CO.A.No.12/2006 & W.P.(C).11863/2004

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE C.T.RAVIKUMAR & THE HONOURABLE MRS. JUSTICE MARY JOSEPH TUESDAY, THE 5TH DAY OF APRIL 2016/16TH CHAITHRA, 1938 Co.Appeal.No. 12 of 2006 ( ) ----------------------------AGAINST THE ORDER IN CP 13/2003 of COMPANY LAW BOARD, ADDL.PRL.BENCH, CHENNAI DATED 21-11-2005 APPELLANT(S)/PETITIONERS: ----------------------------------- - 1. ABRAHAM MATHEW (RECORDED) - 2-14-2, ARIHANT MAJESTIC TOWERS, 216, J.N.SALAI, KOYAMBEDU, CHENNAI-600 107. 2. P.M.EIPE,PUTHEPEEDIKAYIL PULIKAL KAVALA, KASNAM P.O., KOTTAYAM. BY ADV. SRI.P.CHANDRASEKHAR RESPONDENT(S)/RESPONDENTS: -------------------------- 1. M/S.SUNGKAI PLANTATIONS PRIVATE LTD. - T.C.3/1556, PATTAM, THIRUVANANTHAPURAM, KERALA. - 2. MARY ABRAHAM, W/O. LATE P.T.ABRAHAM, (DIED) - "LAKGNUS", PATTOM, THIRUVANANTHAPURAM, KERALA-695 004. - 3. RACHEL CHERIAN (RECORDED) - "SHYAM SCION", P.M.G.JUNCTION, TRIVANDRUM-695 033.(DIED) - 4. SHEILA MARY ABRAHAM, C/O. GEORGE ABRAHAM (RECORDED) MOOLA MANNIL, KOWDIAR, TRIVANDRUM-695 003. - 5. ACCAMMA EAPEN (RECORDED) - "LAKGNUS", T.C.NO.3/1913, PATTOM, THIRUVANANTHAPURAM-695 004. 6. SUNI, W/O. SATHEESAN, PANGODE P.O., AYIUR ANAKUDI POST, PANGODE VILLAGE, NEDUMANGADU TALUK, TRIVANDRUM. 7. SATHEESAN, PANGODE P.O., AYIUR, ANAKUDI POST, PANGODE VILLAGE, NEDUMANGADU TALUK, TRIVANDRUM. 8. SUNDARESAN, S/O. KUNJU KRISHNAN, - "ASWATHI", PUNALUR MURI, PUNALUR VILLAGE, PATHANAPURAM TALUK. ## LRs OF DECEASED 2ND RESPONDENT 1ST APPELLANT: - R1. ABRAHAM MATHEW - 2-14-2, ARIHANT MAJESTIC TOWERS, 216 J.N.SALAI, KOYAMBEDU, CHENNAI-600107 ## R3. RACHEL CHERIAN "SHYAM SCION" (DIED), P.M.G.JUNCTION, TRIVANDRUM-695 033. (ADDL.RESPONDENTS 11 TO 13 IMPLEADED AS LEGAL HEIRS) ## R4. SHEILA MARY ABRAHAM, MOOLA MANNIL, KOWDIAR, TRIVANDRUM-695 003. ## R5. ACCAMMA EAPEN "LAKGNUS", T.C.NO.3/1913, PATTOM, TRIVANDRUM-695 004. FIRST APPELLANT & RESPONDENTS 3 TO 5 ARE RECORDED AS LEGAL REPRESENTATIVES OF DECEASED 2ND RESPONDENT AS PER ORDER DT.07.06.12 IN I.A.NO.1101/12. ## IMPLEADING OF ADDITIONAL RESPONDENTS R9. ABRAHAM PHILIP, “LAKGNUS”, PATTOM, THIRUVANANTHAPURAM-695004 R10. ANITA GEORGE PUVATHOOR H.NO.19, CHANDANA GARDENS JAYAPRAKSH LANE, KODAPPANAKUNNU TRIVANDRUM-43 ARE IMPLEADED AS ADDITIONAL RESPONDENTS 9 AND 10 RESPECTIVELY AS PER ORDER DT.07.06.12 IN I.A.1101/12 ## LRs OF DECEASED 3RD RESPONDENT (ADDL.R11 TO R13) ADDL.R11:KURIAN I. CHERIAN “SHYAM SCION”, P.M.G. JUNCTION, TRIVANDRUM ADDL.R12.ABRAHAM CHERIAN “SHYAM SCION”, P.M.G. JUNCTION, TRIVANDRUM-695033 ADDL.R13. THOMAS CHERIAN “SHYAM SCION”, P.M.G. JUNCTION, TRIVANDRUM ARE IMPLEADED AS LEGAL HEIRS OF DECEASED 3RD RESPONDENT AS PER ORDER DT.20.8.14 IN I.A.NO.2158/12. R,R6 & R7 BY ADV. SRI.ANOOP MATHEW ABRAHAM R,R2,4 BY ADV. SRI.M.RISHIKESH SHENOY R,R3 BY ADV. SMT.MEENA.A. R,R3 BY ADV. SMT.M.R.MINI R,R6 & R7 BY ADV. SRI.O.V.MANIPRASAD R,R3 BY ADV. SRI.JAYKAR.K.S. R1,R2,4 BY ADV. SRI.GEORGE G.POOTHICOTE R9-R11 BY ADV. SRI.G.SREEKUMAR (CHELUR) R,R9-R11 BY ADV. SMT.PREETHY KARUNAKARAN R8 BY ADV. SRI.K.A.SALIL NARAYANAN THIS COMPANY APPEAL HAVING BEEN FINALLY HEARD ON 05-04-2016, ALONG WITH WPC. 11863/2004, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ## **C.T. RAVIKUMAR & MARY JOSEPH, JJ.** ## **========================== CO.A.No.12/2006 & W.P.(C). No.11863/2004** **==========================** Dated this the 5[th] day of April, 2016 ## **JUDGMENT** _Ravikumar, J._ The captioned appeal has been preferred against order dated 21.11.2005 of the Company Law Board, Additional Principal Bench, Chennai in Company Petition No.13/2003. The petitioners therein are the appellants herein. They filed C.P.No.13/2003 seeking the following prayers: (i) To terminate and set aside the sale deeds dated 22.11.2002 registered as document Nos.3642/02 and 3643/02 on the file of Sub Registrar Office, Anjal. (ii) To appoint an administrator and frame a scheme of administration to administer properties of the first respondent and to conduct the affairs of the first **CO.A.12/2006 & W.P.