K. SRINIVASAPPA & ORS.versusM. MALLAMMA & ORS.

190                      [2022]REPORTS
               SUPREME COURT    4 S.C.R. 190                 [2022] 4 S.C.R.


A                         K. SRINIVASAPPA & ORS.
                                        v.
                           M. MALLAMMA & ORS.
                      (Civil Appeal No. 3486-3488 of 2022)
B                                MAY 18, 2022
               [M. R. SHAH AND B. V. NAGARATHNA, JJ.]
             Code of Civil Procedure, 1908: Or. XXIII r. 3 – Compromise
      of suit – Compromise recorded by the Lok Adalat, between the parties
      to the suit – Recall of said order by the High Court in writ petitions
C
      filed there against – Sustainability of – Held: Writ court cannot, in
      a casual manner, de hors any reasoning, set aside the order of the
      Lok Adalat – Strong reasons are required to recall a compromise
      recorded – Compromise ultimately results into a decree of a court
      which can be enforced just as a decree and such decree shall be
D     final and binding upon the parties – Writ petition would only be
      maintainable against an award of the Lok Adalat, on allegation of
      fraud in the manner of obtaining the award of compromise – Terms
      of a compromise decree, cannot be avoided, unless the allegation
      of fraud has been proved – In the absence of any conclusive proof
      as to fraud on the part of the objectors, the High Court could not
E
      have set aside the compromise decree – High Court’s decision to set
      aside the order of the Lok Adalat, without entering into a discussion
      as to the findings in such order, cannot be sustained – Such decision
      of the High Court is against the principle of protecting the sanctity
      and finality of orders based on a compromise or consent between
F     parties – Judgment of the High Court is set aside and that of the
      Lok Adalat is restored – Legal Services Authorities Act, 1987 – s.
      21.
            Allowing the appeals, the Court
            HELD: 1.1 There are no reasons forthcoming from the
G     judgment of the High court while setting aside the order of the
      Lok Adalat whereby the terms of the compromise were recorded.
      To recall a compromise that has been recorded would call for
      strong reasons. This is because a compromise would result
      ultimately into a decree of a Court which can be enforced just as
H     a decree passed on an adjudication of a case. This is also true in
                                     190
    K. SRINIVASAPPA & ORS. v. M. MALLAMMA & ORS.                       191


the case of a compromise recorded before a Lok Adalat. Section         A
21 of the Legal Services Authorities Act, 1987 equates an award
of the Lok Adalat, to a decree of a Civil Court and imputes an
element of finality to an award of compromise passed by the Lok
Adalat. When the Lok Adalat disposes cases in terms of a
compromise arrived at between the parties to a suit, after following
                                                                       B
principles of equity and natural justice, every such award of the
Lok Adalat shall be deemed to be a decree of a Civil Court and
such decree shall be final and binding upon the parties. Given
the element of finality attached to an award of the Lok Adalat, it
also follows that no appeal would lie, under Section 96 CPC
against such award. [Paras 27, 28][202-H; 203-A-B, E-F]                C
      1.2 While a writ petition would be maintainable against an
award of the Lok Adalat, especially when such writ petition has
been filed alleging fraud in the manner of obtaining the award of
compromise, a writ court cannot, in a casual manner, de hors any
reasoning, set aside the order of the Lok Adalat. The award of a       D
Lok Adalat cannot be reversed or set aside without setting aside
the facts recorded in such award as being fraudulent arrived at.
[Para 29][203-G]
      1.3 The Latin maxim “cessante ratione legis cessat ipsa lex”
meaning “reason is the soul of the law, and when the reason of         E
any particular law ceases, so does the law itself”. There is a duty
to accord reasons for a decision arrived at by a court, or for that
matter, even a quasi-judicial authority. [Para 30-31][204-A-B]
      H H Sri Swamiji of Sri Admar Mutt v. the Commissioner,
      Hindu Religious and Charitable Endowments Dept.                  F
      (1979) 4 SCC 642 : [1980] 1 SCR 368; Kranti
      Associates Private Limited & Anr. Vs. Masood Ahmed
      Khan & Ors. (2010) 9 SCC 496 : [2010] 10 SCR 1070
      – relied on.
     1.4 The Lok Adalat, in its award dated 07th July, 2012            G
recorded that the parties had admitted that the contents of the
compromise petition were true and correct, after the terms thereof
had been read over and explained to them in Kannada language.
Further, it was also noted that the compromise was entered into

                                                                       H
192            SUPREME COURT REPORTS                       [2022] 4 S.C.R.


