to the Lok Adalats taking cognizance of matters at pre-litigation stage. The relevant portions of other sub-sections of Section 20, relating to cases referred by courts, are extracted below:
“20. (3) Where any case is referred to a Lok Adalat under sub-section (1) … the Lok Adalat shall proceed to dispose of the case … 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 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 (1) for disposal in accordance with law.
***
(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).”
(emphasis supplied)
8. It is evident from the said provisions that the Lok Adalats have no adjudicatory or judicial functions. Their functions relate purely to conciliation. A Lok Adalat determines a reference on the basis of a compromise or settlement between the parties at its instance, and puts its seal of confirmation by making an award in terms of the compromise or settlement. When the Lok Adalat is not able to arrive at a settlement or compromise, no award is made and the case record is returned to the court from which the reference was received, for disposal in accordance with law. No Lok Adalat has the power to “hear” parties to adjudicate cases as a court does. It discusses the subject-matter with the parties and persuades them to arrive at a just settlement. In their conciliatory role, the Lok Adalats are guided by the principles of justice, equity and fair play. When the LSA Act refers to “determination” by the Lok Adalat and “award” by the Lok Adalat, the said Act does not contemplate nor require an adjudicatory judicial determination, but a non-adjudicatory determination based on a compromise or settlement, arrived at by the parties, with guidance and assistance from the Lok Adalat. The “award” of the Lok Adalat does not mean any independent verdict or opinion arrived at by any decision-making process. The making of the award is merely an administrative act of incorporating the terms of settlement or compromise agreed by parties in the presence of the Lok Adalat, in the form of an executable order under the signature and seal of the Lok Adalat.
…. …. ….
12. It is true that where an award is made by the Lok Adalat in terms of a settlement arrived at between the parties (which is duly signed by parties and annexed to the award of the Lok Adalat), it becomes final and binding on the parties to the settlement and becomes executable as if it is a decree of a civil court, and no appeal lies against it to any court. If any party wants to challenge such an award based on settlement, it can be done only by filing a petition under Article 226 and/or Article 227 of the Constitution, that too on very limited grounds. But where no compromise or settlement is signed by the parties and the order of the Lok Adalat does not refer to any settlement, but directs the respondent to either make payment if it agrees to the order, or approach the High Court for disposal of appeal on merits, if it does not agree, is not an award of the Lok Adalat. The question of challenging such an order in a petition under Article 227 does not arise. As already noticed, in such a situation, the High Court ought to have heard and disposed of the appeal on merits.”
(Emphasis supplied)
9.2 The Apex Court following JALOUR SINGH supra, in the case of BHARGAVI CONSTRUCTIONS V. KOTHAKAPU MUTHYAM REDDY [(2018) 13 SCC 480], has held as follows:
“10. The defendants, on being served with the notice of the suit, filed an application under Order 7 Rule 11(d) of the Code of Civil Procedure, 1908 (hereinafter referred to as “the Code”) and prayed for rejection of the plaint. According to the defendants, since the suit seeks to challenge the award of Lok Adalat, it is not maintainable being barred by virtue of rigour contained in Order 7 Rule 11(d) of the Code. It was contended that the remedy of the plaintiff was in filing writ petition under Article 226 or/and Article 227 of the Constitution of India to challenge the award dated 22- 8-2007 as held by this Court in State of Punjab v. Jalour Singh [State of Punjab v. Jalour Singh, (2008) 2 SCC 660 : (2008) 1 SCC (Civ) 669 : (2008) 1 SCC (Cri) 524 : (2008) 1 SCC (L&S) 535] .
11. The trial court, by order dated 24-7-2013 allowed the application filed by the defendants and rejected the plaint by invoking powers under clause (d) of Rule 11. It was held that the filing of the civil suit to challenge the award of Lok Adalat is impliedly barred and the remedy of the plaintiffs is to challenge the award by filing writ petition under Articles 226 or/and 227 of the Constitution in the High Court as held by this Court in State of Punjab [State of Punjab v. Jalour Singh, (2008) 2 SCC 660 : (2008) 1 SCC (Civ) 669 : (2008) 1 SCC (Cri) 524 : (2008) 1 SCC (L&S) 535] .
…. …. ….
22. The question arose before this Court (three- Judge Bench) in State of Punjab [State of Punjab v. Jalour Singh, (2008) 2 SCC 660 : (2008) 1 SCC (Civ) 669 : (2008) 1 SCC (Cri) 524 : (2008) 1 SCC (L&S) 535] as to what is the remedy available to the person aggrieved of the award passed by the Lok Adalat under Section 20 of the Act. In that case, the award was passed by the Lok Adalat which had resulted in disposal of the appeal pending before the High Court relating to a claim case arising out of the Motor Vehicles Act. One party to the appeal felt aggrieved of the award and, therefore, questioned its legality and correctness by filing a writ petition under Articles 226/227 of the Constitution of India. The High Court dismissed the writ petition holding it to be not maintainable. The aggrieved party, therefore, filed an appeal by way of special leave before this Court. This Court, after examining the scheme of the Act allowed the appeal and set aside the order of the High Court. This Court held that the High Court was not right in dismissing the writ petition as not maintainable. It was held that the only remedy available with the aggrieved person was to challenge the award of the Lok Adalat by filing a writ petition under Article 226 or/and Article 227 of the Constitution of India in the High Court and that too on very limited grounds. The case was accordingly remanded to the High Court for deciding the writ petition filed by the aggrieved person on its merits in accordance with law.
23. This is what their Lordships held in para 12 : (Jalour Singh case [State of Punjab v. Jalour Singh, (2008) 2 SCC 660 : (2008) 1 SCC (Civ) 669 : (2008) 1 SCC (Cri) 524 : (2008) 1 SCC (L&S) 535] , SCC p. 666, para 12)
“12. It is true that where an award is made by the Lok Adalat in terms of a settlement arrived at between the parties (which is duly signed by parties and annexed to the award of the Lok Adalat), it becomes final and binding on the parties to the settlement and becomes executable as if it is a decree of a civil court, and no appeal lies against it to any court. If any party wants to challenge such an award based on settlement, it can be done only by filing a petition under Article 226 and/or Article 227 of the Constitution, that too on very limited grounds. But where no compromise or settlement is signed by the parties and the order of the Lok Adalat does not refer to any settlement, but directs the respondent to either make payment if it agrees to the order, or approach the High Court for disposal of appeal on merits, if it does not agree, is not an award of the Lok Adalat. The question of challenging such an order in a petition under Article 227 does not arise. As already noticed, in such a situation, the High Court ought to have heard and disposed of the appeal on merits.”
