Lok Adalat Award Can Be Challenged Only By Filing Writ Petition; Filing Objection In Execution Proceedings Not "Efficacious Alternative Remedy”: Supreme Court

​The Bench of Justice Vikram Nath and Justice Sandeep Mehta observed, “In the context of a decree which merely embodies a Lok Adalat award, such objections can at best invite the Executing Court to examine whether and to what extent the decree is executable against the objector, but cannot furnish a forum for pronouncing upon the validity of the award itself or for setting aside the decree drawn in its terms. The reliance placed by the respondents on the fact that, in the prayer clause of that application, the appellant also used language suggesting that the judgment and decree be “set aside” does not advance their case. The form of the pleading cannot enlarge the jurisdiction of the Executing Court beyond what the LSA Act and the CPC permit, nor can it convert a limited execution forum into a court of appeal over a Lok Adalat award. Equally, such resort to execution, compelled by the imminent threat of dispossession, cannot be treated as an election of remedy that forecloses recourse to the only effective avenue which the law recognises for challenging a Lok Adalat award, namely a writ petition before the High Court.”

Senior Advocate Siddharth Bhatnagar appeared for the Appellant, whereas Senior Advocate Ravindra Srivastava appeared for the Respondents.

Background

The appellant had purchased immovable property in Jabalpur from the original owner's husband via a registered sale deed. This transaction followed prior disputes involving the original owner, who had filed a Suit to declare a 2008 power of attorney (in favor of Respondent No. 3) and a subsequent 2009 sale deed void. Furthermore, an FIR was registered in 2011 against Respondent No. 3, alleging he had used fabricated documents, including the power of attorney, to deal with the property.

In 2022, Respondents No. 1 and 2, who claimed rights under a 2009 agreement to sell with Respondent No. 3, instituted a suit for specific performance against Respondent No. 3 alone, deliberately excluding the appellant and the original owner’s heirs. A joint compromise application was filed, and the matter was placed before the Lok Adalat at Jabalpur. The Lok Adalat passed an award in terms of the compromise, resulting in a decree for specific performance.

Based on this decree, a registered sale deed was executed in favor of Respondents No. 1 and 2 on July 22, 2022, for the same property, leading them to initiate execution proceedings. The Appellant claimed he only became aware of the decree when police authorities visited the property to enforce warrants for possession. He then filed objections under Order XXI Rule 101 CPC in the Executing Court, alleging the Lok Adalat award was obtained by fraud and collusion, and simultaneously instituted a writ petition before the Madhya Pradesh High Court to quash the award and execution proceedings.

The Single Judge dismissed the writ petition, holding that the Appellant's objections before the Executing Court were the appropriate forum to adjudicate questions of title and fraud. The Division Bench affirmed this dismissal, leading to the present appeal before the Supreme Court.

Contention of the Parties

The central dispute in this appeal involved the validity of a Lok Adalat award and a subsequent sale deed, which the Appellant (claiming to be a bona fide purchaser) asserted were fundamentally vitiated by fraud and collusion stemming from an ante-dated, unregistered agreement to sell. The Appellant's primary legal contention was that a challenge to a Lok Adalat award, based on Section 22E of the LSA Act and established precedent, had to be exclusively brought through a Writ Petition under Articles 226/227 of the Constitution, even when fraud was alleged. Consequently, the Appellant argued that their objections filed in the execution court under Order XXI Rule 101 CPC were merely a "defensive and transitory measure" to protect their possession and should not have been construed as an election of an alternative remedy that barred the High Court from exercising its superior writ jurisdiction to annul the fraudulent proceedings.

The Respondents countered that the Appellant, as a third party/stranger to the Lok Adalat award, was not bound by the strict legal path prescribed for the parties to the award; thus, other civil remedies were not excluded at their instance. More critically, the Respondents argued that the Appellant had already invoked an efficacious and adequate alternative remedy by filing objections in the execution court. They emphasized that under the comprehensive scheme of Order XXI Rules 97, 99, and 101 CPC, the Executing Court was empowered to fully and finally adjudicate all questions of right, title, interest, and allegations of fraud raised by a third-party objector. Therefore, by initiating these parallel execution proceedings first, the Appellant elected their remedy, and the High Court was correct in refusing to entertain a Writ Petition that sought substantially the same relief on disputed facts better examined through evidence in the Civil and Executing Courts.

Observation of the Court

The main question considered by the Court was whether the High Court was justified in declining to entertain the Appellant’s challenge to the Lok Adalat decree on the ground that he had already filed objections before the Executing Court.

The Court said, “Section 21 of the LSA Act provides that every award of a Lok Adalat shall be deemed to be a decree of a civil court, that it shall be final and binding on the parties to the dispute, and that no appeal shall lie against it. Section 22E, which deals with awards of a Permanent Lok Adalat, similarly declares that every award shall be final and binding on the parties and persons claiming under them, shall be deemed to be a decree of a civil court and shall not be called in question in any original suit, application or execution proceeding. Both provisions reflect a common legislative intent that such awards are to attain finality, are not appealable in the ordinary sense and are to operate as decrees only for the limited purpose of execution.”

The Court said that the approach of the High Court cannot be sustained as once the decree which is sought to be executed is one that merely embodies a Lok Adalat award under the LSA Act, the role of the Executing Court is confined to giving effect to that award in terms of execution.

“It has no authority to annul or set aside the award itself, or the decree drawn in its terms, nor can it sit in judgment over the validity of the compromise on which the Lok Adalat proceeded. Treating the filing of objections in such execution as an “efficacious alternative remedy” for challenging the award is therefore inconsistent with the statutory scheme.”, the Court added.

Conclusion

The Court concluded that the writ petition filed by the appellant to assail the Lok Adalat decree was maintainable and that the High Court was not justified in declining to examine it on the ground of an alleged alternative remedy in execution.

Accordingly, the Appeal was allowed, and the matter was remanded back to the Madhya Pradesh High Court to be heard and decided afresh.

Cause Title: Dilip Mehta v. Rakesh Gupta &Ors. [SLP (C) No. 27806/2023]

Appearances:

Appellant: Senior Advocate Siddharth Bhatnagar, AOR Mrigank Prabhakar, Advocates Siddharth R Gupta, Sankalp Kochar, Siddhant Kochar, Aman Agarwal, Uddaish Palya, Aditya Sidhra, Surbhi Saxena, Siddharth Sahu, Astha Singh and Nr Shwetabh.

Respondents: Senior Advocates Ravindra Shrivastava, Pallav Sishodiya, A.K. Sanghi, AORs Abhijeet Shrivastava, Kunal Verma, Abhijit Sengupta, Advocates Anshuman Shrivastava, Malik Arjun Khare, Shruti Verma, Ananya Sahu, Boudhik Garg, Shashank S Dwivedi, Atharva Joshi, Kavya Verma, Yugandhara Pawar Jha, Yasha Goyal, Swati Mishra, V. Sridhar Reddy, Hardeep and Deepak Bahl.