State of Punjab v Jalour Singh

Facts

• A motor accident claim was pending before the MACT (Motor Accidents Claims Tribunal)
• The case was referred to a Lok Adalat for settlement
• At the Lok Adalat, the parties could not reach a compromise
• Despite the absence of consensus, the Lok Adalat proceeded to determine compensation on merits and passed an "award"
• The insurer challenged this award arguing the Lok Adalat exceeded its jurisdiction

Issue

1. Whether a regular Lok Adalat (under S.19-21 of the Legal Services Authorities Act, 1987) can decide a dispute on merits when parties fail to reach a settlement.

Held

• No adjudicatory power: A regular Lok Adalat (S.19-21) has no power to adjudicate or decide disputes on merits. It can ONLY record a settlement arrived at by consensus.
• Consent is foundational: The entire edifice of Lok Adalat rests on consent. Without consent of both parties, no award can be passed.
• Return to court: If no compromise is reached (S.20(5)), the matter must be returned to the concerned court for adjudication in accordance with law.
• Distinguished from Permanent Lok Adalat: Only a Permanent Lok Adalat (S.22C(8)) for public utility services has the power to decide on merits when settlement fails.
• Award without consent = nullity: The "award" passed by the Lok Adalat without genuine consent of both parties is without jurisdiction and a nullity.

Ratio Decidendi

A regular Lok Adalat is a conciliation forum, not an adjudicatory body. Its jurisdiction is limited to recording consensual settlements. Any exercise of adjudicatory power (deciding on merits) is without jurisdiction and void.