BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION

VAZHUTHACAUD, THIRUVANANTHAPURAM.

PRESENT

SRI.P.V.JAYARAJAN                                 : PRESIDENT

SMT. PREETHA G. NAIR                           : MEMBER

SRI. VIJU V.R                                               : MEMBER

C.C. No. 573/2016 Filed on 01/12/2016

ORDER DATED: 14/11/2024

ORDER

SRI. VIJU V.R : MEMBER

The complainant has presented this complaint before this Commission under Section 12 of the Consumer Protection Act 1986.  The brief facts of the case is that the complainant started a business of soap manufacturing unit by the name and style Amma Soaps.  He availed a loan from the opposite party to a tune of Rs.21.16 lakhs and he was also sanctioned a government subsidy of Rs.3,85,154/- from the Khadi  and Village Industrial Commission (KVIC).  This subsidy amount was to be deducted from the principle amount of Rs.21.61 lakhs and the balance amount with interest alone was to be paid by the complainant.  The opposite party has not deducted the subsidy amount from the principle loan amount, there by the subsidy amount remained as a fixed deposit.  Since the complainant has not repaid the loan amount the opposite party initiated SARFAESI proceedings and attached all the security mortgaged with the bank, including the residence of the complainant.  Being so the complainant put forth several compromise formulas to the opposite party for settlement which was not accepted by the opposite party.  The complainant participated in the Lok Adalat of the Hon’ble High Court of Kerala held on 23/11/2012 and offered for a settlement of Rs.18,85,154/- including the margin money of Rs.3,85,154/- for which the opposite party expressed inability as the same was beyond their pecuniary jurisdiction.  It is pertinent to note that the margin money of Rs.3,85,154/- was included in the settlement amount of Rs.18,85,154/-.  After that in the National Lok Adalat dated 14/02/2015 held at DRT Ernakulam a final settlement was arrived between the complainant and the opposite party as per the terms of said compromise an amount of Rs.18 lakhs to be paid towards the full and final settlement of the loan.  But at the time closure of the loan the opposite party insisted the complainant to pay an additional amount of Rs.2589+983 to receive the clearance letter.  Even though the loan was closed on 25/03/2015, the opposite party returned the original document only by 20/07/2015 to the complainant.  The complainant was of the firm belief that the margin money was included in the above mentioned amount as full and final settlement.  The complainant has to deposit Rs.1 lakh to the account of Sastha Industry as per the direction of the opposite party.  The complainant on receipt of this statement of account of the opposite party came to understand that the total amount of Rs.22,88,726/- was collected by the opposite party towards the closing of the loan inspite of the settlement mutually arrived upon in the Lok Adalat.  The opposite party even though had agreed to adjust the said margin money of Rs. 3,85,154/- in the final settlement amount of Rs.19 lakhs had cleverly and with dubious intentions had no fulfilled the said undertaking and had made the complainant to pay Rs.19 lakhs towards the settlement amount even though the said margin money was held by them as fixed deposit.  The opposite party has not returned the subsidy amount to the complainant, which amounts to deficiency in service, hence this complaint.  

                        2. The opposite party entered appearance and filed version as well as an additional version.  The opposite party has averred that the complaint is not maintainable either in law or on facts.  The complainant has made default in the repayment during 2008 itself and on 10/12/2008 the complainant filed an application before the opposite party requesting to deduct the government subsidy amount allotted to the above said loan from his loan account and produce the application form that he has submitted before KVIC along with his request.  The certificate of adjustment of margin money of REGP:KVIC dated 07/11/2008 is also prepared.  Thereafter the proposal was accepted and as per the recommendation of the opposite party the margin money of Rs.3,85,154/- has to be adjusted subject to the production of KVIC registration certificate from the proprietor on 19/03/2013 as per the compromise proposal under the recovery policy of the bank for the time settlement in the account of M/s.Amma Industries.  Further the PC certificate of adjustment of margin money of REGP:KVIC dated 02/04/2013 were issued by the opposite party with a request to permit for adjustment of margin money amounting to Rs.3,85,154/- against the outstanding loan advances and due communications were given to the complainant on 26/04/2013.  Thereafter the margin money amount of Rs.3,85,154/- released to the opposite party under REGP scheme of KVIC had been adjusted towards the loan account of the beneficiary.  There is no deficiency in service from the side of the opposite party and hence the complaint may be dismissed. 

3. Issues to be ascertained:

1. Whether there is any unfair trade practice or deficiency in service from the side of the opposite party?
2. Whether the complainant is entitled to get the reliefs?

