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CASE NO.: Appeal (civil)  4089 of 2006

PETITIONER: State of Punjab & Ors.

RESPONDENT: Shri Ganpat Raj

DATE OF JUDGMENT: 12/09/2006

BENCH: ARIJIT PASAYAT & LOKESHWAR SINGH PANTA

JUDGMENT: J U D G M E N T (Arising out of S.L.P. (C) No. 16673 of 2005

ARIJIT PASAYAT, J.

       Leave granted.

                As noted by this Court in State of Punjab and Others v.  Phulan Rani and Another (2004 (7) SCC 555), a simple matter  has unnecessary been complicated as a result of which there  has been inordinate delay in disposing of the matter.

       Respondent filed Civil Writ Petition no.943 of 2000 in the  Punjab and Haryana High Court praying, inter alia, to issue a  writ in the nature of mandamus directing the present  appellants to pay interest @ 18% on delayed payment of  pension, arrears of pension, DGRC, computation of pension  and arrears of GPF arrears and other retirement benefits. The  writ petition was sent to Lok Adalats for settlement being a  pension matter and the matter was allowed on 4.3.2003  without any settlement compromise between the parties. It is  to be noted that the appellants contested the claim and filed  written statement to the writ petition. Lok Adalat awarded  12% interest for the delayed payments. A writ petition was  filed by the appellants before the Punjab and Haryana High  Court challenging the order dated 4.2.2003 assed by the Lok  Adalat in Civil No.943 of 2000.  The same was dismissed  holding that the petition was misconceived.  Though the High  Court accepted that the disposal by the Lok Adalat was not  the proper course, yet it was held that on merits respondent  was entitled to relief.   

       In support of the appeal, learned counsel for the  appellant submitted that the matter could not have been  disposed of by the Lok Adalat in view of the specific provisions  contained in Section 20 of The Legal Services Authorities Act,  1987 (in short the ’Act’).

       Per contra learned counsel for the submitted that the  High Court has rightly proceeded on the basis that even if the  matter could not have been disposed of by the Lok Adalat,  there is nothing wrong, in the ultimate result holding that the  respondent  was entitled to relief.               The matters which can be taken up by the Lok Adalat  for disposal are enumerated in Section 20 of the Act which

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reads as follows:                  "20.    Cognizance of cases by Lok Adalats:-

(1)     Where in any case referred to in clause (i) of  sub-section (5) of Section 19-

(i)(a) the parties thereof agree; or   (b) one of the parties thereof makes an  application to the Court, for referring the  case to the Lok Adalat for settlement and if  such Court is prima facie satisfied that  there are chances of such settlement; or

(ii) the Court is satisfied that the matter is an  appropriate one to be taken cognizance of by  the Lok Adalat,

The Court shall refer the case to the Lok  Adalat:

Provided that no case shall be referred to  the Lok Adalat under sub-clause (b) of clause  (i) or clause (ii) by such Court except after  giving a reasonable opportunity of being heard  to the parties.

(2)     Notwithstanding anything contained in any  other law for the time being in force, the  Authority or Committee organizing the Lok  Adalat under sub-section (1) of Section 19  may, on receipt of an application from any one  of the parties to any matter referred to in  clause (ii) of sub-section (5) of section 19 that  such matter needs to be determined by a Lok  Adalat, refer such matter to the Lok Adalat, for  determination:

       Provided that no matter shall be referred  to the Lok Adalat except after giving a  reasonable opportunity of being heard to the  other party.

(3)     Where any case is referred to a Lok Adalat  under sub-section (1) or where a reference has  been made to it under sub-section (2), the Lok  Adalat shall proceed to dispose of the case or  matter 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.

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(6)     Where no award is made by the Lok Adalat on  the ground that no compromise or settlement  could be arrived at between the parties, in a  matter referred to in sub-section (2), that Lok  Adalat shall advice the parties to seek remedy  in a Court.

(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)."           

       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 Re NFU Development Trust Ltd.  (1973) 1 All ER 135(Ch.D).  A compromise is always bilateral  and means mutual adjustment.  "Settlement" is termination of  legal proceedings by mutual consent.  The case at hand did  not involve compromise or settlement and could not have been  disposed of by Lok Adalat.  If no compromise or settlement is  or could be arrived at, no order can be passed by the Lok  Adalat. Therefore, the disposal of the Civil Writ Petition No.  943 of 2000 filed by respondent is clearly impermissible.  Therefore, the disposal of the Civil Petition 943 of 2000 filed by  respondent is clearly impermissible.   

What was challenged in Writ Petition 16246 of 2004 to  which this appeal relates related to the powers of disposal of  cases by the Lok Adalat. In view of findings recorded that  matter could not have been disposed of by the Lok Adalat,  High Court ought to have directed restoration of writ petition  filed by respondent i.e. Civil Writ Petition No. 943 of 2000 for  disposal in accordance with law.                   The inevitable result is that appeal has to be allowed. The  impugned judgment is set aside. It cannot be lost sight of that  the matter is pending for long.  Let Civil Writ Petition 943 of  2000 be restored to its original position. The High Court is  requested to dispose of the writ petition within a period of  three months from the date of receipt of this order.  The appeal  is allowed in the aforesaid terms with no order as to costs.