Lok Adalat Award cannot be a basis for redetermination of the compensation under Section 28A of the LA Act: SC

Supreme Court: The bench of KM Joseph* and PS Narsimha, JJ was called upon to decide whether the Award passed by a Lok Adalat under 0 can form the basis for redetermination of compensation as contemplated under Section 28A of the Land Acquisition Act, 1894. The Court held that an application under Section 28A of the LA Act cannot be maintained on the basis of an award passed by the Lok Adalat under Section 20 of LSA Act.

Scheme of Section 20 of the LSA Act

The jurisdiction of the Lok Adalat under Section 20 is to facilitate a settlement of disputes between the parties in a case. It has no adjudicatory role. It cannot decide a lis. All that it can do is to bring about a genuine compromise or settlement. Sub-Section (4) of Section 20 is important insofar as the law giver has set out the guiding principles for a Lok Adalat. The principles are justice, equality, fair play and other legal principles. The significance of this provision looms large when the Court bears in mind the scheme of Section 28A of the Act.

Scheme of Section 28A of LA Act

Section 28A contemplates a redetermination of compensation under an award passed under Part III. Section 23 deals with the matters to be taken into consideration. Various aspects including the market value on the date of the notification under Section 4(1) are indicated. The elements of Section 23 are not in consonance as such with the guiding principles set out in Section 19(4) of the LSA Act which are to guide a Lok Adalat. When the Court deals with the matter under Section 18, in other words, it is bound to look into the evidence and arrive at findings based on the evidence applying the legal principles which have been enunciated and arrive at the compensation. While it may be true that there is reference to ‘other legal principles’ in Section 19(4) of the LSA Act, the Lok Adalat also can seek light from the principles of justice, equity, and fair play. The Lok Adalat by virtue of the express provisions is only a facilitator of settlement and compromise in regard to matters which are referred to it. It has no adjudicatory role.

Analysis

A plea founded on estoppel arising out of a consent decree or from an Award passed by a Lok Adalat which can perhaps be even likened to a consent decision cannot be the basis for redetermination of the compensation. What Section 28A indeed insists is on decision by a Civil Court as defined in Section 2(l). In other words what is made the only basis for invoking Section 28A of the Act is an adjudication by the Court as defined in the Act. The plea of estoppel which, ordinarily, arises from a consent decree or Award passed by the Lok Adalat which, does not involve any adjudication by a Court, would hardly suffice. The estoppel which is referred to by this Court applies as between the parties to the consent decree.

An Award passed by the Lok Adalat under LSA Act is the culmination of a non-adjudicatory process. The parties are persuaded even by members of the Lok Adalat to arrive at mutually agreeable compromise. The Award sets out the terms. The provisions contained in Section 21 by which the Award is treated as if it were a decree is intended only to clothe the Award with enforceability. In view of the provisions of Section 21 by which it is to be treated as a decree which cannot be challenged, undoubtedly, by way of an appeal in view of the express provisions forbidding it, unless it is set aside in other appropriate proceedings, it becomes enforceable. The purport of the law giver is only to confer it with enforceability in like manner as if it were a decree.

On the argument that by virtue of this legislative device, the award of the Lok Adalat passed in these cases by the Reference Court under Section 18 executing the Lok Adalat must be treated as an order passed by the Court under Section 28A of the Act, the Court said,

“Can the Court be oblivious to the plain language of the statute? Can we ignore the voice of the legislature when it is clear and unambiguous? Section 28A figures in Part III of the Act. It has a heading. The heading reads as ‘Redetermination of the amount of compensation on the basis of the award of the Court’. The very opening words in our view deal a fatal blow to the very premise of the respondent’s contention. An award under Part III of the Act commences with a reference under Section 18. The Court proceeds to adjudicate the reference in particular by bearing in mind the matters which are to be considered under Section 23 of the Act.”

The award which is passed by the Lok Adalat cannot be said to be an award passed under Part III. It is the compromise arrived at between the parties before the Lok Adalat which culminates in the award by the Lok Adalat. In fact, an award under Part III of the Act contemplates grounds or reasons and therefore, adjudication is contemplated and Section 26(2) of the Act is self-explanatory.

“The Award passed by the Lok Adalat in itself without anything more is to be treated by the deeming fiction to be a decree. It is not a case where a compromise is arrived at under Order XXIII of the Code of Civil Procedure, 1908, between the parties and the court is expected to look into the compromise and satisfy itself that it is lawful before it assumes efficacy by virtue of Section 21. Without anything more, the award passed by Lok Adalat becomes a decree. The enhancement of the compensation is determined purely on the basis of compromise which is arrived at and not as a result of any decision of a ‘Court’ as defined in the Act.”

Hence, an Award passed under Section 19 of the 1987 Act is a product of compromise. Sans compromise, the Lok Adalat loses jurisdiction. The matter goes back to the Court for adjudication. Pursuant to the compromise and the terms being reduced to writing with the approval of the parties it assumes the garb of an Award which in turn is again deemed to be a decree without anything more.

[NOIDA v. Yunus, 2022 SCC OnLine SC 138, 03.02.2022]


*Judgment by: Justice KM Joseph


Counsels

For appellant: Anil Kaushik, learned counsel for the appellant.

For respondents: Senior Advocates Dhruv Mehta and V. K. Shukla

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