A     by plaintiff no. 1, on behalf of, and for the benefit of his two minor
      children, in order to protect their shares. The same was allowed
      by the Lok Adalat on recognising the terms of the compromise,
      would protect the interests plaintiff no. 1’s minor children. There
      is no objection raised on behalf of plaintiff no. 1 in the instant
      case. The Lok Adalat, in its order dated 27th April, 2013, rejected
B
      the allegations of fraud raised by plaintiff nos. 4-6, against the
      defendants and recorded that plaintiff nos. 4-6 had offered no
      explanation as to why no objection was raised by any of them on
      07th July, 2012 before the Lok Adalat. It was further observed
      that plaintiff nos. 4-6, could not, after having accepted huge sums
C     of money in terms of the compromise, rescind from the terms
      thereof. It is not the case of plaintiff nos. 4-6 that they had not
      received an amount of Rs. 30,00,000/- (rupees thirty lakhs) each,
      in terms of the compromise. Further, it is not their case that such
      sum has been returned, in whole or in part, to the defendants.
      That although plaintiff no. 4, stated that on learning that the
D
      proceedings conducted on 07th July, 2012 before the Lok Adalat
      were in relation to a compromise, she had not signed the order
      sheet, she failed to provide any explanation as to why she did not
      inform the Lok Adalat on the said date that her signature on the
      compromise petition was obtained by fraud. That plaintiff nos. 4-
E     6 had admitted before the Lok Adalat on 07th July, 2012 that the
      contents of the compromise petition were true and correct, when
      the same had been read over and explained to them in Kannada.
      That plaintiff nos. 4-6 specifically admitted that they had received
      a sum of Rs. 30,00,000/- (rupees thirty lakhs) each, as mentioned
      in the compromise petition in lieu of relinquishing their rights,
F
      title and interest in the other suit schedule properties. That if, in
      fact, the signatures of plaintiff nos. 4-6 had been obtained by fraud,
      they ought to have returned the amount of Rs. 30,00,000/- (rupees
      thirty lakhs) each, paid to them in accordance with the terms of
      the compromise. Having not done so, plaintiff nos. 4-6 had failed
G     to establish that any fraud was practiced upon them, by the
      defendants, with a view to obtain their signatures on the
      compromise petition. On a perusal of the plaint, it is noted that
      there were 13 items of the suit schedule property having different
      valuation and therefore, the plaintiffs would have had their
      respective shares in the suit schedule properties taken together.
H
    K. SRINIVASAPPA & ORS. v. M. MALLAMMA & ORS.                          193


However, plaintiff nos.4-6 accepted a sum of Rs.30 lakhs each by          A
relinquishing their right, title and interest in all the suit schedule
properties. Having received a monetary share in respect of the
suit items, the plaintiffs had decided to relinquish their right, title
and interest in respect of all the suit items. The Single Judge of
the High Court in the impugned judgment has not considered
                                                                          B
the said facts of the case in the context of setting aside the award
of the Lok Adalat dated 07th July, 2012. The Single Judge has
also not considered the reasoning given in the order dated 27th
April, 2013 by which the objections raised by plaintiff nos.4-6 to
the decree of the Lok Adalat had been rejected. [Para 32][205-
G-H; 206-A-H; 207-A-D]                                                    C
      1.5 Where an allegation of fraud is made against a party to
an agreement, the said allegation would have to be proved strictly,
in order to avoid the agreement on the ground that fraud was
practiced on a party in order to induce such party to enter into
the agreement. Similarly, the terms of a compromise decree,               D
cannot be avoided, unless the allegation of fraud has been proved.
In the absence of any conclusive proof as to fraud on the part of
the objectors, the High Court could not have set aside the
compromise decree in the instant case. [Para 35][208-A-B]
      1.6 No ground was made out warranting the decision of the           E
High Court to set aside the order of the Lok Adalat wherein
compromise was recorded between the parties. The High Court’s
decision to set aside the order of the Lok Adalat, without entering
into a discussion as to the findings in such order, cannot be
sustained. Such decision of the High Court runs contrary to
established principles of law which seek to protect the sanctity          F
and finality of orders based on a compromise or consent between
parties. Hence the impugned judgment of the High Court, is set
aside and the order of the Lok Adalat, whereby the compromise
between the parties to the suit was recorded, is restored. [Para
36, 37][208-C-E]                                                          G
      Smt. Sawarni v. Smt. Inder Kaur and Ors. (1996) 6 SCC
      223 : [1996] 5 Suppl. SCR 165; Ruby Sales and Services
      Pvt. Ltd. v. State of Maharashtra (1994) 1 SCC 531 :
      [1993] 3 Suppl. SCR 473; Pushpa Devi Bhagat (dead)
                                                                          H
194             SUPREME COURT REPORTS                            [2022] 4 S.C.R.


A            through LR. Sadhna Rai v. Rajinder Singh and Ors.
             (2006) 5 SCC 566 : [2006] 3 Suppl. SCR 370 – referred
             to.
                                Case Law Reference
      [1996] 5 Suppl. SCR 165                   referred to           Para 17
B
      [1980] 1 SCR 368                          relied on             Para 30
      [2010] 10 SCR 1070                        relied on             Para 31
      [1993] 3 Suppl. SCR 473                   referred to           Para 33
      [2006] 3 Suppl. SCR 370                   referred to           Para 34
C
            CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 3486-
      3488 of 2022.
            From the Judgment and Order dated 17.04.2015 of the High Court
      of Karnataka at Bangalore in Writ Petition Nos. 20607-09 of 2013.
D            Ms. Pritha Srikumar, Anirudh Gotety, Abhinav Ramanand, Advs.
      for the Appellants.
             Ms. Manju Jetley, Adv. for the Respondents.
             The Judgment of the Court was delivered by
E            NAGARATHNA J.
              1. These appeals assail the judgment and order dated 17th April,
      2015, passed by the High Court of Karnataka at Bengaluru in Writ Petition
      nos.20607, 20608 and 20609 of 2013, whereby the High Court disposed
      of the Writ Petitions filed by plaintiff nos. 4 to 6 and has recalled order
F     dated 7th July, 2012 by which the compromise had been recorded by the
      Lok Adalat, between the parties to Original Suit No. 876 of 2004, being
      a suit for partition and separate possession instituted by plaintiff nos. 1 to
      6 on the file of the Court of the Civil Judge (Junior Division), Rural
      District, Bangalore.
G           2. For the sake of convenience, the parties shall be referred to in
      terms of their rank and status in O.S. No. 876 of 2004.
             3. Briefly stated, the facts giving rise to the present appeal are
      that plaintiff nos. 1, 4, 5, 6 and defendant nos. 2 to 5 are children of
      M. Krishnappa and M. Mallamma, defendant no. 1. Plaintiff nos. 2 and
H     3 are the sons of plaintiff no. 1, namely, K. Devraj. The Plaintiffs filed a
     K. SRINIVASAPPA & ORS. v. M. MALLAMMA & ORS.                               195
                  [B. V. NAGARATHNA]

