Karnataka HC: Lok Adalat Award Invalid With Only Lawyers’ Signatures, Parties’ Signatures Necessary

The Karnataka High Court in Shaila & Ors v ICICI Lombard GIC Ltd & Ors has clarified that a Lok Adalat award becomes legally binding only when it is signed by the parties themselves, and not merely by their lawyers.

The ruling came from Justice M Nagaprasanna, who set aside a Lok Adalat award after finding that the claimants had not personally consented to the settlement. The Court emphasised that voluntary agreement is central to the validity of such awards.

The case involved a widow and her son who had lost a family member in a road accident. Initially, the Motor Accident Claims Tribunal awarded them compensation of ₹9,18,600. The insurer later challenged this decision through an appeal filed in 2014.

During the appellate proceedings, the matter was referred to a Lok Adalat. In 2019, a settlement was recorded, reducing the compensation amount to approximately ₹7,82,000. However, this settlement was signed only by the advocate representing the claimants, not by the claimants themselves.

The petitioners approached the High Court, arguing that they were unaware of the settlement and had not authorised their lawyer to agree to any reduction in compensation. They contended that the award was passed without their consent.

The Court examined the joint memo placed before the Lok Adalat and noted that the claimants had not affixed their signatures. It found that only the lawyers and the insurance company’s representative had signed the document.

Relying on established legal principles, the Court reiterated that Lok Adalat proceedings are based on mutual consent. For an award to be binding, the parties must voluntarily agree to the terms and formally endorse them through their signatures.

The Court observed, “It is clear from the joint memo that the claimants (petitioners) have not 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.”

Accordingly, the High Court quashed the 2019 Lok Adalat award and restored the insurer’s appeal for fresh consideration. This ensures that the dispute will now be decided on its merits rather than on the basis of an invalid settlement.