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E-NOTES

CLASS & SECTION : B.A. LLB/ V SEM

SUBJECT NAME : ADR
SUBJECT CODE: LLB 309

UNIT-1

Alternative dispute resolution

Alternative dispute resolution Alternative dispute resolution (ADR; known in some

countries, such as Australia, external dispute resolution) includes dispute resolution
processes and techniques that act as a means for disagreeing parties to come to an
agreement short of litigation. It is a collective term for the ways that parties can settle
disputes, with (or without) the help of a third party.
Despite historic resistance to ADR by many popular parties and their
advocates, ADR has gained widespread acceptance among both the general public and
the legal profession in recent years. In fact, some courts now require some parties to
resort to ADR of some type, usually mediation, before permitting the parties' cases to be
tried (indeed the European Mediation Directive (2008) expressly contemplates so-called
"compulsory" mediation; this means that attendance is compulsory, not that settlement
must be reached through mediation). Additionally, parties to M&A transactions are
increasingly turning to ADR to resolve post-acquisition disputes.
The rising popularity of ADR can be explained by the increasing caseload of
traditional courts, the perception that ADR imposes fewer costs than litigation, a
preference for confidentiality, and the desire of some parties to have greater control over
the selection of the individual or individuals who will decide their dispute. Some of the
senior judiciary in certain jurisdictions (of which England and Wales is one) are strongly
in favour of this (ADR) use of mediation to settle disputes

Salient features

ADR is generally classified into at least four types: negotiation, mediation,

collaborative law, and arbitration. (Sometimes a fifth type, conciliation, is included as
well, but for present purposes it can be regarded as a form of mediation. See conciliation
for further details.) ADR can be used alongside existing legal systems such as sharia
courts within common law jurisdictions such as the UK.
ADR traditions vary somewhat by country and culture. There are significant
common elements which justify a main topic, and each country or region's difference
should be delegated to sub-pages.
Alternative Dispute Resolution is of two historic types. First, methods for
resolving disputes outside of the official judicial mechanisms. Second, informal methods
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attached to or pendant to official judicial mechanisms. There are in addition free-standing

and or independent methods, such as mediation programs and ombuds offices within
organizations. The methods are similar, whether or not they are pendant, and generally
use similar tool or skill sets, which are basically sub-sets of the skills of negotiation.
ADR includes informal tribunals, informal mediative processes, formal tribunals
and formal mediative processes. The classic formal tribunal forms of ADR are arbitration
(both binding and advisory or non-binding) and private judges (either sitting alone, on
panels or over summary jury trials). The classic formal mediative process is referral for
mediation before a court appointed mediator or mediation panel. Structured
transformative mediation as used by the U.S. Postal Service is a formal process. Classic
informal methods include social processes, referrals to non-formal authorities (such as a
respected member of a trade or social group) and intercession. The major differences
between formal and informal processes are (a) pendency to a court procedure and (b) the
possession or lack of a formal structure for the application of the procedure.
For example, freeform negotiation is merely the use of the tools without any
process. Negotiation within a labor arbitration setting is the use of the tools within a
highly formalized and controlled setting.
Calling upon an organizational ombudsman's office is never, by itself, a formal
procedure. (Calling upon an organizational ombudsman is always voluntary; by the
International Ombudsman Association Standards of Practice, no one can be compelled to
use an ombuds office.)
Organizational ombuds offices refer people to all conflict management options in
the organization: formal and informal, rights-based and interest-based. But, in addition, in
part because they have no decision-making authority, ombuds offices can, themselves,
offer a wide spectrum of informal options.
This spectrum is often overlooked in contemporary discussions of "ADR."
"ADR" often refers to external conflict management options that are important, but used
only occasionally. An organizational ombuds office typically offers many internal
options that are used in hundreds of cases a year. These options include
:  delivering respect, for example, affirming the feelings of a visitor, while staying
explicitly neutral on the facts of a case,
 active listening, serving as a sounding board,
 providing and explaining information, one-on-one, for example, about policies and
rules, and about the context of a concern,
 receiving vital information, one-on-one, for example, from those reporting
unacceptable or illegal behavior,
 reframing issues,
 helping to develop and evaluate new options for the issues at hand,
 offering the option of referrals to other resources, to "key people" in the relevant
department, and to managers and compliance offices,
 helping people help themselves to use a direct approach, for example, helping people
collect and analyze their own information, helping people to draft a letter about their
issues, coaching and role-playing,
 offering shuttle diplomacy, for example, helping employees and managers to think
through proposals that may resolve a dispute, facilitating discussions,
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 offering mediation inside the organization,

