Dismissed

Prabhat Kumar Singh v. Hdfc Bank Limited Represented by Its Authorized Manager Shri Alkesh Jain

Jharkhand HC22 Sept 2021LPA/87/2021

Case brief

AI extract

What is this about?

The High Court dismissed an intra-court appeal challenging a Single Judge's order. The Single Judge had quashed a Lok Adalat award because the bank respondent had not signed or sealed it. The Court upheld the quashing, holding that an unsigned award suffers a fatal legal lacuna and cannot be accepted.

What the court decided

AI extract

Prabhat Kumar Singh Vs Hdfc Bank Limited Represented by Its… — Arbitration | Jharkhand HC (2021)

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IN THE HIGH COURT OF JHARKHAND AT RANCHI L.P.A. No. 87 of 2021

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Prabhat Kumar Singh …. … Appellant

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Versus

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HDFC Bank Limited, represented by its authorized Manager, Shri Alkesh Jain

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.…. … Respondent

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CORAM : HON’BLE THE CHIEF JUSTICE HON’BLE MR. JUSTICE SUJIT NARAYAN PRASAD

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-------For the Appellant : Mr. Krishna Kumar, Advocate Mr. Amit Sinha, Advocate

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Oral Order 04/ Dated 22.09.2021

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Heard the parties.

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This Intra Court Appeal has been preferred assailing the Judgment dated 12.01.2021 passed by the learned Single Judge in W.P.(C) No. 3711 of 2014, whereby and whereunder, the writ petition filed by the HDFC Bank Limited, Jamshedpur, has been allowed and the impugned Award prepared by the Lok Adalat settling a dispute between the writ petitioner and the private respondent-appellant by payment of an amount of Rs.2,57,450/- has been set aside.

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Learned counsel appearing for the appellant has submitted before us that at the time of passing of the Award the representative of the writ petitioner-Bank was present throughout and has consented for settling the dispute.

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As a next point, it has been submitted that after an Award having been prepared, the concerned Court of the Judicial Magistrate, 1^st class has passed the final order on 23.11.2013, accepting the Award but the same has not been challenged by the Writ petitioner-Bank and as such, without challenging the aforesaid order which has attained the finality, the Award could not have been separately challenged.

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We after careful consideration of the materials on record and the related legal provisions are not inclined to interfere into the order passed by the learned Single Judge for the following reasons:-

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(I) It is an admitted position that the settlement does not carry signature and seal of the writ petitioner-respondent-Bank, whereas it bears the signature of the appellant. Section 20 (4) of the Legal Services Authority Act, 1987 lays down that Lok Adalat shall, while determining any reference before it under this Act, act with utmost expedition to arrive at a compromise or settlement between the parties and shall be guided by the principles of justice, equity, fair play and other legal principles. By no angle of any principles of justice, equity and fair play, it can be accepted that one of the parties will sign the Award and the other party does not sign it even if he was present at the time of deliberation, that the Award has to be accepted in that circumstance. It is also to be noted here that even the learned Court while recording the result of the Award has not considered the aforesaid issue.

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Thus, in our considered view, if the representative of the bank has not put its signature and seal and the bank is contesting that, it has not deliberately put it because it was not acceptable to it. By no means, we would understand that there is a change of view in the approach of the bank later on because the Award does not bear the signature of its representative.

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It is not a case of oral settlement. Every Award under the Legal Services Authority Act, 1987 has to be under the proforma provided for it and one of the requirements is signature of the party, reaching to the settlement. That having not been achieved, the Award cannot be accepted. It has to be understood in such circumstance that it suffers from fatal legal

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lacuna.

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(II) So far as the next question is concerned, in our considered view, there is no requirement for challenging the order of the Judicial Magistrate which incorporates the outcome of the Award only for the purpose of record as Section 20 (3) lays down as under :-

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(3) Where any case is referred to a Lok Adalat under subsection (1) or where a reference has been made to it under sub-section (2), the Lok Adalat shall proceed to dispose of the case or matter and arrive at a compromise or settlement between the parties.