suit for partition and separate possession, being O.S. 876 of 2004 on the       A
file of the Court of the Civil Judge, Junior Division, Rural District
Bangalore stating that the suit schedule properties were acquired by M.
Krishnappa and were in joint possession and enjoyment of the plaintiffs
and defendants, until the demise of M. Krishnappa. That following the
death of M. Krishnappa, defendant no. 1 was in possession of the suit
                                                                                B
schedule properties and was acting in a manner detrimental to the interests
of the plaintiffs and had attempted to alienate the properties without
effecting a partition so as to crystallise the rights of each of the parties
to the suit. That requests of the plaintiffs to effect a partition of the
property, were met with threats by the defendants to alienate the same.
      With the aforesaid averments the plaintiffs had sought partition          C
and separate possession of their shares in the suit schedule properties.
       4. During the pendency of the suit, on 30 th June, 2012, a
compromise petition was filed jointly by the plaintiffs and the defendants
under Order XXIII Rule 3 of the Code of Civil Procedure, 1908
(hereinafter “CPC”, for short), before the Trial Court stating therein          D
that the parties to the suit had, on intervention of relatives and well-
wishers there was a mediation of their disputes as to partition and settled
their disputes inter-se, in the following manner:
      i.    That the plaintiffs would relinquish their right, title, interest
            and claim in respect of the suit schedule properties, and in        E
            consideration for the same, the defendants had paid to the
            plaintiffs the following amounts:
            a) Rs. 1,10,00,000/- (rupees one crore, ten lakhs) paid in
               favour of K. Devaraj, plaintiff no. 1.
                                                                                F
            b) Rs. 30,00,000/- (rupees thirty lakhs) paid in favour of
               K. Sugunamma, plaintiff no. 4, by way of two cheques
               for amounts of Rs. 2,50,000/- (rupees two lakhs and
               fifty thousands) and Rs. 27,50,000/- (rupees twenty
               seven lakhs and fifty thousands), respectively.
                                                                                G
            c) Rs. 30,00,000/- (rupees thirty lakhs) paid in favour of
               K. Shanthamma, plaintiff no. 5 by way of two cheques
               for amounts of Rs. 2,50,000/- (rupees two lakhs and
               fifty thousands) and Rs. 27,50,000/- (rupees twenty
               seven lakhs and fifty thousands), respectively.
                                                                                H
196                SUPREME COURT REPORTS                           [2022] 4 S.C.R.


A                   d) Rs. 30,00,000/- (rupees thirty lakhs) paid in favour of
                       K. Geetha, plaintiff no. 6, by way of two cheques for
                       amounts of Rs. 2,50,000/- (rupees two lakhs and fifty
                       thousands) and Rs. 27,50,000/- (rupees twenty seven
                       lakhs and fifty thousands), respectively.
B                   e) Rs. 4,00,000/- (rupees four lakhs) paid in favour of
                       Mallamma, defendant no. 1.
            ii.     That the defendants would be entitled, jointly and severally,
                    to enjoy absolute right, title and interest over the suit schedule
                    properties.
C           iii.    That defendant nos. 2 to 5 would be entitled to get the khata,
                    mutation and record of rights transferred in their names, in
                    respect of the suit schedule properties.
            iv.     That the suit schedule properties would be retained by
                    defendant nos. 2 to 5, who shall hold the same as joint owners
D                   thereof, until a division is effected inter-se between the said
                    defendants. That the said property would not be available
                    for partition, so far as the plaintiffs were concerned as their
                    right over the suit property was conveyed in favour of
                    defendant nos. 2 to 5, for consideration.
E           v.      That the plaintiffs undertake not to initiate any action or
                    proceedings by themselves or through their successors-in-
                    interest or heirs, as regards their right, title and interest over
                    the suit schedule properties.
            vi.     That the compromise was entered into by plaintiff no. 1, on
F                   behalf of, and for the benefit of his two minor children, in
                    order to protect their shares.
             5. On 26th June, 2012, plaintiff no. 4 encashed two cheques
      received by her as a part of the compromise entered into between the
      plaintiffs and the defendants, as detailed above.
G           6. In view of the inter-se compromise between the parties, the
      matter was referred by the Trial Court to the Lok Adalat. After hearing
      the parties, the Lok Adalat passed an order dated 07th July, 2012,
      decreeing the suit for partition and separate possession, in terms of the
      memo of compromise presented before it. The Lok Adalat recorded the
H     following findings:
     K. SRINIVASAPPA & ORS. v. M. MALLAMMA & ORS.                               197
                  [B. V. NAGARATHNA]