 "looking into" a problem informally,
 facilitating a generic approach to an individual problem, for example instigating or
offering training on a given issue, finding ways to promulgate an existing policy,
 identifying and communicating throughout the organization about "new issues,"
 identifying and communicating about patterns of issues,  working for systems change,
for example, suggesting new policies, or procedures,
 following up with a visitor, following up on a system change recommendation. (See
Rowe, Mary, Informality
Informal referral to a co-worker known to help people work out issues is an
informal procedure. Co-worker interventions are usually informal.
Conceptualizing ADR in this way makes it easy to avoid confusing tools and
methods (does negotiation once a lawsuit is filed cease to be ADR? If it is a tool, then the
question is the wrong question) (is mediation ADR unless a court orders it? If you look at
court orders and similar things as formalism, then the answer is clear: court annexed
mediation is merely a formal ADR process).
Dividing lines in ADR processes are often provider driven rather than
consumer driven. Educated consumers will often choose to use many different options
depending on the needs and circumstances that they face. Finally, it is important to
realize that conflict resolution is one major goal of all the ADR processes. If a process
leads to resolution, it is a dispute resolution process.
The salient features of each type are as follows:

1. In negotiation, participation is voluntary and there is no third party who facilitates

the resolution process or imposes a resolution. (NB – a third party like a chaplain or
organizational ombudsperson or social worker or a skilled friend may be coaching
one or both of the parties behind the scene, a process called "Helping People Help
Themselves" – see Helping People Help Themselves, in Negotiation Journal July
1990, pp. 239–248, which includes a section on helping someone draft a letter to
someone who is perceived to have wronged them.

2. In mediation, there is a third party, a mediator, who facilitates the resolution process
(and may even suggest a resolution, typically known as a "mediator's proposal"), but
does not impose a resolution on the parties. In some countries (for example, the United
Kingdom), ADR is synonymous with what is generally referred to as mediation in other
countries.

3. In collaborative law or collaborative divorce, each party has an attorney who

facilitates the resolution process within specifically contracted terms. The parties reach
agreement with support of the attorneys (who are trained in the process) and mutually-
agreed experts. No one imposes a resolution on the parties. However, the process is a
formalized process that is part of the litigation and court system. Rather than being an
Alternative Resolution methodology it is a litigation variant that happens to rely on
ADR like attitudes and processes.
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4. In arbitration, participation is typically voluntary, and there is a third party who, as a

private judge, imposes a resolution. Arbitrations often occur because parties to contracts
agree that any future dispute concerning the agreement will be resolved by arbitration.
This is known as a 'Scott Avery Clause'. In recent years, the enforceability of arbitration
clauses, particularly in the context of consumer agreements (e.g., credit card
agreements), has drawn scrutiny from courts Although parties may appeal arbitration
outcomes to courts, such appeals face an exacting standard of review.

"Alternative" dispute resolution is usually considered to be alternative to litigation.

It also can be used as a colloquialism for allowing a dispute to drop or as an alternative
to violence.
In recent years there has been more discussion about taking a systems approach
in order to offer different kinds of options to people who are in conflict, and to foster
"appropriate" dispute resolution.
That is, some cases and some complaints in fact ought to go to formal grievance
or to court or to the police or to a compliance officer or to a government IG. Other
conflicts could be settled by the parties if they had enough support and coaching, and yet
other cases need mediation or arbitration. Thus "alternative" dispute resolution usually
means a method that is not the courts. "Appropriate" dispute resolution considers all the
possible responsible options for conflict resolution that are relevant for a given issue.
ADR can increasingly be conducted online, which is known as online
dispute resolution (ODR, which is mostly a buzzword and an attempt to create a
distinctive product). It should be noted, however, that ODR services can be provided by
government entities, and as such may form part of the litigation process. Moreover, they
can be provided on a global scale, where no effective domestic remedies are available to
disputing parties, as in the case of the UDRP and domain name disputes. In this respect,
ODR might not satisfy the "alternative" element of ADR.