(Emphasis supplied)
In the light of the judgments of the Apex Court in JALOUR SINGH and BHARGAVI CONSTRUCTIONS (supra), and the facts obtaining in the case at hand, the decree so drawn on the basis of the award of the Lok Adalat can only be challenged by filing a writ petition under Article 226 or 227 of the Constitution of India on the grounds set out by the Apex Court in the afore-quoted two judgments. The issue is answered accordingly.
ISSUE NO.2:
Whether a writ petition filed by a third party challenging the award of the Lok Adalat is maintainable and entertainable ?
10. To consider the said issue, it is necessary to consider the facts that has lead the petitioners before this Court, though at the periphery. It is not in dispute that the suit is for partition and separate possession, in which the distinction of a plaintiff and defendant is illusory, as all of them are entitled to a share in the property. The contention of the petitioners is that, the genealogical tree produced before the concerned Court is said to be in error, as it has left out the petitioners from the family. The genealogical tree upon which the present petition is preferred is as follows:
On the strength of the said genealogical tree, the petitioners have built their submissions. The submission is, tracing the history to 17.02.1968, when the partition deed was entered into by the family. The partition recognized certain rights of the petitioners and certain shares in the suit properties. The submission now is that, the share that is allotted to the petitioners in the partition deed in the year 1968 is further partitioned without providing the respective shares to these petitioners. Further, the petitioners’ father, way back in the year 1970 had acquired by purchasing the properties from Bharamaiah, who is the only son of Lakshmaiah, who inherited his share of the properties in the partition deed dated 17.02.1968. Therefore, the petitioners ought to have been made as parties - defendants before the concerned Court, especially when the petitioners have a higher share in the suit properties. The respondents instead, without impleading the petitioners in the suit for partition, have fraudulently entered into a compromise decree on the entirety of the suit properties, without having any right to the same. Therefore, the issue now would be, whether a person who is not arrayed as a party to the suit can challenge the decree or award of compromise passed by the Lok Adalat, arising from the said suit.
11. Jurisprudence is replete as to whether a person who is not a party / third party can file a writ petition challenging an award of the Lok Adalat. I deem it appropriate to quote a few judgments on this issue.
11.1. A Division Bench of the High Court of Andhra Pradesh, in the case of BATCHU SUBBA LAKSHMI V. SANNIDHI SRINIVASULU[2009 SCC OnLine AP 795], has held as follows:
“…. …. ….
Who can file writ petition challenging the Lok Adalat Award
8. The parties to the compromise or settlement, which is the basis for award of Lok Adalat, no doubt entitled to challenge the award on any of the grounds referred to herein above grounds. Ordinarily, a third party cannot challenge the award in a writ petition even if such award causes prejudice. The remedy of such party would be to institute a separate suit or proceeding for necessary redressal and seek appropriate decree of declaration by filing a suit within the period of limitation prescribed under law. Under Section 34 of the Specific Relief Act, 1963, any person entitled to legal character or any right as to any property, may file a suit for declaration. Under this provision, any person can even institute a suit for declaration that the decree passed by Civil Court in an earlier suit is not binding on him. When a civil Court can even declare that an earlier decree of the Court is not binding on the party before it, we do not see any objection for a third party to institute a suit in a civil Court seeking a declaration that the award of Lok Adalat is not binding on him/her subject to the law of limitation. We however hasten to add that there may be extraordinary cases where a third party is meted with injustice at the behest of two or more conniving and colluding parties, who may have obtained an award of Lok Adalat by fraud or misrepresentation only to defeat the rights of such third party. In such cases within a reasonable period such third party may maintain a writ petition. But in such cases, there should be prima facie evidence of fraud or misrepresentation or collusion in obtaining the award of Lok Adalat. Even if such allegations are made and the question involves complicated questions of fact requiring voluminous evidence, third party should be left to seek remedy in a civil Court rather than preferring extraordinary remedy under Article 226 of Constitution.
What are grounds of challenge
9. Insofar as legal position that the Lok Adalat cannot pass award unless and until there is a compromise and settlement under Section 20(3) and (5) of the Act between the parties, is well settled. In State of Punjab v. Ganpat Raj, (2006) 8 SCC 364, respondent moved Punjab and Haryana High Court by filing writ petition seeking writ of Mandamus to the State to pay interest at 18% per annum on the delayed payment of pension arrears and other retiral benefits. The case was sent to Lok Adalat, which passed award without any settlement or compromise between the pensioner and the State. The writ petition filed by the State was dismissed as misconceived. In the Supreme Court, it was submitted that the matter could not have been disposed of by Lok Adalat in view of the specific provisions contained in Section 20 of the Act. While allowing the appeal, the matter was remitted to High Court for de novo consideration. The purport of Section 20(3) and (5) of the Act is explained by Supreme Court in the following words.
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 differences by mutual concessions. It is an agreement reached 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 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.
10. In State of Punjab v. Jalour Singh, (2008) 3 SCC 660, the wife and son of Amarjit Kaur, who died in a motor accident, filed petition before the Motor Accidents Claims Tribunal (MACT) claiming Rs. 5,00,000/- as compensation. An award was passed by MACT on 1.12.1998 for Rs. 1,44,000/-. The claimants filed appeal before High Court, which was referred to High Court Lok Adalat for settlement. On 3.8.2001, Lok Adalat passed an order awarding Rs. 1,70,200/- observing that if the parties have any objection to the order proposed, they may move the High Court for disposal of appeal on merits. Aggrieved by the same, Punjab Roadways filed application before the High Court to set aside the Lok Adalat award. A learned Single Judge rejected the same placing reliance on earlier judgment of another learned Single Judge wherein it had been held that an order passed by Lok Adalat can be challenged by filing a petition under Article 227 of Constitution of India. Therefore, another petition was moved under Article 227 of Constitution challenging the order of Lok Adalat. The same was rejected by learned Single Judge on the ground that such a petition is not maintainable under Article 227 of Constitution. The Supreme Court while reversing the award and remanding the matter to High Court laid down as under.