(C).11863/2004** 2 respondent company till a new board is appointed by the Court. (iii) Remove the existing Directors and reconstitute the Board of Directors. (iv) Direct the respondents 2 to 5 to restore all the benefits including diversion of profits, business, assets, from the first respondent company. (v) To pass order of eviction of any illegal occupancy of the bungalow and the properties of the company by respondents 2 to 8 or any other person claiming such occupation. 2. The first respondent therein is Company namely Messrs. Sungkai Plantations Private Limited, Pattam, Thiruvananthapuram and the appellants/petitioners are its shareholders. Respondents 2 to 5 are the Directors of the first respondent company. 8[th] respondent is the person who executed an agreement for sale deed which ultimately culminated in the registration of the aforementioned sale deeds. Respondents 6 and 7 are the **CO.A.12/2006 & W.P.(C).11863/2004** 3 persons who purchased the properties under the aforementioned documents. Before proceeding with the factual narration and the other issues involved in this case, it is inevitable to look into the challenge made in the captioned writ petition. The 8[th] respondent in the captioned appeal allegedly entered into an agreement for sale with the Company on 09.06.1994 and then, another supplementary agreement for sale on 20.12.1994. The total consideration shown in both the agreements was Rs.34.67 lakhs. Later, the 8[th] respondent instituted O.S.No.109/95 before the Sub Court, Kottarakkara for specific performance of the agreement dated 09.06.1994. The said suit was referred to the Lok Adalath by the Sub Court in terms of the provisions under Section 19 of the Legal Services Authorities Act, 1987 read with section 89 (2) of the Code of Civil Procedure. Obviously, a settlement was arrived out of the Lok Adalat and later, the Lok Adalat passed Ext.P4 recording the factum of such settlement though in the light of the provisions under section 21(2), **CO.A.12/2006 & W.P.(C).11863/2004** 4 the Lok Adalat was to pass an award. Ext.P4 would reveal that in fact, the suit was decreed in terms of the compromise petition dated 21.11.2002. Essentially, the captioned writ petition has been filed by the third respondent in the above appeal who is one of the Directors of the first respondent company challenging Ext.P4. Various contentions have been raised to mount challenge against Ext.P4. We will deal with such contentions, a little later. 3.We have heard the learned counsel appearing for both sides in the appeal as also in the writ petition. Both the sides submit that a joint consideration is essential as the issues and facts are intrinsically intertwined and consented for such consideration. 4.Now, we will revert to the appeal preferred against the order of the Company Law Board. It is to be noted that the said company petition was filed under sections 397 and 398 read with section 402 of the Companies Act with the aforementioned prayers. A perusal of the impugned order **CO.A.12/2006 & W.P.(C).11863/2004** 5 dated 21.11.2005 passed thereon would reveal that virtually, the CLB declined to entertain the same on the ground of want of jurisdiction. The operative portion of the said order reads thus:- The parties will be bound by the order which may be passed by the Kerala High Court in the writ petition filed challenging the award of the Kottarakara Taluk Legal Services Authority. By virtue of section 21(2) o the Legal Services Authority Act, 1987 every award made by a Lok Adalat shall be final and binding on all the parties to the dispute, and no appeal shall lie to any court against the award. Hence, the CLB has no jurisdiction to adjudicate the validity of the award dated 22.11.2002. I am, therefore, constrained not to express my opinion on the purported fraud played on the Company by its Managing Director in collusion with the eighth respondent and on the validity of the compromise decree obtained in the civil suit, as claimed by the petitioners as well as the third respondent and the supporting decisions cited in this behalf. The other charges-(a) sale of the property without special resolution and without notice to directors/shareholders; (b) illegal convening of the board meeting without participation of the third respondent; (c) illegal convening of the extraordinary general meeting; (d) **CO.A.12/2006 & W.P.