Benefits

ADR has been increasingly used internationally, both alongside and integrated formally
into legal systems, in order to capitalise on the typical advantages of ADR over
litigation:
 Suitability for multi-party disputes
 Flexibility of procedure - the process is determined and controlled by the parties to the
dispute
 Lower costs  Less complexity ("less is more")
 Parties choice of neutral third party (and therefore expertise in area of dispute) to
direct negotiations/adjudicate
 Likelihood and speed of settlements
 Practical solutions tailored to parties’ interests and needs (not rights and wants,as they
may perceive them)
 Durability of agreements
 Confidentiality
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 The preservation of relationships and the preservation of reputations

Modern era

Traditional people's mediation has always involved the parties remaining in

contact for most or all of the mediation session. The innovation of separating the parties
after (or sometimes before) a joint session and conducting the rest of the process without
the parties in the same area was a major innovation and one that dramatically improved
mediation's success rate.

Traditional arbitration involved heads of trade guilds or other dominant

authorities settling disputes. The modern innovation was to have commercial vendors of
arbitrators, often ones with little or no social or political dominance over the parties. The
advantage was that such persons are much more readily available. The disadvantage is
that it does not involve the community of the parties. When wool contract arbitration
was conducted by senior guild officials, the arbitrator combined a seasoned expert on the
subject matter with a socially dominant individual whose patronage, good will and
opinion were important.
Private Judges and summary jury trials are cost- and time-saving processes that
have had limited penetration due to the alternatives becoming more robust and accepted.

Latin has a number of terms for mediator that predate the Roman Empire. Any
time there are formal adjudicative processes it appears that there are informal ones as
well. It is probably fruitless to attempt to determine which group had mediation first

. India

Alternative dispute resolution in India is not new and it was in existence even
under the previous Arbitration Act, 1940. The Arbitration and Conciliation Act, 1996
has been enacted to accommodate the harmonisation mandates of UNCITRAL Model.
To streamline the Indian legal system the traditional civil law known as Code of Civil
Procedure, (CPC) 1908 has also been amended and section 89 has been introduced.
Section 89 (1) of CPC provides an option for the settlement of disputes outside the court.
It provides that where it appears to the court that there exist elements, which may be
acceptable to the parties, the court may formulate the terms of a possible settlement and
refer the same for arbitration, conciliation, mediation or judicial settlement.
Due to extremely slow judicial process, there has been a big thrust on Alternate
Dispute Resolution mechanisms in India. While Arbitration and Conciliation Act, 1996
is a fairly standard western approach towards ADR, the Lok Adalat system constituted
under National Legal Services Authority Act, 1987 is a uniquely Indian approach.
Arbitration and Conciliation Act, 1996
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Part I of this act formalizes the process of Arbitration and Part III
formalizes the process of Conciliation. (Part II is about Enforcement of Foreign Awards
under New York and Geneva Conventions.)

Arbitration

The process of arbitration can start only if there exists a valid Arbitration
Agreement between the parties prior to the emergence of the dispute. As per Section 7,
such an agreement must be in writing. The contract regarding which the dispute exists,
must either contain an arbitration clause or must refer to a separate document signed by
the parties containing the arbitration agreement. The existence of an arbitration
agreement can also be inferred by written correspondence such as letters, telex, or
telegrams which provide a record of the agreement. An exchange of statement of claim
and defense in which existence of an arbitration agreement is alleged by one party and
not denied by other is also considered as valid written arbitration agreement
. Any party to the dispute can start the process of appointing arbitrator and if
the other party does not cooperate, the party can approach the office of Chief Justice for
appointment of an arbitrator. There are only two grounds upon which a party can
challenge the appointment of an arbitrator – reasonable doubt in the impartiality of the
arbitrator and the lack of proper qualification of the arbitrator as required by the
arbitration agreement. A sole arbitrator or a panel of arbitrators so appointed constitute
the Arbitration Tribunal.
Except for some interim measures, there is very little scope for judicial
intervention in the arbitration process. The arbitration tribunal has jurisdiction over its
own jurisdiction. Thus, if a party wants to challenge the jurisdiction of the arbitration
tribunal, it can do so only before the tribunal itself. If the tribunal rejects the request,
there is little the party can do except to approach a court after the tribunal makes an
award. Section 34 provides certain grounds upon which a party can appeal to the
principal civil court of original jurisdiction for setting aside the award.
The period for filing an appeal for setting aside an award is over, or if such
an appeal is rejected, the award is binding on the parties and is considered as a decree of
the court.

