A Lok Adalat award obtained through fraudulent concealment of material facts is a nullity challengeable under Article 227.

The respondent filed O.S. No. 81/2013 against the petitioner and others for a declaration of possession and correction of survey numbers regarding Schedule ‘A’ (Sy.No. 86/18) and Schedule ‘B’ (Sy.No. 84/3) properties.

On 23.11.2013, the matter was advanced and referred to a Lok Adalat, where a compromise was recorded allotting Sy.No. 84/3 to the petitioner and Sy.No. 86/18 to the respondent.

However, the respondent failed to disclose that he had already sold Sy.No. 84/3 to one G.B. Jayaramu via a registered sale deed in 1992.

The petitioner discovered the compromise decree only after being served in a subsequent injunction suit (O.S. No. 299/2021).

The petitioner challenged the Lok Adalat award under Article 227 of the Constitution, alleging fraud and concealment.

1. Whether a Lok Adalat award obtained through active concealment of material facts (fraud) is legally valid.

2. Whether a writ petition under Article 226/227 is the appropriate remedy to challenge a Lok Adalat award as opposed to a recall application or a fresh suit.

Section 17 of the Indian Contract Act, 1872, which defines fraud as the active concealment of a fact by one having knowledge of it.

The doctrine "fraud vitiates all judicial acts" as established in Papayya Shastry v. Government of Andhra Pradesh, holding that a decree obtained by fraud is a nullity.

Section 21(2) of the Legal Services Authorities Act, 1987, alongside the precedents of State of Punjab v. Jalour Singh and Bhargavi Constructions v. Kothakapu Muthyam Reddy, which mandate that a Lok Adalat award can only be challenged via writ jurisdiction under Article 226 or 227 and not via appeal or separate suit.

The Court found that the respondent committed "active concealment" under Section 17 of the Contract Act by inducing the petitioner to accept a property (Sy.No. 84/3) that he had already alienated in 1992 and which was subject to multiple litigations.

The Court rejected the respondent's argument regarding the bar on suits under Order XXIII Rule 3A CPC, distinguishing between a compromise decree passed by a Civil Court and an award by a Lok Adalat; the latter is only challengeable via writ petition.

The Court reasoned that since the respondent tricked the petitioner into a settlement regarding non-existent title, the "finality of litigation" could not protect a fraudulent act.

It further held that delay (laches) does not bar relief when the underlying decree is void ab initio due to fraud.

The Court allowed the petition and quashed the Lok Adalat award/decree dated 23.11.2013 passed in O.S. No. 81/2013.