(C).11863/2004** 6 circulation of the circular resolution in violation of section 289 etc., not having been raised at any prior point of time are found per se not oppressive for the purpose of section 397/398, more so, when no prejudices have been made out on account of the sale of the property on the facts and in circumstances set out elsewhere and, therefore, cannot be entertained in the present company petition. 5.Thus, it is obvious from the impugned order that the CLB was of the view that the parties before it would be bound by the order that may be passed by this Court in the writ petition filed challenging the award of the Taluk Legal Services Authority, Kottarakkara. Further, it was held therein that by virtue of section 21(2) of the Legal Services Authority Act, 1987, every award made by a Lok Adalat shall be final and binding on all the parties to the dispute and no appeal would lie, to any court against the award. In fact, it is holding such a view that the CLB declined jurisdiction to adjudicate the validity of the award dated 22.11.2002. Furthermore, it was observed thereunder that **CO.A.12/2006 & W.P.(C).11863/2004** 7 the CLB restrained itself from making any opinion on the fraud allegedly played on the Company by its Managing Director in collusion with the eighth respondent and on the validity of the compromise decree obtained in the civil suit. A perusal of the impugned order would also reveal that as regards the other issues such as sale of property, allegedly, without special resolution and without notice to directors/shareholders, alleged illegal convening of the board meeting without participation of the third respondent, alleged illegal convening of the extraordinary general meeting, circulation of the circular resolution in violation of section 289 of the Companies Act it was observed that they were not raised at any prior point of time and were found per se not oppressive for the purpose of section 397/398, more so, when no prejudices have been made out on account of the sale of the property. It is assigning such reasons that the CLB declined jurisdiction. 6.The learned counsel for the appellant contended that the observation of the CLB to the effect that the award **CO.A.12/2006 & W.P.(C).11863/2004** 8 of the Kottarakkara Taluk Legal Services Authority is final by virtue of section 21(2) of the Legal Services Authority Act, 1987 and it will bind on all parties to the dispute could not have been assigned as a reason to decline jurisdiction for the simple reason that the appellants were not parties to the said suit in which Ext.P4 was passed. At the first blush, the said contention appears to be attractive and sustainable. But in this case, to appreciate the contention, certain other indisputable aspects and facts have to be looked into. Indisputably, prior to the very institution of OS No.109 of 1995, the appellants herein had approached this Court invoking its jurisdiction under the Companies Act by filing C.P.8/1993 (sic.CP.9/1993). That petition was later dismissed as withdrawn evidently for the purpose of approaching the CLB as early as on 2.12.1994. Evidently, it was subsequent to the withdrawal of the said company petition that the original suit was instituted by the eighth respondent. As noticed hereinbefore, it culminated in an award by the Taluk Legal Services Authority. The present **CO.A.12/2006 & W.P.