Deemed Decree
A deemed decree is an order or award that, while not passed by a civil court through regular trial, is treated by law as having the same force and effect as a civil court decree — most notably, the award of a Lok Adalat under Section 21 of the Legal Services Authorities Act, 1987.
What is a Deemed Decree?
A **deemed decree** is an order, award, or decision that is not passed through the regular process of a civil court trial, but which the law expressly declares to have the same legal effect, force, and enforceability as a decree passed by a civil court. The most significant example in Indian law is the **award passed by a Lok Adalat**, which is deemed to be a decree of a civil court under **Section 21 of the Legal Services Authorities Act, 1987**.
In everyday terms, a deemed decree is a legal shortcut — certain proceedings produce results that are treated as if a court passed a formal judgment, even though no full trial took place. This means the winning party can enforce the award exactly as if they had won a court case.
Legal Framework
Legal Services Authorities Act, 1987
The most prominent source of deemed decrees in Indian law is the **Legal Services Authorities Act, 1987 (LSA Act)**, which established the framework for **Lok Adalats** (people's courts).
**Section 21: Award of Lok Adalat**
> "(1) Every award of the Lok Adalat shall be deemed to be a decree of a civil court or, as the case may be, an order of any other court and where a compromise or settlement has been arrived at, by a Lok Adalat in a case referred to it under sub-section (1) of Section 20, the court-fee paid in such case shall be refunded in the manner provided under the Court Fees Act, 1870."
> "(2) Every award made by a Lok Adalat shall be final and binding on all the parties to the dispute, and no appeal shall lie to any court against the award."
Essential Features of Lok Adalat's Deemed Decree
1. **Deemed to be a decree:** The award has the same legal status as a decree passed by a civil court after a full trial.
2. **Final and binding:** No appeal lies against a Lok Adalat award. This is a critical difference from regular court decrees, which can be appealed.
3. **Enforceable as a decree:** The award can be executed through the same mechanisms available for executing a civil court decree under Order 21 of the CPC — attachment, sale of property, arrest of the judgment-debtor, etc.
4. **Court fee refund:** If the matter was pending before a court and was referred to the Lok Adalat for settlement, the **court fee paid** by the parties is refunded. This is a significant financial incentive for parties to settle disputes through Lok Adalats.
Other Instances of Deemed Decrees
While the Lok Adalat award is the most common example, the concept of deemed decree appears in several other contexts:
**Arbitral Awards (Section 36, Arbitration and Conciliation Act, 1996)**
Once the time for challenging an arbitral award under Section 34 expires, or the challenge is rejected, the award is enforceable **as if it were a decree of the court**. While the Act uses the language of enforcement "as if" it were a decree rather than explicitly calling it a "deemed decree," the practical effect is the same.
**Consent Decree / Compromise Decree (Order 23, Rule 3 CPC)**
When parties settle a dispute during court proceedings and the settlement is recorded by the court, it becomes a decree (a **compromise decree**). While this is technically a court decree (not a deemed decree), it shares the characteristic of being based on the parties' agreement rather than a judicial determination.
**Debt Recovery Tribunal Orders**
Orders of the Debt Recovery Tribunal (DRT) under the **Recovery of Debts Due to Banks and Financial Institutions Act, 1993** are executable as decrees of a civil court.
**Real Estate Regulatory Authority (RERA) Orders**
Orders of **RERA** under the Real Estate (Regulation and Development) Act, 2016, for recovery of amounts due, are enforceable as a decree of a civil court.
Lok Adalats: The Primary Source of Deemed Decrees
What is a Lok Adalat?
A **Lok Adalat** is a forum constituted under the LSA Act for the settlement of disputes through conciliation and compromise. It is an alternative dispute resolution mechanism that provides swift, cost-effective justice.
Types of Lok Adalats
1. **Lok Adalat (Section 19):** Regular Lok Adalats organized by the Legal Services Authority at the district, state, or national level. Cases can be referred by the court if both parties agree, or parties can directly approach the Lok Adalat.
2. **Permanent Lok Adalat (Section 22B-22E):** Established for disputes relating to **public utility services** — transport, postal, telegraph, insurance, supply of power, water, sanitation, hospitals, and educational institutions. Unlike regular Lok Adalats, Permanent Lok Adalats can **decide cases** even if a settlement is not reached (for cases involving public utility services where the value does not exceed Rs 1 crore).
Cases Handled by Lok Adalats
Lok Adalats commonly settle:
- **Motor accident claims** — the largest category, often involving insurance companies.
- **Labour disputes** — workmen's compensation, wage claims.
- **Matrimonial disputes** — divorce by mutual consent, maintenance.
- **Electricity and water disputes** — pending bills, disconnection disputes.
- **Bank recovery cases** — loan defaults, cheque bounce settlements.
- **Compoundable criminal cases** — minor offences that can be settled between parties.
How a Deemed Decree is Passed
1. **Reference:** A pending case is referred to the Lok Adalat by the court, or parties approach the Lok Adalat directly with a pre-litigation dispute.
2. **Conciliation:** The Lok Adalat bench (typically comprising a retired judge and two members) facilitates discussion between the parties to reach a settlement.
3. **Settlement:** If both parties agree on terms, the agreement is recorded as an **award**.
