Permanent Lok Adalat Cannot Decide Dispute Without Conciliation: Kerala HC

In M/s. Panjos Builders Private Limited & Anr. v. Panjos Garden Apartment Owners Association & Ors., the Kerala High Court has ruled that a Permanent Lok Adalat cannot decide disputes on merits without first conducting mandatory conciliation proceedings under Section 22C of the Legal Services Authorities Act.

Justice P.M. Manoj observed that conciliation is not an optional step but a statutory requirement before adjudication can begin. The Court also clarified that a delay in remitting costs imposed for setting aside an ex parte order cannot be used as a reason to bypass the conciliation process.

The dispute arose between infrastructure company Panjos Builders Private Limited and the owners’ association of an apartment complex. The association had approached the Permanent Lok Adalat seeking relief against the company.

The petitioner company argued that the Adalat lacked jurisdiction because earlier litigation between the parties was already pending before a civil court. It contended that Section 22C only permits pre-litigation disputes to be taken before a Permanent Lok Adalat.

The company also submitted that the role of Permanent Lok Adalats is primarily to promote settlement through conciliation. According to the petitioner, adjudication can happen only after conciliation efforts fail in the manner prescribed by law.

The Court relied on the Supreme Court’s ruling in Canara Bank v. G.S. Jayarama and reiterated that adjudication under Section 22C(8) is permissible only when settlement efforts fail after following the mandatory conciliation procedure.

The High Court noted that the Permanent Lok Adalat had proceeded to pass an award on merits merely because there was a slight delay in payment of costs by the petitioner. The Court held that such an approach was contrary to the statutory scheme and the law laid down by the Supreme Court.

The judgment further highlighted that the dispute did not fall within the category of “public utility service” disputes contemplated under Section 22B of the Act. The Court observed that Permanent Lok Adalats have limited jurisdiction and can only entertain disputes specifically covered under the statute.

The Bench also pointed out that similar reliefs had already been sought before the Munsiff Court, Ernakulam. Since the matter was already before a civil court, the Permanent Lok Adalat was barred from taking cognisance of the dispute under Section 22C.

Holding that the proceedings were conducted without jurisdiction, the High Court set aside the award passed by the Permanent Lok Adalat and allowed the writ petition filed by the company.

The ruling reinforces that Permanent Lok Adalats must strictly follow the statutory process of conciliation before deciding disputes and cannot assume jurisdiction in matters already pending before regular courts.