The Supreme Court has held that a Writ Petition under Articles 226 and 227 of the Constitution of India is the only maintainable remedy to challenge a Lok Adalat award, even for a third party alleging fraud. The Court ruled that filing objections before an Executing Court does not bar a subsequent Writ Petition, as an Executing Court possesses no jurisdiction to annul a Lok Adalat award or a decree drawn in its terms.
The Bench, comprising Justice Vikram Nath and Justice Sandeep Mehta, set aside a judgment of the Madhya Pradesh High Court which had dismissed a writ petition on the ground that the appellant had already invoked the remedy of objections before the Executing Court.
Case Background
The appeal, Dilip Mehta v. Rakesh Gupta & Ors. (Civil Appeal arising out of SLP (C) No. 27806 of 2023), arose from a property dispute in Jabalpur. The appellant, Dilip Mehta, claimed to be a bona fide purchaser of immovable property via a registered sale deed dated February 17, 2016, executed by the husband and sole heir of the original owner, Smt. Siya Bai.
Respondents No. 1 and 2 claimed rights over the same property based on an agreement to sell dated January 21, 2009, executed by Respondent No. 3 (holding a power of attorney). They instituted a suit for specific performance (R.C.S. No. 229-A of 2022) against Respondent No. 3 alone, without impleading the appellant or the original owner’s heirs.
In that suit, a compromise was reached, and the Lok Adalat at Jabalpur passed an award on May 14, 2022. Subsequently, a sale deed was executed in favor of Respondents No. 1 and 2, and execution proceedings were initiated.
The appellant, upon becoming aware of the proceedings when police visited the property for possession, filed objections under Order XXI Rule 101 read with Section 151 of the Code of Civil Procedure (CPC) in the Execution Case. Simultaneously, he filed a Writ Petition before the High Court alleging that the Lok Adalat award was vitiated by fraud and collusion.
The High Court dismissed the writ petition and the subsequent writ appeal, holding that since the appellant had raised objections in the execution proceedings, he could not maintain parallel proceedings in the writ jurisdiction.
Arguments of the Parties
Mr. Siddharth Bhatnagar, learned senior counsel for the appellant, argued that the compromise decree was obtained by fraud behind the appellant’s back. He contended that the Executing Court has no power to annul a Lok Adalat award. Relying on the Supreme Court’s decisions in State of Punjab v. Jalour Singh (2008) and Bhargavi Constructions v. Kothakapu Muthyam Reddy (2018), he submitted that a writ petition is the only remedy to set aside such an award. He characterized the objections filed in the execution court as a “defensive and transitory measure” to protect possession.
Mr. Ravindra Srivastava, learned senior counsel for the respondents, argued that the appellant, being a third party, could adjudicate all questions regarding right, title, and interest, including fraud, under Order XXI Rules 97, 99, and 101 CPC before the Executing Court. He submitted that having invoked the jurisdiction of the Executing Court, the appellant was barred from maintaining a parallel writ petition.
The Court’s Analysis and Observations
The Supreme Court examined Sections 21 and 22E of the Legal Services Authorities Act, 1987 (LSA Act), which mandate that Lok Adalat awards are final, binding, and deemed to be decrees of a civil court.
Referencing the precedent in State of Punjab v. Jalour Singh, the Court reiterated that the “only recognised avenue of challenge is the constitutional jurisdiction of the High Court.”
The Bench observed that the Executing Court’s role is confined to giving effect to the award. The Court stated:
“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.”
Regarding the provisions of Order XXI CPC, the Court noted that while the Executing Court can address incidental questions regarding enforcement, it cannot reopen the settlement. The Court held:
“They [Order XXI Rules] do not authorise the Executing Court, under the guise of adjudicating resistance, obstruction or dispossession, to reopen the settlement which resulted in the award, to examine the validity of the award as such, or to declare that the decree based upon it is void.”
The Court rejected the High Court’s reliance on Section 22E(4) of the LSA Act, clarifying that the prohibition against calling an award in question in execution proceedings reinforces the bar against collateral challenges and does not create a separate remedy for third parties.
Addressing the appellant’s filing of objections, the Court termed it a “defensive step” compelled by the imminent threat of dispossession. The Court observed:
“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.”
Decision
The Supreme Court allowed the appeal and set aside the judgments of the High Court of Madhya Pradesh.
- Remand: The matter was remanded back to the High Court to be decided afresh on its own merits.
- Withdrawal of Objections: The appellant was directed to withdraw the objections filed under Order XXI Rule 101 CPC in the Execution Case within four weeks.
- Interim Protection: To preserve the subject matter, the Court directed that the appellant shall not be dispossessed from the property pursuant to the Lok Adalat award until the High Court finally disposes of the matter.
The Court clarified that it expressed no opinion on the factual allegations regarding fraud, collusion, or title, leaving those issues open for the High Court to consider.
