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CASE NO.:

Appeal (civil) 4677 of 2005

PETITIONER:

P.T. THOMAS

RESPONDENT:

THOMAS JOB

DATE OF JUDGMENT: 04/08/2005

BENCH:

RUMA PAL & Dr. AR. LAKSHMANAN

JUDGMENT:

JUDGMENT

(ARISING OUT OF S.L.P (C) No..20179/2003)

Dr.AR. LAKSHMANAN,J.

Leave granted.

The above appeal is directed against the final order of the High Court

of Kerala at Ernakulam dated 27.8.2003 in CRP No. 1136/2003 allowing the

Revision Petition filed by the Respondent herein.

The Appellant and the Respondent are brothers, Respondent being the

elder. They have another brother who is well employed in the United States.

The three brothers partitioned the property left behind by their father by

metes and bounds. The Respondent was running a theatre. A part of the

theatre fell in the property allotted to the appellant. Since Respondent did

not vacate and give vacant possession to the Appellant, he was constrained

to file a suit for a mandatory injunction for removal of the building and to

surrender vacant possession. The Appellant also prayed for a decree for

recovery of possession.

The appellant's suit was decreed as prayed for. When the matter was

pending in appeal at the instance of the Respondent in the District Court, the

dispute was referred to the Lok Adalat constituted under the Legal Services

Authorities Act for resolution of the dispute. The matter was settled in the

Lok Adalat. The award of the Lok Adalat dated 5.10.1999 provided for sale

to the Appellant or his nominee of the property scheduled to the award after

a period of one year and within a period of two years on payment of a sum

of Rs. 9.5 lakhs to the Respondent and on default of the Respondent to

execute the document, the appellant could get it executed through court. On

the other hand, in case of default on the part of the appellant, he had to give

up his aforesaid right and instead be entitled to be paid to Rs. 3.5 lakhs by

the Respondent.

The Respondent did not execute the sale deed within the time fixed

despite repeated requests by the Appellant. The Appellant, therefore, sent a

lawyer's notice on 3.10.2001 to the Respondent calling upon him to execute

the sale deed. Respondent did not receive the notice and the notice was

returned unserved to the Appellant. The Appellant thereafter sent a telegram

on 26.10.2001 requiring the Respondent to execute the sale deed and also

sent him a copy of his earlier notice dated 3.10.2001 by certificate of

posting. There was no response from the Respondent. The Appellant was,

therefore, constrained to move for execution of the award by filing petition

in the Trial Court, which was opposed on various grounds. The Subordinate

Judge overruled all the objections and the appellant was directed to deposit a

sum of Rs. 9.5 lakhs within three days i.e., on or before 8.4.2003. The

Appellant, however, deposited the amount one day earlier on 7.4.2003 the

next working day. But, the High Court allowed the Revision filed by the

Respondent and dismissed the execution petition on grounds, which

according to the Appellant, are irrelevant and incorrect. Hence, the

Appellant preferred the above special leave petition.

We have heard Mr. TLV Iyer, learned senior counsel for the

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Appellant and Mr. M.P.Vinod, learned counsel for the Respondent and

perused the pleadings, orders passed by the courts below and the Annexures

filed along with the appeal.

Mr. TLV Iyer, learned senior counsel appearing for the Appellant

submitted that the High Court has exceeded its jurisdiction under Section

115 C.P.C in entering into the investigation of questions of fact and

appraisal of evidence in setting aside the well considered order of the

Executing Court. He further submitted that the High Court is in error in

holding that the Appellant did not have the funds with him to have the deed

of sale executed in his favour and the reasoning and the premises on which

such a conclusion is based are faulty and fallacious besides being beyond

jurisdiction. It is further submitted that the Respondent had not performed

his obligations by evincing his willingness to execute the sale deed on

receipt of the amount of Rs. 9.5 lakhs. Concluding his arguments, Mr Iyer

submitted that the view taken by the High Court would totally defeat the

object and purposes of the Legal Services Authorities Act and render the

decisions of the Lok Adalat meaningless.

Per contra, Mr. Vinod, learned counsel for the Respondent submitted

that the appellant has not paid the sum of Rs. 9.5 lakhs after one year from

the date of the award, namely, 5.10.1999 and at any rate within two years

therefrom. It is further submitted that the appellant also did not deposit the

amount before filing the execution petition as contemplated in the award.

