Quick answer: You cannot appeal a Lok Adalat award. Section 21 of the Legal Services Authorities Act, 1987 makes it a final civil court decree. The only route is a writ petition before the High Court under Articles 226 or 227. Courts hear it on narrow grounds such as fraud, lack of consent or no real settlement.
Banks and NBFCs settle thousands of loan disputes in Lok Adalats every year. Sometimes, however, one side later wants to undo the deal. So, how do you challenge a Lok Adalat award? The answer is narrow, and the wrong forum can waste months.
Why a Lok Adalat Award Is Final
Section 21 of the Legal Services Authorities Act, 1987 treats every Lok Adalat award as a decree of a civil court. It also declares the award final and binding on all parties. Moreover, no appeal lies to any court. Section 22E gives the same finality to awards of Permanent Lok Adalats.
The logic is simple. A Lok Adalat records the parties’ own compromise, so neither side can reopen the merits later.
How to Challenge a Lok Adalat Award: The Only Remedy
The Supreme Court has closed every route except one. A party must file a writ petition before the High Court under Article 226 or Article 227 of the Constitution. A fresh civil suit will fail, and so will objections in execution.
The High Court does not re-hear the loan dispute. Instead, it checks whether a genuine, lawful settlement took place.
Key Case Law
- State of Punjab v. Jalour Singh (2008) 2 SCC 660: A three-judge bench held that a party must use a writ petition to attack a Lok Adalat award. It also held that a Lok Adalat cannot impose its own view on parties.
- Bhargavi Constructions v. Kothakapu Muthyam Reddy (2018) 13 SCC 480: The Court rejected a civil suit that alleged fraud. It ruled that the law bars such a suit, leaving only the writ route.
- Estate Officer v. Colonel H.V. Mankotia (7 October 2021): The Court held that a Lok Adalat cannot decide a case on merits. If parties do not settle, it must return the case to the regular court.
- Dilip Mehta v. Rakesh Gupta (18 November 2025): The Court held that an executing court cannot set aside a Lok Adalat decree. Execution objections are not an effective alternative remedy, so the High Court must hear the writ.
- T.K. Dharanesh v. H.D. Bhagya (reported June 2026): The Court held that an award stays binding until a competent forum stays or sets it aside. Courts cannot dilute it in side proceedings.
Grounds Courts Accept
Courts usually examine only a few questions:
- Did a party obtain the award by fraud or misrepresentation?
- Did the parties actually consent, and did authorised persons sign?
- Did the Lok Adalat decide merits without any settlement?
- Does the settlement breach a law or public policy?
Practical Checklist for Banks, NBFCs and Borrowers
- Collect the record: Obtain the certified award, the settlement terms and the signed attendance sheet.
- Check authority: Confirm that the bank officer or borrower who signed had authority to settle.
- Act quickly: No fixed limitation applies to writs, but High Courts refuse relief for unexplained delay.
- Choose the right forum: File in the High Court with territorial jurisdiction. Do not file a suit or execution objection.
- Seek a stay: Ask the High Court to stay execution while the petition remains pending.
- Plan for default: If a borrower misses settlement instalments, the lender can usually execute the award as a decree.
Lenders should also remember P. Vijayakumari v. Indian Bank (2018) 14 SCC 735. There, the Supreme Court accepted that a forum may condone a borrower’s delay in paying a Lok Adalat settlement. However, it ordered the borrowers to pay interest and costs for the delay. Lenders should therefore draft clear default clauses.
For wider dispute strategy, see our arbitration and alternative dispute resolution services.
Frequently Asked Questions
Can a Lok Adalat award be challenged?
Yes, but only through a writ petition in the High Court under Article 226 or 227. Courts hear it on narrow grounds such as fraud or lack of consent.
Can you appeal against a Lok Adalat award?
No. Section 21(2) of the Legal Services Authorities Act, 1987 expressly bars any appeal from a Lok Adalat award.
Can an executing court set aside a Lok Adalat award?
No. In Dilip Mehta (2025), the Supreme Court held that an executing court can only execute the decree. It cannot annul the award.
Can I file a civil suit to cancel a Lok Adalat award?
No. Bhargavi Constructions (2018) holds that such a suit is not maintainable, even when it alleges fraud.
What are the grounds to challenge a Lok Adalat award?
The usual grounds are fraud, misrepresentation, no genuine consent, a merits decision without settlement, or unlawful terms.
What happens if a borrower defaults on a Lok Adalat settlement?
The award works as a civil decree, so the lender can usually file for execution. The settlement terms and any default clause will shape the exact remedy.
Lex Pleaders advises banks, NBFCs and businesses on Lok Adalat settlements, writ challenges to awards and recovery strategy. Write to us at lexpleadersindia@gmail.com to discuss your matter.
Disclaimer: This article offers general information only and does not constitute legal advice.
Lok Adalat Loan Settlement Process Explained
November 7, 2026[…] For the narrow writ remedy against a flawed award, read our guide on how to challenge a Lok Adalat award. […]