(C).11863/2004** 9 company petition from which the captioned appeal has arisen was filed only on 13.03.2003 viz., more than 9 years since the withdrawal of C.P.8/1993 (sic.C.P.9/1993) for approaching the CLB. In such circumstances, the question is whether the appellant can feign ignorance about the subsequent developments in between the withdrawal of C.P.8/1993 and the filing of the company petition before the CLB on 13.03.2003. A perusal of the company petition which culminated in the impugned order would reveal that the appellants had mentioned about the institution of OS.109 of 1995 by the 8[th] respondent therein. More importantly, in paragraphs VI and VII therein, they had stated that a compromise was arrived at between the parties and the said compromise dated 21.11.2002 was incorporated and an award was consequently passed by the Kottarakkara Taluk Legal Services Committee. In the company petition, it is also specifically stated that the eighth respondent was in possession and enjoyment of the property for over eight years and was earning huge income **CO.A.12/2006 & W.P.(C).11863/2004** 10 from the proceeds and yields of the scheduled property. Thus, a scanning of the pleadings in the company petition before the CLB would also reveal that the details regarding the institution of OS.109 of 1995 before the Sub Court, Kottarakkara by the eighth respondent and the fact that it ultimately culminated in an award based on a compromise dated 21.11.2002 was also expressly revealed by the appellants themselves in the said company petition. The contention that the appellants were not parties to the said suit has to be appreciated bearing in mind the aforesaid indisputable and undisputed facts. The learned counsel for the appellants submitted that in a company petition under sections 397 and 398 read with section 402 of the Companies Act, such aspects could not have been and should not have been taken into consideration by the CLB for the purpose of declining jurisdiction. The contention is that the CLB ought to have considered only the question whether there was any mismanagement since the petition filed before it was under sections 397 and 398 of the **CO.A.12/2006 & W.P.(C).11863/2004** 11 Companies Act. But at the same time, a careful scanning of the pleadings in the company petition would reveal that such contentions are intrinsically intertwined with the execution of the agreement which culminated in the award in OS.109 of 1995 by the Kottarakkara Taluk Legal Services Authority. In the said context, it is also to be noted that the appellants themselves had earlier approached this court by filing C.P.8/1993 (sic.C.P.9/1993). It was filed apprehending sale of property involved in the company petition viz., having an extent of 46 acres and 10 cents. But at the same time, it is evident that pending the said petition, an agreement for sale was executed by the eighth respondent on 9.6.1994. It was in the said circumstances that the said company petition was got dismissed as withdrawn for the purpose of approaching the CLB on 2.12.1994. Obviously, a settlement agreement for sale dated 2.12.1994 was executed subsequent to the dismissal of the aforesaid company petition. Going by the very pleadings of the appellant herein in C.P.13 of 2003 filed before the CLB, it is **CO.A.12/2006 & W.P.(C).11863/2004** 12 evident that the appellants were fully aware of the fact that the eighth respondent subsequently approached the Civil Court by instituting O.S.109 of 1995 and subsequently, the Kottarakkara Taluk Legal Services Authority passed an order under the Legal Services Authority Act, 1987 based on a compromise petition dated 21.11.2002. Obviously, C.P.13 of 2003 was filed only subsequently. The impugned order passed by the CLB would reveal that the contentions raised on behalf of the first respondent as also respondents 6 to 8 were duly taken note of by the Board. Essentially, the said respondents took up the contention that the impugned sale was a concluded one and therefore, it would not fall within the scope of sections 397 and 398 of the Companies Act. To buttress the said contention, they had also relied on various decisions such as **Palghat Exports (P) Ltd. v. Chandran [1994 (79) Com. Cas 213], G. Kasthuri v. N. Murali [1992 (74) Com. Cas 661], Sheth Mohanlal Ganpatram v. Shri. Sayaji Jubill Cotton and Jute Mills Co. Ltd. [1964 (34) Com. Cas** **CO.A.12/2006 & W.P.