1 CGHC010162112015 2026:CGHC:40239 AFR HIGH COURT OF CHHATTISGARH AT BILASPUR WP227 No. 547 of 2015 Reserved for orders on 18/08/2026 Order delivered on 15/09/2026 1 - Chhattisgarh State Power Distribution Company Limited Cspdcl Through Its Executive Engineer, City Division - I East Torva Bilaspur, Chhattisgarh , Chhattisgarh 2 - Chhattisgarh State Power Distribution Company Ltd. Cspdcl, Through Its Superintending Engineer, Tifra Bilaspur Chhattisgarh , District : Bilaspur, Chhattisgarh ... Petitioners versus 1 - Commissioner For Employees Compensation Act S/o Labour Court Bilaspur Chhattisgarh , Chhattisgarh 2 - Smt. Meena Bai Patel W/o Chamru Patel R/o Village And Post Ghuma, P.S. Sirgitti Tahsil And District Bilaspur Chhattsigarh, District : Bilaspur, Chhattisgarh 3 - Chamru Patel S/o Late Shri Puriram Patel R/o Village And Post Ghuma, P.S. Sirgitti Tahsil And District Bilaspur Chhattsigarh, District : Bilaspur, Chhattisgarh 4 - Abhinav Tiwari S/o Krishna Kumar R/o Gandhi Nagar, Behind Balram Talkies, Jarhabhata, P.S. Civil Lines District Bilaspur Chhattisgarh , District : Bilaspur, Chhattisgarh Respondents (Cause title taken from Case Information System) VED PRAKASH DEWANGAN Digitally signed by VED PRAKASH DEWANGAN Date: 2026.09.15 14:51:01 +0530 2 For Petitioner : Mr. Jitendra Pali, Advocate For Respondent No.4 : Mr. K.P.S. Gandhi, Advocate For other Respondents : None Hon'ble Shri R avindra Kumar Agrawal , Judge C.A.V. Order 1. The petitioners have assailed the order dated 06.12.2014 passed by learned National Lok Adalat, Bench No. 23, Labour Court, Bilaspur, in Case No. 5/ECAct/2014/Fatal, whereby, on the basis of the claimants having expressed that they did not wish to press their application on merits as the compensation amount having already been deposited, the award was passed directing payment of the deposited amount to the legal heirs/dependants of the deceased employee Chhotu @ Shatruhan and exonerating the non-applicant No.1/contractor from payment of compensation. The petitioners also challenged the consequential order dated 15.06.2015 passed by the Commissioner for Employees Compensation, Labour Court, Bilaspur (hereinafter called as “Labour Court”). 2. The brief facts of the case are that the respondents No. 2 and 3/claimants, being the parents of deceased Chotu @ Shatruhan Patel, instituted a claim under Section 22 of the Workmen’s Compensation Act, 1923 seeking compensation of Rs.9,00,880/- on account of the death of the deceased during the course of his employment. The deceased was alleged to have been working under non-applicant No.1, the contractor engaged by the petitioners/Chhattisgarh State Power Distribution Company Limited (in short ‘CSPDCL’). The petitioners, upon receiving notice of the 3 claim, appeared in the proceedings before the learned Labour Court, through their counsel. Though the petitioners denied their liability, however under the provisions of the Act of 1923, he deposited an amount of Rs. 9,00,880/- before the Commissioner provisionally and under protest on 10.03.2014, specifically contending that the amount would be recoverable from the contractor. 3. During the subsequent proceedings, the counsel representing the petitioners before the Labour Court petitioners not appeared in the proceeding on 11.11.2014 and the non-applicants No. 2 and 3/petitioners were proceeded ex parte and the next date was fixed for 22.11.2014. On 22.11.2014, an application was filed by the claimants for not pressing their application for compensation on merits, as the amount of compensation has already been deposited by the non- applicants N. 2 and 3, then the case was directed to be listed on 06.12.2014 before the National Lok Adalat. It was also ordered that for disbursement and apportionment of the amount of compensation, a notice should be published in daily newspaper and to submit a copy of the same in the case. The case was further fixed on 30.12.2014 for recording evidence of the claimants with respect to the dependents of the deceased employee. On 06.12.2014, the matter was posted before the National Lok Adalat, Bench No.23, Labour Court, Bilaspur and on that day an award was passed on the ground that the compensation amount has already been deposited by the non- applicants No. 2 and 3 and the claimants does not want to press their claim application on merits. It was also ordered that the non-applicant No.1 is not liable to pay compensation. Thereafter, the case was fixed for 30.12.2014 for disbursement and determination of the 4 entitlement of compensation by the dependents of the deceased employee and the proceedings of the original case was closed. 