It is true that where an award is made by the Lok Adalat in terms of a settlement arrived at between the parties (which is duly signed by parties and annexed to the award of the Lok Adalat), it becomes final and binding on the parties to the settlement and becomes executable as if it is a decree of a civil Court, and no appeal lies against it to any Court. If any party wants to challenge such an award based on settlement, it can be done only by filing a petition under Article 226 and/or Article 227 of the Constitution, that too on very limited grounds. But where no compromise or settlement is signed by the parties and the order of the Lok Adalat does not refer to any settlement, but directs the respondent to either make payment if it agrees to the order, or approach the High Court for disposal of appeal on merits, if it does not agree, is not an award of the Lok Adalat. The question of challenging such an order in a petition under Article 227 does not arise. As already noticed, in such a situation, the High Court ought to have heard and disposed of the appeal on merits.
11. Dealing with the provisions of the Act especially Sections 19 and 20, their Lordships observed as under:
It is evident from the said provisions that the Lok Adalats have no adjudicatory or judicial functions. Their functions relate purely to conciliation. A Lok Adalat determines a reference on the basis of a compromise or settlement between the parties at its instance, and puts its seal of confirmation by making an award in terms of the compromise or settlement. When the Lok Adalat is not able to arrive at a settlement or compromise, no award is made and the case record is returned to the Court from which the reference was received, for disposal in accordance with law. No Lok Adalat has the power to “hear” parties to adjudicate cases as a Court does. It discusses the subject-matter with the parties and persuades them to arrive at a just settlement. In their conciliatory role, the Lok Adalats are guided by the principles of justice, equity and fair play. When the LSA Act refers to “determination” by the Lok Adalat and “award” by the Lok Adalat, the said Act does not contemplate nor require an adjudicatory judicial determination, but a non-adjudicatory determination based on a compromise or settlement, arrived at by the parties, with guidance and assistance from the Lok Adalat. The “award” of the Lok Adalat does not mean any independent verdict or opinion arrived at by any decision-making process. The making of the award is merely an administrative act of incorporating the terms of settlement or compromise agreed by parties in the presence of the Lok Adalat, in the form of an executable order under the signature and seal of the Lok Adalat.
(emphasis supplied)
12. From the above judgments, it may be taken as well settled that the award of Lok Adalat is administrative act of incorporating the terms of compromise or settlement agreed by the parties in the presence of Lok Adalat and Lok Adalat does not sit in adjudication of the dispute. When an award is passed in terms of the settlement arrived between the parties, which is duly signed by the parties annexed to the award of Lok Adalat, it becomes binding on the parties to the settlement and becomes executable as if it is a decree of Civil Court. No appeal would lie against the award of Lok Adalat and if any party wants to challenge such an award, it can be by way of petition under Article 226 or 227 of Constitution. If there is no compromise or settlement between the parties before the Lok Adalat, it cannot pass any award nor such award can bind the parties. The challenge to the award of Lok Adalat under Article 226 of Constitution can be entertained on very limited grounds raised only by parties to the settlement/compromise before Lok Adalat and not by anybody else.”
(Emphasis supplied)
11.2 The High Court of Bombay, in the case of KUSUMBAI v. BHAUSAHEB [2019 SCC OnLine Bom 585], has held as follows:
“…. …. ….
2. The issue raised in this petition is as to whether, the third party can challenge the award of the Lok Adalath before the High Court on the ground that the litigating sides had excluded the third party from the litigation?
…. …. ….
6. I find from Bhargavi Constructions (supra) that the Honourable Supreme Court was not dealing with the issue as to whether, a third party could also have the same remedy of challenging the Lok Adalat award in the High Court contending that such third party is aggrieved by the Lok Adalat Award. The Honourable Supreme Court, therefore, concluded that an “aggrieved party” can challenge the Lok Adalat award before the High Court.
7. The Division Bench of the Andhra Pradesh High Court, in the matter of Batchu Subba Lakshmi v. Sannidhi Srinivasulu, 2010 (1) ALT 483 : 2010 (1) ALD 277, dealt with the issue of a third party challenging the award of the Lok Adalat. The observations made by the Andhra Pradesh High Court as to who can challenge the Lok Adalat award are found in paragraph 8 of the judgment, which read as under:—
“Who can file writ petition challenging the Lok Adalat Award.
8. The parties to the compromise or settlement, which is the basis for award of Lok Adalat, no doubt entitled to challenge the award on any of the grounds referred to herein above grounds. Ordinarily, a third party cannot challenge the award in a writ petition even if such award causes prejudice. The remedy of such party would be to institute a separate suit or proceeding for necessary redressal and seek appropriate decree of declaration by filing a suit within the period of limitation prescribed under law. Under Section 34 of the Specific Relief Act, 1963, any person entitled to legal character or any right as to any property, may file a suit for declaration. Under this provision, any person can even institute a suit for declaration that the decree passed by Civil Court in an earlier suit is not binding on him. When a civil Court can even declare that an earlier decree of the Court is not binding on the party before it, we do not see any objection for a third party to institute a suit in a civil Court seeking a declaration that the award of Lok Adalat is not binding on him/her subject to the law of limitation. We however hasten to add that there may be extraordinary cases where a third party is meted with injustice at the behest of two or more conniving and colluding parties, who may have obtained an award of Lok Adalat by fraud or misrepresentation only to defeat the rights of such third party. In such cases within a reasonable period such third party may maintain a writ petition. But in such cases, there should be prima facie evidence of fraud or misrepresentation or collusion in obtaining the award of Lok Adalat. Even if such allegations are made and the question involves complicated questions of fact requiring voluminous evidence, third party should be left to seek remedy in a civil Court rather than preferring extraordinary remedy under Article 226 of Constitution.”
