STATEMENT OF PROBLEM:

With a change in the economic and social scenario, where the corporate world dominates
over the domains of insurance, communications, etc. it is essential that there exists a
mechanism that gives relief without being too exhaustive.

HYPOTHESIS:

 Composition of PLA is an extension of political control and in furtherance of

bureaucracy.
 Permanent Lok Adalat has extensive powers akin to the civil court.
 No appeal can lie against the award passed by the PLA.
OBJECTIVES:

While solving the statement of problem, this exercise will aim at and around the hypothesis
and try to disprove it. In the process of solving, we will also try and understand about
Permanent Lok Adalat while analyzing the existing laws on the subject matter.

RELEVANT STATUTES:

 THE LEGAL SERVICES AUTHORITIES ACT, 1987-

Chapter VI A - Pre-Litigation Conciliation and Settlement

Section 22B. Establishment of Permanent Lok Adalat

Section 22C. Cognizance of cases by Permanent Lok Adalat

Section 22D. Procedure of Permanent Lok Adalat

Section 22E. Award of Permanent Lok Adalat to be Final

 THE PERMANENT LOK ADALAT (Other Terms and Conditions Of Appointment

Of Chairman And Other Persons) RULES, 20031
Rule 4-Terms and Conditions of Service of Chairman and other persons of
Permanent Lok Adalat—
“(1) Before appointment, the Chairman and other person, shall have to take
an undertaking that he does not and will not have any such financial or other
interest as is likely to affect prejudicially his functions as such chairman or
other person.
1
Vide G.S.R. 3(E), dated 2-1-2003, published in the Gazette of India Ext., Pt. II, S.3(i), dated 2-1-2003
 (2) The Chairman and other persons shall hold office for a term of five years
and shall not be eligible for re-appointment.
(3) Notwithstanding anything contained in sub-rule (2), Chairman or other
persons may —
(a) by writing under his hand and addressed to the Central Authority
or, as the case may be, the State Authority, resign his office at any
time;
(b) be removed from his office in accordance with the provisions of
rule 5.
(4) When the Chairman is unable to discharge his functions owing to absence,
illness or any other cause, the senior-most (in order of appointment) person of
Permanent Lok Adalat holding office for the time being shall discharge the
functions of the Chairman until the day on which the Chairman resumes the
charge of his functions.
(5) The Chairman or any other person ceasing to hold office as such shall not
hold any appointment in, or be connected with the management or
administration of an organization which has been the subject of the
proceeding under the Act during his tenure for a period of five years from the
date on which he ceases to hold such office.”
DISCUSSION:

 The basic features of a permanent Lok Adalat are identical to a Lok Adalat. There are,
however, certain modifications made. The key difference is that a typical Lok Adalat
can only be summoned occasionally and not on a daily basis, a permanent Lok Adalat
is an established system which is operational throughout just like any other court or
tribunal. The Legal services Authorities Act, 1987, which had established Lok Adalat,
did not, at first, establish permanent Lok Adalat. It was the Amendment Act of 2002
that enabled the establishment of the first permanent Lok Adalat.

 PLA has twofold power. First: it has the power to conduct the conciliation
proceedings between the parties, taking into consideration the circumstances
surrounding the dispute, to help them reach an amicable solution in an impartial,
speedy, and independent manner. Second: if during the conciliatory proceedings in
action, the panel of neutrals realises that one of the parties is unnecessarily becoming
adamant to not settle the dispute, even when there exist possible “elements of
 settlement” for the parties to sign an ‘agreement of settlement on dispute’, then the
PLA also has the power to give a decision in the dispute, provided that the dispute
does not relate to any non-compoundable offence.
 Therefore, the key benefit of PLA is that while it is a venue for ADR and is mainly m-
eant to address conflicts on a consensual basis, it is also allowed to make a definitive 
and binding determination where one of the parties is consciously unwilling to settle
a case.
 Unlike Lok Adalat which can only be called occasionally, PLAs are established
institutions. Further, the unique feature of PLA is that, unlike Lok Adalat, it is a
hybrid mechanism of reconciliation and adjudication.
 In order to meet the fundamental guarantee of justice for any and all Parliament made
certain amendments to the Legal Services Authority Act, 1987 (hereinafter 'the Act')
in 2002 in an accessible, effective and timely manner and added Chapter VI-A to the
pre-litigation conciliation and resolution of disputes. This reform, which gave rise to
the PLA system, was an attempt to further improve the Lok Adalat system in India by
institutionalising a forum for compulsory pre-litigation re-conciliation and settlement
of disputes relating to public utility services, such as those concerning to transport,
postal services, sanitation, education, dispensary, banking, insurance, housing and real
estate, electricity, energy, etc.
 The procedure followed by the PLA is in complete resonance with what is required to
be followed in any ADR mechanism. The legislation requires that the proceedings in
the PLA, both at the time of conciliation between the parties and at the time of
deciding a dispute on merit if needed, should be guided by “the principles of natural
justice, objectivity, fair play, equity, and other principles of justice.”2 Moreover, it is
required that the PLA should remain impartial and independent while conciliating the
parties to reach an amicable solution. 3 Further, as far as procedural applicability is
concerned, the PLA is not bound by the Code of Civil Procedure, 1908 and the
Evidence Act, 1872.4 However, “for the purpose of holding any determination”, the
PLA shall have the same powers as are vested in a civil court under the Code of Civil
Procedure, 1908 while trying a suit.5
2
Section 22-D of the Legal Services Authorities Act, 1987
3
 Section 22-C (5) of the Legal Services Authorities Act, 1987
4
Section 22-D of the Legal Services Authorities Act, 1987
5
Section 22(1) of the Legal Services Authorities Act, 1987. 
  Section 22 B provides for the establishment of PLA at numerous places with
consideration towards the cases and on public utility services. Permanent Lok Adalat
is presided over by a chairperson, who:

