Lok Adalat jurisdiction depends on compromise or settlement; without it, no valid disposal or merger can follow.

A Lok Adalat may dispose of a case only on the basis of a compromise or settlement between the parties under Section 20 of the National Legal Services Authorities Act, 1987; unilateral surrender or a non-settled dispute does not satisfy that requirement. In the absence of a valid settlement, the Lok Adalat lacks jurisdiction to pass an award or finally determine the matter, and no question of merger of its order into a later High Court order arises. The matter was remitted to the High Court for fresh adjudication on merits.

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Issues: Whether a Lok Adalat can dispose of a matter in the absence of a compromise or settlement between the parties, and whether the Lok Adalat order can merge into the subsequent order of the High Court in such circumstances.

Analysis: Section 20 of the National Legal Services Authorities Act, 1987 permits disposal by Lok Adalat only through a compromise or settlement. The statutory expressions contemplate mutual adjustment and bilateral agreement, and do not cover a unilateral surrender or a non-settled dispute. Where no compromise or settlement is arrived at, the Lok Adalat has no jurisdiction to pass an award or dispose of the matter, and the question of merger of its order into a later judicial order does not arise.

Conclusion: The Lok Adalat could not validly dispose of the matter without a compromise or settlement, and its order did not merge so as to sustain the High Court's disposal on that basis.

Final Conclusion: The matter was sent back to the High Court for fresh adjudication on merits, with consideration of the applicable legal position governing Lok Adalat proceedings.

Ratio Decidendi: A Lok Adalat can dispose of a case only on the basis of a compromise or settlement between the parties, and in the absence of such settlement it lacks authority to finally determine the dispute.

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