8. While dealing with such challenge, the Andhra Pradesh High Court also concluded in Batchu Subba Lakshmi (supra) that such a challenge can be posed on certain grounds. The grounds for challenge are recorded in paragraph 9 of the said judgment, which read as under:—
“What are grounds of challenge.
9. Insofar as legal position that the Lok Adalat cannot pass award unless and until there is a compromise and settlement under Section 20(3) and (5) of the Act between the parties, is well settled. In State of Punjab v. Ganpat Raj : (2006) 8 SCC 364 : 2006 (7) SCJ 364 : 2007 (1) ALT 283 (DNSC), respondent moved Punjab and Haryana High Court by filing writ petition seeking writ of Mandamus to the State to pay interest at 18% per annum on the delayed payment of pension arrears and other retiral benefits. The case was sent to Lok Adalat, which passed award without any settlement or compromise between the pensioner and the State. The writ petition filed by the State was dismissed as misconceived. In the Supreme Court, it was submitted that the matter could not have been disposed of by Lok Adalat in view of the specific provisions contained in Section 20 of the Act. While allowing the appeal, the matter was remitted to High Court for de novo consideration. The purport of Section 20(3) and (5) of the Act is explained by Supreme Court in the following words.
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 differences by mutual concessions. It is an agreement reached by adjustment of conflicting or opposing claims by reciprocal modification of demands. As per Tertnes 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 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 (2) (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.”
9. In the instant case, RCS No. 730/2017 was filed on 30.06.2017 and the Defendants appeared suo moto in the said matter. It was immediately placed in the list of matters, which could be taken up in the Lok Adalat after 08 days, scheduled on 08.07.2017. On the said date, the suit was compromised with reference to the properties mentioned above. Prima facie, a fraud is played by the Plaintiff and the Defendants on these Petitioners. All of them were parties to the earlier RCS No. 447/2000. The entire family as appearing in the family tree was before the Civil Court. The said first suit was compromised on 02.09.2002 and the shares of the parties were demarcated. The property at Survey No. 104 in Vadjai sector was mentioned in the suit properties in the 2000 suit as well as in the 2017 suit as noted above. The Plaintiff in the 2017 suit, therefore, had no reason to exclude these Petitioners.
10. The learned counsel for the Petitioners submits that this mischief is played because the husband of Petitioner No. 1 (deceased Ramesh), who is the brother of the Plaintiff Bhausaheb in the 2017 suit, had passed away in 2000 and Bhusaheb along with other relatives desired to deprive the widow of Ramesh with that share of the property to which Ramesh would have a right. This prima facie appears to be the fraud played upon these Petitioners as well as the court when the 2017 suit was settled in the Lok Adalat within 08 days of it's institution and when the Defendants had appeared suo moto without any notice. All had declared that there are no other family members.
11. These set of facts are not found in the judgments delivered by the Honourable Supreme Court in Bhargavi Construction (supra) and in State of Punjab v. Jalour Singh, (2008) 2 SCC 660 and in the matter decided by the High Court of Punjab and Haryana in the case of Shalu v. Vineet, 2014 (174) (2) PLR 602 : 2013 TLP & H 4103.
12. It is true that a party aggrieved by the Lok Adalat award can approach the High Court if it discovers any fraud post the Lok Adalat award. It is equally true that the third party, which is not a litigant in a suit which has suffered a compromise decree, can also file a separate suit for seeking a declaration that such decree which affects the rights of the third party, would not be binding upon the said party as the said decree was delivered in the matter in which, such third party was never arrayed. It, therefore, appears that an option to either prefer a separate suit or file a writ petition in the High Court would be available to such third party. At times, the issue of limitation would crop up and the suit to be preferred by such third party might be barred, of course, subject to the date of the knowledge of such decree.
13. Both the learned Advocates submit that despite their best efforts, they could not locate any judgment, directly on this law point, delivered by this Court or by the Honourable Supreme Court. It is conceded that the judgment delivered by the High Court of Andhra Pradesh in the matter of Batchu Subba Lakshmi (supra) is the only judicial pronouncement available dealing with a third party being aggrieved by the Lok Adalat award on the ground of fraud and his/her exclusion from such proceedings, which culminated into the Lok Adalat award.
14. The learned Advocate for the Petitioners, who are the third parties, relies upon the judgments delivered by the Honourable Supreme Court in Bhargavi Constructions (supra) and State of Punjab (supra) to contend that when any aggrieved party can approach the High Court for challenging the Lok Adalat award, such “aggrieved party” would also include a “third party” as like the Petitioners herein.
15. While hearing the learned Advocates for the respective sides, notwithstanding that prima facie the contention of fraud is sustainable, I have perused the record and have found that the property situated in Survey No. 104 which is known as Vadjai area, was the suit property in the 2000 suit for partition and separate possession and the same survey number involving a larger area of land in Vadjai area was the suit property in the 2017 suit, in which these Petitioners were excluded. As such, if at all there is any fraud played by the Plaintiff (Bhausaheb) or the Defendants (Kondabai and Lahanabai) in the 2017 suit, it relates to the property Survey No. 104 in Vadjai area and which, therefore, fortifies the contention of the Petitioners that the property admeasuring 3 Acres 35 Gunthas, which was subject matter of the 2000 suit is the suit property in the 2017 suit, which is shown to be admeasuring 7 Acres 19 Gunthas.
16. In view of the above, I conclude, in the light of the law laid down by the Honourable Supreme Court in Bhargavi Constructions (supra) and State of Punjab (supra), that the third party would be covered by the meaning “aggrieved person” and as is held by the High Court of Andhra Pradesh in the matter of Batchu Subba Lakshmi (supra), such a third party can challenge the Lok Adalat award provided the ground of fraud and misrepresentation is, prima facie, made out.”
