In Brief
A bank sought recovery of defaulted loans before a Permanent Lok Adalat, which passed an award against the borrower who did not participate in proceedings. The High Court struck down the award, holding that Lok Adalats have no adjudicatory powers. The Supreme Court held that while Permanent Lok Adalats do have adjudicatory powers under the LSA Act, conciliation proceedings are mandatory before deciding disputes on merits. Since the Permanent Lok Adalat failed to attempt conciliation before adjudicating, the award was rightly set aside.
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