      i.     That all the parties to the dispute had agreed to amicably         A
             settle the dispute as regards the partition of the suit schedule
             property, in terms of the memo of compromise;
      ii.    That the terms of compromise had been read over and
             explained to the parties in a language known and understood
             by them, in the presence of their Advocates and the parties        B
             had admitted the same to be true and correct;
      iii.   That since the compromise was in favour of the minor
             children of plaintiff no. 1, he was permitted to enter into the
             compromise on their behalf.
       In view of the aforestated findings, the application filed by the        C
parties under Order XXXII Rule 3 of the CPC, was allowed and accepted.
      7. Two days later, on 09th July, 2012, only plaintiff nos.4-6 filed an
affidavit before the Lok Adalat stating that the defendants had played
fraud on them and misled them in order to obtain their consent to the
terms of compromise.                                                            D
       8. The Lok Adalat considered the affidavit submitted by plaintiff
nos.4-6 and by an order dated 13th July, 2012, rejected the prayer made
therein, to set aside the order recording compromise of the parties. The
Lok Adalat noted that the order recording compromise was passed after
duly recording the consent of all parties to the compromise and therefore,      E
the prayer to set aside the compromise could not be entertained.
       9. Aggrieved by the order of the Lok Adalat dated 13th July, 2012,
plaintiff no. 4 filed a Writ Petition, being W.P. No. 25989 of 2012, before
the High Court of Karnataka, praying, inter-alia, that the order of the
Lok Adalat dated 07th July, 2012 whereby compromise of the parties              F
was recorded, be set aside. Plaintiff no. 4 submitted before the learned
Single Judge of the High Court that although she had signed the
compromise petition presented before the Trial Court and thereafter
referred to the Lok Adalat, the order sheet dated 07th July, 2012, which
was drawn up in terms of the compromise petition was not signed by
                                                                                G
her. That the compromise petition was signed by plaintiff no. 4 as a
result of fraud practiced by the defendants.
      10. In light of the allegation of fraud on the part of the defendants,
the High Court, by an order dated 24th January, 2013 disposed of W.P.
No. 25989 of 2012, by remanding the matter to the Civil Judge (Junior
                                                                                H
198             SUPREME COURT REPORTS                           [2022] 4 S.C.R.


A     Division), Bangalore, to refer the matter to the Lok Adalat to hold an
      enquiry and record a finding on the allegation of fraud levelled against
      the defendants. The High Court directed that such an exercise ought to
      be completed by the Lok Adalat within a period of three months.
             11. In accordance with the directions issued by the High Court
B     vide order dated 24th January, 2013, the matter was referred by the Trial
      Court to the Lok Adalat, Rural District, Bangalore. Plaintiff nos. 4-6
      filed their objections to the compromise stating that their signatures on
      the compromise petition were obtained by fraud on the part of the
      defendants. It was stated that during the pendency of O.S. No. 876 of
      2004, one property included in the schedule of properties to be partitioned,
C     was sold in favour of M/s. Trishul Buildtech and Infrastructure Pvt.
      Ltd., by way of a registered sale deed dated 23rd June, 2012 for a
      consideration of Rs. 2,70,00,000/- (rupees two crores and seventy lakhs.
      That the amount of Rs. 30,00,000/- (rupees thirty lakhs), paid to plaintiff
      nos. 4-6, was their share of consideration for the said sale. That on the
D     date of sale of the said property, several papers were signed by plaintiff
      nos. 4-6, at the behest of the defendants, under the guise that the same
      were required to be submitted to the tax authorities. That plaintiff no. 1
      and the defendants had conspired together and engaged the services of
      advocates to represent plaintiff nos. 4-6, without their knowledge. It
      was further alleged that the defendants had caused plaintiff nos.4-6 to
E     believe that they were appearing before the tax authorities, in relation to
      the sale carried out on 23rd June, 2012, when in fact, they were appearing
      before the Lok Adalat in connection with the compromise petition. Plaintiff
      no. 4 stated that on realising before the Lok Adalat that the proceedings
      related to a compromise petition, she refused to sign the order sheet
F     dated 07th July, 2012, wherein the terms of compromise had been recorded
      by the Lok Adalat. Plaintiff nos.5 and 6 stated that they were misled into
      signing both, the compromise petition, as well as the order sheet dated
      07th July, 2012.
             12. On hearing the parties, the Lok Adalat, by an order dated
G     27th April, 2013, rejected the objections filed by plaintiff nos.4-6 and the
      order of the Lok Adalat dated 07th July, 2012, wherein the terms of
      compromise had been recorded, was confirmed.
            13. Aggrieved by the order of the Lok Adalat dated 27th April,
      2013, plaintiff nos. 4-6 filed Writ Petitions, being W.P. Nos. 20607-20609
H     of 2013, before the High Court of Karnataka, praying, inter-alia, that
     K. SRINIVASAPPA & ORS. v. M. MALLAMMA & ORS.                               199
                  [B. V. NAGARATHNA]

the entire records pertaining to O.S. No. 876 of 2004 be called for and         A
the orders of the Lok Adalat dated 07th July, 2012 and 27th April, 2013,
be quashed.
       14. By the impugned judgment dated 17th April, 2015, the learned
Single Judge of the High Court of Karnataka, Bengaluru disposed of the
Writ Petition filed by plaintiff nos.4-6 by recalling the order of compromise   B
passed by the Lok Adalat on 07th July, 2012. The High Court remanded
the matter to the Civil Judge (Junior Division), Bengaluru, to dispose of
the matter in accordance with law, as if no compromise was entered
into between the parties. Aggrieved by the judgment of the High Court
whereby the order of the Lok Adalat recording compromise, was set
aside, defendant nos. 2-5 have preferred the present appeals.                   C

