Hyderabad: The Hyderabad High Court has set aside an award passed by the Lok Adalat since it was based on a settlement arrived at between some of the parties, affecting the interests of other parties in the case.
A division bench comprising Justice C.V. Nagarjuna Reddy and Justice M.S.K. Jaiswal was dealing with a petition filed by Sai Vuma Chit Fund Company and Group of Companies Sufferers Welfare Association, Vijayawada.
The association moved the petition opposing the award of the Lok Adalat passed pursuant to a compromise bet-ween the competent authority — the Vijayawada police commissioner of police — and Indian Overseas Bank and taking steps to conduct the public auction of 36.99 acres situated at Kanchikacherla.
The petitioners contended that the Lok Adalat award was contrary to the provisions of the AP Protection of Depositors of Financial Establishments Act, 1999. The Lok Adalat passed the order on December 7, 2015, in a writ petition referred to it earlier by the High Court.
They told the court that though only 22 items were mortgaged with the Indian Overseas Bank, the competent authority permitted the bank to sell all the 61 properties of the company without the consent of the special court which had ordered attachment of the properties.
The bench said the Lok Adalat ought not to have passed the award based on a settlement.
