The Telangana High Court has held that parties who receive and retain sale consideration cannot challenge a Lok Adalat award on the ground of fraud, dismissing a writ petition filed ten years after the award.
Hyderabad: The Telangana High Court has dismissed a writ petition by the wife and daughter of a deceased power-of-attorney holder seeking to set aside a 2013 Lok Adalat award for a four-acre land sale at Raidurg, holding that persons who received and retained the sale consideration cannot allege fraud to challenge the award, and that the Legal Services Authorities Act, 1987 does not require a separate signed memorandum of settlement [Smt. M. Nagalakshmi and Another v. The Chairman, Mandal Legal Services Committee, Cyberabad and Five Others].
A Division Bench of Justice Moushumi Bhattacharya and Justice Renuka Yara dismissed Writ Petition No. 16457 of 2026 along with all connected applications, without costs. The judgment, authored by Justice Bhattacharya, was reserved on September 28, 2026 and pronounced on October 13, 2026.
How the case reached the High Court
The dispute concerns land in Sy. No. 66/2, measuring four acres, at Raidurg Nava Khalsa Village, Ranga Reddy District. On October 31, 2011, M. Ganga Raju, holding an irrevocable general power of attorney from the owners, entered into an agreement of sale-cum-general power of attorney with the purchaser for Rs 1 crore. The Court recorded that Rs 85 lakh was paid to him before the award. On March 30, 2013, the Lok Adalat at Kukatpally recorded a compromise in PLC No. 70 of 2012: the sale deed was to be registered within two months, with the purchaser paying the balance Rs 15 lakh and bearing stamp duty and registration charges.
Ganga Raju died on September 27, 2014. His wife and daughter, the petitioners, were not parties before the Lok Adalat. The Court noted that they received Rs 30 lakh between April and September 2015 by cheques and issued receipts describing the sums as “part sale consideration”. When the purchaser sought execution of the award in 2022, the petitioners moved the High Court in October 2024.
A Division Bench told them the correct remedy was a civil suit, and a review was dismissed in September 2025. Their civil suit alleging fraud was rejected by the District Court in March 2026, and an appeal failed in April 2026, before the present writ petition was filed on May 4, 2026.
The petitioners’ case and the response
The petitioners contended that the award was vitiated by fraud, that it did not contain a separate compromise signed by the parties, and that the Lok Adalat lacked pecuniary jurisdiction. The purchaser answered that the petitioners had admitted Ganga Raju’s signature and had received and retained the sale consideration, that fraud had not been pleaded with particulars, and that the pecuniary limit in Section 22C of the 1987 Act does not apply to the award. These were the parties’ contentions before the Court.
Fraud: no challenge after retaining consideration
The Bench held that fraud must be pleaded with specific particulars and that a party who receives and retains consideration is precluded from challenging a Lok Adalat award on that ground, relying on the Supreme Court’s decision in K. Srinivasappa v. Mallanna (2022 INSC 674). It observed:
“it is impermissible to take advantage of transaction and thereafter turn around to deny its validity”
No separate memorandum of settlement needed
On the second ground, the Bench held that the primary requirement of a Lok Adalat is to arrive at a compromise or settlement. It said:
“The 1987 Act does not require the Award passed by the Lok Adalat to be legalised or legitimised by the recording of a separate compromise or a signed settlement decree between the parties.”
It held that the opening lines and body of the award satisfied Section 20(4) of the Act.
Pecuniary jurisdiction
On the third ground, the Bench held that the Rs 10 lakh limit in the second proviso to Section 22C(1) applies to Permanent Lok Adalats under Chapter VIA, which are fundamentally different from Lok Adalats under Chapter VI. It also noted that the objection was raised for the first time in a rejoinder dated August 13, 2026, after oral arguments had concluded:
“The present Writ Petition was filed 10 years after the impugned Award; the petitioners have not taken this objection to pecuniary jurisdiction of the Lok Adalat in the Writ Petition.”
Conclusion
“The petitioners have not shown any statutory infraction of the conditions of a valid Lok Adalat Award either under the 1987 Act or the 2009 Regulations.”
The Court also noted that an application to implead a person claiming to be a protected tenant of the land was dismissed on September 28, 2026, leaving him free to pursue his own pending writ petition.
Why the judgment matters
The ruling underlines that a Lok Adalat award is a settlement-based, final instrument and that a challenge to it must clear a high bar: fraud has to be pleaded with particulars, and a party that enjoys the benefit of the transaction is not allowed to disown it later.
It also clarifies that a Lok Adalat award can itself record a settlement reached before it, signed by the parties and countersigned by the Lok Adalat members, without a prior memorandum, and that the pecuniary cap in Section 22C belongs to Permanent Lok Adalats.
Case Title: Smt. M. Nagalakshmi and Another v. The Chairman, Mandal Legal Services Committee, Cyberabad and Five Others [Writ Petition No. 16457 of 2026]
Bench: Justice Moushumi Bhattacharya and Justice Renuka Yara, Telangana High Court
Date of Judgment: October 13, 2026
Appearances: Mr. B. Mayur Reddy, Senior Counsel, with Mr. Sanjay Kumar Agarwal for the petitioners; Mr. Vivek Reddy, Senior Counsel, with Ms. Soubhagyavalli Vedantam for the respondent