Conciliation

Conciliation is a less formal form of arbitration. This process does not require an
existence of any prior agreement. Any party can request the other party to appoint a
conciliator. One conciliator is preferred but two or three are also allowed. In case of
multiple conciliators, all must act jointly. If a party rejects an offer to conciliate, there
can be no conciliation.
Parties may submit statements to the conciliator describing the general nature of
the dispute and the points at issue. Each party sends a copy of the statement to the other.
The conciliator may request further details, may ask to meet the parties, or communicate
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with the parties orally or in writing. Parties may even submit suggestions for the
settlement of the dispute to the conciliator.
When it appears to the conciliator that elements of settlement exist, he may
draw up the terms of settlement and send it to the parties for their acceptance. If both the
parties sign the settlement document, it shall be final and binding on both. Note that in
USA, this process is similar to Mediation. However, in India, Mediation is different
from Conciliation and is a completely informal type of ADR mechanism.

Lok Adalat

Etymologically, Lok Adalat means "people's court". India has had a long history
of resolving disputes through the mediation of village elders. The current system of Lok
Adalats is an improvement on that and is based on Gandhian principles. This is a non-
adversarial system, whereby mock courts (called Lok Adalats) are held by the State
Authority, District Authority, Supreme Court Legal Services Committee, High Court
Legal Services Committee, or Taluk Legal Services Committee, periodically for
exercising such jurisdiction as they thinks fit. These are usually presided by retired
judge, social activists, or members of legal profession. It does not have jurisdiction on
matters related to noncompoundable offences.
While in regular suits, the plaintiff is required to pay the prescribed court fee, in
Lok Adalat, there is no court fee and no rigid procedural requirement (i.e. no need to
follow process given by [Indian] Civil Procedure Code or Indian Evidence Act), which
makes the process very fast. Parties can directly interact with the judge, which is not
possible in regular courts.
Cases that are pending in regular courts can be transferred to a Lok Adalat if both
the parties agree. A case can also be transferred to a Lok Adalat if one party applies to
the court and the court sees some chance of settlement after giving an opportunity of
being heard to the other party.
The focus in Lok Adalats is on compromise. When no compromise is reached, the
matter goes back to the court. However, if a compromise is reached, an award is made
and is binding on the parties. It is enforced as a decree of a civil court. An important
aspect is that the award is final and cannot be appealed, not even under Article 226 of
the Constitution of India [which empowers the litigants to file Writ Petition before High
Courts] because it is a judgement by consent.
All proceedings of a Lok Adalat are deemed to be judicial proceedings and every
Lok Adalat is deemed to be a Civil Court.

LEGAL SERVICES AUTHORITIES ACT ,1987

Article 39-A of the Constitution which was inserted by the Constitution (Forty second)
Amendment Act, 1976 casts an obligation on the State to secure that the operation of the
legal system promotes justice on a basis of equal opportunity, and in particular, provide
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free legal aid by suitable legislation or schemes or in any other way, to ensure that the
opportunities for securing justice are not denied to any citizen by reason of economic or
other disabilities. Besides, the right to free legal aid has now been included as part of
right to life and personal liberty guaranteed under Article 21 of the Constitution.

With a view to accomplishing this objective, the Government of India appointed, a

committee for implementing the legal aid schemes in 1980. This committee was headed
by Mr. Justice P.M. Bhagwati. The committee prepared a draft-legal aid programme
which could be applicable throughout India. It is on the basis of the recommendations
and the draft outlined by this Committee that the Legal Services Authorities Act, 1987,
was passed to establish Statutory Legal Services Authorities. It also contained provisions
relating to Lok Adalats.

Object of the Act: The main object of the Legal Services Authorities Act, 1987 is to
provide free and competent legal services to the poor and weaker sections of the society
so as to ensure that they are not denied the opportunities for securing justice by reason of
economic or other disabilities and to organise Lok Adalats to secure that the operation of
the legal system promotes justice on the basis of equal opportunity.

Entitlement to Legal Services: Section 13 of the Legal Services Authorities Act, 1987
provides that persons who satisfy all or any of the criteria specified in Section 12 shall
be entitled to avail legal services provided that the concerned Legal Aid authority is
satisfied that such person has a prima facie case to prosecute or to defend. The person
concerned is required to file an affidavit stating that he is entitled to legal services under
the Act.

Section 12 of the Act enumerates the categories of persons who are entitled to legal
services. These are as follows -

1. A person who is a member of Scheduled Caste. or Scheduled Tribe;

2. A victim of trafficking in human beings or beggar as referred to in Article 23 of
the Constitution of India;
3. A woman or a child;
4. A person who is disabled as defined in Section 2(i) of the Persons with
Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995;

5. A victim of a mass disaster, ethnic violence, caste atrocity, flood, drought,

earthquake or industrial disaster;

6. an industrial workman;

7. a person who is in custody under the Immoral Traffic (Prevention) Act, 1956;
Juvenile Justice (Protection and care and children) Act, 2000, Mental Health Act, 1987;
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8. A person whose annual income is less than Rs.9,000/- or a higher amount as may
be prescribed by- the State Government, and less than Rs.12,000/- hen the case is before
the Supreme Court.