      15. We have heard Mr. Anirudh Gotety, learned counsel for the
appellants and Ms. Manju Jetly, learned counsel for the respondents,
and perused the material on record.
        16. Learned counsel for the appellants at the outset contended          D
that the High Court was not right in setting aside the order of the Lok
Adalat dated 07th July, 2012, whereby the compromise of the parties
was recorded. Elaborating the said contention, it was submitted that the
Lok Adalat had, in its order dated 07th July, 2012 noted that every party
to the compromise had consented to the terms thereof, and had admitted
that the contents of the compromise petition were true and correct, when        E
the same had been read over and explained to them in Kannada language.
That the Lok Adalat in its order dated 27th April, 2013 had upheld the
validity of the compromise between the parties, after considering, in
detail the objections raised by plaintiff nos. 4-6 and rejecting the same. It
was urged that the Lok Adalat’s order dated 27th April, 2013 had been           F
passed after detailed examination of the contentions of the parties and
the Lok Adalat had rightly rejected the objections raised by plaintiff nos.
4-6. However, the learned Single Judge of the High Court, in the absence
of any reasoning, and in a casual and cryptic manner, had reversed the
order of the Lok Adalat wherein the compromise of the parties was
recorded.                                                                       G
       17. It was next contended that every award of a Lok Adalat is
deemed to be a decree of a Civil Court as provided under Section 21 of
the Legal Services Authorities Act, 1987 and cannot therefore be set
aside by a cryptic order of the High Court sans reasons. Learned counsel
                                                                                H
200             SUPREME COURT REPORTS                            [2022] 4 S.C.R.


A     for the appellants relied on Smt. Sawarni vs. Smt. Inder Kaur and
      Ors. – [1996 (6) SCC 223] to contend that when a Civil Court had
      come to a conclusion after elaborate discussion of the evidence on record,
      an Appellate Court could not set aside the decree of the Civil Court
      without a reasoned decision to reverse the findings of the Civil Court. In
      that context, it was further submitted that the award of the Lok Adalat,
B
      dated 07th July, 2012, being in the nature of a decree of the Civil Court,
      could not have been set aside by the High Court, without a reasoned
      decision to reverse the findings of the Lok Adalat.
             18. Learned counsel for the appellants submitted that plaintiff nos.4-
      6 having taken advantage of the terms of the compromise by accepting
C     a sum of Rs. 30,00,000/- (rupees thirty lakhs) each, as consideration for
      relinquishing all their rights of title and interest in the suit schedule
      properties in favour of the defendants, could not, at a later juncture rescind
      from the terms of the compromise, after encashing the cheques issued
      to them. That these objectors could not approbate and reprobate at the
D     same time. That the High Court had erred in setting aside the compromise,
      without issuing any direction requiring plaintiff nos.4-6 to return the
      amounts paid to them in terms of the compromise.
              19. It was averred that the Lok Adalat, had, in its orders dated
      07th July, 2012 and 27th April, 2013 recorded several findings of fact
E     which ought not to have been interfered with by the High Court in exercise
      of its writ jurisdiction under Article 227 of the Constitution of India.
             20. That plaintiff nos. 4-6 had not made any effort to explain why
      they did not state before the Lok Adalat on 07th July, 2012 that their
      signatures were obtained by fraud. That this aspect of the matter was
F     rightly recognised by the Lok Adalat in rejecting the allegations of fraud
      raised against the defendants. However, the High Court, made no
      reference to any of the findings of the Lok Adalat, in passing the impugned
      judgment.
             With the aforesaid contentions, it was prayed that the impugned
G     judgment of the High Court may be set aside and the order of the Lok
      Adalat, dated 07th July, 2012, whereby the compromise between the
      parties was recorded, be restored.
            21. Per contra, Ms. Manju Jetly, learned counsel for the
      respondents submitted that the impugned judgment of the High Court
      does not suffer from any infirmity warranting interference by this Court.
H
     K. SRINIVASAPPA & ORS. v. M. MALLAMMA & ORS.                             201
                  [B. V. NAGARATHNA]