4. On 19.12.2014, an application for setting aside the ex parte order dated 14.11.2014, award dated 06.12.2014 along with an application under Section 5 of Limitation Act have been filed by the non- applicants No. 2 and 3/petitioners before the Labour Court, Bilaspur. A separate application for staying the disbursement of the compensation amount has also been filed by the petitioners. After hearing the parties, the learned Labour Court rejected the applications filed by the non-applicants No.2 and 3/petitioners vide order dated 15.06.2015, which is under challenge in the present writ petition. The petitioners have also challenged the award dated 06.12.2014, passed by learned National Lok Adalat, Bench No. 23, Labour Court, Bilaspur. 5. Learned counsel for the petitioners submits that the order dated 06.12.2014 passed by the National Lok Adalat is unsustainable in law, as there was no compromise or settlement between the parties. He submits that the petitioners had deposited a sum of Rs.9,00,880/- only provisionally and under protest, without admitting any liability, and had specifically reserved their right to recover the said amount from non-applicant No.1/contractor. It is further submitted that the contractor had categorically denied the employer-employee relationship with the deceased and had also disputed his liability to pay compensation. Therefore, in the absence of any mutual settlement, the National Lok Adalat could not have adjudicated upon the liability of the non-applicant No.1/contractor or recorded a finding 5 that he was not liable for payment of compensation. Learned counsel further submits that the claimants themselves had stated that they did not wish to press the claim on merits only because the compensation amount had already been deposited, and consequently there remained no dispute which could have been adjudicated by the National Lok Adalat. It is, therefore, submitted that the impugned order passed by the National Lok Adalat, as well as the consequential order passed by the Commissioner, deserves to be set aside and the matter be remitted to the Commissioner for fresh adjudication on merits, after affording due opportunity of hearing to all concerned parties. 6. Learned counsel appearing for respondent No.4/contractor submits that the impugned order passed by the National Lok Adalat does not call for any interference, as the claimants themselves had voluntarily stated that they did not wish to press their claim on merits after the compensation amount had been deposited by non-applicants No. 2 and 3/petitioners. He submits that respondent No.4 had consistently denied any employer-employee relationship with the deceased and had disputed his liability to pay compensation. It is further submitted that the proceedings before the National Lok Adalat were concluded on the basis of the statement of the claimants and the deposit of the compensation amount, and that respondent No.4 cannot now be fastened with any liability in respect of the amount already deposited. Learned counsel, therefore, submits that the writ petition is devoid of merit and deserves to be dismissed. 6 7. I have heard learned counsel for the parties and perused the material annexed with the petition. 8. Having considered the submissions of learned counsel for the parties and perused the record, this Court finds that the impugned proceedings before the National Lok Adalat suffer from a fundamental jurisdictional infirmity. The record would show that the claimants had categorically stated before the Labour Court that, since the compensation amount of Rs.9,00,880/- had already been deposited by the petitioners/CSPDCL, they did not wish to press their claim on merits. The National Lok Adalat/Labour Court, accordingly, terminated the proceedings on 06.12.2014. While terminating the proceedings, learned Lok Adalat also held that the non-applicant No.1 is not liable to pay compensation. Thus, the basis on which the matter was placed before the Lok Adalat was not any concluded compromise between the parties, but on the statement of the claimants that they did not wish to pursue the claim on merits in view of the deposit of the compensation amount already made. 9. It is equally material that the amount of Rs.9,00,880/- had been deposited by the petitioners/CSPDCL provisionally and under protest, without admitting its liability, with a specific stand that the amount would be recoverable from the contractor. At the same time, respondent No.4/contractor had specifically denied the employer- employee relationship with the deceased and had disputed his liability. Therefore, there was neither a common proposal nor a mutual acceptance nor any concluded settlement between the petitioners, the contractor and the claimants. The deposit of the 7 amount by the petitioners under protest could not, in the facts of the present case, be treated as consent to any compromise or as an admission that respondent No.4 was not liable. 