4. **Award as deemed decree:** The moment the award is signed and passed, it becomes a deemed decree of a civil court. No further formality is required.
5. **Execution:** If one party fails to comply with the award, the other party can apply for **execution** of the deemed decree through the civil court, using the same mechanisms as for any other court decree.
When Does This Term Matter?
In Dispute Settlement
Understanding the concept of deemed decree is essential for anyone considering Lok Adalat settlement. Once the settlement is recorded as a Lok Adalat award, it carries the full force of a court judgment — meaning it can be enforced through the court's execution machinery. Parties should enter Lok Adalat proceedings with the understanding that the outcome is **final and irrevocable**.
In Motor Accident Claims
A massive number of motor accident claims are settled through Lok Adalats organized by the Motor Accident Claims Tribunal. Insurance companies routinely participate. The settlement becomes a deemed decree, and the claimant can enforce it against the insurance company if payment is delayed.
In Loan Recovery
Banks and financial institutions increasingly use Lok Adalats to settle loan recovery cases. When a borrower and bank reach a one-time settlement (OTS) at the Lok Adalat, the agreed terms become a deemed decree, binding both parties.
In Family Disputes
Matrimonial cases settled at Lok Adalats — including mutual consent divorce with settlement of maintenance and property — result in deemed decrees that are final and enforceable.
Practical Significance
- **Speed and finality:** Deemed decrees through Lok Adalats provide a resolution in a single sitting, compared to years of litigation in regular courts. The finality (no appeal) eliminates the possibility of prolonged disputes.
- **Cost-free:** Lok Adalat proceedings are **free of charge** — no court fees, and existing court fees are refunded. This makes it one of the most accessible dispute resolution mechanisms.
- **No appeal, but revision possible:** While Section 21(2) bars appeals, the Supreme Court in **State of Punjab v. Jalour Singh (2008) 2 SCC 660** held that a Lok Adalat award can be challenged by way of a **writ petition** under Article 226 or 227 of the Constitution if it is obtained through fraud, coercion, or without consent of the parties, or if the Lok Adalat lacked jurisdiction.
- **Consent is key:** A Lok Adalat can only pass an award if **both parties agree**. If no consensus is reached, the case is returned to the court for regular adjudication. This consent-based nature is what gives the award its legitimacy and finality.
- **Execution like a decree:** The execution process is identical to that of a regular civil court decree — attachment of property, arrest of the defaulter, garnishee orders on bank accounts, etc.
Frequently Asked Questions
Can a Lok Adalat award be challenged or appealed?
Under **Section 21(2) of the LSA Act**, no appeal lies against a Lok Adalat award. However, it can be challenged through a **writ petition** under Article 226/227 of the Constitution before the High Court in limited circumstances — if the award was obtained by **fraud, coercion, or misrepresentation**; if it was passed **without the consent** of one of the parties; or if the Lok Adalat had **no jurisdiction** over the subject matter. The Supreme Court has clarified that this writ jurisdiction should be exercised sparingly and only in cases of manifest injustice.
What is the difference between a decree and a deemed decree?
A **decree** is the formal expression of an adjudication by a civil court that conclusively determines the rights of the parties after a full trial (Section 2(2) CPC). A **deemed decree** is not passed after a trial but is treated by operation of law as having the same force. The key difference is the **process** — a decree follows from a judicial determination; a deemed decree follows from a settlement, arbitral award, or statutory order that the law elevates to the status of a decree. In terms of **enforceability**, there is no difference.
What happens if one party does not comply with the Lok Adalat award?
If a party fails to comply with the Lok Adalat award (deemed decree), the other party can file an **execution petition** before the civil court that has jurisdiction. The court can then use all enforcement mechanisms available under **Order 21 CPC** — attaching the defaulting party's property, directing sale of assets, arresting the defaulter (in rare cases), garnishing bank accounts, or directing payment from specific sources. The enforcement process is identical to executing a regular court decree.
Can a Lok Adalat award be passed without the consent of both parties?
In a regular Lok Adalat (Section 19-21), **no**. The award must be based on the **consent and agreement** of both parties. If the parties cannot reach a settlement, the matter is returned to the referring court. However, in a **Permanent Lok Adalat** (Section 22B-22E) dealing with **public utility services** (where the dispute value does not exceed Rs 1 crore), the Permanent Lok Adalat has the power to **decide the dispute on merits** if a settlement is not reached. This decision also has the force of a deemed decree and is final.
Disclaimer: This glossary entry is for informational purposes only and does not constitute legal advice.
Related Legal Terms
Decree
A decree is the formal expression of an adjudication by a civil court which conclusively determines the rights of the parties with regard to all or any of the matters in controversy in the suit.
Execution of Decree
Execution of decree is the legal process by which a court enforces its decree, compelling the judgment debtor to comply with the court's decision by delivering property, paying money, or performing the required act.
Compromise Decree
A compromise decree is a court decree passed on the basis of a lawful agreement or settlement reached between the parties to a suit, recorded and made enforceable by the court under Order 23 Rule 3 of the CPC.
Mediation
Mediation is a voluntary, confidential process in which a neutral third party (the mediator) helps disputing parties reach a mutually acceptable settlement without imposing a decision.
Arbitration
Arbitration is a method of alternative dispute resolution where parties agree to have their dispute decided by a private tribunal (arbitrator) instead of going to court.