Research › Search › Judgment

Andhra High Court · body

2023 DIGILAW 1350 (AP)

Gudela Anuradha v. R. V. Satyanarayana Murthy

2023-09-26

B.S.BHANUMATHI

body2023
JUDGMENT 1. This revision, under Article 227 of the Constitution of India, is filed challenging the order, dtd. 31/10/2022, dismissing petition in I.A.No.195 of 2019 in O.S.No.237 of 2018 on the file of the Court of XII Additional District Judge, Vijayawada, filed by the defendant under Order 7 Rule 11 CPC to reject the plaint. 2. Heard Ms. Ganta Sridevi, learned counsel representing Sri Ch.Bhanu Prasad, learned counsel for the revision petitioner/defendant and Sri Sai Gangadhar Chamarthy, learned counsel for the respondent/ plaintiff. 3. The facts leading to filing of this revision petition, briefly stated, are as follows: The parties to the suit in O.S.No.237 of 2018 were referred to the Lok Adalat for settlement, and thereby, an award was passed on 3/7/2015 in Case No.782 of 2015. The respondent/plaintiff filed the above suit O.S.No.237 of 2018 to declare that the award, dtd. 3/7/2015, passed by the Lok Adalat, Vijayawada, in case No.782 of 2015 is not valid and binding on the plaintiff on the ground of fraud. 4. At the time of filing the suit, on the objection raised by the office, the plaintiff submitted a decision of the High Court of A.P. in Rambha Narayana Murthy Vs Nimmagadda Eswara Venkata Narasimha Rao, 2017(2) ALT 443 (S.B.). On being satisfied about the legal proposition, the suit was registered. 5. The defendant filed I.A.No.195 of 2019 under Order VII Rule 11 CPC to reject the plaint stating that civil suit is not maintainable to challenge the award passed by the Lok Adalat. The petition was resisted by the respondent/plaintiff by filing counter and denying the averments. After hearing both parties, the petition was dismissed observing that on a bare reading of Order VII Rule 11 CPC, the ground raised by the petitioner to reject the plaint, questioning the Lok Adalat Award is not shown or covered and that the remedy of the petitioner is elsewhere. 6. Having aggrieved by the order, this revision petition is filed. 7. The learned counsel for the revision petitioner/defendant submitted that as per Order VII Rule 11 (d) CPC, if a suit is not in accordance with 'law', the plaint is to be rejected and that the word 'law' includes a decision passed by the constitutional courts, and therefore, the observation of the trial Court that Order VII Rule 11 CPC does not apply is erroneous. In this regard, she further submitted that as per the decision of the Supreme Court in Bhargavi Constructions and another Vs Kothakapu Muthyam Reddy and others, (2018) 13 SCC 480 . when an award passed by the Lok Adalat is to be challenged on the ground of fraud, the only remedy available is to file a writ petition under Article 226/227 of the Constitution of India and not by a separate suit, and therefore, within the meaning of 'law' under Order VII Rule 11(d) CPC, the suit in the present case is not maintainable. 8. Per contra, the learned counsel for the respondent/plaintiff submitted that when an award is challenged on the ground of fraud which requires a detailed trial and involve voluminous evidence, a civil suit would lie and in support of his contentions, he placed reliance on decisions of the Division Benches of this Court in Atluru Chandra Sekhara Rao v. Atluru Mahesh Babu and others, 2019 (3) ALT 119 # AIR 2019 AP 7 . and Iragadindla Ramachandrudu v. The Lok Adalath Bench,W.P.Nos.14433 of 2020 &.13268 of 2020, dtd. 12/9/2023 (APHC). wherein by relying on the observation of the earlier decision of this High Court in Batchu Subba Lakshmi & others v. Sannidhi Srinivasulu & others, 2010 (1) ALD 277 (D.B). it was held that a third party to the Lok Adalat award can file a civil suit on the ground of award being vitiated by fraud. It was held at paragraph Nos.12, 13 & 17 as follows: "12) Be that as it may, upon establishing the fact that he is the grandson of Iragadindla Chinna Chinnanna, when he only claims 1/3rd share in the said property as a heir of one of the land holders, he also, if he feels aggrieved by the award on the ground of any such fraud, which is now alleged, in view of the settled law, as discussed supra, got a right to approach the competent Civil Court to file a suit for declaration that the award is not binding on him on the ground of alleged fraud, which is now pleaded. He also got a legal right to seek a decree to set-aside the said award establishing the fraud, which is now pleaded by adducing acceptable legal evidence in the said Suit. He also got a legal right to seek a decree to set-aside the said award establishing