10. The difficulty becomes more apparent from the award dated 06.12.2014 passed by National Lok Adalat. The National Lok Adalat, on the one hand, recorded that the respondents No. 2 and 3/claimants did not press the claim on merits and that the compensation amount had been deposited, but, on the other hand, proceeded to pass a decree and recorded a finding that respondent No.4 was not liable for payment of compensation. Thereafter, instead of bringing the proceedings to an end on the basis of any concluded settlement, the matter was continued for determination of the legal dependents and consequential disbursement/apportionment of the deposited amount. Such a course is legally impermissible. Once the claimants had stated that they did not wish to press the claim on merits, there was no question of the National Lok Adalat thereafter adjudicating upon the inter se liability of the petitioner and the contractor. Conversely, if the National Lok Adalat intended to adjudicate upon the liability of the contractor, such adjudication was beyond its jurisdiction, as a Lok Adalat does not possess adjudicatory power to decide a disputed claim on merits. 11. The Hon'ble Supreme Court, in State of Punjab and Others v. Jalour Singh and Others, (2008) 2 SCC 660, has categorically held that a Lok Adalat has no adjudicatory or judicial function and that its jurisdiction is to arrive at a compromise or settlement between the parties. Where no compromise or settlement is arrived at, the matter 8 has to be returned to the Court which referred it for adjudication in accordance with law. The same principle has been reiterated in B.P. Moideen Sevamandir & Anr. v. A.M. Kutty Hassan, (2009) 2 SCC 198 wherein the Hon'ble Supreme Court explained that a Lok Adalat cannot decide a case on merits in the absence of a settlement. Thus, the Lok Adalat could not have simultaneously treated the claim as not being pressed, exonerated the contractor from liability and thereafter continued the proceedings for determination of dependents and disbursement of the compensation amount. The aforesaid principle is further evident from paragraph no. 8 of the judgment of B.P. Moideen Sevamandir (supra), wherein the Hon’ble Supreme Court has observed as under:- “8. When a case is referred to the Lok Adalat for settlement, two courses are open to it: (a) if a compromise or a settlement is arrived at between the parties, to make an award, incorporating such compromise or settlement (which when signed by the parties and countersigned by the members of the Lok Adalat, has the force of a decree); or (b) if there is no compromise or settlement, to return the record with a failure report to the court. There can be no third hybrid order by the Lok Adalat containing directions to the parties by way of final decision, with a further direction to the parties to settle the case in terms of such directions. In fact, there cannot be an "award" when there is no settlement. Nor can there be any "directions" by the Lok Adalat determining the rights/obligations/ title of parties, when there is no settlement. The settlement should precede the award and not vice versa.” 9 12. The Hon’ble Supreme Court in Estate Officer v. Colonel H.V. Mankotia (Retired) (2022) 12 SCC 609 has held that:- “7.1. As per sub-section (5) of Section 19, a Lok Adalat shall have jurisdiction to determine and to arrive at a compromise or a settlement between the parties to a dispute in respect of (1) any case pending before; or (ii) any matter which is falling within the jurisdiction of, and is not brought before, any court for which the Lok Adalat is organised. As per sub-section (1) of Section 20 where in any case referred to in clause (1) of sub- section (5) of Section 19-(1)(a) the parties thereof agree; or (1)(b) one of the parties thereof makes an application to the court, for referring the case to the Lok Adalat for settlement and if such court is prima facie satisfied that there are chances of such settlement or (ii) the court is satisfied that the matter is an appropriate one to be taken cognizance of by the Lok Adalat, the court shall refer the case to the Lok Adalat. It further provides that no case shall be referred to the Lok Adalat under sub-clause (b) of clause (1) or clause (ii) by such court except after giving a reasonable opportunity of being heard to the parties. 7.2. As per sub-section (3) of Section 20 where any case is referred to a Lok Adalat under sub- section (1) or where a reference is made to it under sub-section (2), the Lok Adalat shall proceed to dispose of the case or matter and arrive at a compromise or settlement between the parties. Sub-section (5) of Section 20 further provides that where no award is made by the Lok Adalat on the ground that no compromise or 10 settlement could be arrived at between the parties, the record of the case shall be returned by it to the court, from which the reference has been received under sub-section (1) for disposal in accordance with law. 8. Thus, a fair reading of the aforesaid provisions of the Legal Services Authorities Act, 1987 makes it clear that the jurisdiction of the Lok Adalat would be to determine and to arrive at a compromise or a settlement between the parties to a dispute and once the aforesaid settlement/compromise fails and no compromise or settlement could be arrived at between the parties, the Lok Adalat has to return the case to the Court from which the reference has been received for disposal in accordance with law and in any case, the Lok Adalat has no jurisdiction at all to decide the matter on merits once it is found that compromise or settlement could not be arrived at between the parties. 