In addition to the above, legal services may also be granted in cases of great public
importance and in special cases which are considered deserving of legal services.

Cases for which legal aid is not available: The cases coming under any of the
following category shall not entitle a person to receive legal aid from the State:

1. Cases involving the offence of defamation, malicious prosecution, contempt of

Court, perjury etc.
2. Proceedings relating to elections;
3. Cases in which the fine imposed is not more than Rupees fifty;
4. Cases where the person seeking legal aid is not directly concerned with the
proceedings and whose interests will not be affected, if not represented properly.
Withdrawal of Legal Aid/Services: The Legal Aid Committee has the power to
withdraw the legal aid/ services granted to a person under the following circumstances:

1. Where the aid is obtained through misrepresentation or fraud;

2. Any material change occurs in the circumstances of the person to whom such
legal aid was granted;
3. In case of misconduct, misbehaviour or negligence on the part of the aided
person;
4. Where the aided person does not co-operate with the allotted lawyer or counsel;
5. If the aided person appoints another legal practitioner;
6. In case of death except in civil cases;
7. Where the proceedings amount to misuse of the process of law or of legal services
:

Where the legal services are withdrawn, the Legal Aid Committee may recover the cost
of legal services . granted. However, the person aggrieved has a right to appeal before
the Chairman of the Legal Aid Committee.

Organisation of Lok Adalats: Lok Adalats are judicial bodies set up for the purpose of
facilitating peaceful resolution of disputes between the litigating parties. They have the
powers of an ordinary Civil Court such as summonig, examining, taking evidence etc.
These Adalats can resolve matters except criminal cases that are non compoundable.

Special status has been assigned to the Lok Adalats under the Legal Services Authorities
Act, 1987, which

has come into force with effect from 9th November, 1995. The said Act provides the
statutory base to the Lok Adalats. The Lok Adalat shall now have :
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1. The same powers as are vested in a civil court under the Code of Civil Procedure,
1908;

2. All proceedings before a Lok Adalat shall be deemed to' be judicial proceedings
within the meaning of sections 193,219 and 228 of the Indian Penal Code;

3. Every Lok Adalat shall be deemed to be civil court for the purpose of section, 195
and chapter XXVI of the Code of Criminal Procedure, 1973;

4. The members of the Lok Adalats, in terms of the provisions of Section 23 of the
Act, shall be

5. deemed to be public servants with in the meaning of section 21 of the Indian

Penal Code; and

6. Every award made by a Lok Adalat shall be final, binding and non-appeable.

Lok Adalat under the Act shall have jurisdiction to determine and to arrive at a
compromise or settlement between the parties to a dispute in respect of:

Any case pending before: or any, after which is falling within the jurisdiction of and is
not brought before any court for which the Lok Adalat is organized.

The Lok Adalat shall, however, have no jurisdiction in respect of any case of matter
relating to an offense not compoundable under any law.

A dispute can now be referred to Lok Adalats by (a) Mutual consent; or (b) at the
request of one of the parties; or (c) by the Court suo motu. So, even private cases can be
referred to any decided by Lok Adalats.

National Legal Services Authority: The National Legal Services Authority consists of
Chief Justice of India as Patron-in-Chief; a sitting or retired judge of the Supreme Court
as Executive Chairman and a Committee constituted by Chief Justice of India. Equaily,
in each state, Chief Justice of the High Court is patron-in-Chief; a sitting or retired High
Court Judge is Executive Chairman and a committee constituted in that behalf. In each
district there is a District Authority presided over by the Principal District Judge and a
Committee. At Taluka or Mandai level for each Taluka or Mandai or a group of Taluka
or Mandals, a committee would be constituted with a Principal Subordinate Officer as
Chairman. Thus, the Lok Adalat system is now a uniform and court-oriented
programme.

Both types of cases, that is, pre-litigative cases as well as post-litigative cases now be
brought before he Lok Adalats for determination. The Lok Adalats, it would be seen, are
court-oriented programme as supplement ADR to the regular trial procedure.
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The Act provides incentive with regard to refund of court fee initially paid at the time of
the institution of he case, if the case is eventually settled through the Lok Adalats.

The success of the Lok Adalat as a social institution is the massive literacy programme
in advance. The empowerment of people, awareness of rights and general consciousness
are basic requirements for successful resolution of disputes without resorting to
extensive expenditure and delay.