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As the relevant provision under Section 20, answers the

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aforesaid questions effectively and which is quoted as under :-

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20. Cognizance of cases by Lok Adalats.- (1) Where in any case referred to in clause (i) of sub-section (5) of section 19, -

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(i) (a) the parties thereof agree; or

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(b) one of the parties thereof makes an application to the Court, for referring the case to the Lok Adalat for settlement and if such Court is prima facie satisfied that there are chances of such settlement; or

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(ii) the Court is satisfied that the matter is an appropriate one to be taken cognizance of by the Lok Adalat,

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The Court shall refer the case to the Lok Adalat;

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Provided that no case shall be referred to the Lok Adalat under sub-clause (b) of clause (i) or clause (ii) by such Court except after giving a reasonable opportunity of being heard to the parties.

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(2) xxx xxx xxx

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(4) Every Lok Adalat shall, while determining any reference before it under this Act, act with utmost expedition to arrive at a compromise or settlement between the parties and shall be guided by the principles of justice, equity, fair play and other legal principles.

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(5) Where no award is made by the Lok Adalat on the ground that no compromise or settlement could be arrived at between the parties, the record of the case shall be returned by it to the Court, from which the reference has been received under sub-section (1) for disposal in accordance with law.

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(6). xxx xxx xxx

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(7). xxx xxx xxx

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From perusal of the aforesaid provisions, it would be apparent that the moment the case is referred to the Lok Adalat under sub-Section (1) or where reference is made under sub-Sections 3, 4 & 5 that when the case is referred to the Lok Adalat under Sub-Section (1), the Lok Adalat shall proceed to dispose of the case or the matter arisen under the compromise or settlement between the parties. Sub-Section 5 lays down that if no Award is made by the Lok Adalat on the ground that no compromise or settlement could be arrived at, then the record of the case would be returned to the concerned Court from which the reference was received and that it would be disposed of by the said Court in accordance with law.

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It would be apt to refer here the provision of Sub-Section 21 of

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the Act also which is quoted as under :-

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21.Award of Lok Adalat- (1) Every award of the Lok Adalat shall be deemed to be a decree of a Civil Court or, as the case may be, an order of any other Court and where a compromise or settlement has been arrived at, by a Lok Adalat in a case referred to it under Sub-section (1) of Section 20, the Court fee paid in such case shall be refunded in the manner provided under the Court Fees Act, 1870 (7 of 1870).

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(2) Every award made by a Lok Adalat shall be final and binding on all the parties to the dispute, and no appeal shall lie to any Court against the award.

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It is apparent from the aforesaid sub-Section (1) of the aforesaid provisions that every Award would be deemed to be a decree of the Civil Court. Sub-Section (2) lays down that every Award made by the Lok Adalat shall be final and binding upon all the parties to the dispute, and no appeal shall lie in any Court against the Award. It means that since the Award itself becomes a decree of a Court, there is no requirement of passing order by such a Court to that effect, therefore, the recording of the result of Lok Adalat in the order sheet by the Judicial Magistrate in Annexure-2

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is merely a formality and for the purpose of record but it has got no legal mandatory requirement as the Award itself is the final document of resolution of dispute against which even no appeal can be preferred as it would be final and binding upon all the parties.

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From the aforesaid provisions, it has also to be held that since it would have a binding force upon all the parties and no appeal lies before any Court of law against the Award, the importance of provision contained in Section 20 (4) would become of paramount importance. Thus, before disposing of the matter, the Lok Adalat would have to adhere to the principles of justice, equity and fair play.

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When a party does not sign the Award, at the cost of reiteration,

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it is our view that it cannot be accepted as an Award under the Act.

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In the result, in our considered view, the appellant has not been able to persuade us to intervene into the order passed by the learned Single Judge by raising any plausible ground.

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In the result, this appeal fails and is, accordingly, dismissed.

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(Dr. Ravi Ranjan, C.J.)

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(Sujit Narayan Prasad, J.)

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DS/APK

Prabhat Kumar Singh v. Hdfc Bank Limited Represented by Its Authorized Manager Shri Alkesh Jain

Case brief

What is this about?

What the court decided

Prabhat Kumar Singh v. Hdfc Bank Limited Represented by Its Authorized Manager Shri Alkesh Jain

Case brief

What is this about?

What the court decided

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