(Emphasis supplied)
The view taken by the High Court of Bombay in the afore- quoted case was subsequently followed by the same High Court of again in the case of LATA v. SHANKAR reported in 2021 SCC ONLINE BOM 6358.
11.3 The High Court of Madras, in the case of M. ANTONYSAMY v. S. MUMTAJ [2018 SCC OnLine Mad 12537], has held as follows:
“…. …. ….
21. When the entire facts leading to the registration of the award obtained before the Lok Adalat is established to have been obtained by playing a fraud and the parties colluding among themselves, the award itself would be a nullity and non-est in the eyes of law.
22. The learned Senior counsel for the petitioner relied upon the decision of the Hon'ble Apex Court in S.P. Chengalvaraya Naidu v. Jagannath reported in (1994) 1 SCC 1 : AIR 1994 SC 853 on these proposition and the relevant observation reads as follows:—
“1.“Fraud avoids all judicial acts, ecclesiastical or temporal” observed Chief Justice Edward Coke of England about three centuries ago. It is the settled proposition of law that a judgment or decree obtained by playing fraud on the court is a nullity and non est in the eyes of law. Such a judgment/decree by the first court or by the highest court has to be treated as a nullity by every court, whether superior or inferior. It can be challenged in any court even in collateral proceedings.
8. The facts of the present case leave no manner of doubt that Jagannath obtained the preliminary decree by playing fraud on the court. A fraud is an act of deliberate deception with the design of securing something by taking unfair advantage of another. It is a deception in order to gain by another's loss. It is a cheating intended to get an advantage.…”
23. Insofar as what constitutes a fraud or collusion has been discussed by this Court in a decision reported in 1998 (1) CTC 66 [Ranipet Municipality v. M. Shamsheerkhan] and this Court made the following observations:
“9. It is this conduct of the respondent that is attacked by the petitioner as abuse of process of Court. What is ‘abuse of the process of the Court’? Of course, for the term ‘abuse of the process of the Court’ the Code of Civil Procedure has not given any definition. A party to a litigation is said to be guilty of abuse of process of the Court, in any of the following cases:—
(1) Gaining an unfair advantage by the use of a rule of procedure.
(2) Contempt of the authority of the Court by a party or stranger.
(3) Fraud or collusion in Court proceedings as between parties.
(4) Retention of a benefit wrongly received.
(5) Resorting to and encouraging multiplicity of proceedings.
(6) Circumventing of the law by indirect means.
(7) Presence of witness during examination of previous witness.
(8) Institution vexatious, obstructive or dilatory actions.
(9) Introduction of Scandalous or objectionable matter in proceedings.
(10) Executing a decree manifestly at variance with its purpose and intent.
(11) Institution of a suit by a puppet plaintiff.
(12) Institution of a suit in the name of the firm by one partner against the majority opinion of other partners etc. (See The Code of Civil Procedure - A.I.R. Commentary to Section 151, C.P.C.) The above are only some of the instances, where a party may be said to be guilty of committing abuse of the process of Court.”
24. The issue as to whether the revision petitioner, who was not a party to the suit, can seek for setting aside an award obtained by fraud or misrepresentation is also no more res-integra in view of the following decisions:
1) 1998 (1) CTC 470 [J. Sivasubramanian v. N. Govindarajan],
“1. A person who is not a party to the suit, but who is aggrieved by the decree, has come to this Court, under Art. 227 of the Constitution of India, alleging fraud and collusion in obtaining the decree.
13. I feel that all these decisions will show that a duty is cast on the litigant to plead, pray and get relief by placing all materials before Court. By suppressing facts and without impleading the necessary parties, a collusive decree is obtained. In the case on hand, the collusion is apparent. A person who has no right in the property concedes the right of the plaintiff to get a decree, and that too within 49 hours of filing of the suit. The result of this is getting unfair advantage over the rights of the petitioners and to deprive them of their properties. Both the respondents were aware that the petitioners are in possession on the basis of documents. They themselves (i, e. parties to the suit) admit the possession of the petitioners. But, without disclosing any of these documents, the power of attorney (agent) filed the suit against the principal and gets a decree, by consent. I have already stated as to what is the legal effect, i.e., the second respondent (defendant) himself is the plaintiff and defendant. It will be unjust to accept the contention of the respondents. Such a collusive decree also cannot be allowed to stand. After coming to know of these facts, if any Court shuts its eyes to realities, it will cease to be a Court of Justice. By invoking the judicial supervisory jurisdiction, I declare that the decree in O.S. No. 7631 of 1997, on the file of XV Assistant Judge, City Civil Court at Madras is a nullity and on the basis of the said decree, possession of the petitioners shall not be disturbed. I further find that since the suit is filed fraudulently, the same is liable to be quashed, and I do so. O.S. No. 7631 of 1997 is struck off from the file of the lower Court. The Civil Revision Petition is allowed with costs. Advocate's fee Rs. 2,500/- (Rupees Two thousand five hundred). CMP. No. 17556 of 1997 for stay is closed.”
2) 2009 SCC OnLine AP 795 [Batchu Subba Lakshmi v. Sannidhi Srinivasualu]
“7. Under Section 21(1) of the Act an award of Lok Adalat shall be deemed to be decree of a Civil Court and under Section 21(2) of the Act every award made by Lok Adalat shall be final and binding on all the parties. No appeal shall lie to any Court against the award, and therefore, ordinarily a writ petition challenging award is also barred. But there may be situations where there being no compromise or settlement as envisaged under Section 20(3) and (5) of the Act, Lok Adalat may have passed an award. In other words, what would be the position if Lok Adalat passes an order even without parties arriving at a compromise or settlement among themselves. In such a situation, it cannot be said that there is an award of Lok Adalat, which can be enforced by a Civil Court as a decree. There may be yet another situation where in the absence of the parties to the lis or in the absence of one of the parties to the lis, award of Lok Adalat may have been obtained by impersonation, misrepresentation or fraud. Even in such cases, there being no valid award, Section 21(1) of the Act is not attracted. Having regard to the language of Article 226(1) of Constitution of India, which empowers the High Court of a State to issue writs, orders or directions against any public authority or against authorities discharging public functions, the High Court can entertain a writ petition against an award of Lok Adalat. The phrase ‘for any other purpose’ appearing in Article 226(1) of Constitution, in our opinion, is broad enough to take within its purview the situations where a statute contains ‘no Certiorari clause’. It is well settled that ‘no Certiorari clause’ in a statute does not bar the Constitutional Court from entertaining a petition for redressal of grievance and issue an appropriate order ex debito justitiae. Therefore, in either of the situations or any such other situations, a writ petition would lie.