(C).11863/2004** 13 **777] and Thakur Hotel (Simla) Company Private Ltd.,** **In re.[1963 (33) Com. Cas 1030].** In **Chandran** 's case, the Division Bench held that the object of section 397 of the Companies Act on its plain reading would indicate that the object of section is to terminate or prevent an existing, present, state of prejudicial, oppressive, harsh, unfair conduct. More importantly, it was held therein that past conduct or closed affairs are not encompassed in the said section. Furthermore, it was held therein that if the affairs complained of are not being conducted in present as at the time of filing the petition they were matters of the past conduct and they got no present existence there could be no complaints to bring to an end by an order of the court. Naturally, in such state of affairs, they could not be taken as affairs of present or future to be prevented. The decisions in **G. Kasthuri'** s case (supra) and **Sheth Mohanlal Ganpatram'** s case (supra) and also **Thakur Hotel'** s case would reveal that they essentially followed the said view. In **Thakur Hotel'** s case, it was held that **CO.A.12/2006 & W.P.(C).11863/2004** 14 the object of section 397 is not 'to rake up the past but to redeem the future'. It is thus obvious that the constant and consistent view in regard to sections 397 and 398 is to the effect that the remedy thereunder is preventive and therefore, the affairs complained of must have a present existence. The averments of the appellant in the company petition referred to hereinbefore would undoubtedly go to show that the appellants themselves gave details, in C.P. 13 of 2003, virtually establishing that the affairs pertaining to the sale of the property in question were concluded before the filing of the company petition. That apart, they would go to show that the fact that a settlement was arrived at, was specifically mentioned thereunder and add to it, it was also stated therein that based on such compromise petition dated 21.11.2002 an order was passed by the Taluk Legal Services Authority. In the light of the aforesaid facts which are borne out from the pleadings of the appellant in C.P.13/2003 and in the light of the decisions referred (supra), it can only be said that the **CO.A.12/2006 & W.P.(C).11863/2004** 15 complaints made by the appellant in C.P.13 of 2003 were regarding past conduct or closed affairs and in such circumstances, in the light of the decisions referred hereinbefore, they could not have been the subject matter of a petition either under section 397 or under section 398 of the Companies Act. The learned counsel for the appellant attempted to drive home the point that in the absence of a proper resolution authorising for the execution of an agreement for sale of the property mentioned hereinbefore, the subsequent actions in execution of the agreement and the consequential sale are invalid and are of no consequences. Going by the very pleadings in CP.13 of 2003, it is evident that pursuant to the agreement entered into by the eighth respondent, the property referred to thereunder was actually sold to respondents 6 and 7 as per sale deeds Nos.3642 and 3643 of 2002 of Sub Registry, Anchal. In the light of the facts borne out from the very pleadings of the appellant in CP. 13/2003 and also from the pleadings of respondents 1 and 6-8 therein, we **CO.A.12/2006 & W.P.(C).11863/2004** 16 are of the considered view that it could not be said that the CLB wrongly arrived at a conclusion that the matters complained of in C.P.13/2003 are past conduct or closed affairs. As noticed hereinbefore, the very pleadings in C.P.13/2003 would undoubtedly indicate that what was complained of are matters which are closed affairs. In other words, they are relating past conduct. When that be the position obtained by virtue of the pleadings in C.P. 13/2003 and the pleadings of the respondents therein, in the light of the decisions referred hereinbefore, the decision of the CLB in declining jurisdiction cannot be said to be either illegal or perverse warranting appellate interference. In such circumstances, it is for the appellant to work out his remedies in accordance with law in case he is aggrieved by the sale transaction in respect of the property referred hereinbefore and advised accordingly. 