That the High Court rightly set aside the Order dated 07th July, 2012,        A
passed by the Lok Adalat, after appreciating that the consent of plaintiff
nos.4-6 to the terms of compromise had been obtained by practicing
fraud.
       22. It was submitted that the High Court passed the impugned
judgment after taking note of the fact that plaintiff no. 4 had not signed    B
the order sheet dated 07th July, 2012, wherein the Lok Adalat had recorded
the compromise of the parties, although she had signed the compromise
petition presented before the Lok Adalat.
       23. It was next contended by learned counsel for the respondents
that the amount of Rs.30,00,000/- (rupees thirty lakhs), paid to plaintiff    C
nos. 4-6, was their share of consideration for the sale of one property
which was included in the schedule of the properties to be divided between
the parties. That such amount was not received in relation to the
compromise between the parties and therefore, could not form the basis
for rejecting their objections to the order recording compromise.
                                                                              D
      24. Ms. Manju Jetly further submitted that the fact that plaintiff
no.4 had refused to sign the order sheet dated 07th July, 2012, having
signed the compromise petition, would establish that she realised at that
juncture that the defendants had fraudulently obtained her signature on
the compromise petition, under the guise that such signatures were being
taken on documents to be submitted to the tax authorities.                    E

       As regards plaintiff nos.5 and 6, it was submitted that they were
misled into signing both, the compromise petition, as well as the order
sheet dated 07th July, 2012.
       25. It was averred that plaintiff nos.4-6, on 09th July, 2012 had      F
submitted an affidavit before the Lok Adalat, stating therein that the
defendants had played fraud on them and misled them in order to obtain
their consent to the terms of compromise. The fact that such an affidavit
was submitted within a short span of two days after the order of the Lok
Adalat dated 07th July, 2012 would establish that plaintiff nos. 4-6 took
immediate steps to bring to the notice of the Lok Adalat, the fraud on the    G
part of the defendants. Therefore, the fact that plaintiff nos. 4-6 did not
state before the Lok Adalat on 07th July, 2012 that their signatures were
obtained by fraud, could not form the basis for rejecting their allegations
of fraud on the part of the defendants.
                                                                              H
202            SUPREME COURT REPORTS                           [2022] 4 S.C.R.


A            With the aforesaid contentions, it was submitted that the impugned
      order of the High Court, whereby the order of the Lok Adalat dated 07th
      July, 2012 was set aside, did not call for interference by this Court.
             26. Having regard to the contention of the learned counsel for
      appellant that the impugned judgment of the High Court set aside the
B     order of the Lok Adalat dated 07th July, 2012, in a very cursory and
      cryptic manner, without assigning any reasons for doing so, the impugned
      judgment dated 17th April, 2015 in its entirety has been extracted
      hereinunder:
                                   “O R D E R
C                  In these writ petitions, petitioners have challenged the order
            sheet of the Lok Adalath, dated 7.7.2012. Being aggrieved by the
            rejection of the objections to the compromise petition raised by
            the petitioners and orders passed by the Learned Judicial and non
            Judicial Members of the Lok Adalath, Bangalore Rural, Bangalore
D           on 27.04.2013 passed in O.S. No. 876/2004, petitioners are before
            this Court. The learned counsel requests the court, under the facts
            and circumstances of the case, order of compromise passed is to
            be set aside.
            2. As against this, learned counsel appearing for the respondents
E           support the order passed by the Lok Adalat and prays to dismiss
            these writ petitions.
                   Petitioners are the defendants no. 6 to 9 and it is submitted
            by the learned counsel for the petitioners that by playing fraud
            compromise petition was filed. Petitioner No. 1 submits that she
F           has not at all signed the compromise petition entered into between
            the parties.
            3. Under the facts and circumstances of the case, I deem it proper
            to recall the order of the compromise. Order dated 7.7.2012 passed
            by the Lok Adalat is set aside. The matter is referred to the learned
            Civil Judge (Jr.Dn.) Bengaluru and is hereby directed to dispose
G
            of the matter in accordance with law, as if no compromise is
            entered into between the parties.
                   Accordingly, these petitions are disposed of.”
            27. At the outset, we observe that we do not find any reason
H     forthcoming from the judgment of the High court while setting aside the
     K. SRINIVASAPPA & ORS. v. M. MALLAMMA & ORS.                               203
                  [B. V. NAGARATHNA]

order of the Lok Adalat dated 07th July, 2012 whereby the terms of the          A
compromise were recorded. To recall a compromise that has been
recorded would call for strong reasons. This is because a compromise
would result ultimately into a decree of a Court which can be enforced
just as a decree passed on an adjudication of a case. This is also true in
the case of a compromise recorded before a Lok Adalat. In this regard,
                                                                                B
it may be apposite to refer to Section 21 of the Legal Services Authorities
Act, 1987, which is extracted as under:
      “21. Award of Lok Adalat.— (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        C
      to it under sub-section (1) of section 20, the court-fee paid in such
      case 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   D
      against the award.”
       28. Section 21 of the Legal Services Authorities Act, 1987 equates
an award of the Lok Adalat, to a decree of a Civil Court and imputes an
element of finality to an award of compromise passed by the Lok Adalat.
When the Lok Adalat disposes cases in terms of a compromise arrived             E
at between the parties to a suit, after following principles of equity and
natural justice, every such award of the Lok Adalat shall be deemed to
be a decree of a Civil Court and such decree shall be final and binding
upon the parties. Given the element of finality attached to an award of
the Lok Adalat, it also follows that no appeal would lie, under Section 96      F
of the CPC against such award, vide P.T. Thomas vs. Thomas Job -
[(2005) 6 SCC 478].
      29. While we recognise that a Writ Petition would be maintainable
against an award of the Lok Adalat, especially when such writ petition
has been filed alleging fraud in the manner of obtaining the award of           G
compromise, a writ court cannot, in a casual manner, de hors any
reasoning, set aside the order of the Lok Adalat. The award of a Lok
Adalat cannot be reversed or set aside without setting aside the facts
recorded in such award as being fraudulent arrived at.