The programme, though widespread and widely appreciated, is not continuously

successful because of several reasons. They are:

a. It is not institutionalized
b. concepts are not clarified
c. infra-structure was not properly developed
d. no training for personnel
e. no minimum standards prescribed

It should appear fair and just in all aspects as Lok Adalat 'is supposed to be a substitute
to judicial process. The Lok Adalat is a para judicial institution.

The Legal Services Authority Act 1987 was brought into force in 1995 after an
amendment in 1994. When Jodhpur experiment could not be continued because of 40
days strike by ministerial staff and subordinate judicial officers, which ended in
settlement which led to stoppage of Lok Adalat experiment till 1991. The need for
institutionalizing the Lok Adalat and providing for legal sanctity and authority to
continue the movement was felt and the Act of 1987 was passed. This Act was long
overdue as justice has been merely an illusion for the poor and needy. It is strange, that
the Act was brought into force eight years after it was made.

The Object: The object of the Act is to create authorities to provide free and competent
legal services to the weaker sections of the society to ensure that opportunities for
securing justice are not denied to any citizen for reason of economic or other disabilities
and to organise Lok Adalats to secure that the operation of the legal system promotes
justice on basis of equal opportunity.

The Authorities under the Law: It created National (under Section 3), State (S-7) and
District (8-9) Legal Service Authorities with the power to organize Lok Adalats. Each
Lok Adalat has to be presided over by Judicial and Non-Judicial member. The award of
Lok Adalat is deemed to be a Decree of Civil Court and without provision for Appeal.
For the purpose of determination, the LokAdalat will have powers of Civil Court and its
proceedings are deemed to be judicial proceedings with the jurisdiction of civil and
criminal court,- revenue courts or any tribunal. At the national level National Legal
Services Authority decides policy for the nation, while at state level, there is State Legal
Services Authority. The Supreme Court Legal Services Committee and High Court
Legal Services Committee will promote the Lok Adalat. At District and Taluk level also
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Legal Services Committees are constituted. (The Taluk level Committee (S 11A) was
envisaged by 1994 amendment) All these authorities are empowered to organize
LokAdalat to determine and arrive at a compromise or settlement between the parties to
a dispute in respect of cases pending before or falling within jurisdiction of the
respective courts.

For Whom : Section 12 entitled every person who has to file or defend a case to legal
services, if that person belongs to Scheduled Caste or tribe, a victim of Trafficking in
human being or beggar, a woman or child, a person with disability, a person under
circumstances of undeserved want such as being a victim of a mass disaster, ethnic
violence, caste atrocity, flood, drought, earthquake or industrial disaster; or, an industrial
workman, in custody, including custody in a protective home, juvenile home, psychiatric
hospital or psychiatric nursing home, or a person who has in receipt of annual income
less than rupees nine thousand if the case is before Supreme Court, and if the case is
before a court other than the Supreme Court and less than Rupees twelve thousand
rupees or such other higher amount as prescribed by the

Government. In cases before Supreme Court, the Center and in cases before other courts
the s ate government may prescribe a higher amount as eligibility criterion to receive
services under this ct. One of the main eligibility criterion is that the person mentioned
under Section 12 should have a prima facie case to prosecute or to defend and the
Authority should be satisfied about that factor according to S 13). The income criteria
can be satisfied by an affidavit from a person seeking legal services.

The National Legal Aid Fund is created under Section 15. Similarly the State fund under
Section 16 and District Fund under Section 17 was created.

Constitution and Jurisdiction of Lok Adalat: Section 19 says that every authority is
empowered to organize Lok Adalats at such intervals and places and for exercising such
jurisdiction and for such areas as it thinks fit. The Lok Adalat consists of a serving or
retired judicial officer and other persons on its bench. The Lok Adalat shall have
jurisdiction to determine and to arrive at a compromise or settlement between the parties
to a dispute in respect of, (i) any case pending before or any matter which is falling
within the jurisdiction of and is not brought before any court for which the Lok Adalat is
organized. It has no jurisdiction in respect to an offence which is not compoundable
under any law (S 19).

The Lok Adalat takes cognizance of a case referred if the parties agree, or one of the
parties thereof makes an application to the court for referring the case to Lok Adalat and
if such court is prima facie satisfied that there are chances of such settlement; or the
court is satisfied that the matter is an appropriate one to be taken cognizance by the Lok
Adalat (Section 20). The reference of any case to Lok Adalat by the court has to be done
only after a due opportunity is given to the party which has not applied or reference.
After such reference is made, the Lok Adalat has to proceed to arrive at a compromise or
settlement between the parties, with utmost expedition. It has to be guided by the
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principles of justice equity, fair play and other legal principles. If the compromise or
settlement could not be arrived at, the case will return to the Court.