Even when he was examined in court on 22.2.2003, he had not deposited the

said amount. According to Mr. Vinod, the award of the Lok Adalat cannot

be equated with a decree and it only incorporates an agreement between the

parties and that in case of any violation of the said agreement, or the terms

of the compromise recorded in the award, the parties lose their right to get

the same executed and the compromise stands withdrawn. It is further

argued that the Appellant admittedly had not produced any material to show

that the Appellant had the resources to pay the said amount at any relevant

point of time or that the said amount was ever offered to the respondent at

any point of time and, therefore, the appellant is not entitled to any relief in

this appeal.

It is further submitted that there is no effective service of any notice

on the Respondent before 5.10.1999 and the only endorsement is that the

Respondent was absent. It is submitted that the Appellant never had the

money with him and the belated payment after the order of the executing

court will not improve the case of the Appellant to prove his readiness and

willingness to deposit a sum of Rs. 9.5 lakhs as agreed upon by him, and on

the date specified, on the basis on which the matter was compromised before

the Lok Adalat and an award was passed. Concluding his arguments,

learned counsel submitted that there is no merit whatsoever in the grounds

raised in this appeal and therefore, the appeal, which is clearly without any

merits, deserves to be dismissed.

We have carefully considered the rival submissions made by both the

learned counsel. We do not find any merit in the submissions made by

learned counsel for the Respondent. From the evidence and the documents

filed, we see bona fides on the part of the appellant in giving effect to the

compromise arrived at between parties in the Lok Adalat. We also see

absolute merits on the submissions made by learned senior counsel, Mr.

TLV Iyer.

It is seen from the records that the Appellant was compelled to file the

suit for recovery of possession of Plot No. 2 since the Respondent herein

refused to comply with the terms of the compromise arrived at between the

parties. The suit was decreed on 26.7.1990 and appeal was filed by the

Judgment Debtor \026 Respondent before the District Court and during the

pendency of the appeal the matter was compromised between parties on

5.10.1999. We have already extracted the terms of compromise in

paragraph supra. It is thus clear that the decree holder Appellant has

approached the executing court on the ground that the Judgment debtor/

Respondent failed to execute the sale deed after receiving Rs. 9.5 lakhs

from the decree holder. Therefore the Appellant prayed before the

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Executing Court that he should be permitted to deposit Rs. 9.5 lakhs in that

court and get the documents executed through court if the Judgment debtor

failed to do so on issuance of notice for the purpose by the executing court.

The respondent submitted that the compromise arrived at is a conditional

one and Judgment debtor is liable to execute the sale deed in favour of the

decree holder only if he remits the amount as agreed, and since decree

holder has failed to comply with the conditions the Judgment debtor is not

bound by the terms of the compromise. On the other hand the

respondent/J.D. was ready and willing to deposit Rs.3.5 lakhs before the

executing court as per the terms of the compromise.

Before the executing Court witnesses were examined on both sides

and Exhibit A1 to A8 and B1 were produced by the respective parties. The

executing court, accepting the evidence of PW 1 came to the conclusion that

the notice issued requiring the respondent to execute the document as

submitted in the award was not received by the Judgment debtor and it has

been returned unclaimed. It is seen that notice was an attempt to be served

on the Judgment debtor on 4.10.2001 and since he was absent, intimation

regarding the notice has been given and the above notice has been returned

as unclaimed on 19.10.2001. The Appellant after return of the Exhibit A2

notice immediately sent a telegram to the Judgment debtor on 26.1.2001.

The receipt issued for the telegram and certified true copy of the telegram

was marked as Exhibit A3 and A4. The Original telegram was produced on

the side of the Respondent and marked as an Exhibit. By the telegram the

Judgment debtor was intimated that the notice sent by the decree holder

through his Advocate on 3.10.2001 was returned unclaimed and copy of that

notice was being forwarded by certificate of posting and that he was always

ready and willing to pay Rs. 9.5 lakhs and get the sale deed executed in

terms of the award. The copy of the Exhibit A2 notice is marked as A5, the

certificate of posting obtained for issuing the copy of notice along with the

copy of the telegram is marked as Exhibit A6. Thus, it is clearly seen that

the appellant decree holder has expressed his readiness and willingness to

deposit the amount as per the award and get the document executed.

It is argued on the side of the Respondent that the Appellant has not

sufficient fund to fulfill the obligation as per the award and that the

Appellant had issued a notice and telegram so as to create some records in

his favour that he is always willing and ready to pay the amount as per the

award. It is submitted that it is only due to the default of the Appellant the

execution of the sale deed has not taken place and therefore, the Appellant is

not entitled to any relief in this appeal. The learned Subordinate Judge on a

consideration of the entire evidence placed on record granted the Appellant

three days time to deposit Rs. 9.5 lakhs before the said court upon which he

could get the sale deed through court as stipulated in the award. The

appellant as directed by the learned Subordinate Judge deposited the entire

sum of Rs. 9.5 lakhs in the sub-court on 7.4.2003 as could be seen from

Annxure 6.