 Is a district judge or has been one

 Is an additional district judge
 Has held judicial office higher in rank than that of a judge of the district court

Along with the chairperson, the government also appoints two other persons who are
experienced in the area of public utility service. The state authority or the central
authority appoints this person, depending on the case, after a nomination by the
respective government has been made.

SUPPORTIVE MATTER:

 Permanent Lok Adalat are one of the most effective tools of ADR in India. PLAs
are special tribunals established by the National Legal Service Authority or the State
Legal Service Authority with a pre-litigation attempt to resolve the disputes related to
public utility in a speedy manner by means of compromise. The latest statistics on
PLAs available on the NALSA website reveal that currently there are 298 PLAs in the
country which had collectively settled 102,625 out of 143,061 cases from April 2018-
March 2019, the total settlement value of those touches Rs. 3,870,578,815.6
Moreover, the pecuniary jurisdiction of the PLA has been increased from Rupees Ten
lakhs to Rupees One crore.7
 In Interglobe Aviation Ltd v. N. Satchidanand8, the Supreme Court of India said that
“the procedural trait of PLA is CON-ARB (that is conciliation-cum- arbitration).”
Further, in Bar Council of India v. Union of India 9, it was said that “PLAs are
empowered to decide the dispute on merits upon failure between the parties to arrive
at a settlement by the way of conciliation.”
 In Bar Council of India v. UOI, it was held that- “…the award of PLA is non-
appealable.” It further clarified that

6
National Legal Service Authority, Permanent Lok Adalat, April 2018 to March 2019, National Legal Service
Authority of India (May 02, 2020, 02:05 Am)
7
Section 22-C (1) of the Legal Services Authorities Act, 1987
8
(2011) 7 SCC 463
9
(2012) 8 SCC 243
 (i) “the right to appeal is not an inherent right but a creation of statute; if a
statute doesn’t expressly prohibit the appeal of an award, that by ipso
facto  doesn’t make an award appealable especially when the text of the
statute strongly suggests otherwise;
(ii) that PLAs are special tribunals aiming at resolving public utility disputes at
the earliest, and hence, to avoid unnecessary prolongation, the right to appeal
is absent;
(iii) that if at all, a party is aggrieved by the adjudication of PLA, he always has
an option to invoke the special and extraordinary jurisdiction of the High
Court under Articles 226 and 227 of the Constitution of India.10”

 There is always a possibility of fraud, misrepresentation, coercion etc, while arriving

at the consent or compromise. The likelihood of such event cannot be ruled out in Lok
Adalat proceedings. Accordingly, in Mansukhlal Vithaldas Chauhav v. State of
Gujarat,11 it was held- “…in case, Lok Adalat exceeds its powers, committed an error
of law, breach of rules of Natural Justice or abused its powers, the award passed by it
cannot be tolerated and it will justify the interference by courts under Article 226 and
Article 32 of the Constitution of India.”

 The PLA method thus offers an escape route from the complications and difficulties,
saving the parties a great deal of time, money and energy and guaranteeing a time-
bound settlement of the issue.

FINDINGS:

“Moreover, PLA is a machinery to settle or decide disputes relating to public utility services.
Further, in the changing economic scenario, the establishments rendering public utility
services, enumerated in the Act might be run by corporate sectors. Common people may have
claims against these corporates. So, if they are given a speedy and inexpensive remedy to
resolve their grievances by means of PLAs, it should be welcomed.”