Who can file writ petition challenging the Lok Adalat Award
8. The parties to the compromise or settlement, which is the basis for award of Lok Adalat, no doubt entitled to challenge the award on any of the grounds referred to herein above grounds. Ordinarily, a third party cannot challenge the award in a writ petition even if such award causes prejudice. The remedy of such party would be to institute a separate suit or proceeding for necessary redressal and seek appropriate decree of declaration by filing a suit within the period of limitation prescribed under law. Under Section 34 of the Specific Relief Act, 1963, any person entitled to legal character or any right as to any property, may file a suit for declaration. Under this provision, any person can even institute a suit for declaration that the decree passed by Civil Court in an earlier suit is not binding on him. When a civil Court can even declare that an earlier decree of the Court is not binding on the party before it, we do not see any objection for a third party to institute a suit in a civil Court seeking a declaration that the award of Lok Adalat is not binding on him/her subject to the law of limitation. We however hasten to add that there may be extraordinary cases where a third party is meted with injustice at the behest of two or more conniving and colluding parties, who may have obtained an award of Lok Adalat by fraud or misrepresentation only to defeat the rights of such third party. In such cases within a reasonable period such third party may maintain a writ petition. But in such cases, there should be prima facie evidence of fraud or misrepresentation or collusion in obtaining the award of Lok Adalat. Even if such allegations are made and the question involves complicated questions of fact requiring voluminous evidence, third party should be left to seek remedy in a civil Court rather than preferring extraordinary remedy under Article 226 of Constitution.
13. Reverting to the facts of this case, there is no dispute that respondents 1, 2 and 4 are partners in 3rd respondent firm. There is also no dispute that respondents 1 and 2 filed O.S. No. 1 of 2004 against third respondent and its Managing Partner, the fourth respondent, for dissolution of firm and rendition of accounts. On 07.2.2004, plaintiffs and defendants therein signed memorandum of compromise and settlement whereunder they agreed to withdraw from the firm and fourth respondent was permitted to continue the business till 31.3.2008, failing which it shall be open to first respondent to execute the decree and recover possession of vacant site used as stockyard for the business of third respondent. The award passed by Lok Adalat on 07.2.2004 was signed by respondents 1 and 2. Fourth respondent signed on his behalf and also on behalf of third respondent firm. Either on the date of award of Lok Adalat or during pendency of suit before District Court, Nandyal, allegation of reconstitution of third respondent firm with petitioners and fourth respondent as new partners was not revealed. There is also no dispute nor it can be denied that partnership deed dated 01.4.2003 was executed by petitioners and fourth respondent on the stamp papers which had been produced (sic. purchased) by third respondent firm on 27.3.2001 long prior to disputes arose among respondents 1 to 4. This creates any amount of doubt on the case put up by petitioners. This doubt becomes strong when we realised that the petitioners 1 to 3 are stepmother, wife and grandfather respectively of fourth respondent and they are all living under the same roof. The allegation made by respondents 1 and 2 in their counter affidavit remains uncontroverted. These lend support to the submissions made on behalf of respondents 1 and 2 and we do not see strong reasons to discredit those submissions.”
3) 2013 (6) CTC 166 [P. Subramani v. A. Periyasamy]
“21. In the present case, the entire proceedings relating to delivery of possession are vitiated by fraud. When an order is obtained by resorting to fraud, all the subsequent proceedings thereto will also render it vitiated. In this context, I am fortified by the decision of this Court reported in (J. Sivasubramanian v. N. Govindarajan) 1998 1 CTC 470 relied on by the learned counsel for the revision petitioner. In that case, this Court took note of the fact that the suit was filed by suppressing material facts and by not impleading the proper and necessary parties. This Court held that fraud and collusion are palpable and that the decree was obtained by power of attorney agent as against his own principal thereby depriving his right over the property, which was purchased by him from the original owner. As the power agent filed the suit by suppressing the material facts, this Court held that “….in such cases, it is the duty of the Court to see that the suit itself is wiped off from the file.” It was also held by this Court that in such circumstances the revision petition under Article 227 of the Constitution of India is very much maintainable. In that case, this Court, relying on the decision of the Honourable Supreme Court reported in S.P. Chengalvaraya Naidu (dead) by Lrs. v. Jagannath (dead) by Lrs., (1994) 1 SCC 1 culled out the legal propositions as follows:
“12. In S.P. Chengalvaraya Naidu (dead) by LRs. v. Jagannath (dead) by LRs., their Lordships have decided as to what is meant by ‘fraud’. In paragraph 6, Their Lordships have held thus:—
“… A fraud is an act of deliberate deception with the design of securing something by taking unfair advantage 14 of another. It is a deception in order to gain by another's loss. It is a cheating intended to get an advantage…” Their Lordships have further said thus:— “A litigant who approaches the Court, is bound to produce all the documents executed by him which are relevant to the litigation. If he withholds a vital document in order to gain advantage on the other side, then he would be guilty of playing fraud on the Court as well as on the opposite party.” In the earlier portion of that Judgment, their Lordships have held thus:— “… We have no hesitation to say that a person whose case is based on falsehood, has no right to approach the Court. He can be summarily thrown out at any stage of the litigation.” The effect of such a decree obtained in such cases is also stated in that judgment thus:— “… The principle of “finality of litigation” cannot be pressed to the extent of such an absurdity that it becomes an engine of fraud in the hands of dishonest litigants. The Courts of law are meant for imparting justice between the parties. One who comes to the Court, must come with clean hands…. A judgment or decree obtained by playing fraud on the court is a nullity and non est in the eyes of law. Such a judgment/decree by the first Court or by the highest Court has to be treated as a nullity by every Court, whether superior or inferior. It can be challenged in any court even in collateral proceedings.” In Mahboob Sahab v. Syed Ismail, of the judgment, Their Lordships declared thus:— “… The reason is that fraud is and extrinsic collateral act, which vitiates the most solemn proceedings of courts of justice. If a party obtains a decree from the Court by practicing fraud or collusion, he cannot be allowed to say that the matter is res judicata and cannot be reopened. There can also be no question of res judicata in a case where signs of fraud or collusion are transparently pregnant or apparent from the facts on record.” In paragraph 10, Their Lordships further declared thus:—
