Can your lawyer settle case without you? Gauhati High Court quashes ‘final’ Lok Adalat award over missing representative

“This court has not come across any such authority letter. In any case, the requirement of the Act (Legal Services Authorities Act) is for arriving at a settlement by the parties, which implicitly requires the presence of the parties. In the instant case, the petitioner no. 1, being a Company, it would be the authorised representative, who is duly competent to enter into such a settlement, which apparently does not appear to be done in the instant case,” the court said.

The court examined the provision of Section 21 of the Legal Services Authorities Act and noted that “every award made by a Lok Adalat is final and binding on all the parties to the dispute, and no appeal shall be filed in any court against the said award”.

Justice Sanjay Kumar Medhi examined the provisions of the Legal Services Authorities Act and found that a settlement arrived between the parties in a Lok Adalat is “final in nature”. (Image is enhanced using AI)

Findings

• Settlement arrived at the National Lok Adalat between the parties is “final in nature”.
• Objective of the Legal Services Authorities Act is to bring disputes to a final settlement for which the presence of the parties and their free consent is mandatory.
• In this case, no authority letter was provided to the lawyer by the company regarding that said settlement.
• Since the petitioner is a company, an authorised representative will be the competent authority to enter into such a settlement, but there was no such authority in the present case.
• The Assam State Consumer Disputes Redressal Commission ought to consider and dispose of the appeal on its own merits expeditiously.
• No other alternative but to interfere with the order passed by the National Lok Adalat.

Arguments

• Representing the company, advocate J K Bhuyan argued that the settlement order of September 2024 in the National Lok Adalat cannot be deemed to be a settlement under the Legal Services Authorities Act, 1987.
• Bhuyan further emphasised that no authorised officer of the company was present in the National Lok Adalat, and his lawyer had made some arguments which were beyond the instructions of their client.
• It was argued that the said settlement should be interfered with by the high court as the same was ordered in the absence of the parties, and it defeats the entire essence and objective of the said Act.
• On the contrary, advocate S Hoque, appearing for the other party, admitted that the said order was passed in the absence of any officer of the petitioners.
• However, Hoque further submitted that their lawyer was equipped with appropriate instructions shared in the form of WhatsApp messages and were displayed in the proceeding.
• He stated that there is no illegality in the September 2024 order.

Background

The matter stemmed from the appeal filed before the State Consumer Disputes Redressal Commission, challenging an ex parte order passed by the district consumer forum, which directed the company to pay a certain amount to another party.

The said appeal was taken up for consideration in the National Lok Adalat in September 2024, where a settlement order was passed in the absence of any authorised officer of the company.

It was also argued by the company that their counsel had made certain concessions without any authority provided for the same.