We have also perused the order of the learned Single Judge of the

High Court in revision. The learned Single Judge, in our view, has

misunderstood the terms of the award. The obligation was on the

Respondent to evince his willingness to execute the sale deed within two

years and not vice-versa as assumed by the High Court. There was already a

decree of ejectment against the Respondent in the suit in the trial Court and

it was his appeal that was sought to be settled in the Lok Adalat. The

settlement was a concession in his favour giving a breathing time to vacate

and give vacant possession. Therefore, the initiative had to come from the

Respondent after offering to execute the sale deed where upon it became

necessary to comply with his obligations. However, without taking any

initiative the Respondent has adopted the delaying tactics by alleging that

the appellant was not able to provide the requisite funds for purchase and

forgetting the facts that the Appellant's brother is in USA and providing the

requisite funds for purchase. It was he, in fact, who had provided the

amount which was deposited on 7.4.2003 and not on 8.4.2003 as assumed by

the High Court. It is, thus, seen that the Appellant has performed his

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obligation. He had sent the notice on 3.10.2001 and it was 4.10.2001 well

before the expiry of time on 5.10.2001. Though the notice was correctly

addressed and despite the intimation by the post office, the notice was not

accepted by the Respondent and was returned unserved. In such

circumstances, the presumption of law is that the notice has been served on

the Respondent.

The High Court, in our view, has also misinterpreted Section 27 of the

Post Office Act. The requirement of Section has been complied with in this

case. The reasoning of the High Court on this issue is not correct and not in

accordance with factual position. In the notice issued, the Postman has

made the endorsement. This presumption is correct in law. He had given

notice and intimation. Nevertheless, the respondent did not receive the

notice and it was returned unserved. Therefore, in our view, there is no

obligation cast on the appellant to examine the Postman as assumed by the

High Court. The presumption under Section 114 of the Evidence Act

operates apart from that under the Post Office Act.

In our opinion, the award of the Lok Adalat is fictionally deemed to

be decrees of Court and therefore the courts have all the powers in relation

thereto as it has in relation to a decree passed by itself. This, in our opinion,

includes the powers to extend time in appropriate cases. In our opinion, the

award passed by the Lok Adalat is the decision of the court itself though

arrived at by the simpler method of conciliation instead of the process of

arguments in court. The effect is the same. In this connection, the High

Court has failed to note that by the award what is put an end to is the appeal

in the District Court and thereby the litigations between brothers forever.

The view taken by the High Court, in our view, will totally defeat the object

and purposes of the Legal Services Authorities Act and render the decision

of the Lok Adalat meaningless.

Section 21 of the Legal Services Authorities Act, 1987 reads as follows :-

"21. AWARD OF LOK ADALAT. \026 2[(1)] Every award

of the Lok Adalat shall be deemed to be a decree of a Civil

Court or, as the case may be, an order of any other Court and

where a compromise or settlement has been arrived at, by a Lok

Adalat in a case referred on it under sub-section (1) of Sec.20,

the court fee paid in such cases shall be refunded; in the manner

provided under the Court Fees Act, 1870 (7 of 1870)

(2) Every award made by a Lok Adalat shall be final and

binding on all the parties to the dispute, and no appeal shall lie

to any Court against the award.

Section 22 reads thus :-

"22. POWERS OF LOK ADALATS - (1) The Lok

Adalat shall, for the purposes of holding any determination

under this Act, have the same powers as are vested in a Civil

Court under the Code of Civil Procedure, 1908 (5 of 1908),

while trying a suit in respect of the following matters, namely :

(a) the summoning and enforcing the attendance of any witness

and examining him on oath;

(b) the discovery and production of any document ;

(c) the reception of evidence on affidavits ;

(d) the requisitioning of any public record or document or copy

of such record or document from any Court or Office; and

(e) such other matters as may be prescribed.

(2) Without prejudice to the generality of the powers contained

in sub-section (1), every Lok Adalat shall have the requisite

powers to specify its own procedure for the determination of

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any dispute coming before it.

(3) All Proceedings before a Lok Adalat shall be deemed to be

judicial proceedings within the meaning of Secs. 193, 219 and

228 of the Indian Penal Code (45 of 1860) and every Lok

Adalat shall be deemed to be a Civil Court for the purpose of

Sec. 195 and Chapter XXVI of the Code of Criminal Procedure,

1973 (2) of 1974).