The Section 21 is a significant one as it provided status of decree to the award of Lok
Adalat, and legal sanctity for the proceedings before it. Every award of the Lok Adalat is
deemed to be a decree of a civil court, and the court fee paid shall be refunded in the
manner provided under Court-fees Act. Every such award shall be binding on all the
parties to the dispute and no appeal shall lie to any court (S 21). Refund of court fee is
an incentive for parties to negotiate for settlement. The Lok Adalat is vested with
powers of civil court, with powers to summon and enforce the attendance of any
witnesses, for discovery and production of any document, the reception of evidence in
affidavits, to requisition of any public record from any court or office, etc. It can specify
its own procedure for determination of any dispute coming before it. All the proceedings
before it shall be deemed to be judicial proceedings, and Lok Adalat shall be deemed to
be a civil court (S 22). All the officers and persons concerning the Lok Adalat and
Authorities are regarded as public servants as per Section 23 which was substituted by
1994 amendment.

Almost in all districts and moffusil courts, the Lok Adalats were constituted and
functioning in regular Intervals. yet the Lok Adalat is not a permanent seat of settlement.
It has to be constituted by authority whenever it feels necessary to constitute.
The Permanent Lok Adalat: The Lok Adalat is a very useful experiment that
succeeded in clearing the long pending cases. That success is one of the main reasons for
transforming occasional, specific or special Lok Adatat into a permanent institution. If it
retains the character of court annexed Alternative Dispute Resolution center, and
provides for consensus dispute resolution process, there is nothing wrong in creating
Permanent Lok Adalats (PLA). National Legal Services Authority Act was recently
amended in July 2002 and Supreme Court found its earliest opportunity to hold it
constitutionally valid, and now there is no hitch in launching the PLAs. Bar Council of
India opposed the change and the structure of the PLA. The

NALSA Act was passed in 1987 to provide free legal services to weaker sections of
society and to ensure that they are not denied justice by reason of economic or other
disabilities. Under Section 19 to 22 of the NALSA Act, any matter pending before any
court or tribunal may, if the parties make a joint application indicating their intention to
compromise, be transferred to a LokAdalat.

To tackle the baffling figures of pending cases the Judiciary and Legislature are making
all possible efforts and reforming the law. The Civil Procedure Code was drastically
amended despite the fundamental objections raised by the lawyering community. The
State is promoting Alternative Dispute Resolution mechanisms by all means. The
changed CPC makes it an obligation of the Courts to refer to ADR methods before it
finally decided to adjudicate upon (Section 89 of CPC).
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Amendment 2002: Chapter VIA of the Legal Service Authorities (Amendment) Act
2002 provided for establishment of Permanent Lok Adalat in the name of providing for
'pre-litigation conciliation and settlement' Permanent Lok Adalat is headed by either
former or sitting district judge or additional district judge or officer of rank higher than
district judge. It will have two members with 'adequate experience in Public Utility
Service". The PLA would decide by majority. Public Utility Service means any transport
service, postal, telegraph, or telephone, power supply, Public conservancy or sanitation,
hospital or insurance service agency. Thus any former employee of the above public
utility service can be appointed as the members of the PLA and if they can form unity
they can decide any case in any manner ignoring the chairman who is a judicial member.
These PLAs can take up any matter where the value of the property in dispute is up to
RS.10 lakhs. The PLA has to conduct conciliation proceedings or decide a dispute on
merit and in doing so it has to be guided by the principles of natural justice, objectivity,
fair play, equity and other principles of justice and shall not be bound under the Code of
Civil Procedure, 1908 and the Indian Evidence Act, m1872. Two non-judicial members
of the PLA must have never had any opportunity either to learn or practice natural
principles of justice. The Chairman of PLA being the judicial person could be expected
and experienced to have practiced the natural principles of justice. He could be of great
help to the other two non-judicial members provided they agree with him. If they
disagree and they constitute majority they will have entire power to decide the case.

Scope for Consensual Process: Before this Amendment the two disputants have to
make a joint application seeking resolution of dispute before Lok Adalat. If one party
alone makes an application to the court to refer the case to Lok Adalat, the Court can do
so if it is satisfied that there are chances of settlement. Before such reference, the court is
obliged to give a reasonable opportunity to the party which did not agree to refer the
dispute to Lok Adalat. Though the conciliation or mediation is consensual process, the
court can still impose the process based on its satisfaction that there is an element of
settlement in the dispute.

