Lok Adalat and Mediation: Two Different Ways to Settle a Dispute Without a Full Trial

By S&S Co. Advocates & Solicitors · Published 3 November 2026 · Informational content, not legal advice: see our disclaimer

A Lok Adalat and a mediation are not the same thing, even though both end a dispute by agreement rather than by judgment. A Lok Adalat is a forum organised under the Legal Services Authorities Act, 1987, where a panel, usually including a judicial officer and lay members, tries to get the parties to a compromise on the spot, most often in cases already pending before a court or in categories like motor accident claims, bank recovery, utility bills and matrimonial disputes referred to it. The moment the parties agree, that agreement is recorded as an award, and Section 21 of the Act makes that award final and treats it as a decree of a civil court, with no appeal lying against it. Mediation, by contrast, is a longer process run by a trained, usually private, mediator, governed since 2023 by the Mediation Act, and it produces a settlement agreement that the parties themselves must get registered or have made into a decree before it carries that same finality.

As on today's date, a party with a pending or about-to-be-filed case has three linked but separate things to think about: whether to try a Lok Adalat sitting for a quick, binding disposal of a case that is already fairly simple on facts; whether to use structured mediation, either voluntarily or because the Commercial Courts Act makes a pre-institution attempt compulsory for certain commercial suits; and what to do with a Permanent Lok Adalat if the dispute is against a bank, electricity board or similar utility, since that forum can decide the case on merits even without an agreement.

What Happens at an Ordinary Lok Adalat Sitting

Lok Adalats are organised periodically by the State and District Legal Services Authorities, and also inside many courts as a standing arrangement, under Sections 19 and 20 of the Legal Services Authorities Act. A case can reach a Lok Adalat in two ways: a court already seized of the matter can refer it there if it thinks a settlement is likely, or a party can directly apply to have a pre-litigation dispute taken up. Cases that work well here share a pattern: both sides broadly agree on the facts and are really arguing about amount or timing, such as a motor accident compensation claim, a cheque bounce matter where the accused is willing to pay, a bank's recovery suit where the borrower wants a revised repayment schedule, or a matrimonial dispute where both sides want an amicable separation on agreed terms.

A Lok Adalat does not have the power to force a decision on an unwilling party the way a Permanent Lok Adalat for utility services can; if either side refuses to settle, the case simply goes back to the court it came from, or stays unresolved if it was a pre-litigation reference. Court fees already paid are ordinarily refunded when a case pending in court is settled this way, which is one reason parties who were always going to settle eventually find it worth trying a Lok Adalat sitting before putting more money and years into contested litigation.

Why the Lok Adalat Award Is Harder to Undo Than an Ordinary Settlement

Section 21 of the Legal Services Authorities Act gives the award a status that an ordinary out-of-court settlement does not have. It is deemed to be a decree of a civil court, it is final and binding on the parties, and the Act expressly bars an appeal against it. Courts, including the Jammu and Kashmir High Court, have read this as closing the door to an appeal under Section 96 of the Code of Civil Procedure, and the Supreme Court has described the award as directly executable, the way any civil decree is executed, without the winning party having to sue afresh on the agreement.

This finality cuts both ways for a party considering the forum. A genuine, informed settlement becomes almost impossible to reopen later, which protects the person who kept their side of the bargain. But it also means a party should not sign off on a Lok Adalat settlement casually or under pressure to get the case over quickly, since the usual routes open after an ordinary compromise decree, such as a fresh suit alleging fraud on specific and narrow grounds, remain difficult to invoke here precisely because the law treats the award as final by design.

Permanent Lok Adalats for Banks, Electricity Boards and Other Public Utilities

A separate and more powerful forum exists under Chapter VI-A of the same Act, inserted by the 2002 amendment: the Permanent Lok Adalat for public utility services, which can be approached even before a suit is filed, for disputes involving services the Act specifically lists, such as transport, postal, telegraph, electricity, water supply, insurance, housing construction and certain banking and financial services. A party can approach a Permanent Lok Adalat directly against a bank or utility rather than filing a civil suit first.

What sets this forum apart is that it does not need the other side's consent to reach a binding outcome. The Supreme Court, in Canara Bank v. G.S. Jayarama (2022), held that the Permanent Lok Adalat must first attempt conciliation between the parties, but if that fails and the dispute does not involve an offence, the forum goes on to decide the case on its own merits, much like a court would, and that decision also carries the same deemed-decree, no-appeal status under Section 22E of the Act. A party facing a dispute with a bank over loan terms, or with an electricity board over a disputed bill, should weigh this forum specifically for that reason: it offers a cheaper, faster hearing that can end in a binding outcome whether or not the other side cooperates, rather than depending on mutual willingness to settle the way an ordinary Lok Adalat does.

Mediation Under the 2023 Act: A Slower, More Consensual Process

Mediation, structured by the Mediation Act, 2023, works differently in both pace and character. A trained mediator, who may be empanelled by a Mediation Service Provider, sits with the parties over one or more sessions to help them negotiate their own resolution, without deciding anything for them. The process is confidential, and a mediator cannot be called later to testify about what was discussed. If the parties reach an agreement, it becomes enforceable once it is signed, authenticated and registered as the Act requires; it is not automatically a court decree the way a Lok Adalat award is, though a settlement reached in a court-referred mediation can be taken on record and made part of a decree of that court.

A buyer or litigant who is specifically a plaintiff in a commercial suit of the kind covered by the Commercial Courts Act should know that Section 12A of that Act makes an attempt at pre-institution mediation compulsory before filing, unless the suit itself contemplates urgent interim relief; the Supreme Court has clarified that this compulsory attempt applies prospectively, to suits filed from 20 August 2022 onward, and does not retrospectively invalidate suits filed before that date even if they skipped the step.

Choosing Between the Two Routes for a Specific Dispute

A dispute that is simple on facts and where both sides are roughly willing to settle, such as an accepted debt with a dispute only over instalments, or a matrimonial matter where separation itself is not contested, usually moves faster through a Lok Adalat sitting, particularly the periodic National Lok Adalats that many courts hold specifically to clear a backlog of such matters. A dispute that is factually or legally contested, where one side genuinely disputes liability, usually needs the slower, more exploratory process that structured mediation offers, because a Lok Adalat sitting is not designed to spend hours testing each side's version of events. Where the other party is a bank, insurer, electricity board or similar utility and simply will not come to the table, the Permanent Lok Adalat route is worth trying precisely because it does not depend on the other side's cooperation to reach a binding result.

Frequently Asked Questions

References & Further Reading

The provisions and rulings below were relied on for this guide. The position can change with amendments and later decisions, so check the current text and the latest case law before acting on any of it.

1. Legal Services Authorities Act, 1987, Sections 19 to 21 (Lok Adalats and the finality of an award)
2. Legal Services Authorities Act, 1987, Chapter VI-A, Sections 22A to 22E (Permanent Lok Adalats for public utility services)
3. Canara Bank v. G.S. Jayarama, (2022) Supreme Court ruling on the conciliatory and adjudicatory functions of a Permanent Lok Adalat
4. Mediation Act, 2023
5. Commercial Courts Act, 2015, Section 12A, and Supreme Court clarification on its prospective application from 20 August 2022
6. Related: A Business Owner's Guide to Commercial Litigation Under the Commercial Courts Act; Does Section 12A Pre-Institution Mediation Apply to a Commercial Suit Filed Before 2022?; Mediation in Matrimonial Disputes: How It Works and When Courts Refer Couples to It