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2014 DIGILAW 147 (JK)

Ishpal Singh v. Lok Adalat

2014-04-01

BANSI LAL BHAT

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1. Petitioner who had obtained loan for purchase of truck to the tune of Rs. 5.24 lacs from the State Bank of India Zonal Office, Jammu in the year 2004 and was saddled with the liability to pay an amount of Rs.4,34,864/- alongwith interest @ 11.75% per annum with quarterly, rests and costs in terms of judgment and decree dated 17.8.2010 passed by the learned Additional District Judge Bank Cases, Jammu in ex parte, is aggrieved of the award passed in execution proceedings by the Lok Adalat on 25.1.2012 by virtue whereof he was directed to pay an amount of Rs. 04,80,000/- as full and final settlement in two installments, first installment of Rs.2,80,000/- payable before 7.2.2012 and second installment of Rs.2.00 lacs payable by 29.2.2012. The impugned award has been assailed on the following grounds: i) that the petitioner never authorized his counsel to enter into settlement with respondent-2 before Lok Adalat. ii) that reference to Lok Adalat was bad in law. 2. Respondent- Bank has filed objections pleading that the petitioner cannot be permitted to raise disputed questions of fact. It is further pleaded that the petitioner has played a fraud on court by withholding vital documents relevant to litigation. Reference is made to the application of petitioner for referring the dispute to Lok Adalat, approaching Respondent- Bank to seek time to pay amount settled in Lok Adalat and depositing of some amount subsequently by petitioner signifying his consent to the terms of settlement on which the impugned award is based. 3. Learned counsel for petitioner contended that since reference to Lok Adalat was bad and counsel was not authorized to enter into settlement with the bank, the impugned award was rendered illegal. Per contra, learned counsel for bank submitted that reference to Lok Adalat was made at the instance of petitioner who had engaged a counsel authorized to enter into settlement in terms of conditions embodied in Vakalatnama and that the settlement was for the benefit of petitioner. Thus, petitioner cannot be permitted to wriggle out of the liability in terms of the impugned award passed by the Lok Adalat in execution proceedings. 4. Heard and considered. 5. The undisputable facts emerging from the record are that Respondent-Bank had filed a civil suit for recovery of loan amount which came to be decreed in ex parte. It happened on 17.8.2010. Respondent-Bank had claimed Rs. 4. Heard and considered. 5. The undisputable facts emerging from the record are that Respondent-Bank had filed a civil suit for recovery of loan amount which came to be decreed in ex parte. It happened on 17.8.2010. Respondent-Bank had claimed Rs. 4, 34,864/- from petitioner and co-defendants who were his guarantors. Petitioner and co-defendants did not respond to the summons served upon them through registered post. Consequently, the suit was heard and decided in ex parte. A decree for Rs. 4,34,864/- together with interest and costs was passed against the petitioner. Since the decree was not satisfied, respondent-Bank filed execution petition. It was during the pendency of execution proceedings, that the petitioner moved an application for reference of the dispute for settlement before the Lok Adalat. Application appears to have been moved by Mr. Sunil K Bhatti, Advocate representing the petitioner before the Executing Court on 24.10.2011. From the minutes of proceedings recorded on 14.1.2012 by the Executing Court, it emerges that the petitioner and his counsel were present and it was at petitioner's instance that the matter was referred to Lok Adalat for settlement. In the face of this factual position, it does not lie in the month of petitioner that the reference to Lok Adalat was bad and not conforming to the procedure embodied in section 19 of the Legal Services Authorities Act, 1997. It further appears from the record that petitioner, after being saddled with liability to pay Rs.4.80 lacs in terms of settlement recorded by the Lok Adalat, approached Respondent-Bank on 29.3.2012 with written request for extension of time to liquidate the liability. He offered to deposit Rs.2.40 lacs on 29.3.2012 and clear the balance amount of Rs.2.40 lacs before 30.4.2012. He also appears to have deposited an amount of Rs.50,000/-with Respondent- Bank on 8.8.2013 i.e. subsequent to the passing of the impugned award. The record further reveals that the petitioner had approached the trial court with an application under Order 9 Rule 13 CPC for setting aside of ex parte decree. He also sought condonation of delay in filing of such application. In the face of these documents, petitioner cannot be heard to say that he was not party to the referral of dispute in execution proceedings to Lok Adalat for settlement. 6. Reference in question is strictly in adherence to the provisions of law and does not suffer from any legal infirmity. In the face of these documents, petitioner cannot be heard to say that he was not party to the referral of dispute in execution proceedings to Lok Adalat for settlement. 6. Reference in question is strictly in adherence to the provisions of law and does not suffer from any legal infirmity. It is the petitioner who was instrumental in causing dispute to be referred to Lok Adalat for settlement. His conduct, both pre and post impugned award speaks eloquently that he voluntarily caused the matter to be referred to Lok Adalat for settlement. There is no substance in the argument raised by learned counsel for petitioner to assail the impugned award on this ground and the same is rejected. 7. Now coming to the next ground on which the impugned award has been assailed, be it seen that in terms of Vakalatnama on record, petitioner authorized his counsel, inter alia to compromise the said cause. In the face of covenants in Vakalatnama, petitioner cannot be heard to say that his counsel was not authorized to enter into settlement before Lok Adalat. It has been found that the reference was made to Lok Adalat at the instance of petitioner who was instructed to be present in person before the Lok Adalat. It is true that petitioner did not appear in person before Lok Adalat and his counsel has signed the Settlement Deed, culminating in passing of the impugned award. Since the learned counsel was authorized to enter into settlement, no fault can be found with the impugned award unless the petitioner demonstrates that his counsel has not acted in bona fide. 8. It is well settled that in presence of clear stipulation in Vakalatnama authorizing the Advocate to compromise the matter, contention that the party had hot authorized its Advocate to enter into compromise, cannot be accepted. In Jamilabi v. Shanker Lal reported in AIR 1975 SC 2202 , it was held by the Hon'ble Apex Court that the Advocate has authority to act by way of compromising a case in which he is engaged even without specific consent from his client subject to two overriding considerations : a) He must act in good faith and for the benefit of his client. b) It is prudent and proper to consent his client and take his Consent if there is time and opportunity. 9. b) It is prudent and proper to consent his client and take his Consent if there is time and opportunity. 9. In the instant case, the counsel was authorised, to enter into compromise. Reference was made to Lok Adalat at the instance of petitioner and in presence of his counsel. It is manifestly clear that the counsel acted substantially with knowledge and encouragement by his client. Petitioner was saddled with liability to pay an amount of Rs. 4,34,864/- with interest @ 11.75% per annum with quarterly rests and costs. Admittedly, the loan was obtained by the petitioner in the year 2004. By the time the settlement was recorded by Lok Adalat on 25.1.2012, the liability must have swelled to Rs.8.00 lacs or more. In terms of settlement, before Lok Adalat, petitioner was required to pay only an amount of Rs.04,80,000/- towards full and final- settlement. Thus, compromise was for the benefit of petitioner, and his learned counsel can by no stretch of imagination be said to have exercised authority in a manner where bona-fides were lacking. Consequently, this ground also fails. 10. There being no merit ill the writ petition, the same is dismissed alongwith connected CMP.