Under the amendment the permanent Lok Adalat can take up the case even if one of the
disputants applies for settlement before it. Another major change brought in is that the
resolution process need not be consensual. It can be imposed by the PLA. If the
disputant could resolve the dispute by conciliation process, there is no problem. But
when they fail to resolve in consensual process, the PLA has the authority to decide case
on merits without applying CPC and Evidence Act, and impose it on them. The parties
have no authority to take it in appeal, which means, one of disputants can seek
resolution by PLA, even if they fail to arrive at, he may have to accept the decision even
when it was decided by majority of non-judiciary members and be satisfied with its
decision which has the legal value of decree without having any scope for appeal. If
injustice is hurried, the disputant must be happy that he got it for it was achieved in
remarkable time with remarkable speed.

Institutions and Individuals: As all the disputes worth RS.10 lakhs concerning a public
utility dispute have
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to be resolved, undoubtedly, either by ADR or ad judicatory processes in reasonable

speed, if the public utility service like RTC seeks a dispute, which is worth of RS.10
lakhs, PLA decides to initiate conciliation proceedings. If that person and RTC fail to
conciliate, the PLA's both non-judicial members decide the case for RTC 2-1 majority
(even if judicial member who is also a chairman decides in favour of individual against
RTC, the individual has to shut his claim as that would be a final settlement as he could
not go in appeal. Section 21 (E) (1) makes the award of these PLAs final and no appeal
lies.

The permanent Lok Adalat would have been provided for consensual process, or the
adjudication by natural principles of justice, appointed a bench of three members
including one public utility service member with scope for justice and justice based
majority, instead of such an unjustified composition of permanent Lok Adalat as
provided by the Amendment. It is surprising that this provision against Natural
Principles of Justice which may even lead to a serious unconstitutionality was not
effectively noticed.

Either Union or the State Government can declare, in public interest, any service as
public utility service. The moment such declaration is made, all the disputes in such a
service, worth of which not exceeding RS.10 lakhs would be made over to PLA.
Another major objection raised by the Advocates is that the very purpose of Legal
Services Authority Act is to provide legal services to weaker sections of society, where
as the new Amendment makes no such discrimination and every litigant in dispute with
any public utility service would get the 'benefit' of the quick disposal. Every dispute
except non compoundable offences, and disputes beyond value of RS.10 lakhs, every
other civil or criminal case can be decided by PLA. There is no qualification prescribed
for being appointed as the non-judicial members of PLA. Because of these reasons the
BAR is opposing the Amendment saying that the Government has introduced innovative
alternative justice redressal system forgetting the fact that litigants approach the courts
for getting justice and not for mere disposal of cases.

The Supreme Court has validated the Amendment and the constitution of Permanent
Lok Adalats as prescribed under the new Amendment to LSAAct.

It is true that existing legal system is ridden with flaws and procedural deficiencies,
either because of law or practices. If practices and attitude of bench and bar are
responsible for loss of credibility of adjudication process, practices could be changes
and practices be reformed. A sincere effort is made to amend the process by two
controversial amendments to Civil Procedure. It is a known fact that attitudes and
gradually discredited systems cannot be reformed by amendments to law. With this
backdrop, a law that inherently provides for bias and application of natural principles of
justice is only a recommendatory possibility, how could justice be rendered? This shows
that both the judiciary and legislative are interested in clearing the pending files by
disposing them by some or the other way, without rendering justice.
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The Lok Adalat contemplated under this new regulation is neither an adjudicating
process nor an alternative dispute resolution process. It has imbibed deficiencies of
adjudicating process and removed the role of consensus allowing imposition of
unappealable' awards. The Supreme Court also hoped that only persons of integrity
would be appointed in Lok Adalats. People too hope that such persons alone would be
appointed in all levels of courts. Does it mean that persons with integrity are not
available for courts and are available for Lok Adalats? Surprisingly the Supreme Court
stated that the Act would ensure the justice to litigants speedily and impartially. With
what speed Lok Adalat works has to be a waited and observed whereas impartiality had
already become a casualty, with above referred deficiencies. With regard to lawyers'
opposition, only remark that could be made is they either silently suffered from or
exploited those loopholes and left the ordinary clients to hopeless situations. The same
fate awaits the poor clients even in public utility courts headed by former judges.