In a significant ruling, the Karnataka High Court has clarified that individuals who were not originally part of a legal dispute can still challenge a Lok Adalat settlement if they allege it was secured through fraud by deliberately excluding them. This judgment provides a crucial legal remedy for parties wrongfully kept out of compromise agreements.
Land Dispute and Alleged Fraud
The case stemmed from a land partition dispute in Kamalapur village, Vijayanagara district. The original owner of the properties was Khemmani Hanumanthappa. A compromise petition was recorded before a Lok Adalat between Nagamma Nagalapura and the children of Karadantappa, who belonged to different branches of the family.
However, Guramma and her children, who also claimed to be part of the same family and asserted a rightful share in the property, were not made parties to the suit. They argued the compromise was collusive and intended to deny them their legitimate inheritance.
High Court's Landmark Observations
Justice M Nagaprasanna, after examining the records, the Code of Civil Procedure (CPC), and precedent judgments, delivered a pivotal verdict. The court held that a third party is entitled to invoke the High Court's writ jurisdiction to challenge a Lok Adalat award if fraud is alleged on the specific ground that they were a necessary party deliberately excluded from the proceedings.
The judge quashed the decree passed by the civil court in Hosapete on July 8, 2023, which was based on the Lok Adalat compromise. The respondents had opposed the writ petition, contending it was not maintainable since Guramma and her children were not parties to the original suit. The High Court rejected this argument, recognizing the need to prevent injustice through fraudulent settlements.
Procedure for Compromise and Lok Adalat Referral
Justice Nagaprasanna also highlighted critical procedural lapses by the trial court. The court underscored that when a compromise petition is filed under Order XXIII Rule 3 of the CPC, the civil court itself must decide on the compromise's validity. It cannot refer the matter to a Lok Adalat.
Referral to a Lok Adalat is permissible only on a joint request by all parties to the suit. The judge warned that failure to follow this procedure leads to avoidable litigation and an unnecessary increase in cases before the High Court.
Outcome and Directives
Allowing the writ petition filed by Guramma and her children, the High Court ordered the restoration of the original civil suit before the Hosapete court. The partition proceedings will now continue with all necessary parties.
In a significant protective measure, the court further directed that any financial transactions carried out based on the fraudulent compromise must be deposited with the trial court. These funds will remain subject to the final outcome of the partition case, safeguarding the interests of the aggrieved parties.
This judgment reinforces the principle that Lok Adalat awards, meant for speedy justice, cannot be used as instruments of fraud. It opens a vital judicial door for third parties whose rights are adversely affected by collusive settlements obtained through improper means.