However, there is sharp criticism against this machinery both in its constitution and its
functioning especially from lawyers based on the following-
10
Bar Council of India v. Union of India, (2012) 8 SCC 243
11
http://www.legalserviceindia.com/articles/lok-a.htm, visited on 16/01/2012.
 (1) with regard to the constitution of PLA
Although it is true that the members of PLA shall be nominated by the respective
Governments. But such nomination shall be, in terms of Section 22-B(2)(b) of the Act, on
recommendation by the Legal Services Authority concerned. After such nomination, they
have to be appointed by the Legal Services Authority concerned. So there is no chance for the
Government's nominee getting appointed. There is yet another criticism that the persons so
appointed will not have legal background. But, even in other alternative dispute redressal
forums, along with persons with judicial background experts, experienced persons without
legal background are also appointed. 12

(2) PLA is given the power to decide a dispute unlike the ordinary Lok Adalat
envisaged as per Section 19 of the Act which only conciliates the dispute.
While deciding the dispute, it is made clear that the provisions of the Code of Civil Procedure
and the Indian Evidence Act will not have application. 13 In other words, the determination or
decisions will be in a summary manner.

A decision can be made only in such cases where in the view of the Permanent Lok Adalat,
there are elements of resolution. In those cases, the PLA shall formulate the terms of a
reasonable settlement and shall give those grounds to the parties concerned for their
observations.

These findings would be viewed on the basis of facts submitted by the parties. If they do not
reach a resolution, the PLA shall decide on the dispute. That means that the PLA does not
have the authority to settle any conflict that comes before it. Only disputes where there are
elements of agreement can be resolved by the Permanent Lok Adalat. The decision or
judgement of the Permanent Lok Adalat as to whether there are any settlement components is
also a matter which could be subject to judicial review under Article 226 of the Constitution
of India. Therefore, there shall be a check in that respect as well.

(3) Absence of provision for appeal against the decision of PLA.

It is further ensured in the Act that while deciding the dispute on merit, PLA shall be guided
by the "principles of natural justice, objectivity, fair play, equity and other principles of
justice". Thus, a fair procedure is always envisaged. Therefore, there is no reason for any
criticism on the power granted to PLA to decide the dispute in the event of a settlement not
being arrived at despite the existence of an element of settlement.
12
Supra note 23.
13
Ibid.
When a dispute is decided on the grounds of agreement, there is no need for an appeal based
on any such order or award, even though it is settled in court. Nor in compliance with the rule
of civil procedure, shall an appeal be based on a decree passed with the consent of the parties.
That is why the Act states that no appeal shall lie to any court against the award" of the
ordinary Lok Adalat (LA) provided for in Chapter VI of the Act.

But the award of Permanent Lok Adalat (PLA) envisaged in the newly introduced Chapter
VI-A is different. If it is an award upon consent of parties and is as a result of compromise,
necessarily, nobody will think of an appeal.

But, when there is a decision by PLA, as the parties did not agree for a compromise, it is
possible that the aggrieved party may think of an appeal. Every award of the Permanent Lok
Adalat, whether it is based on consent of the parties, or on compromise or upon the decision,
"shall be deemed to be a decree of a civil court". Thus, the decision taken by PLA will have
all the attributes of a decree of a civil court. 14 Although it is true that there is no provision for
appeal in case of award of PLA but appeal is not also expressly excluded. It is not stated
anywhere in the Act that an award of a PLA shall not be called in question in any appeal15.

Hence, an appeal is possible against an award of PLA in terms of Section 96(1) of the Code
of Civil Procedure, when it is not specifically barred by the Legal Services Authorities Act,
1987 and as the award has all the attributes of a decree of a civil court. Even otherwise, the
jurisdiction under Article 226 of the Constitution of India cannot be ruled out, being one
among the basic features of the Constitution of India. Therefore, the criticism that the award
of PLA cannot be called in question in a higher forum has no force.

14
Every decree, unless it is appealed against and so long as it is allowed to continue, will be final and binding on
the parties. Same is the case of an award of PLA.
15
When the award of PLA is treated as a decree of civil court and as it is not otherwise provided in the Legal
Services Authorities Act that no appeal shall lie from such award, necessarily, that being deemed a civil court
decree, an appeal shall lie from that decree.
Necessarily, an appeal shall also lie to a court depending upon the quantum of the amount involved in the decree
or to the High Court being a decision of a body consisting of three persons of which a District Judge or a retired
District Judge is the Chairman. So there is possibility for a judicial review in an appeal.