New Okhla Industrial Development Authority (NOIDA) vs Yunus


In a significant ruling, the Supreme Court held that Lok Adalats are not courts because they do not use judicial adjudication to settle disputes and that their settlement decrees cannot be used as precedent by parties not involved in the Lok Adalat compromise to obtain comparable relief in a court of law.
In order to acquire land in villages located in Tehsil Dadri for planned industrial development, Noida issued a notification in March 1983. In November 1984, landowners received compensation at the rate of twenty rupees per square yard. All of the landowners accepted the amounts owed to them and did not contest the rate of compensation.

In 2016, NOIDA reached a settlement with Fateh Mohammed, agreeing to pay Rs 297 per square yard, nearly 15 times the original compensation more than 30 years later. Fateh Mohammed had filed an application seeking reference against the Award of November 28, 1984, and it was turned over to a Lok Adalat.
Seeing their chance, the other landowners effectively petitioned the Allahabad High Court for compensation at the amount of Rs 297 per square yard, arguing that decisions issued by Lok Adalat had precedential value. In SC, NOIDA contested the HC order.

“Whether the Award passed by a Lok Adalat under Section 20 of the Legal Services Authorities Act, 1987 can form the basis for redetermination of compensation as contemplated under Section 28A of the Land Acquisition Act, 1894″ is the question posed by a bench of Justices K M Joseph and P S Narasimha. By the contested decision, the High Court has determined that the Lok Adalat’s Award can, in fact, serve as the basis for the exercise of authority under Section 28A of the Act.”
In contrast to the HC’s perspective, Justice Joseph wrote the judgement, stating that Lok Adalats are exempt from judicial scrutiny and are only permitted by the Legal Services Act to promote amicable resolution between the parties. It stated that notwithstanding the awad by Lok Adalat could be enforceable like a decree, it cannot in the judicial arena have a precedential value.

“It is undeniably true that the Lok Adalat’s authority under Section 20 is to assist in the resolution of disagreements between the parties to a case. It plays no part in adjudication. It can’t determine what is. Its only possible outcome is to facilitate a sincere resolution or agreement. According to the explicit requirements, the Lok Adalat’s role is limited to mediating disputes and offering solutions related to cases presented to it. Its job is not adjudicatory,” the bench declared.
The Supreme Court ruled, “The award passed by the Lok Adalat cannot be said to be an award passed under the Land Acquisition Act.” What ultimately determines Lok Adalat’s award is the settlement that the involved parties were able to reach before the session. The agreement reached alone, not a decision rendered by a “Court” as that word is defined in the Act, determines the increase in compensation.”

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