                                                                                H
204                SUPREME COURT REPORTS                         [2022] 4 S.C.R.


A           30. The Latin maxim “cessante ratione legis cessat ipsa lex”
      meaning “reason is the soul of the law, and when the reason of any
      particular law ceases, so does the law itself” vide H H Sri Swamiji of
      Sri Admar Mutt vs. the Commissioner, Hindu Religious and
      Charitable Endowments Dept.– [(1979) 4 SCC 642], is also apposite.
B           31. On the aspect of the duty to accord reasons for a decision
      arrived at by a court, or for that matter, even a quasi-judicial authority, it
      would be useful to refer to a judgment of this Court in Kranti Associates
      Private Limited & Anr. Vs. Masood Ahmed Khan & Ors. – (2010) 9
      SCC 496, wherein after referring to a number of judgments, this Court
      summarised at paragraph 47 of the judgment the law on the point. The
C     relevant principles for the purpose of this case are extracted as under:
             (a)     Insistence on recording of reasons is meant to serve the
                     wider principle of justice that justice must not only be done
                     it must also appear to be done as well.

D            (b)     Recording of reasons also operates as a valid restraint on
                     any possible arbitrary exercise of judicial and quasi-judicial
                     or even administrative power.
             (c)     Reasons reassure that discretion has been exercised by the
                     decision-maker on relevant grounds and by disregarding
E                    extraneous considerations.
             (d)     Reasons have virtually become as indispensable a
                     component of a decision-making process as observing
                     principles of natural justice by judicial, quasi-judicial and
                     even by administrative bodies.
F            (e)     Reasons facilitate the process of judicial review by superior
                     courts.
             (f)     The ongoing judicial trend in all countries committed to rule
                     of law and constitutional governance is in favour of
                     reasoned decisions based on relevant facts. This is virtually
G                    the lifeblood of judicial decision-making justifying the
                     principle that reason is the soul of justice.
             (g)     Judicial or even quasi-judicial opinions these days can be
                     as different as the judges and authorities who deliver them.
                     All these decisions serve one common purpose which is to
H                    demonstrate by reason that the relevant factors have been
    K. SRINIVASAPPA & ORS. v. M. MALLAMMA & ORS.                             205
                 [B. V. NAGARATHNA]

             objectively considered. This is important for sustaining the    A
             litigants’ faith in the justice delivery system.
      (h)    Insistence on reason is a requirement for both judicial
             accountability and transparency.
      (i)    If a judge or a quasi-judicial authority is not candid enough
             about his/her decision-making process then it is impossible     B
             to know whether the person deciding is faithful to the
             doctrine of precedent or to principles of incrementalism.
      (j)    Reasons in support of decisions must be cogent, clear and
             succinct. A pretence of reasons or “rubber-stamp reasons”
             is not to be equated with a valid decision-making process.      C

      (k)    It cannot be doubted that transparency is the sine qua non
             of restraint on abuse of judicial powers. Transparency in
             decision-making not only makes the judges and decision-
             makers less prone to errors but also makes them subject to
             broader scrutiny. (See David Shapiro in Defence of              D
             Judicial Candor [(1987) 100 Harvard Law Review 731-
             37)
      (l)    In all common law jurisdictions judgments play a vital role
             in setting up precedents for the future. Therefore, for
             development of law, requirement of giving reasons for the       E
             decision is of the essence and is virtually a part of “due
             process”.
      (m)    The requirement to record reasons emanates from the broad
             doctrine of fairness in decision-making i.e. adequate and
             intelligible reasons must be given for judicial decisions.      F
       Though the aforesaid judgment was rendered in the context of a
dismissal of a revision petition by a cryptic order by the National
Consumer Disputes Redressal Commission, reliance could be placed on
the said judgment on the need to give reasons while deciding a matter
particularly as it arises in the instant case.                               G
       32. In view of the aforesaid discussion, we shall now consider the
facts of the present case. The details as to the terms of the compromise
as well as the contentions raised at the Bar have been narrated above.
On a consideration of the same, the following aspects would emerge:
                                                                             H
206             SUPREME COURT REPORTS                             [2022] 4 S.C.R.


