Advocate’s signature alone cannot validate Lok Adalat Award parties must sign, says HC

In a significant challenge to a Lok Adalat settlement, the Karnataka High Court was called upon to examine whether an award passed on the basis of a compromise, allegedly without the claimants’ signatures, can bind the parties and close their right to contest compensation. The case raised critical questions on the sanctity of consent in Lok Adalat proceedings, the binding nature of awards under the Legal Services Authorities framework, and whether an advocate’s consent alone can foreclose the client’s substantive rights.

The controversy began after a motor accident claim culminated in an award of Rs.9.18 lakh by the Tribunal, which was later challenged by the insurer. During the pendency of the appeal, the matter was referred to a Lok Adalat, where a joint memo allegedly recorded a settlement reducing the compensation to Rs.7.82 lakh as full and final settlement. The petitioners later approached the Court contending that they were never informed of the settlement, did not sign the joint memo, and that their earlier counsel had entered into the compromise without their knowledge. They argued that the reduced compensation was unjust, especially as the deceased was the sole breadwinner, and sought restoration of their appeal for adjudication on merits.

The insurer, on the other hand, defended the Lok Adalat award, arguing that the settlement was final and binding, having been signed by the advocates and recorded in proceedings. It was contended that permitting such challenges would open floodgates and undermine the finality of Lok Adalat awards.

The Court closely examined the joint memo and noted a crucial flaw, it did not bear the signatures of the claimants themselves. Drawing from established precedent, the Court emphasized that a Lok Adalat award attains finality only when there is a valid compromise signed by the parties. It observed that “where no compromise or settlement is signed by the parties… it is not an award of the Lok Adalat.”

Further, relying on legal principles, the Court held that an advocate’s signature or concession cannot substitute for the client’s consent, and “a concession made by counsel would not bind the parties.” The Court stressed that the absence of the claimants’ signatures meant that the mandatory requirement of voluntary and informed consent was not satisfied.

Consequently, the award could not stand. The Court set aside the Lok Adalat award and restored the appeal to be heard on merits.

Case Title: Smt. Shaila and Anr Vs. Vishal and Anr

Case No.: Writ Petition No.102733 of 2021 (GM-AC)

Coram: Hon'ble Mr. Justice M. Nagaprasanna

Advocate for the Petitioner: Adv. Shiriya S.Katagimath

Advocate for the Respondent: Adv. S.K.Kayakamath, Adv. Mahesh Wodeyar

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