9. Identical question came to be considered by this Court in State of Punjab v. Ganpat Raj 2 and after considering Section 20 of the 1987 Act, it is observed and held in para 7 as under: (SCC p. 366) 7. The specific language used in sub- section (3) of Section 20 makes it clear that the Lok Adalat can dispose of a matter by way of a compromise or settlement between the parties. Two crucial terms in sub-sections (3) and (5) of Section 20 are "compromise" and "settlement". The former expression means settlement of differences by mutual concessions. It is an agreement reached by adjustment of conflicting or 11 opposing claims by reciprocal modification of demands. As per Termes de la Ley, 'compromise is a mutual promise of two or more parties that are at controversy'. As per Bouvier it is 'an agreement between two or more persons, who, to avoid a law suit, amicably settle their differences, on such terms as they can agree upon'. The word "compromise" implies some element of accommodation on each side. It is not apt to describe total surrender. (See N.F.U. Development Trust Ltd., In re.) A compromise is always bilateral and means mutual adjustment. "Settlement" is termination of legal proceedings by mutual consent. The case at hand did not involve compromise or settlement and could not have been disposed of by the Lok Adalat. If no compromise or settlement is or could be arrived at, no order can be passed by the Lok Adalat. Therefore, the disposal of Civil Writ Petition No. 943 of 2000 filed by the respondent is clearly impermissible." 10. In view of the above, the impugned order 1 passed by the Lok Adalat dismissing the writ petition on merits is unsustainable and deserves to be quashed and set aside. The submission made by the learned counsel appearing on behalf of the respondent that once the matter was placed before the Lok Adalat with consent, thereafter the entire matter is at large before the Lok Adalat and, therefore, the Lok Adalat is justified in disposing the matter on merits has no substance and the same is required to be rejected outright. The consent to place the matter before the Lok Adalat was to arrive at a 12 settlement and or a compromise between the parties and not for placing the matter before the Lok Adalat for deciding the matter on merits. Once there is no compromise and/or a settlement between the parties before the Lok Adalat, as provided in sub-section (5) of Section 20, the matter has to be returned to the Court from where the matter was referred to the Lok Adalat for deciding the matter on merits by the court concerned.” 13. The record further indicates that the petitioners had initially appeared before the learned Labour Court and had disputed their liability, but were subsequently proceeded ex parte on account of their non- appearance. The petitioners have been declared ex parte on 11.11.2014 and further date was fixed on 22.11.2014, thereafter on 22.11.2014, the application for not pressing the claim application was filed and the matter was directed to be placed before the National Lok Adalat on 06.12.2014 and on that day, the award was passed by the National Lok Adalat. On 19.12.2014, the application for setting aside ex parte order dated 11.11.2014 and award dated 06.12.2014 was filed by the petitioners. The reason assigned in the application filed by the petitioners that the daily diary of their counsel was missing and therefore they could not remember the date of hearing and could not appear on the date fixed. In between that, due to ill health of his parents, he had gone to his native place and instructed his junior counsel to appear in the case on 04.12.2018, on his impression that the case was fixed on that day. When he came back on 12.12.2024, he came to know about the award dated 06.12.2014 passed by National Lok Adalat and exoneration of non-applicant 13 No.1. Immediately thereafter, the petitioners filed their application for setting aside the ex parte order dated 11.11.2014 and award dated 06.12.2014. It is not the case here that the applications for setting aside the ex parte order have been filed by the petitioners after any long delay or any deliberate attempt to cause delay in the adjudication of their claim application. In between 22.11.2014 and 06.12.2014, the application has been filed and award was passed by the National Lok Adalat without further noticing to the petitioners/non- applicants No. 2 and 3. The explanation submitted for the non- appearance of the counsel of the non-applicants No. 2 and 3 on 11.11.2014 appears to be a plausible explanation and under the facts and circumstances of the case, they are entitled for an opportunity of hearing in the case. 