- Lok adalat is similar to a civil court can be organised by the State Authority, the District Authority, The Supreme Court Legal Service Committee or High Court Legal Services Committee at such intervals and places as deemed appropriate.
- Lok Adalts are created under Legal Services Authority Act 1987
JURISDICTION AND TYPES OF CASE
- A lok Adalt has jurisdiction to determine and arrive at a compromise or settlement between the parties to compromise or settlement between the parties to the dispute. It deals with the cases where
- The parties to the dispute agree to refer the issue to parties to Lok Adalt
- One of the parties approaches the Lok Adalt and Lok Adalt is satisfied that there are chances of settlement. In such case , the Adalt issues notices to the other party
- In the opinion of the Lok Adalt, the cognizance of the dispute can be taken.
CASES THAT CANNOT BE TAKEN UP
- The offences, which are compoundable under any Law, cannot be brought within the purview of the Lok Adalt. This implies that the Lok Adalt has no authority of its own, to pass judgements.
AWARDS OF LOK ADALT
- Their awards are in the form of consent decrees
- No appeal lies against such awards which is binding on all parties
PROCEDURE AND POWERS
- Civil Procedure Code is applicable which means the Lok Adalt can send summons, take evidence on oath, initiative ex-party proceedings and determine court procedures.
WHERE COMPROMISE IS NOT REACHED
- The case shall be returned back to the court from which the references was received for continuing with the case, there.
RBI GUIDELINES ON LOK ADALTS
- To make increasing use of the forum of Lok Adalts to settle banking disputes involving smaller amounts, RBI during April 2001 advised bank and financial institutions to follow the following guidelines for implementation:
- Cases involving an amount up to Rs. 30 lakh may be referred to Lok Adalats
- All NPA accounts, both suit filed and non-suit filed which are in “doubtful” and “loss” category. NO cut off date is suggested since Lok Adalat is an on-going process.
- It would be flexible with following essential parameters
- A decree should be sought from the Lok Adalat for the principal amount and interest claimed in the suit and after full payments of decree amount, a discharge certificate should be issued by the bank/financial institutions.
- Repayment period to be within 1-3 years
- The negotiated agreement should contain a default clause. If borrower does not pay due amount regularly, within the repayment period, entire debt will fall due for payments and bank may initiate legal proceedings
- The representing Offices should have sufficient powers to accept the comparises worked out within bank policy framework and should respond pro-actively to the suggestion of the Presiding Officer of the Lok Adalat.
DRT LOK ADALTS
- Banks can take up matters where outstanding exceed the ceiling of Rs. 20 lac, with Lok Adalats organised by the Debt Recovery Tribunals / Debt Recovery Appellate Tribunals.
SUPREME COURT SUGGESTION
- Supreme Court has suggested that personal loan cases up to Rs. 10 lac should preferably settled through Lok Adalts.
ORGANISATIONAL ARRANGEMENTSThe individual banks and financial institutions should be more pro-active and should take the responsibility of organising Lok Adalts. The institutions should get in touch with State/ District/ Taluk level Legal Services authorities for organising Lok Adalats. The banks should report the progressing to RBI at quarterly intervals within one month from the quarters ending MARCH, June, September and December. RBI monitors the progress made by the institutions in effecting recovery under the scheme
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