Parties must sign Lok Adalat award to make it binding, lawyer's signature not enough: Karnataka HC

The Karnataka High Court recently set aside a Lok Adalat award on finding that it was not signed by one side of the parties to the dispute, but rather only by their lawyer [Shaila & Ors v ICICI Lombard GIC Ltd & Ors].

Justice M Nagaprasanna was dealing with a case where a woman and her son (petitioners) challenged the validity of a Lok Adalat award that reduced the compensation payable to them for a motor accident.

The petitioners argued that the Lok Adalat award was passed without their knowledge. They submitted that their earlier lawyer had entered into such a settlement with an insurer without the petitioners' permission. They, therefore, urged the Court to quash the Lok Adalat award.

The Court granted them relief, after taking note of various caselaws which hold that parties to a dispute must sign Lok Adalat awards themselves to ensure that the settlement contained in it is voluntary.

These judgments hold that the signature of the party's lawyer alone will not render the award binding. Relying on such precedents, the High Court set aside the Lok Adalat award before it.

"It is clear from the joint memo that the claimants (petitioners) have not affixed their signatures. It is only the Advocates of both sides and the representative of the Insurance Company who have affixed their signatures ... Since the claimants have not signed the joint memo, I deem it appropriate to set aside the award of the Lok Adalat and restore the appeal to its file to be heard on its merits," the Court ordered.

The matter concerned a widow and son of a daily wage worker who died after colliding with a car. A Motor Accident Claims Tribunal (MACT) initially awarded a sum of ₹9,18,600 as compensation for the fatal accident. The insurer filed an appeal against this ruling in 2014.

During the appeal proceedings, the matter was referred to a Lok Adalat, which awarded a reduced final compensation payable to about ₹7,82,000. This Lok Adalat award was only signed by the advocate representing the widow and son, and not themselves.

Justice Nagaprasanna reiterated that a Lok Adalat award becomes binding only when the parties themselves have signed it.

In view of this, the Court quashed the 2019 Lok Adalat award under challenge and ordered a reconsideration of the 2014 appeal from which the award arose.

[Read Order]