The High Court of Karnataka dismissed writ petitions challenging Trial Court orders permitting reopening of suits after Lok Adalat proceedings, holding that no final settlement had occurred and the Lok Adalat exceeded its conciliatory mandate by passing a 'hybrid order'.
Background & Facts
The Dispute
Bowring Institute, a society registered under the Karnataka Societies Registration Act 1960, faced multiple suits filed by individuals challenging its functioning, specifically regarding an Enquiry Committee Report dated 08.04.2013. The suits sought declarations that the enquiry committee was illegal, its proceedings violated natural justice, and communications demanding additional payment of Rs. 9 lakhs were without jurisdiction.
Key Facts
- Suits were filed in various O.S. Nos.: 3924/2017 (W.P.No.4306/2026), 4033/2017 (W.P.No.7083/2026), 4362/2017 (W.P.No.7160/2026), 4030/2017 (W.P.No.7097/2026), 2972/2018 (W.P.No.7098/2026), 2521/2018 (W.P.No.7102/2026), 2214/2019 (W.P.No.7127/2026), 2971/2018 (W.P.No.7130/2026), and 1191/2019 (W.P.No.7093/2026)
- During pendency, by order dated 04.12.2023, the learned Trial Court referred the matter to Lok Adalat to be held on 09.12.2023
- On 09.12.2023, plaintiffs filed applications under Order 23, Rule 1 of CPC to withdraw suits, stating they had resolved to withdraw the suit "with liberty to file fresh suit on the same cause of action, in the interest of justice and equity"
- The withdrawal applications specified that resolution would be placed in the Agenda of the Annual General Body Meeting of Bowring Institute to be held in June 2024, and a memo agreeing to pay Rs. 9 lakhs for regularization of membership would be filed
- Mr. H.S. Srikanth, Secretary of Bowring Institute, assured the Lok Adalat Presiding Officer that the matter would be amicably resolved at the June 2024 meeting
- The Lok Adalat proceedings on 09.12.2023 showed: matter called, plaintiff and counsel present, secretary of defendant club present, negotiation held, plaintiff counsel filed withdrawal application, suit withdrawn as per application, plaintiff permitted to withdraw suit and at liberty to reopen or file fresh suit if June 2024 General Body meeting resolution unfavorable
- The order sheet was signed by Advocate Conciliator, Judicial Conciliator, and the plaintiff in W.P.No.4306/2026
- Subsequently, plaintiffs filed applications under Section 151 of CPC (I.A.No.1/2025) seeking to reopen suits, stating Bowring Institute failed to consider relief per compromise petition terms
- The learned Trial Court, by impugned orders dated 19.01.2026, allowed the Section 151 applications and permitted reopening of suits
Procedural History
- 04.12.2023: Trial Court referred matter to Lok Adalat (order dated 04.12.2023)
- 09.12.2023: Lok Adalat proceedings held; withdrawal applications filed and suits permitted to be withdrawn with liberty to reopen
- 19.01.2026: XXXVII Addl. City Civil and Sessions Judge (CCH-38), Bangalore passed impugned orders allowing Section 151 applications to reopen suits (O.S.Nos. 3924/2017, 4033/2017, 1191/2019, 4030/2017, 2972/2018, 2521/2018, 2214/2019, 2971/2018, 4362/2017)
- 10.09.2026: High Court of Karnataka pronounced judgment dismissing writ petitions challenging the impugned orders
Relief Sought
The petitioner sought to quash the impugned orders dated 19.01.2026 passed by the Trial Court, arguing that the Lok Adalat order dated 09.12.2023 attained finality and the Trial Court became functus officio thereafter.
The Legal Issue
The central question was whether the Civil Court can re-examine an issue based on an application filed by a party, after the suit has been disposed of as settled in Lok Adalat pursuant to an application filed under Order 23, Rule 1 of the CPC for withdrawal of the suit.
Arguments Presented
For the Petitioner
Learned counsel for Bowring Institute relied on the doctrine of functus officio, contending that once a judicial authority renders a decision, it cannot revisit the decision. Reliance was placed on Hari Singh Mann v. Harbhajan Singh Bajwa, (2001) 1 SCC 169. Additionally, counsel cited Order 23 Rule 3 of CPC, arguing that where a suit has been adjudicated wholly or in part by compromise, no suit shall lie to set aside the decree on the ground that compromise was not lawful, relying on Orissa Administrative Tribunal Bar Association v. Union of India and Ors., (2023) 18 SCC 1. Lastly, reliance was placed on Dilip Mehta v. Rakesh Gupta and Ors, 2025 SCC Online SC 2737, to argue that a Lok Adalat award based on settlement attains statutory finality and cannot be reopened through an ordinary civil suit.
