Decided on January 22,2003



- (1.) The Original Petition is filed for quashing an award passed by the Lok Adalath held by the District Legal Services Authority constituted under the Kerala State Legal Services Authorities Act (District Authority for short). The first petitioner is the son of petitioners 2 and 3. The first petitioner availed a loan from the first respondent Bank on 29-1-1996. The second and third petitioners were the coobligants for the loan amount. The petitioners committed default in repaying the debt. It is averred that the petitioners received a notice from the first respondent asking them to attend a Lok Adalath to be held on 14-1-2000. It is further averred that usually cases pending before the civil courts alone are posted before the Lok Adalat but the petitioners did not receive any such notice from any of the civil courts. It is also averred that the first petitioner expressed his willingness to settle the case provided the first respondent reduces the rate of interest. It is alleged that Ext. P2 award was passed by the Lok Adalat conducted by the District Authority without hearing the petitioners. It is also averred that the first petitioner was cheated by the first respondent Bank and no concession was given to him in the rate of interest. The second respondent Recovery Officer issued Ext. P7 demand notice based on an order passed by the Debts Recovery Tribunal in O.A. No. 157 of 2000 dated 13-2-2002. It is also averred that the petitioners are not aware of the pendency of any such O.A. and no notice was issued to them from the Debts Recovery Tribunal. It is also contended that the second respondent initiated recovery proceedings for sale of the properties in violation of the Rules. Hence the petition for quashing Ext. P2 Award, Ext. P6 recovery notice and Ext. P7 notice of sale proclamation.
(2.) The first respondent Bank has filed a counter affidavit contending that the original petition is not maintainable and the same is filed suppressing material facts. It is contended that the first petitioner availed a loan of Rs.7,19,000/-. Since the petitioners failed to repay the amount a notice was issued. It is contended that the petitioners came forward with the request for settling the dispute on mutual consent so that they can save the cost of litigation. It is averred that based on the request made by the petitioners, the first respondent submitted Ext.R1 (A) request before the District Authority, on 10-12-1999 to take the case in the Lok Adalat and pass suitable orders. It is also contended that the petitioners were informed about the inclusion of the matter in the Lok Adalat by the first respondent Bank and the District Authority. The petitioners were cooperative and agreed to pay the amount together with interest within one year from the date of award. It is also contended that reasonable opportunity was given to the petitioners before signing the compromise proposal and the parties had agreed to settle the matter and filed a compromise petition and based on the compromise petition, the award was passed. It is contended that the compromise petition was signed by all the petitioners and countersigned by the Presiding Officer. It is contended that the jurisdiction of the Lok Adalat is not confined to settle disputed in pending cases but also to matters which are not filed before any court. It is contended that in view of the provisions contained in S.21 of the Legal Services Authorities Act, 1987 (for short, the Act), the petitioners are not entitled to challenge the award at all. It is also averred that based on Ext. P2 award, the Bank filed O.A.No. 157 of 2000 before the Debts Recovery Tribunal and the Tribunal disposed of the O.A. allowing the Bank to recover an amount of Rs. 10,42,057.00. It is also averred that that order is passed by the Tribunal in exercise of the powers conferred under S.31A of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. It is also contended that the final order passed by the Debts Recovery Tribunal cannot be challenged before the High Court under Art.226 or 227 of the Constitution of India. It is contended that the admissions made by the petitioners in the O.P. itself will show that the parties had agreed to pay the entire amount as per the agreement and hence they are not entitled to raise a contention that the rate of interest awarded is excessive.
(3.) No counter affidavit is filed by the second respondent.;

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