UNREPORTED JUDGEMENTS 2004 (2) VOL 37."

What is Lok Adalat? :

"The "Lok Adalat" is an old form of adjudicating system

prevailed in ancient India and it's validity has not been taken

away even in the modern days too. The word 'Lok Adalat'

means 'People Court'. This system is based on Gandhian

Principles. It is one of the components of ADR system. As the

Indian Courts are over burdened with the backlog of cases and

the regular Courts are to decide the cases involve a lengthy,

expensive and tedious procedure. The Court takes years

together to settle even petty cases. Lok Adalat , therefore

provides alternative resolution or devise for expedious and

inexpensive justice.

In Lok Adalat proceedings there are no victors and

vanquished and, thus, no rancour.

Experiment of 'Lok Adalat' as an alternate mode of

dispute settlement has come to be accepted in India, as a viable,

economic, efficient and informal one.

LOK ADALAT is another alternative to JUDICIAL

JUSTICE. This is a recent strategy for delivering informal,

cheap and expeditious justice to the common man by way of

settling disputes, which are pending in Courts and also those,

which have not yet reached Courts by negotiation, conciliation

and by adopting persuasive, common sense and human

approach to the problems of the disputants, with the assistance

of specially trained and experienced Members of a Team of

Conciliators."

Benefits Under Lok Adalat:

1. There is no Court fee and if Court fee is already paid the

amount will be refunded if the dispute is settled at Lok Adalat

according to the rules.

2. The basic features of Lok Adalat are the procedural flexibility

and speedy trial of the disputes. There is no strict application of

procedural laws like Civil Procedure Code and Evidence Act

while assessing the claim by Lok Adalat.

3. The parties to the dispute can directly interect with the Judge

through their Counsel which is not possible in regular Courts of

law.

4. The award by the Lok Adalat is binding on the parties and it

has the status of a decree of a Civil Court and it is non-

appealable which does not causes the delay in the settlement of

disputes finally.

In view of above facilities provided by the 'Act' Lok Adalats are boon to the

litigating public they can get their disputes settled fast and free of cost

amicably.

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AWARD OF LOK DALAT :-

The Lok Adalat shall proceed and dispose the cases and arrive at a

compromise or settlement by following the legal principles, equity and

natural justice. Ultimately the Lok Adalat passes an award, and every such

award shall be deemed to be a decree of Civil Court or as the case may be

which is final.

AWARD OF LOK ADALAT SHALL BE FINAL :-

The Lok Adalat will passes the award with the consent of the

parties, therefore there is no need either to reconsider or review the matter

again and again, as the award passed by the Lok Adalat shall be final. Even

as under Section 96(3) of C.P.C. that "no appeal shall lie from a decree

passed by the Court with the consent of the parties". The award of the Lok

Adalat is an order by the Lok Adalat under the consent of the parties, and it

shall be deemed to be a decree of the Civil Court, therefore an appeal shall

not lie from the award of the Lok Adalat as under Section 96(3) C.P.C.

In Punjab National Bank vs. Lakshmichand Rah reported in AIR

2000 Madhya Pradesh 301, 304, the High Court held that "The provisions

of the Act shall prevail in the matter of filing an appeal and an appeal would

not lie under the provisions of Section 96 C.P.C. Lok Adalat is conducted

under an independent enactment and once the award is made by Lok Adalat

the right of appeal shall be governed by the provisions of the Legal Services

Authorities Act when it has been specifically barred under Provisions of

Section 21(2), no appeal can be filed against the award under Sec.96 C.P.C."

The Court further stated that "It may incidentally be further seen that even

the Code of Civil Procedure does not provide for an appeal under Section

96(3) against a consent decree. The Code of Civil Procedure also intends

that once a consent decree is passed by Civil Court finality is attached to it.

Such finality cannot be permitted to be destroyed, particularly under the

Legal Services Authorities Act, as it would amount to defeat the very aim

and object of the Act with which it has been enacted, hence, we hold that the

appeal filed is not maintainable.

The High Court of Andhra Pradesh held that, in Board of

Trustees of the Port of Visakhapatnam vs. Presiding Officer,

Permanent, Lok Adalat-cum-Secretary, District Legal Services

Authority, Visakhapatnam and another reported in 2000(5) ALT 577, "

The award is enforceable as a decree and it is final. In all fours, the

endeavour is only to see that the disputes are narrowed down and make the

final settlement so that the parties are not again driven to further litigation or

any dispute. Though the award of a Lok Adalat is not a result of a contest

on merits just as a regular suit by a Court on a regular suit by a Court on a

regular trial, however, it is as equal and on par with a decree on compromise

and will have the same binding effect and conclusive just as the decree

passed on the compromises cannot be challenged in a regular appeal, the

award of the Lok Adalat being akin to the same, cannot be challenged by

any regular remedies available under law including invoking Article 226 of

the Constitution of India challenging the correctness of the award on any

ground. Judicial review cannot be invoked in such awards especially on the

grounds as raised in this writ petition.