For the Respondents
Learned counsel for the plaintiffs contended that no actual compromise happened between parties, as the settlement was contingent on the June 2024 General Body meeting which had not yet occurred. It was argued that the Lok Adalat order dated 09.12.2023 was not challenged by either party, so matter had not attained finality. Reliance was placed on Jet Plywood and another v. Madhukar Nowlakha and Others, (2006) 3 SCC 699, to submit that the Court is not powerless to set aside dismissal orders in its inherent powers under Section 151 CPC. Counsel further relied on Manohar Lal Chopra v. Seth Hiralal, 1961 SCC OnLine SC 17, arguing that the provisions of the Code are not exhaustive. Lastly, reliance was placed on Rameswar Sarkar v. State of West Bengal, (1985) SCC OnLine Cal 139, to contend that where a suit is withdrawn by mistake, the Court is not powerless to set aside the order permitting such withdrawal.
The Court's Analysis
The Court first examined the nature of Lok Adalat proceedings under the Legal Services Authorities Act, 1987 (LSA Act). Referring to State of Punjab and Another v. Jalour Singh and Ors., (2008) 2 SCC 660, the Court held that Lok Adalats have no adjudicatory or judicial functions; their functions relate purely to conciliation. Section 20(3) of the LSA Act provides that where a case is referred to a Lok Adalat, it shall proceed to dispose of the case and arrive at a compromise or settlement. Section 20(5) states that where no award is made by the Lok Adalat on the ground that no compromise or settlement could be arrived at, the record of the case shall be returned to the court. Section 21 provides that every award of the Lok Adalat shall be deemed to be a decree of a civil court.
The Court analyzed the proceedings before the Lok Adalat on 09.12.2023. The withdrawal applications filed by plaintiffs set out that in deliberations, it was resolved that a resolution passed in the Special General Body Meeting held on 21-04-2017 would be placed in the Agenda of the Annual General Body Meeting to be held in June 2024, and a memo agreeing to pay Rs. 9 lakhs for regularization of membership would be filed. The applications further stated that in the event the June 2024 meeting did not have a favorable result, the suit could be continued by reopening or filing a fresh suit.
Critically, the Court observed: "In the present case, as was observed by the learned Trial Court, no Joint Memo envisaging a compromise in the Lok Adalat was executed by the parties and neither did the defendant/club execute any document evidencing a settlement between the parties. Only the Withdrawal Applications were filed by the respondents/plaintiffs and an 'Order' was passed by the Lok Adalat Court."
The Court held that the Lok Adalat exceeded its mandate by passing what can be termed only as a 'hybrid order'. Citing B.P. Moideen Sevamandir And Another v. A.M. Kutty Hassan, (2009) 2 SCC 198, the Court stated: "There can be no third 'hybrid order' by the Lok Adalat containing directions. The settlement should precede the award and not vice versa. When the Lok Adalat records the minutes of a proceeding referring to certain terms and directs the parties to draw a compromise deed or a memorandum of settlement and file it before the court, it means that there is no final or concluded settlement and the Lok Adalat is only making tentative suggestions for settlement."
Since no Joint Memo of Settlement was filed, no actual settlement took place - only a pre-cursor to a possible settlement which did not fructify. Therefore, the application for reopening was filed and the learned Trial Court exercised its power to recall the 'hybrid order' passed by the Lok Adalat. The Court found no cause to interfere with the Trial Court's decision in exercise of its powers under Article 227 of the Constitution, as the circumstances warranted the application(s) for recall to be allowed.
The Verdict
The High Court of Karnataka dismissed all nine writ petitions (WP No. 4306 of 2026; WP No. 7083 of 2026; WP No. 7093 of 2026; WP No. 7097 of 2026; WP No. 7098 of 2026; WP No. 7102 of 2026; WP No. 7127 of 2026; WP No. 7130 of 2026 and WP No. 7160 of 2026) and held that pending applications, if any, stand closed. The Court affirmed the Trial Court's orders dated 19.01.2026 permitting reopening of suits, clarifying that all rights and contentions of both parties remain open to be agitated before the learned Trial Court. No costs were awarded.
What This Means For Similar Cases
Lok Adalat's Conciliatory Role Is Absolute
The judgment reinforces that Lok Adalats possess no adjudicatory or judicial authority. Their function is strictly limited to facilitating conciliation between parties. Where no actual settlement is reduced to writing and executed by the parties, the Lok Adalat cannot pass an order directing future actions or creating contingent rights. Any such 'hybrid order' exceeds statutory jurisdiction and is liable to be recalled by the civil court under Section 151 CPC.
Contingent Settlements Do Not Attain Finality
Parties entering into settlements contingent on future events (such as approval by a general body meeting) must understand that until the contingency is fulfilled, no final settlement exists for Lok Adalat purposes. The liberty to reopen suits expressly reserved in withdrawal applications preserves the parties' right to litigate if the contemplated settlement fails to materialize. The doctrine of functus officio applies only where a duly executed settlement has been converted into a Lok Adalat award.
Trial Court's Inherent Power Under Section 151 CPC
Where a Lok Adalat proceeds beyond its conciliatory role by issuing directions rather than returning the record when no settlement is achieved, the Trial Court retains authority to intervene. Section 151 CPC permits the court to recall such orders in the interest of justice, particularly where the withdrawal was based on a misunderstanding or misrepresentation about the settlement's finality. This power is not ousted by the Lok Adalat proceedings where no actual award was made.