the fraud, which is now pleaded by adducing acceptable legal evidence in the said Suit. 13) In this context, at the cost of repetition, we would like to extract paragraph No. 8 of the judgment of the Division Bench of the erstwhile High Court of Andhra Pradesh in the case of Batchu Subba Lakshmi [cited 2nd supra], wherein it is held as follows: "8. The parties to the compromise or settlement, which is the basis for award of Lok Adalat, no doubt entitled to challenge the award on any of the grounds referred to herein above grounds. Ordinarily, a third party cannot challenge the award in a writ petition even if such award causes prejudice. The remedy of such party would be to institute a separate suit or proceeding for necessary redressal and seek appropriate decree of declaration by filing a suit within the period of limitation prescribed under law. Under Sec. 34 of the Specific Relief Act, 1963, any person entitled to legal character or any right as to any property, may file a suit for declaration. Under this provision, any person can even institute a suit for declaration that the decree passed by Civil Court in an earlier suit is not binding on him. When a civil Court can even declare that an earlier decree of the Court is not binding on the party before it, we do not see any objection for a third party to institute a suit in a civil Court seeking a declaration that the award of Lok Adalat is not binding on him/her subject to the law of limitation. We however hasten to add that there may be extraordinary cases where a third party is meted with injustice at the behest of two or more conniving and colluding parties, who may have obtained an award of Lok Adalat by fraud or misrepresentation only to defeat the rights of such third party. In such cases within a reasonable period such third party may maintain a writ petition. But in such cases, there should be prima facie evidence of fraud or misrepresentation or collusion in obtaining the award of Lok Adalat. In such cases within a reasonable period such third party may maintain a writ petition. But in such cases, there should be prima facie evidence of fraud or misrepresentation or collusion in obtaining the award of Lok Adalat. Even if such allegations are made and the question involves complicated questions of fact requiring voluminous evidence, third party should be left to seek remedy in a civil Court rather than preferring extraordinary remedy under Article 226 of Constitution." 17) It is a well settled law that, when several disputed question of facts are involved, which requires ample evidence to adjudicate the said lis, the appropriate remedy for the parties is to approach the Civil Court and file a comprehensive suit to claim appropriate relief to that effect." 9. In reply, the learned counsel for the petitioner submitted that the decision in Iragadindla Ramachandrudu v. The Lok Adalath Bench (4 supra), was rendered in the context of a third party filing the case challenging the award, whereas, in the present case, a party to the award had filed the suit and the same is not maintainable in view of the decision of the Supreme Court in Bhargavi Constructions and another (2nd supra). 10. In view of the above rival contentions, the question that falls for consideration in this revision is: Whether a party to the Lok Adalat award can maintain a civil suit to challenge it on ground of fraud? And, if not, whether a plaint can be rejected under Order VII Rule 11 CPC? 11. In Bhargavi Constructions (2nd supra), the Supreme Court by reiterating what was decided in State of Punjab v. Jalour Singh,(2008) 3 SCC 660. observed as follows: "25. The question arose before this Court (Three Judge Bench) in the case of State of Punjab (supra) as to what is the remedy available to the person aggrieved of the award passed by the Lok Adalat Under Sec. 20 of the Act. In that case, the award was passed by the Lok Adalat which had resulted in disposal of the appeal pending before the High Court relating to a claim case arising out of Motor Vehicle Act. One party to the appeal felt aggrieved of the Award and, therefore, questioned its legality and correctness by filing a writ petition Under Article 226/227 of the Constitution of India. One party to the appeal felt aggrieved of the Award and, therefore, questioned its legality and correctness by filing a writ petition Under Article 226/227 of the Constitution of India. The High Court dismissed the writ petition holding it to be not maintainable. The aggrieved party, therefore, filed an appeal by way of special leave before this Court. This Court, after examining the scheme of the Act allowed the appeal