Once a settlement is reached, the parties return to the court with the agreement, and the court passes a final order giving effect to the settlement, meaning that the terms of the settlement will become the final judgment of the court. 

2) Lok Adalat is one of the alternative dispute redressal mechanisms, it is a forum where disputes/cases pending in the court of law or at pre-litigation stage are settled/ compromised amicably.

The compromise is binding on you unless fraud has been played by other side. You can challenge it in writ petition 

You are bound by it but if one of you retract from it then the matter will be proceeded in execution court on merits. Yes it is bound to be recorded as stated above the observation of you is correct 

The Bombay High Court recently held that a Lok Adalat award, is  equivalent to a civil court decree,

2) Settlement recorded by Lok Adalat having binding force of decree. award by Lok Adalat could be enforceable like a decree,

3) It is open to the parties namely, the decree-holder and the judgment-debtor to enter into a contract or compromise in regard to their rights and obligations under the decree. If such contract or compromise amounts to an adjustment of the decree, it has to be recorded by the court under Rule 2 of Order 21.

if you really want to use the provision under O.21 R.2 you should construct your argument in the following manner

Lok Adalat is not a court is well settled

that point is not important to decide whether or not the compliance under O.21 R.2 of certification by the DH and recording by EC, was complied with 

you have to say that the JD was before the Executing court in the EP since the execution petition was already filed by the DH even when the Appeal was pending 

So the JD was already before the EC which is obviously a court as contemplated by the expression 'out of court' used in O.21 R.2

The JD [defendant] adjusted the decree with the DH [imposter though] out of the court [i.e. the EC] by filing consent terms before the Lok Adalat

since the above adjustment was not certified by the DH [in any event he could never have certified the said adjustment since he was NOT the DH in the first place but was an imposter/fake DH] and consequently the EC could not record the said adjustment, there is no compliance of O.21 R.2 and thus going by R.3 the said adjustment [as recorded in the consent terms filed before LA] cannot be recognised by the EC in absence of certification by DH and recording by the EC of the said adjustment 

Any agreement reached before DLSA  is final and binding and is a decree of Court under  Section 21 of Legal Services Authority Act. The agreement  reached can be executed as decree of civil Court. The decree has to be transferred to the District Court and after that execution petition can be filed against other party seeking his arrest or attachment of his property. Purport of New Okhla Industrial Development Authority (Noid) v/s Yunus And others is different, it is in the  context of Land Acquisition and Compensation Act, 1894. No further procedure  is contemplated after decree of Lokadalat, except of transfer of award to executing Court and execution of award.

The award made by the Lok Adalats is deemed to be a decree of a civil court and is final and binding on all parties.

Execution maintainable. 

Lok Adalat award, being equivalent to a civil court decree, can be enforced via an execution suit

1. Lok Adalats have been given statutory status under the Legal Services Authorities Act, 1987. Under the said Act, the award (decision) made by the Lok Adalats is deemed to be a decree of a civil court and is final and binding on all parties and no appeal against such an award lies before any court of law.

2. All the matters referreed before lok adalat and every award of a Lok Adalat is deemed a civil court decree, and as such, it is executable by a civil court.

Every Award made by the Permanent Lok Adalat will be transmitted to a Civil Court having local jurisdiction and such Civil Court shall execute the order as if it were a decree made by that Court as per Section 22-E (5) of the Act.

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 

Lok Adalat pass the award with the consent of the parties, therefore there is no need either to reconsider or review the matter again and again, as the award passed by the Lok Adalat shall be final.

1. The Compromise entered in Lok Adalat , whether falls under “Compromise Out of Court”

A compromise entered in Lok Adalat does not fall under the category of “compromise out of court”. A compromise out of court is a settlement between the parties without the intervention or approval of the court. A compromise in Lok Adalat, on the other hand, is a settlement between the parties with the assistance and consent of the Lok Adalat, which is a statutory body under the Legal Services Authorities Act, 1987. A compromise in Lok Adalat has the same effect as a decree of a civil court and is binding and final on the parties. Therefore, a compromise in Lok Adalat is different from a compromise out of court.

1. Whether such compromise (Considering out of Court) requires to be recorded before Executing Court as per Order 21 Rule 2 CPC.

Order 21 Rule 2 of the Code of Civil Procedure, 1908 (CPC) provides that where any money payable under a decree of any kind is paid out of court or where any property movable or immovable is transferred by any party to a suit to another in satisfaction of his claim under such decree, such payment or transfer shall be certified to the court whose duty it is to execute such decree. However, this rule does not apply to a compromise in Lok Adalat, as it is not a payment or transfer out of court, but a settlement in Lok Adalat. Moreover, as per Section 21 of the Legal Services Authorities Act, 1987, every award made by a Lok Adalat shall be deemed to be a decree of a civil court and shall be final and binding on all the parties thereto and no appeal shall lie to any court against such award. Therefore, such compromise does not require to be recorded before executing court as per Order 21 Rule 2 CPC.

If reply is “yes” from Experts…then How to satisfy the Executing Court, In view of settled law of SC cited above.

Since the reply is “no” from me, this question does not arise. However, if you still want to know how to satisfy the executing court in case of a compromise in Lok Adalat, you may have to produce the award or certificate issued by the Lok Adalat before the executing court and seek its execution as per Order 21 Rule 11 CPC. You may also have to show that there was no fraud or coercion involved in the compromise and that it was voluntary and lawful. However, you should consult a lawyer and follow his or her advice before taking any action.

Dear Sir/Madam, 

You are informed that the compromise done in Lok Adalat would be valid in executing court also. 

Greetings of the Day,

I have read your issue but find that there are some facts which need to be clarified. You can approach on either nine two one two one two four five eight five or seven zero four two eight three three six eight six for personal approach.

We Hope that a personal consultation would be fruitful to the issue and it would be better for you to talk to someone directly.

Best Regards

SPS Law Chambers
New Delhi.