14. The record further indicates that the petitioners had initially appeared before the learned Labour Court and had disputed their liability, but were subsequently proceeded ex parte on account of their non- appearance on 11.11.2014. The petitioners thereafter filed an application on 19.12.2014 seeking setting aside of the ex parte order and restoration of the case, along with an application under Section 5 of the Limitation Act. The explanation furnished by the petitioners for their non-appearance appears to be plausible. It is also not a case where the petitioners approached the learned Labour Court after any inordinate delay or with any deliberate intention to delay the proceedings. In the facts and circumstances of the case, particularly when the petitioners had disputed their liability and had deposited the compensation amount provisionally and under protest, this Court is of the considered opinion that the petitioners deserve an opportunity to 14 participate in the proceedings and contest the claim on merits. Accordingly, the application dated 19.12.2014 filed by the petitioners for setting aside the ex parte order and restoration of the case, along with the application under Section 5 of the Limitation Act, deserves to be allowed. 15. In view of the foregoing discussion, this Court is of the considered opinion that the order dated 06.12.2014 passed by the National Lok Adalat cannot be sustained. The National Lok Adalat could either have recorded a lawful compromise or settlement, if one had actually been arrived at between the parties, in which event the matter could have been disposed of in terms of such settlement; or, in the absence of any settlement, it was required to return the matter to the competent Commissioner for adjudication in accordance with law. It could not have permitted the claimants to withdraw/not press the claim while simultaneously adjudicating upon and recording a finding regarding the liability of respondent No.4/contractor. More particularly, the petitioners/CSPDCL having deposited the amount expressly under protest, such deposit could not furnish a foundation for treating the matter as compromised or for exonerating the contractor. The question as to who was liable to pay the compensation was itself a disputed issue, particularly in view of the contractor's denial of the employer-employee relationship. Such disputed liability could not have been adjudicated upon by the National Lok Adalat. 16. Further, once the proceedings on merits had been treated as terminated on the ground that the claimants did not wish to press 15 their claim, there was no justification for keeping the matter alive for determination of dependents and apportionment/disbursement as though a substantive adjudication had taken place. The subsequent application filed by the petitioners seeking recall of the ex parte proceedings and restoration of the matter for adjudication on merits, therefore, ought to have been considered in the correct perspective. In the absence of any concluded compromise or settlement and having regard to the fact that the petitioners had not consented to any compromise, the matter was required to be dealt with by the competent Commissioner in accordance with law. 17. Accordingly, the application dated 19.12.2014 filed by the petitioners for setting aside the ex parte order dated 11.11.2014 and restoration of the case, along with the application under Section 5 of the Limitation Act, is allowed. The ex parte order dated 11.11.2014 passed against the petitioners and the order dated 15.06.2015 are hereby set aside. The award dated 06.12.2014 passed by the National Lok Adalat is also hereby quashed and set aside. The matter is remitted to the Commissioner for Employees' Compensation, Labour Court, Bilaspur, for fresh adjudication on merits, after affording adequate opportunity of hearing to all the concerned parties and in accordance with law, uninfluenced by the findings recorded by the National Lok Adalat. The petitioners are permitted to participate in the proceedings and contest the claim on merits. The amount already deposited by the petitioners shall abide by the outcome of such fresh adjudication. 16 18. The parties are directed to appear before the Commissioner for Employees' Compensation, Labour Court, Bilaspur on 29.09.2016 Since the matter is old one, the learned Labour Court is directed to decide the case expeditiously preferably within 05 months from the date of appearance of the parties. Needless to say that the parties shall cooperate in expeditious disposal of the case. 19. Let a copy of this order and the original records be transmitted to the trial Court concerned forthwith for necessary information and compliance. Sd/- (Ravindra Kumar Agrawal) Judge ved 17 HEAD NOTE Lok Adalat has no adjudicatory power and its jurisdiction is confined to recording a compromise or settlement between the parties; in the absence of such settlement, it cannot decide the disputed claim on merits.