Can your lawyer settle case without you? Gauhati High Court quashes ‘final’ Lok Adalat award over missing representative

Gauhati High Court News: The Gauhati High Court recently clarified that a settlement arrived at between the parties in a Lok Adalat cannot be treated as a valid settlement in the absence of any authorised representative of the company concerned and merely with the presence of its lawyer.

Justice Sanjay Kumar Medhi was hearing an appeal filed by the company, Mahindra and Mahindra Financial Services Ltd, challenging the order passed by the National Lok Adalat in September 2024, where no authorised officer of the company was present, and the company’s lawyer allegedly made certain concessions without any written authority.

The high court noted that neither the company had provided any “written authority letter” to its lawyer permitting him to sign or enter into a settlement on its behalf, nor was any “authorised representative” present before the National Lok Adalat on the date when the settlement order was passed.

“This court has not come across any such authority letter. In any case, the requirement of the Act (Legal Services Authorities Act) is for arriving at a settlement by the parties, which implicitly requires the presence of the parties. In the instant case, the petitioner no. 1, being a Company, it would be the authorised representative, who is duly competent to enter into such a settlement, which apparently does not appear to be done in the instant case,” the court said.

The court examined the provision of Section 21 of the Legal Services Authorities Act and noted that “every award made by a Lok Adalat is final and binding on all the parties to the dispute, and no appeal shall be filed in any court against the said award”.

The matter stemmed from the appeal filed before the State Consumer Disputes Redressal Commission, challenging an ex parte order passed by the district consumer forum, which directed the company to pay a certain amount to another party.

The said appeal was taken up for consideration in the National Lok Adalat in September 2024, where a settlement order was passed in the absence of any authorised officer of the company.

It was also argued by the company that their counsel had made certain concessions without any authority provided for the same.

Richa Sahay is a Legal Correspondent for The Indian Express, ... Read More