7.Now, we will consider the writ petition which carries challenge against Ext.P4 which is the purported award passed by the Kottarakkara Legal Services Authority in **CO.A.12/2006 & W.P.(C).11863/2004** 17 O.S.109/1995. The writ petition was filed by the fourth defendant in O.S.109/1995 on the files of the Sub Court, Kottarakkara. It is contended that though she was originally a party to the said original suit, subsequently she was deleted from the array of parties and it was only thereafter that compromise was entered into on 21.11.2002. That apart, it is contended that a perusal of the compromise petition dated 21.11.2002 itself would reveal that all the directors and the shareholders were not parties to the compromise and in fact, the signatories thereunder are only the plaintiffs i.e., the eighth respondent herein and defendants 3, 6 and 7. The learned counsel for the petitioner further submitted that a perusal of Ext.P4 order itself would reveal that defendants 2 to 8 in the original suit were in fact arrayed therein in their personal capacity and at the same time, nobody was made as a party to represent the first respondent company. In this context, it is further contended that a perusal of Ext.P3 would reveal that even the seventh respondent who **CO.A.12/2006 & W.P.(C).11863/2004** 18 claimed to have represented the company did not put his signature in Ext.P3 representing the company and in fact, he put his signature in his personal capacity. At any rate, it is contended that a perusal of the said compromise petition dated 21.11.2002 would reveal that all the directors and shareholders were not parties to the compromise. In such circumstances, it is contended that a close scrutiny of Ext.P4 would reveal that it could not be construed as an award passed in terms of regulation 17 of the National Legal Services Authority (Lok Adalats) Regulations, 2009 framed in exercise of the powers conferred by section 29 of the Legal Services Authorities Act, 1987. Referring to various regulations thereunder such as Regulations 13, 15, 16 and 17, it is contended that settlement dated 21.11.2002 being one not at all arrived at in the Lok Adalat, the Adalat ought to have applied the provisions of the Legal Services Authorities Act, more particularly, sub section 4 of section 20. When the compromise or settlement between the parties is arrived at, the Lok Adalat **CO.A.12/2006 & W.P.(C).11863/2004** 19 is having a statutory duty to ensure that the compromise or settlement arrived at between the parties are guided by principles of justice, equity, fair play and other legal principles. Regulation 17(6) is also worthy to be noted in the context. It reads thus:- “Members of the Lok Adalat should affix their signature only in settlement reached before them and should avoid affixing signatures to settlement reached by the parties outside the Lok Adalat with the assistance of some third parties, to ensure that the Lok Adalats are not used by unscrupulous parties to commit fraud, forgery etc. 8.Evidently, in this case, bare perusal of Ext.P4 would reveal that the compromise was not arrived at before the Lok Adalat and in fact, it was arrived at outside the Lok Adalat. That fact was duly recorded in Ext.P4 itself. The said order would also reveal that the fact that certain parties originally impleaded as parties to the original suit were deleted, was also properly taken note of in Ext.P4. Even then the question whether all the parties who are **CO.A.12/2006 & W.P.