A            (a) The Lok Adalat, in its award dated 07th July, 2012 recorded
      that the parties had admitted that the contents of the compromise petition
      were true and correct, after the terms thereof had been read over and
      explained to them in Kannada language. Further, it was also noted that
      the compromise was entered into by plaintiff no. 1, on behalf of, and for
      the benefit of his two minor children, in order to protect their shares.
B
      The same was allowed by the Lok Adalat on recognising the terms of
      the compromise, would protect the interests plaintiff no. 1’s minor children.
      There is no objection raised on behalf of plaintiff no. 1 in the instant
      case.
             (b) The Lok Adalat, in its order dated 27th April, 2013, rejected
C     the allegations of fraud raised by plaintiff nos. 4-6, against the defendants
      and recorded that plaintiff nos. 4-6 had offered no explanation as to why
      no objection was raised by any of them on 07th July, 2012 before the Lok
      Adalat. It was further observed that plaintiff nos. 4-6, could not, after
      having accepted huge sums of money in terms of the compromise, rescind
D     from the terms thereof.
            (c) It is not the case of plaintiff nos. 4-6 that they had not received
      an amount of Rs. 30,00,000/- (rupees thirty lakhs) each, in terms of the
      compromise. Further, it is not their case that such sum has been returned,
      in whole or in part, to the defendants.
E            (d) That although plaintiff no. 4, stated that on learning that the
      proceedings conducted on 07th July, 2012 before the Lok Adalat were in
      relation to a compromise, she had not signed the order sheet, she failed
      to provide any explanation as to why she did not inform the Lok Adalat
      on the said date that her signature on the compromise petition was
F     obtained by fraud.
            (e) That plaintiff nos. 4-6 had admitted before the Lok Adalat on
        th
      07 July, 2012 that the contents of the compromise petition were true
      and correct, when the same had been read over and explained to them
      in Kannada.
G            (f) That plaintiff nos. 4-6 specifically admitted that they had received
      a sum of Rs. 30,00,000/- (rupees thirty lakhs) each, as mentioned in the
      compromise petition in lieu of relinquishing their rights, title and interest
      in the other suit schedule properties.
            (g) That if, in fact, the signatures of plaintiff nos. 4-6 had been
H     obtained by fraud, they ought to have returned the amount of Rs.
     K. SRINIVASAPPA & ORS. v. M. MALLAMMA & ORS.                                207
                  [B. V. NAGARATHNA]

30,00,000/- (rupees thirty lakhs) each, paid to them in accordance with          A
the terms of the compromise. Having not done so, plaintiff nos. 4-6 had
failed to establish that any fraud was practiced upon them, by the
defendants, with a view to obtain their signatures on the compromise
petition.
       (h) On a perusal of the plaint, it is noted that there were 13 items      B
of the suit schedule property having different valuation and therefore,
the plaintiffs would have had their respective shares in the suit schedule
properties taken together. However, plaintiff nos.4-6 accepted a sum of
Rs.30 lakhs each by relinquishing their right, title and interest in all the
suit schedule properties. Having received a monetary share in respect
of the suit items, the plaintiffs had decided to relinquish their right, title   C
and interest in respect of all the suit items.
        The learned Single Judge of the High Court in the impugned
judgment has not considered the aforesaid facts of the case in the context
of setting aside the award of the Lok Adalat dated 07th July, 2012. Learned
Single Judge has also not considered the reasoning given in the order            D
dated 27th April, 2013 by which the objections raised by plaintiff nos.4-
6 to the decree of the Lok Adalat had been rejected.
       33. This Court in Ruby Sales and Services Pvt. Ltd. vs. State of
Maharashtra- [(1994) 1 SCC 531] observed that a consent decree is
a creature of an agreement and is liable to be set aside on any of the           E
grounds which will invalidate an agreement. Therefore, it would follow
that the level of circumspection, which a Court of law ought to exercise
while setting aside a consent decree or a decree based on a memo of
compromise, would be atleast of the same degree, which is to be observed
while declaring an agreement as invalid.                                         F
         34. In Pushpa Devi Bhagat (dead) through LR. Sadhna Rai
vs. Rajinder Singh and Ors. – [(2006) 5 SCC 566], this Court held
that since no appeal would lie against a compromise decree, the only
option available to a party seeking to avoid such a decree would be to
challenge the consent decree before the Court that passed the same and           G
to prove that the agreement forming the basis for the decree was invalid.
It is therefore imperative that a party seeking to avoid the terms of a
consent decree has to establish, before the Court that passed the same,
that the agreement on which the consent decree is based, is invalid or
illegal.
                                                                                 H
208             SUPREME COURT REPORTS                           [2022] 4 S.C.R.


A            35. It is a settled position of law that where an allegation of fraud
      is made against a party to an agreement, the said allegation would have
      to be proved strictly, in order to avoid the agreement on the ground that
      fraud was practiced on a party in order to induce such party to enter into
      the agreement. Similarly, the terms of a compromise decree, cannot be
      avoided, unless the allegation of fraud has been proved. In the absence
B
      of any conclusive proof as to fraud on the part of the objectors, the High
      Court could not have set aside the compromise decree in the instant
      case.
             36. Having considered the aforesaid facts of the present case,
      we are of the view that no ground was made out warranting the decision
C     of the High Court to set aside the order of the Lok Adalat dated 07th
      July, 2012, wherein compromise was recorded between the parties. The
      High Court’s decision to set aside the order of the Lok Adalat, without
      entering into a discussion as to the findings in such order, cannot be
      sustained. Such decision of the High Court runs contrary to established
D     principles of law which seek to protect the sanctity and finality of orders
      based on a compromise or consent between parties.
             37. Hence the impugned judgment of the High Court of Karnataka,
      dated 17th April, 2015 is set aside and the order of the Lok Adalat, dated
      07th July, 2012 whereby the compromise between the parties to O.S.
E     No. 876 of 2004 was recorded, is restored. The appeals are allowed.
             38. Having regard to the relationship between the parties, the
      parties are directed to bear their respective costs.

      Nidhi Jain                                                   Appeals allowed.
F     (Assisted by : Tamana, LCRA)




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