4. Issues (i) & (ii): Both these issues are considered together for the sake of convenience.  The complainant has filed chief affidavit in lieu of chief examination and has produced 13 documents which were marked as Exts.P1 to P13.  Ext.P1 is the certificate of registration from KVIC dated 08/02/2007.  Ext.P2 is the FD receipt dated 12/10/2006.  Ext.P3 is the notice of the Lok Adalat held at Hon’ble High Court of Kerala dated 23/11/2012.  Ext.P4 series are the receipts 3 Nos. showing payment of Rs.7,50,000/-.  Ext.P5 is the letter from the complainant to the opposite party dated 27/12/2014.  Ext.P6 is the letter from Branch Manager Vijaya Bank, Vellarada branch dated 31/01/2015.  Ext.P7 is the order of the Lok Adalat held at DRT dated 14/02/2015.  Ext.P8 is the registered letter sent by the complainant to the opposite party dated 20/07/2015.  Ext.P9 is the order of the banking ombudsman dated 26/10/2015.  Ext.P10 is the receipt of payment as per adalat.  Ext.P11 is the clearance letter as to closur of loan for and on behalf of Amma Industries from Vijaya Bank dated 25/03/2015.  Ext.P12 is the letter dated 15/07/2015 showing return of original title deed in the account of Amma Industries from Vijaya Bank.  Ext.P13 is the final settlement of accounts issued from the bank.  The complainant was examined as PW1 and was cross examined by the opposite party.  The opposite party has submitted that they have not oral evidence.  The complainant and the opposite party filed argument note.  The main allegation raised by the complainant is that the opposite party has not repaid the subsidy amount of Rs.3,85,154/- to the complainant.  It is admitted by the complainant that the dispute regarding the loan was settled between the complainant and the opposite party in the National Lok Adalat conducted on 14/02/2015.  The complainant has filed this complaint regarding the subsidy amount which is paid as a subsidy by the government which is deposited as a fixed deposit in the name of the complainant by the Khadi  and Village Industrial Commission (KVIC).  As the complainant become a defaulter the opposite party initiated legal remedies against the complainant and the dispute between them was settled in an National Lok Adalat held on 14/02/2015.  The complainant after the settlement in the Lok Adalat has approached this Commission.  As per Section 21 of the Legal Services Authorities Act, 1987 reads as follows:-

"21. Award of Lok Adalat - 2[(1)] Every award of the Lok Adalat shall be deemed to be a decree of a Civil Court or, as the case may be, an order of any other Court and where a compromise or settlement has been arrived at, by a Lok Adalat in a case referred on it under sub-section (1) of Sec.20, the court fee paid in such cases shall be refunded; in the manner provided under the Court Fees Act, 1870 (7 of 1870)

(2) 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.”

The award of Lok Adalat is final and permanent which is equaled to a decree executable and the same is an ending to the litigation among the parties.  The Lok Adalat will pass the award with the consent of the parties, therefore there is no need either to reconsider or review the matter again and again as the award passed by the Lok Adalat shall be final.  The Hon’ble Supreme Court in Thomas Vs. Thomas Job, (2005) 6 SCC 478 held that:

17. The Lok Adalat will passes the award with the consent of the parties, therefore there is no need either to reconsider or review the matter again and again, as the award passed by the Lok Adalat shall be final. Even as under Section 96(3) of C.P.C. that "no appeal shall lie from a decree passed by the Court with the consent of the parties". The award of the Lok Adalat is an order by the Lok Adalat under the consent of the parties, and it shall be deemed to be a decree of the Civil Court, therefore an appeal shall not lie from the award of the Lok Adalat as under Section 96(3) C.P.C.

18.In Punjab National Bank vs. Lakshmichand Rah reported in AIR 2000 Madhya Pradesh 301, 304, theHigh Court held that "The provisions of the Act shall prevail in the matter of filing an appeal and an appeal would not lie under the provisions of Section 96 C.P.C. Lok Adalat is conducted under an independent enactment and once the award is made by Lok Adalat the right of appeal shall be governed by the provisions of the Legal Services Authorities Act when it has been specifically barred under Provisions of Section 21(2), no appeal can be filed against the award under Sec.96 C.P.C." The Court further stated that "It may incidentally by further seen that even the Code of Civil Procedure does not provide for an appeal under Section 96(3) against a consent decree. The Code of Civil Procedure also intends that once a consent decree is passed by Civil Court finality is attached to it. Such finality cannot be permitted to be destroyed, particularly under the Legal Services Authorities Act, as it would amount to defeat the very aim and object of the Act with which it has been enacted, hence, we hold that the appeal filed is not maintainable.

