The mounting of NPAs in the Bank and the tardy recovery process of the dues is an important concern for the Banks. Lok Adalat is one of the forums which has been playing an important role in the settlement of disputes. Lok Adalat is a process of administering justice without resorting to courts. Its process is voluntary and works on the principle that both parties to the dispute are willing to sort out their disputes amicably. Through this mechanism, disputes can be settled in a simpler, quicker, and cost-effective way. It is for the Banks to make use of this forum and speed up the recovery of NPAs.
Lok Adalat is one of the alternative dispute redressal mechanisms, it is a forum where disputes/cases pending in the court of law or at the pre-litigation stage are settled/ compromised amicably. Lok Adalat has been given statutory status under the Legal Services Authorities Act, 1987. Under the said Act, the award (decision) made by the Lok Adalat is deemed to be a decree of a civil court and is final and binding on all parties and no appeal against such an award lies before any court of law.
Proceedings in Lok Adalat
Salient features in Lok Adalat are as under:
i) No Court Fee is involved.
iii) Lok Adalat to settle banking disputes involving amount up to Rs. 20 lakh.
iv) It can take cognizance of any existing suit pending in Civil Court/DRT Court.
v) If no settlement is arrived at, the parties can continue with Civil Court/DRT proceedings.
vi) Decrees passed by it have legal status and are binding on all the parties to the dispute and no appeal shall lie to any Court against the Award.
vii) Settlement of cases through Lok Adalat will reduce the expenses and time in pursuing the cases before the Court/DRT which is a time-consuming affair.
The organisation of Lok Adalat
Every State Authority or District Authority or the Supreme Court Legal Services Committee or every High Court Legal Services Committee or, as the case may be, Taluk Legal Services Committee may organise Lok Adalat at such intervals and places and for exercising such jurisdiction and for such areas as it thinks fit.
Every Lok Adalat organised for an area shall consist of such number of;
(a) Serving or retired judicial officers; and
(b) Other persons, of the area as may be specified by the State Authority or the District Authority or the Supreme Court Legal Services Committee or the High Court Legal Services Committee, or as the case may be, the Taluk Legal Services Committee, organising such Lok Adalat.
Establishment of Permanent Lok Adalat
The Central Authority or, as the case may be, every State Authority shall, by notification, establish Permanent Lok Adalat at such places and for exercising such jurisdiction in respect of one or more public utility services and for such areas as may be specified in the notification.
Cognisance of Case by Lok Adalat
- Both the parties to the suit may agree to refer their dispute to Lok-Adalat, or
- One of the parties thereof makes an application to the Court/DRT for referring the case to the Lok Adalat for settlement, or
- The court is satisfied that the matter is an appropriate one to be taken cognizance of by the Lok-Adalat, the court shall refer the case to the Lok Adalat.
- Where any case is referred to a Lok Adalat, it shall proceed to dispose of the case or matter and arrive at a compromise or settlement between the parties.
Disposal of the case in Lok Adalat
Every Lok Adalat while determining any reference shall be guided by the principles of justice, equity, fair play, and other legal principles. Where no award is made by the Lok Adalat on the ground that no compromise or settlement could be arrived at between the parties, the record of the case shall be returned by it to the court from which reference has been received, and advice the parties to seek remedy in Court. Where the record of the case is returned, such court shall proceed to deal with such case from the state which was reached before such reference.
Every award made by a Lok Adalat shall be deemed to be a decree of Civil Court or as the case may and shall be final and binding on all the parties to the dispute and no appeal shall lie to any Court against the award.
Powers of Lok Adalat
For determination of the dispute referred to it, the Lok Adalat shall have the following powers:
- to summon and enforce the attendance of any witness and examine him on oath.
- to discovery and production of documents.
- to receive evidence on affidavits.
- to requisition of public record or copy of the record.
How to organise Lok Adalat
For organising Lok Adalat respective banks can approach the district legal services authority. The authorities agree for organising Lok Adalat exclusively for the Banks and exclusively for a particular Bank also.
Identify the area taking into consideration the conglomeration of the bank’s branches.
Several cases pending in the courts or before DRT, irregular/sticky accounts. Where there is a likelihood of a compromise or a settlement & amount involved.
Ajit Doke says
Easy way to settle in various case’s.In Lokadalat compromises the various pending cases.Limit of the serttlement should be increased.If one defaulter availed various types of loans and total dues crossed above Rs.20 lakshs then it’s difficult to solve these cases in Lokadalat.
Ajit Doke says
More than three years accounts are not eligible in the Lokadalat.Is this is true ?.Sometimes when we submitted the documents copies and relevant papers in the Lokadalat court ,at that time they scrutinised these papers .If the defaulters account is more than three years,then authority’s decided these case is invalid.Actual what is the correct method in the prosess.?
Sumita Taterway says
All NPA accounts are eligible in Lok Adalat. Time barred account is not eligible here.
Aditya Agarwal says
What is the maximum amount for which NPA accounts can use Lok Adalat
Sumita Taterway says
Lok Adalat to settle banking disputes involving amount up to Rs. 20 lakh.
shani kumar says
IDBI Bank has come to Lok Adalat
Abinash Mandilwar says
Thank you for your feedback and update.
whether permanent lok adalat is applicable for banking cases in Tamil Nadu in the absence of notification including banking in public utility services by Tamil Nadu state government