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of <h1>Compromise decree in Lok Adalat set aside for fraud after daughters excluded from ancestral property suit</h1> <h3>Lata w/o Bharat Kalamkar Versus Shankar s/o Revaji Tambe and others</h3> The Bombay HC set aside a compromise decree passed in Lok Adalat on grounds of fraud. The case involved ancestral property where daughters of deceased ... Compromise decree passed in Lok Adalat on the ground of fraud - possession of suit property - HELD THAT:- In the instant case, the petitioner and respondent Nos. 7 to 9 and 12 are the daughters of deceased Revaji. On going through the pleadings of said R.C.S. No. 374 of 2013 wherein there is no reference to the petitioner and respondent Nos. 7 to 9 and 12. On the other hand, plaint is silent and there is no pleading as to whether the daughters have relinquished their share in respect of the ancestral property. There are much substance in the contention raised by learned counsel for the petitioner that deceased Revaji was suffering from severe health condition and the same is evident from the fact that within four months of institution of the suit deceased Revaji died. It further appears that the said R.C.S. No. 374 of 2013 was instituted on 18.6.2013 and it was compromised on 30.6.2013 i.e. within 12 days. Thus, prima facie, the contention raised about the fraud is sustainable. The petitioner though is not party to the suit which was decreed in terms of the compromise before the Lok Adalat, however, the petitioner, as the aggrieved person, either can file a separate suit for seeking declaration that such decree would not be binding upon her share or the petitioner may file writ petition on the ground of fraud for setting aside the award passed in the Lok Adalat. The impugned award of the Lok Adalat set aside - petition allowed. Issues Involved:1. Validity of the compromise decree passed in Lok Adalat on grounds of fraud.2. Legal standing of non-parties to the original suit in challenging the Lok Adalat award.3. Appropriate legal remedies for challenging the Lok Adalat award.Issue-wise Detailed Analysis:1. Validity of the Compromise Decree Passed in Lok Adalat on Grounds of Fraud:The petitioner challenged the compromise decree passed in Lok Adalat, alleging fraud. The petitioner argued that respondent Nos. 2 to 5 filed Regular Civil Suit No. 374 of 2012 for partition and separate possession of ancestral property, excluding the petitioner and other joint family members. The parties reached an amicable settlement, and the compromise was recorded in Lok Adalat, resulting in a decree on 30.06.2013. The petitioner claimed that the compromise was achieved by suppressing facts and excluding other legal heirs, including the petitioner, who had a share in the property. The petitioner highlighted that the suit was filed when deceased Revaji was critically ill and was hastily compromised within 12 days, indicating possible fraud.2. Legal Standing of Non-parties to the Original Suit in Challenging the Lok Adalat Award:The respondents argued that the petitioner and other excluded family members were not parties to the original suit and therefore could not challenge the Lok Adalat decree under Article 227 of the Constitution. The Supreme Court in 'State of Punjab vs. Jalour Singh' and 'Bhargavi Constructions vs. Kothakapu Muthyam Reddy' established that an award by Lok Adalat based on a settlement is final and binding, and can only be challenged through a writ petition under Articles 226 and/or 227 on limited grounds. The Andhra Pradesh High Court in 'Batchu Subba Lakshmi vs. Sannidhi Srinivasulu' stated that third parties could challenge a Lok Adalat award by filing a separate suit for declaration if the award was obtained by fraud or misrepresentation.3. Appropriate Legal Remedies for Challenging the Lok Adalat Award:The judgment referenced several precedents, including 'State of Punjab vs. Jalour Singh,' which clarified that challenges to Lok Adalat awards must be made via writ petitions on limited grounds. The Supreme Court in 'Bhargavi Constructions' reiterated that the only remedy for an aggrieved party is to file a writ petition. The petitioner, being a daughter of the deceased and a legal heir, was deemed a necessary party to the original suit but was excluded, suggesting possible fraud. The court found substance in the petitioner’s claim of fraud, noting the hasty compromise and the critical health condition of the deceased.Conclusion:The court concluded that the petitioner, though not a party to the original suit, had the right to challenge the Lok Adalat decree either through a separate suit or a writ petition on grounds of fraud. The court allowed the writ petition, setting aside the Lok Adalat award dated 30.06.2013, and restored Regular Civil Suit No. 374 of 2013 to the file of the Civil Judge, Junior Division, Parner, for a fresh decision after including all necessary parties. The court also restrained the parties from creating any third-party interest or encumbrance on the suit properties until the suit's disposal.Order:I. The writ petition is allowed as per prayer clauses “C”, “D”, and “E”.II. Parties to appear before the trial court in restored R.C.S. No. 374 of 2013 on 06.04.2021.III. The trial court to decide the suit on its merits after adding necessary parties.IV. Parties are prevented from creating third-party interests or encumbrances on the suit properties until the suit's disposal.V. The writ petition is disposed of accordingly.
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