The court restores the appeal for fresh adjudication, emphasizing the necessity of claimant consent in settlement agreements.
In a significant judgment delivered by the Karnataka High Court's Dharwad Bench, the court set aside a Lok Adalat award in the case of Smt. Shaila v. Managing Director, ICICI Lombard GIC Ltd., due to the absence of signatures from the claimants on the settlement memorandum. The decision, penned by Justice M. Nagaprasanna, underscores the importance of explicit consent from all parties in Lok Adalat settlements, thereby restoring the appeal for disposal on merits.
The case originated from a tragic road accident, resulting in the death of the sole breadwinner of a family, for which the claimants, comprising the deceased's wife and son, sought compensation. Initially, the Motor Accident Claims Tribunal granted a compensation of Rs. 9,18,600, which was challenged by the insurance company. During the appeal, a reduced compensation of Rs. 7,82,000 was agreed upon before the Lok Adalat, though the claimants later contested this on the grounds of not being informed about the settlement or its terms.
The judgment highlighted that the Lok Adalat's award, dated July 13, 2019, was not binding due to the lack of claimant signatures on the joint memo, which only bore the signatures of the advocates and the insurance company's representative. The court referenced several precedents, including the Supreme Court's ruling in State of Punjab v. Jalour Singh and Bhargavi Constructions v. Kothakapu Muthyam Reddy, affirming that awards become binding only when signed by all parties involved.
Justice Nagaprasanna emphasized that an advocate’s signature alone cannot waive a client's rights or bind them to a settlement, as affirmed in Kirti v. Oriental Insurance Company Limited. Consequently, the court ordered the restoration of the appeal to its original file for adjudication based on its merits.
This ruling serves as a reminder of the procedural safeguards embedded in the Legal Services Authorities Act, 1987, ensuring that settlements in Lok Adalats reflect voluntary and informed consent from all parties. The decision is expected to impact how Lok Adalats conduct their proceedings, mandating stricter adherence to ensuring all parties are adequately informed and have willingly consented to settlement terms.
Bottom Line:
Lok Adalat award - Joint memo not signed by claimants - Advocate's signature alone cannot bind clients - Award set aside and case restored for disposal on merits.
Statutory provision(s): Legal Services Authorities Act, 1987 Section 20