”… Section 44 of the Evidence Act envisages that any party to a suit or proceeding may show that any judgment, order or decree, which is relevant under Sections 40, 41 or 42 has been obtained by fraud or collusion. Under Section 40, the existence of the judgment, order or decree which by law prevents any Court from taking cognizance of a suit or holding a trial, is a relevant fact when the question is whether such court ought to take cognizance of such suit or to hold such trial.” In Indian Bank v. Satyam Fibres (India) Pvt. Ltd., it was declared thus:—
“The authorities, be they constitutional, statutory or administrative, (and particularly those who have to decide a lis) possess the power to recall their judgments or orders if they are obtained by fraud as fraud and justice never dwell together (Fraud et jus nunquam cohabitant). Fraud and deceit defend or excuse no man (Fraud et dolus nemini patrocinari debent). The judiciary in India also possesses inherent power, specially under Section 151, CPC., to recall its judgment or order if it is obtained by fraud on court. In the case of fraud on a party to the suit or proceedings, the Court may direct the affected parly to file a separate suit for setting aside the decree obtained by fraud. Inherent powers are powers which are resident in all Courts, especially of superior jurisdiction. These powers spring not from legislation but from the nature and the constitution of the tribunals or courts themselves so as to enable them to maintain their dignity, secure obedience to its process and rule, protect its officers from indignity and wrong and to punish unseemly behaviour. This power is necessary for the orderly administration of the Court's business. Since fraud affects the solemnity, regularity and orderliness of the proceedings of the court and also amounts to an abuse of the process of court, the courts have been held to have inherent power to set aside an order obtained by fraud practised upon that Court.”
25. On a overall appreciation of the observations in the aforesaid decisions, I am of the view that the award before the Lok Adalat was obtained by fraud and collusion exercised by the parties to the suit and as such, the award itself has no validity and deemed to be non-est. It is a settled law that fraud vitiates all solemn acts and an award obtained by playing fraud is nullity. Hence, this Court would be justified in setting aside the award by exercising its power under Article 227 of the Constitution of India.”
(Emphasis supplied)
11.4 A Division Bench of the High Court of Telangana, in the case of DASARI LOKESH CHANDRA v. LOK ADALAT [W.P.18369/2021 decided on 20.12.2021] has held as follows:
“…. …. …..
6. Point No.1:-
Arguing at length in respect of the merits of the case, the learned counsel for the petitioner contended that the petitioner is a bona fide purchaser of Plot Nos.379 and 452 admeasuring 400 square yards in Survey No.175 of Patancheru Mandal, Sangareddy District and he purchased the said property on 30.01.2021 through a registered sale deed for valuable consideration, but subsequently he came to know that an Award was passed by the Lok Adalat in respect of the said property and other property in a suit between the sons and the daughters of late Lakkaraju Laxmana Rao and the said Award is based on the terms of compromise entered into between the parties i.e., the sons and the daughters of late Lakkaraju Laxmana Rao and indeed, the said deed of compromise is a collusive one and therefore, the Award passed basing on the said deed of compromise is unsustainable. He further submitted that as there is no other remedy for the petitioner who is a third party to the proceedings to question the Award of the Lok Adalat, he filed the present Writ Petition challenging the same.
7. Undoubtedly, challenge to an Award of the Lok Adalat can be done only by filing a Writ Petition under Article 226 or 227 of the Constitution of India, as observed by the Hon’ble Supreme Court in Bhargavi Constructions and another Vs. Kothakapu Muthyam Reddy and others - (2018) 13 SCC 480.
8. Under Section 21(1) of the Legal Services Authority Act, 1987, an Award of the Lok Adalat shall be deemed to be a decree of the civil Court. Also, as per Section 21(2) of the said Act, the Award made is final and binding on the parties. Law does not provide any appeal to any Court against the said Award. Thus, only, Writ Petitions can be filed challenging the Award passed by the Lok Adalat. However, the grounds of challenge are very limited.
9. Observing that there may be extra- ordinary cases where a third party is meted with injustice at the behest of two or more conniving and colluding parties, who may have obtained the Award of the Lok Adalat by fraud or misrepresentation, the Courts in a series of decisions held that even a third party may maintain a Writ Petition challenging the Award of the Lok Adalat. One of such cases where the said observation is made is Batchu Subba Lakshmi and others Vs. Sannidhi Srinivasulu and others – 2010(1) ALD 277 DB, wherein a Division Bench of this Court at para 8 held as follows:-
“The parties to the compromise or settlement, which is the basis for award of Lok Adalat, no doubt entitled to challenge the award on any of the grounds referred to herein above grounds. Ordinarily, a third party cannot challenge the award in a writ petition even if such award causes prejudice. The remedy of such party would be to institute a separate suit or proceeding for necessary redressal and seek appropriate decree of declaration by filing a suit within the period of limitation prescribed under law. Under Section 34 of the Specific Relief Act, 1963, any person entitled to legal character or any right as to any property, may file a suit for declaration. Under this provision, any person can even institute a suit for declaration that the decree passed by Civil Court in an earlier suit is not binding on him. When a civil Court can even declare that an earlier decree of the Court is not binding on the party before it, we do not see any objection for a third party to institute a suit in a civil Court seeking a declaration that the award of Lok Adalat is not binding on him/her subject to the law of limitation. We however hasten to add that there may be extraordinary cases where a third party is meted with injustice at the behest of two or more conniving and colluding parties, who may have obtained an award of Lok Adalat by fraud or misrepresentation only to defeat the rights of such third party. In such cases within a reasonable period such third party may maintain a writ petition. But in such cases, there should be prima facie evidence of fraud or misrepresentation or collusion in obtaining the award of Lok Adalat. Even if such allegations are made and the question involves complicated questions of fact requiring voluminous evidence, third party should be left to seek remedy in a civil Court rather than preferring extraordinary remedy under Article 226 of Constitution.”