and set aside the order of the High Court. This Court held that the High Court was not right in dismissing the writ petition as not maintainable. It was held that the only remedy available with the aggrieved person was to challenge the award of the Lok Adalat by filing a writ petition Under Article 226 or/and 227 of the Constitution of India in the High Court and that too on very limited grounds. The case was accordingly remanded to the High Court for deciding the writ petition filed by the aggrieved person on its merits in accordance with law. 26. This is what Their Lordships held in Para 12: 12. It is true that where an award is made by the Lok Adalat in terms of a settlement arrived at between the parties (which is duly signed by parties and annexed to the award of the Lok Adalat), it becomes final and binding on the parties to the settlement and becomes executable as if it is a decree of a civil court, and no appeal lies against it to any court. If any party wants to challenge such an award based on settlement, it can be done only by filing a petition Under Article 226 and/or Article 227 of the Constitution, that too on very limited grounds. But where no compromise or settlement is signed by the parties and the order of the Lok Adalat does not refer to any settlement, but directs the Respondent to either make payment if it agrees to the order, or approach the High Court for disposal of appeal on merits, if it does not agree, is not an award of the Lok Adalat. The question of challenging such an order in a petition Under Article 227 does not arise. As already noticed, in such a situation, the High Court ought to have heard and disposed of the appeal on merits. 27. The question of challenging such an order in a petition Under Article 227 does not arise. As already noticed, in such a situation, the High Court ought to have heard and disposed of the appeal on merits. 27. In our considered view, the aforesaid law laid down by this Court is binding on all the Courts in the country by virtue of mandate of Article 141 of the Constitution. This Court, in no uncertain terms, has laid down that challenge to the award of Lok Adalat can be done only by filing a writ petition Under Article 226 and/or Article 227 of the Constitution of India in the High Court and that too on very limited grounds. 28. In the light of clear pronouncement of the law by this Court, we are of the opinion that the only remedy available to the aggrieved person (Respondents herein/Plaintiffs) was to file a writ petition Under Article 226 and/or 227 of the Constitution of India in the High Court for challenging the award dtd. 22/8/2007 passed by the Lok Adalat. It was then for the writ Court to decide as to whether any ground was made out by the writ Petitioners for quashing the award and, if so, whether those grounds are sufficient for its quashing." 12. Therefore, it is clearly observed that an award passed by a Lok Adalat can be challenged even on the ground of fraud by filing a writ petition under Article 226/227 of the Constitution of India. The decision in Rambha Narayana Murthy (1 supra) was rendered basing on a decision of Division Bench of this High Court in Kothakapu Muthyam Reddy and others v. Bhargavi Constructions and others, 2015 (6) ALD 1 . which is subsequently reversed by the Supreme Court in Bhargavi Constructions and another Vs. Kothakapu Muthyam Reddy and others (2nd supra) in the above cited decision, and therefore, the respondent cannot place reliance on this decision to support his contention. 13. Similarly, in the case of Atluru Chandra Sekhara Rao (3rd supra), the Division Bench of this High Court placed reliance on Kothakapu Muthyam Reddy and others v. Bhargavi Constructions and others (6 supra) and also two earlier decisions of the Division Bench of this High Court in Sanjay Kumar V. Secretary, City Civil Court Legal Services Authority, 2010 (3) ALD 330 (DB). and Sri Durga Malleswari Education Society, Vijayawada v. District legal Services Authority, Vijayawada, 2012 (4) ALD 27 (D.B). The respondent cannot lay hand on this decision also for the same reason as in the case of Rambha Narayana Murthy (1 supra) because of the subsequent decision of the Supreme Court in Bhargavi Constructions (2nd supra). 