Lok adalat awards not beyond challenge, says Karnataka high court

Bengaluru: Reiterating an important legal principle, the Karnataka High Court has clarified that awards passed in Lok Adalats are not beyond challenge in all circumstances. The court observed that if a settlement is reached without the presence or consent of both parties, such an award cannot be presumed to be legally valid in perpetuity.

The observation came while allowing a writ petition filed by a mother and her minor son from Hubballi, who had challenged the reduction of compensation awarded to them in a motor accident case. The single-judge bench of Justice M. Nagaprasanna ruled in favour of the petitioners and restored the original compensation amount.

The petitioners, Shaila I. Karkihallimath (37) and her son Vishal (11), had contended that they were unaware of the settlement reached in the Lok Adalat, where the compensation amount was reduced. “We were never informed about any agreement between our previous counsel and the insurance company. We did not consent to the reduction,” they argued before the court.

Accepting their plea, the High Court restored the compensation of ₹9,18,600 along with 6% annual interest from the date of filing the claim petition until realization. The court rejected the argument of the insurance company, which had contended that reopening such cases would create legal complications and uncertainty.

The bench noted a crucial lapse in the Lok Adalat proceedings, pointing out that the petitioners had not signed the joint memo, which is a mandatory requirement for a valid settlement. “The absence of signatures from both parties is a significant factor that cannot be ignored,” the court observed.

The case dates back to 2012, when Shaila’s husband, a cook earning ₹6,000 per month, died in a road accident. In 2013, the Motor Accident Claims Tribunal (MACT) awarded compensation to the family. However, the insurance company challenged the award before the High Court, following which the matter was referred to a Lok Adalat.

In 2019, the Lok Adalat reduced the compensation from ₹9.18 lakh to ₹7.82 lakh and finalized the settlement. Challenging this, the petitioners approached the High Court, stating that the settlement was made without their knowledge or consent.

The court emphasized that Lok Adalat members must ensure that both parties fully understand and voluntarily agree to the terms of settlement. It further reiterated that while Lok Adalat awards are generally final and binding, they can be challenged under limited grounds under Articles 226 and 227 of the Constitution.

The ruling reinforces procedural safeguards and highlights the importance of informed consent in dispute resolution mechanisms like Lok Adalats.