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2014 (9) TMI 1239 - HC - Indian LawsValidity of Arbitral Award - of the property for construction of child and maternity hospital - it is contended by the petitioner as well as the learned counsel for the third respondent that by playing fraud on the Lok Adalat and by impersonation, the Award was passed and therefore it is liable to be set aside - whether the impugned Award passed by the Lok Adalat is an 'Award' within the meaning of Section 21 of the Legal Services Authorities Act, 1987? - HELD THAT - From the material on record, it is clear that the petitioner was not the Secretary of the third respondent society as on the date of settlement in the Lok Adalat i.e. on 29.09.2011. The reason for his giving resignation has been clearly stated by him and the resolution of the Society has been accepted by the Commissioner of Collegiate Education, Andhra Pradesh, Hyderabad. Except disputing about the documents and the resolutions passed by the society, nothing has been brought to our notice that the resolutions passed by the society and the proceedings issued by the Commissioner of Collegiate Education are brought into existence for the purpose of this case. Section 24 of the Andhra Pradesh Education Act, 1982 deals with appointment and removal of manager of private institution. Sub-section (1) of Section 24 of the Act, 1982 provides that the management of every private institution shall be constituted in such manner and shall consist of such number of members as may be prescribed. It is not in dispute that the third respondent is running educational institutions. Sub-section (2) of Section 24 provides that the management shall, for the purposes of this Act, nominate a person to manage the affairs of the institution, whether called by the name of secretary, correspondent or by any other name, and intimate such nomination within 30 days thereof to the competent authority - Under Section 114(e) of the Indian Evidence Act, 1872, the Court may presume that judicial and official acts have been regularly performed, unless contrary is proved. When the party proved the fact that judicial or official act has been, in effect, done or performed, then the presumption would come to the aid of the party to the effect that the said act was performed in accordance with law. As seen from the counter affidavit filed by the respondents, there is no specific denial with regard to this document by raising a ground that it was fake or fabricated document. Therefore, the said document can be acted upon. Settlement is an act of deciding the dispute between the parties to the suit. An agreement is an arrangement or understanding between two or more persons, to avoid the law suit, amicably settle their differences on such terms as they can agree upon. In other words, it is an adjustment between the parties to a dispute ending in a settlement. There is no source of legal power in writing given to the Secretary of the third respondent society to do an act or to enter into settlement or compromise - any act done by such person cannot be said to be legal or proper and would not bind on the society. The society of third respondent is governed by the Rules and Regulations and they have to be acted upon. Any deviation in this regard would not have any effect on the rights and liabilities of the society. When a statute, rule or regulation provides that an authority is conferred with certain liabilities or duties cast on him, they should be performed in accordance with the provisions of the statute, rule or regulation. It means a decision according to the principles of law applicable. When a statutory duty is conferred on the Lok Adalat, it has to exercise that duty in accordance with law especially when the Award passed by the Lok Adalat shall be come final and no appeal shall lie to any Court against the Award - The impugned Award is not signed by the parties to the appeal and therefore it is not binding on any one of the parties to the appeal. Locus standi of the petitioner - HELD THAT - The petitioner to dispel the cloud of legal action against him, he can file the Writ Petition in his individual capacity so as to challenge the Award especially when the Award does not contain that the settlement was arrived at for and on behalf of the society. Therefore, the petitioner is an aggrieved party and he can challenge the Award. The impugned Award is liable to be set aside as it is not an 'Award' within the meaning of Section 21 of the Act, 1987 and the Regulations made thereunder - Petition allowed.
Issues Involved:
1. Validity of the Lok Adalat Award dated 29.09.2011. 2. Allegations of fraud and misrepresentation. 3. Authority and competence of the petitioner to represent the society. 4. Procedural irregularities in the Lok Adalat proceedings. 5. Locus standi of the petitioner to challenge the Award. Detailed Analysis: 1. Validity of the Lok Adalat Award dated 29.09.2011: The petitioner challenged the Lok Adalat Award on the grounds that it was obtained through fraud and misrepresentation. It was argued that the Award was not an 'Award' within the meaning of Section 21 of the Legal Services Authorities Act, 1987. The court noted that the Award must be signed by the parties to the dispute and the panel constituting the Lok Adalat. In this case, the Award was not signed by all members of the Lok Adalat Bench, rendering it invalid. Additionally, the petitioner was not the Secretary of the society at the time of the compromise, further invalidating the Award. 2. Allegations of Fraud and Misrepresentation: The petitioner alleged that the Award was obtained by playing fraud on the Lok Adalat and by impersonation. The court emphasized that a judgment, decree, or order obtained by fraud is a nullity and can be challenged at any time. However, the court found that there was no material evidence to substantiate the allegations of fraud and misrepresentation. The court concluded that these allegations must be pleaded and established before a competent forum, and thus, the impugned Award could not be set aside on these grounds by the High Court. 3. Authority and Competence of the Petitioner to Represent the Society: The court examined whether the petitioner had the authority to represent the society in the compromise. It was established that the petitioner had resigned as Secretary before the date of the compromise, and the new Secretary, Alapati Rajendra Prasad, was recognized by the Commissioner of Collegiate Education. The court also noted that the society's Bye-laws did not confer specific powers on the Secretary to enter into compromises or settlements. Therefore, the petitioner was not authorized to represent the society in the Lok Adalat, invalidating the compromise. 4. Procedural Irregularities in the Lok Adalat Proceedings: The court identified several procedural irregularities in the Lok Adalat proceedings. The General Power of Attorney holder for the second respondent was not properly authorized to represent the respondent in the appeal. The Lok Adalat members failed to verify the identity and authorization of the parties present. Additionally, the Award was not signed by all members of the Lok Adalat Bench, violating the mandatory provisions of the Legal Services Authorities Act and the Andhra Pradesh State Legal Services Authority Regulations, 1996. 5. Locus Standi of the Petitioner to Challenge the Award: The court addressed the issue of the petitioner's locus standi to challenge the Award. The petitioner argued that his signature was forged on the Award and that the society was contemplating legal action against him. The court held that the petitioner, as an aggrieved party, had the right to challenge the Award to dispel the cloud of legal action against him. Therefore, the petitioner had the locus standi to file the Writ Petition. Conclusion: The court concluded that the impugned Award was not an 'Award' within the meaning of Section 21 of the Legal Services Authorities Act, 1987, due to procedural irregularities and lack of proper authorization. Consequently, the Writ Petition No. 28057 of 2012 was allowed, and the impugned Award was set aside. As a result, Writ Petition (SR) No. 138912 of 2014 was closed, and any pending miscellaneous petitions were also closed.
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