19.The High Court of Andhra Pradesh held that, in Board of Trustees of the Port of Visakhapatnam vs.Presiding Officer, Permanent, Lok Adalat-cum-Secretary, District Legal Services Authority, Visakhapatnam and another reported in 2000(5) ALT 577, "The award is enforceable as a decree and it is final. In all fours, the endeavour is only to see that the disputes are narrowed down and make the final settlement so that the parties are not again driven to further litigation or any dispute. Though the award of a Lok Adalat is not a result of a contest on merits just as a regular suit by a Court on a regular suit by a Court on a regular trial, however, it is as equal and on par with a decree on compromise and will have the same binding effect and conclusive just as the decree passed on the compromises cannot be challenged in a regular appeal, the award of the Lok Adalat being akin to the same, cannot be challenged by any regular remedies available under law including invoking Article 226 of the Constitution of India challenging the correctness of the award on any ground. Judicial review cannot be invoked in such awards especially on the grounds as raised in this writ petition.

20. The award of Lok Adalat is final and permanent which is equivalent to a decree executable, and the sameis an ending to the litigation among parties.

In Sailendra Narayan Bhanja Deo vs. The State of Orissa, AIR 1956 Supreme Court 346, (Constitution Bench) held as follows:

A Judgment by consent or default is as effective an estoppel between the parties as a judgment whereby the court exercises its mind on a contested case. (1895) 1 Ch. 37 & 1929 AC 482, Rel. on;

In- 'In re South American and Mexican Co., Ex. Parte Bank of England', (1895) 1 Ch. 37(C), it has been held that a judgment by consent or default is as effective an estoppel between the parties as a judgment whereby the Court exercises its mind on a contested case. Upholding the judgment of Vaughan Williams, J. Lord

Herschell said at page 50;-

"The truth is, a judgment by consent is intended to put a stop to litigation between the parties just as much as is a judgment which results from the decision of the Court after the matter has been fought out to the end.

And I think it would be very mischievous if one were not to give a fair and reasonable interpretation to such judgments, and were to allow questions that were really involved in the action to be fought over again in a subsequent action."

To the like effect are the following observations of the Judicial Committee in - 'Kinch vs. Walvott', 1929 AC 482 at p. 493 (D):-

"First of all their Lordships are clear that in relation to this plea of estoppel it is of no advantage to the appellant that the order in the libel action which is said to raise it was a consent order. For such a purpose an order by consent, not discharged by mutual agreement, and remaining unreduced, is as effective as an order of the Court made otherwise than by consent and not discharged on appeal."

21. The same principle has been followed by the High Courts in India in a number of reported decisions. Reference need only be made to the cases of -'Secy. Of State vs. Ateendranath Das', 63, Cal 550 at p. 558(E), - 'Bhaishanker vs. Moraji', 36 Bom 283(F), and -'Raja Kumara Venkata Perumal Raja Bahadur', vs. Thatha Ramaswamy Chetty', 35 Mad 75(G). In the Calcutta case after referring to the English decisions the High Court observed as follows:

"On this authority it becomes absolutely clear that the consent order is as effective as an order passed on contest, not only with reference to the conclusion arrived at in the previous suit but also with regard to every step in the process of reasoning on which the said conclusion is founded.

When we say 'every step in the reasoning' we mean the findings on the essential facts on which the judgment or the ultimate conclusion was founded. In other words the finding which it was necessary to arrive at for the purpose of sustaining the judgment in the particular case will operate as estoppel by judgment".

The Civil Procedure Code contains the following provisions:

"Order 23 Rule 3 provides for compromise of suit- where it is proved to the satisfaction of the Court that a suit has been adjusted wholly in part by any lawful agreement or compromise, written and signed by the parties. The Court after satisfying itself about the settlement, it can convert the settlement into a judgment decree."

So after settling the dispute in Lok Adalat nobody has the right to challenge anything which is directly involved in the dispute in any of the legal forums.  The complainant has no locus standi to file any complaint before this Commission as the dispute between the complainant and the opposite party has already been settled in the Lok Adalat.

                        In the result the complaint stands dismissed.  No order as to cost.             

A copy of this order as per the statutory requirements is forwarded to the parties free of charge and thereafter the file be consigned to the record room.

Dictated to the Confidential Assistant, transcribed by her, corrected by me and pronounced in the Open Forum, this the 14^th  day of November,  2024.

                                          Sd/-

                                                P.V.JAYARAJAN                 : PRESIDENT

          Sd/-

PREETHA G. NAIR             : MEMBER   

 Sd/-

                                                                 VIJU V.R                           : MEMBER   

R

                                          C.C.No.573/2016

    APPENDIX

I           COMPLAINANT’S WITNESS:

II          COMPLAINANT’S DOCUMENTS:

III         OPPOSITE PARTY’S WITNESS:

IV        OPPOSITE PARTY’S DOCUMENTS:

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PRESIDENT

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