(Emphasis supplied)
The views taken in the cases of BATCHU SUBBALAKSHMI supra and DASARI VENKATESH supra were subsequently affirmed by another Division Bench of the High Court of Telangana in the case of SMT. B. LAVANYA v. THE STATE OF TELANGANA in Writ Petition No.2906 of 2021, decided on 16.12.2023.”
The aforesaid judgment clearly lays down that a writ challenging the award of the Lok Adalat is maintainable and entertainable and the person who was not a party to the proceedings is also entitled to challenge the award of the Lok Adalat. The petitioner fits in to both these principles as laid down by this Court in the aforesaid judgment. The award challenged is that of the Lok Adalat and before the Lok Adalat the petitioner is not a party.
9. Now with regard to the fraud played by all those persons who are beneficiaries of the compromise decree should be permitted to enjoy the fruits of the said decree, notwithstanding the principle that fraud unravels everything, again need not detain this Court for long or delve deep into the matter. A coordinate Bench of this Court in SHAH HARILAL BHIKHABHAI AND COMPANY v. B.MANI (W.P.No.7714 of 2020 )decided on 04-11-2020 , has held as follows:
“…. …. ….
3. Having heard the learned counsel for the petitioner and having perused the petition papers, this Court is inclined to grant indulgence in the matter because:
(a) Petitioner apparently has been in the possession and enjoyment of the subject property by virtue of two registered lease deeds both dated 23.01.1954; his assertion as to this is strengthened by the tax paid receipts for decades, the latest being of the year 2019-2020; the contesting respondents despite service of notice having remained unrepresented, the version of the petitioner which is supported by an affidavit and the accompanying documents remains unrebutted.
(b) In respect of subject property the suit in S.C.No.678/2018 was filed by 1st respondent-Mr.B.Mani represented by 3rd respondent-GPA Holder Mr.Sendil Kumar against the 2nd respondent-Mr.Arun on 26.04.2018; strangely a compromise decree has been obtained on 31.05.2018, absolutely without any explanation for this rocket speed, even when the ink on the pleadings had not yet dried up; what intrigues the mind of this court is that the learned Judge of the Court below has not given a thought to this doubtful swiftness with which the parties to the suit have acted.
(c) Apparently, petitioner a registered partnership firm is a huge stakeholder in the matter and that he has not been impleaded as one of the defendants to the suit, obviously because it would have resisted the suit being decreed on the basis of a fraudulent compromise; as already mentioned above the allegations of fraud and duplication have remained unrebutted, there being no contra pleadings nor controvertion thereof; in fact, the parties to the suit as also the 3rd respondent GPA Holder have chosen to remain unrepresented and this conduct itself shows prima facie fraud that has victimized the petitioner.
(d) Learned counsel for the petitioner is more than justified in banking upon decision of the Apex Court in S.P.CHANGALVARAYA NAIDU vs. JAGANNATH, AIR 1994 SC 853 in support of his contention that fraud vitiates everything; his reliance on MEGHAMALA & OTHERS vs. G.NARASIMHA REDDY & OTHERS, JT (2010) 8 SC 658 also aides the case of the petitioner; at para 33 the Apex Court observed:
“Fraud is an intrinsic, collateral act, and fraud of an egregious nature would vitiate the most solemn proceedings of courts of justice. Fraud is an act of deliberate deception with a design to secure something, which is otherwise not due. The expression “fraud” involves two elements, deceit and injury to the person deceived. It is a cheating intended to get an advantage”.
(e) Learned counsel for the petitioner submits and I think it right that the possession of the suit premises needs to be restored since it was thrown out from the same on the basis of the impugned judgment & decree which are a nullity in the eye of law, having been tainted by fraud and duplicity; he is also justified in seeking a direction to the respondent-Registrar of the Court below for initiating police proceedings in the matter of fraud in a time bound way, inasmuch as several such fraudulent decrees & orders are stated to have been obtained.
In the above circumstances, this writ petition succeeds:
(i) a Writ of Certiorari issues quashing the impugned judgment & decree, and dismissing the subject suit with an exemplary cost of Rs.1 lakh (rupees one lakh) payable by the respondents 1 & 2 each, and Rs.50,000/- payable by respondent no.3;
(ii) the learned Judge of the Court below shall take all steps for restoring possession of the subject property in favour of the petitioner-firm within an outer limit of eight weeks, if necessary, by taking the aid of State Power.
… … ….”
If the law as declared by the coordinate bench in the judgment quoted supra is considered on the facts obtaining in the case at hand, fraud is all over found. Two parties go before the permanent Lok Adalath. No suit is pending. They file a compromise petition before the said Lok Adalath, the next day it is compromised and a decree is drawn. The property does not belong either to the plaintiff or to the defendant, it belongs to the third party, the present petitioner. Therefore, there is a clear fraud played by two parties usurping the property belonging to the petitioner, without any documentation and without any right whatsoever over the property. What is held by the coordinate bench in the judgment quoted supra would aptly become applicable to the facts obtaining in the case at hand, as the entire transaction is marred by fraud, as fraud unravels everything, it does unravel the compromise decree entered into by the parties to the compromise. On the aforesaid reasons the inevitable conclusion is, the success of the petition.
10. For the aforesaid discussions, the following:
O R D E R
(i) Writ Petition is allowed.
(ii) The judgment and decree dated 07-04-2018 passed by the District Legal Services Authority, Belagavi, before Lok Adalat at Belagavi in P.L.C.No.185 of 2018 stands quashed.
(iii) Petitioner would become entitled to all consequential benefits that would flow from quashment of the order.
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