LOK ADALAT have statutory status under the Legal Services Authorities Act, 1987 and have powers similar to those vested in a civil court. All awards are binding on all parties and can not be appealed. According to RBI guidelines, banks can use cases with a monetary value between ₹5 lakhs and ₹20 lakhs to Lok Adalat.
Recovery through award of Lok Adalat is the easiest and fastest mode of recovery. The literal meaning of Lok Adalat is people’s Court. The concept comes under the ‘Alternative Disputes Redressal Mechanism’ like arbitration, conciliation etc. The pre-litigation up to Rs.20 lacs and suit filed accounts where plaint amount does not exceed Rs.20 lacs can be settled through Award of Lok Adalat. The Lok Adalat is constituted under section 19 of Legal Services Authority Act,1987. There are different layers of Legal service authorities namely
- State Legal Service Authority.
- Supreme Court Legal Services Committee.
- High Court Legal Services Committee.
- District Legal Services Authorities.
- Taluk Legal Services Committees.
The members of Lok Adalat are from:
- Serving or retired Judicial Officers.
- A senior counsel or a lawyer of standing or
- A senior officer of the Government or
- A person of repute who is specially interested in the implementation of Legal Services and Programmes or
- An eminent social worker who is engaged in the upliftment of the weaker sections of the society or a medical or any other expert as deemed fit, by the State Authority.
Method of organizing Lok Adalat:
The manager of the Bank shall contact the borrowers and negotiate with them the terms of settlement. The Manager should convince the borrowers about the benefits of settling the matter via Lok Adalat. The branch office has to take their higher office permission/sanction wherever necessary, with regards to proposed terms of settlement.
The Legal Service Authorities shall be approached by the bank to conduct Lok Adalat along with a list of the accounts where settlement is feasible. The Legal Service Authority fixes the date of Lok Adalat and informs the same to the bank. The bank in tern shall service notice to all the parties concerned. The concerned branch of the bank should personally contact the borrowers and ensure that all parties be present at Lok Adalat on the date fixed.
The Lok Adalat will be convened on the date fixed and same day award will be passed. The award is final and binding on all the parties.
Advantage of Lok Adalat:
- Every award of the Lok Adalat is equivalent to a decree of a Civil Court.
- OTS (One Time Settlement) can be put through Lok Adalat, so that on default, the award could be executed by the Court (Like execution of decree).
- No appeal will be entertained against the award of Lok Adalat.
- No case could be instituted in any Court with regard to case decided by Lok Adalat.
- Entire Court fee paid for filing suit will be returned back and no lawyer fee is payable.
- The award can also be passed on a holiday.
Summary:
The decision of the Lok Adalat is binding on the parties to the dispute, and its order can be enforced through legal means. There is no court fee payable when a matter is filed in a Lok Adalat. The court fee can be refunded if a case is settled in Lok Adalat. Specifically, the Supreme Court has clarified that court fee refunds are applicable to settlements reached through Lok Adalat, which are equivalent to court decrees.
The other LOK ADALATs which are popular.
- Insurance Lok Adalat
- Pension Lok Adalat
- Railway Lok Adalat
- Telecom Lok Adalat
- Electricity Lok Adalat
- Muncipal Corporation Lok Adalat
- Marriage Lok Adalat
- Prison Lok Adalat
Originally posted 19.09.2014 updated on 24.05.2025
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