14. Insofar as the very recent decision of the Division Bench of this Court in Iragadindla Ramachandrudu v. The Lok Adalath Bench (4th supra) is concerned, the question involved is a challenge made by a third party to the Lok Adalat award. In that context, reliance was placed on the decision of this Court in Batchu Subba Lakshmi (5th supra) by referring to paragraph No.8 of the said judgment. In Batchu Subba Lakshmi (5th supra), paragraph No.8 is headed by 'who can file writ petition challenging the Lok Adalat award'. While dealing with the question, an observation was made that a third party may maintain a writ petition on the ground of 'fraud' or 'misrepresentation' in obtaining a Lok Adalat award to defeat the rights of third party and that if such fraud is prima facie evidenced, a writ petition would lie, but if such allegations involve complicated questions of fact requiring voluminous evidence, a third party should be left to seek remedy in a civil Court rather than filing a writ petition under Article 227 of the Constitution of India. In the very same decision, at para No.12 under the heading "what are grounds of challenge" referring to the decision of the Supreme Court in Jalour Singh (6th supra), it is held that if any party wants to challenge the award duly signed by parties, it can be by way of filing petition under Article 226/227 of the Constitution of India. Paragraph No.12 of the cited decision in Batchu Subba Lakshmi (supra) reads as under: "12. From the above judgments, it may be taken as well settled that the award of Lok Adalat is administrative act of incorporating the terms of compromise or settlement agreed by the parties in the presence of Lok Adalat and Lok Adalat does not sit in adjudication of the dispute. From the above judgments, it may be taken as well settled that the award of Lok Adalat is administrative act of incorporating the terms of compromise or settlement agreed by the parties in the presence of Lok Adalat and Lok Adalat does not sit in adjudication of the dispute. When an award is passed in terms of the settlement arrived between the parties, which is duly signed by the parties annexed to the award of Lok Adalat, it becomes binding on the parties to the settlement and becomes executable as if it is a decree of Civil Court. No appeal would lie against the award of Lok Adalat and if any party wants to challenge such an award, it can be by way of petition under Article 226 or 227 of Constitution. If there is no compromise or settlement between the parties before the Lok Adalat, it cannot pass any award nor such award can bind the parties. The challenge to the award of Lok Adalat under Article 226 of Constitution can be entertained on very limited grounds raised only by parties to the settlement/compromise before Lok Adalat and not by anybody else." 15. The decision in Iragadindla Ramachandrudu Vs. The Lok Adalath Bench (4th supra), cannot be taken as an aid by the respondent/plaintiff to contend that civil suit would lie to challenge an award passed by Lok Adalat by a party to the contract on the ground of fraud, since the decision was given in a case filed by a third party to the Award. 16. In Bharvavi Constructions (2nd supra), at para No.27, it is affirmed that the decision in Jalour Singh (6th supra) is binding on all Courts in the country by virtue of the mandate of Article 141 of the Constitution. As such, since a civil suit would not lie, as per Order VII Rule 11 (d) CPC, the plaint can be rejected. This view is fortified by the decision of the High Court of Sikkim at Gangtok in Shanti Subba and others v. Jashang Subba10 wherein at paragraph No.16, it was held as follows: "16. Article 141 of the Constitution of India categorically states that the law declared by Supreme Court shall be binding on all Courts within the territory of India. This view is fortified by the decision of the High Court of Sikkim at Gangtok in Shanti Subba and others v. Jashang Subba10 wherein at paragraph No.16, it was held as follows: "16. Article 141 of the Constitution of India categorically states that the law declared by Supreme Court shall be binding on all Courts within the territory of India. It cannot be said that the term "barred by any law" appearing in clause (d) of Rule 11 Order VII CPC means only law codified in legislative enactments and not the law laid down by the Hon'ble Supreme Court. After the decision of the Supreme Court in Bhargavi Constructions (supra), the issue is no longer res integra and the expression "law" in clause (d) of Rule 11 Order VII CPC includes law declared by the Hon'ble Supreme Court." Consequently, the order impugned in the revision is liable to be set aside. 17. In the result, the Civil Revision Petition is allowed setting aside the order, dtd. 31/10/2022, passed in I.A.No.195 of 2019 in O.S.No.237 of 2018 and consequently, I.A.No.195 of 2019 is allowed. The plaintiff is given liberty to avail any other remedy available under law. There shall be no order as to costs. Pending miscellaneous petitions, if any, shall stand closed.