(C).11863/2004** 20 having interest over the property in question or in other words, whether the directors of the first respondent company and also the shareholders in the said company were parties to the compromise was not at all taken into consideration by the Lok Adalat. Ext.P3 was signed only by the plaintiffs and defendants 3, 6 and 7. As noticed hereinbefore, Ext.P3 would reveal that among the defendants none of them put their signature in his/her capacity as authorised representative of the first respondent company. Apart from the said crucial failure, some other infirmities infected in Ext.P4 are also worthy to be noticed. Going by section 21 of the Legal Services Authorities Act, 1987, the Lok Adalat is to pass an award in respect of a matter referred before it in terms of section 19. The award passed by the Lok Adalat should be deemed to be a decree of a civil court. Section 21(2) would reveal that such award made by the Lok Adalat shall be final and binding on all the parties to the dispute and no appeal would lie to any court against that award. At the same **CO.A.12/2006 & W.P.(C).11863/2004** 21 time, a perusal of Ext.P4 would reveal that it cannot be said to be an award. What is stated therein is that in terms of the settlement the suit is decreed. The compromise petition was appended to the decree. Yet another aspect is also to be looked into. Ext.P4 was signed by the Judicial officer in her is capacity as Sub Judge, Kottarakkara and not in her capacity as Chairman of the Lok Adalat. At the same time, beneath the signature it was endorsed 'on behalf of Sri.Emmanuel P. Kolady, Sub Judge, Kollam'. The compromise petition was dated 21.11.2002 and the judicial officer who acted as the member (whether as chairman?) was Immanuel P. Kolady and at the same time, Ext.P4 was signed by B.Santha Bai on 17.2.2004. It would also reveal that, in two places in Ext.P4, even the names and signatures of the members are conspicuously absent. The fact that O.S.109/1995 was actually referred to the Taluk Legal Services Authority in terms of section 19(2) of the Legal Services Authorities Act is not at all in dispute. When such a matter was referred to the Lok Adalat by the **CO.A.12/2006 & W.P.(C).11863/2004** 22 competent civil court in terms of the provisions under section 89(2) of the Civil Procedure Code, the Lok Adalat has to pass an award in accordance with the Legal Service Authorities Act. Regulation 6(d) deals with composition of Lok Adalat on Taluk level. As per the said regulation, the Chairman of the Taluk Legal Services Committee organising the Lok Adalat shall constitute benches of the Lok Adalat, each bench comprising 2 or 3 of the following (i) a sitting or retired judicial officer (ii) a member from the legal profession and(iii) a social worker or a person engaged in para-legal activities of the area preferably a woman. In this case, evidently, the serving judicial officer had actually functioned as a member of the Lok Adalat in question. However, he had not put his signature in the award whereas his successor who had not functioned as a member of the Lok Adalat put the signature and passed the decree viz., Ext.P4. As noticed hereinbefore, nothing is discernible from Ext.P4 as to who are/were the member or members of the said Lok Adalat. Obviously, in this case, **CO.A.12/2006 & W.P.(C).11863/2004** 23 the compromise was arrived out of the Lok Adalat. Even then, while passing Ext.P4, the principles of justice, equality or other legal principles were not at all looked into. In such circumstances, it can only be said that Ext.P4 is vitiated by inherent infirmities and illegalities and the same cannot be construed even as an award and needless to say that by no stretch of imagination, it could be deemed as a decree. In such circumstances, Ext.P4 is set aside. In the result, the Company Appeal is dismissed subject to the observations made as above and W.P.(C).No.11863/2004 is allowed to the above extent. There will be no order as to costs in the appeal. Sd/- ## **C.T. RAVIKUMAR (JUDGE)** **Sd/MARY JOSEPH (JUDGE)** ## **spc/ vs** **CO.A.12/2006 & W.P.(C).11863/2004** 24 **CO.A.12/2006 & W.P.(C).11863/2004** 25 ## **C.T. RAVIKUMAR, J.** **JUDGMENT September, 2010** **CO.A.12/2006 & W.P.(C).11863/2004** 26