The award of Lok Adalat is final and permanent which is

equivalent to a decree executable, and the same is an ending to the litigation

among parties.

In Sailendra Narayan Bhanja Deo vs. The State of Orissa, AIR 1956

SUPREME COURT 346, (CONSTITUTION BENCH) held as follows:

A Judgment by consent or default is as effective an estoppel

between the parties as a judgment whereby the court exercises

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its mind on a contested case. (1895) 1 Ch.37 & 1929 AC 482,

Rel. on;

In \026 'In re South American and Mexican Co., Ex. Parte Bank

of England', (1895) 1 Ch 37 ), it has been held that a judgment

by consent or default is as effective an estoppel between the

parties as a judgment whereby the Court exercises its mind on a

contested case. Upholding the judgment of Vaughan

Williams,J Lord Herschell said at page 50 :-

"The truth is, a judgment by consent is intended to put a stop

to litigation between the parties just as much as is a judgment

which results from the decision of the Court after the matter has

been fought out to the end.

And I think it would be very mischievous if one were not to

give a fair and reasonable interpretation to such judgments, and

were to allow questions that were really involved in the action

to be fought over again in a subsequent action."

To the like effect are the following observations of the Judicial

Committee in \026 'Kinch v. Walvott', 1929 AC 482 at p.493 (D):-

"First of all their Lordships are clear that in relation to this

plea of estoppel it is of no advantage to the appellant that the

order in the libel action which is said to raise it was a consent

order. For such a purpose an order by consent , not discharged

by mutual agreement, and remaining unreduced , is as effective

as an order of the Court made otherwise than by consent and

not discharged on appeal."

The same principle has been followed by the High Courts in India in a

number of reported decisions. Reference need only be made to the cases of

\026 ' Secy. Of State v. Ateendranath Das', 63 Cal 550 at p. 558 (E) ; - '

Bhaishanker v. Moraji', 36 Bom 283 (F) and \026 ' Raja Kumara Venkata

Perumal Raja Bahadur', v. Thatha Ramasamy Chetty', 35 Mad 75 (G). In

the Calcutta case after referring to the English decisions the High Court

observed as follows :

"On this authority it becomes absolutely clear that the

consent order is as effective as an order passed on contest, not

only with reference to the conclusion arrived at in the

previous suit but also with regard to every step in the process

of reasoning on which the said conclusion is founded.

When we say "every step in the reasoning" we mean

the findings on the essential facts on which the judgment or

the ultimate conclusion was founded. In other words the

finding which it was necessary to arrive at for the purpose of

sustaining the judgment in the particular case will operate as

estoppel by judgment."

The Civil Procedure Code contains the following provisions:

"Order 23 Rule 3 provides for compromise of suit \026 where it is

proved to the satisfaction of the Court that a suit has been

adjusted wholly in part by any lawful agreement or

compromise, written and signed by the parties. The Court after

satisfying itself about the settlement, it can convert the

settlement into a judgment decree."

We have already discussed about the steps taken by the appellant to

serve notice on the respondent and the steps taken by him to perform his

obligations and sending of the notice and telegram etc. would not have been

done unless the appellant was ready with his obligations and the money all

along. The appellant had waited till almost the last day for the respondent to

perform his obligations. The High Court, in our view, has failed to note that

the courts attempt should be to give life and enforceability to the

compromise award and not to defeat it on technical grounds. This is a fit

case, in our view, where the Respondent ought to have been directed to

execute the sale deed by the extended time, if necessary. The High Court is

also not correct in holding that the Court has no jurisdiction to extend the

time. In our view, the learned Subordinate Judge has rightly extended the

time for depositing the money which the High Court has wrongly interfered

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with.

We, therefore, hold that the order passed by the High Court in C.R.P.

1136/2003 is liable to be set aside. We do so accordingly. We direct the

Respondent herein to execute the sale deed within two weeks from today

failing which the Appellant could get the sale deed executed though court as

stipulated in the award. The respondent is now entitled to withdraw Rs. 9.5

lakhs from the Sub-Court Alapuzha. Though this is a fit case for awarding

cost, we refrain from doing so in view of the relationship between the

parties.

The appeal is allowed. No costs.