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2014 DIGILAW 681 (PNJ)

Oriental Insurance Co. Ltd. v. Hans Raj

2014-04-07

RITU BAHRI

body2014
JUDGMENT : Ritu Bahri, J. Petitioner-Oriental Insurance Company Ltd. has filed the instant writ petition under Article 226/227 of the Constitution of India for issuing a writ in the nature of certiorari for quashing the order dated 19.08.2010 (P-1) passed by respondent No. 2 whereby the petitioner-Insurance Company has been directed to settle the claim of respondent No. 1 on account of theft of his insured tractor at an amount of Rs. 1,23,500/-. Respondent No. 1 Hans Raj is owner of Eicher Tractor No. HR-26-AK-9965 Engine No. 1176688, Chasis No. 860260, Model No. 241 and the same was insured with the petitioner-Insurance Company, vide policy No. 211200/31/34069 w.e.f. 1.9.2007 to 31.8.2008 and has been premium of Rs. 3264/- to the petitioner-Insurance Company. On 11.11.2007 at about 2.30 P.M. respondent No. 1 parked the said tractor in front of his house and after passing some hours i.e. at about 5.00 P.M. respondent No. 1 found that the said tractor was not there. The complainant/respondent No. 1 reported the matter with the police at PS Sector 10, Gurgaon and F.I.R. No. 467 dated 17.11.2007 u/s. 379 IPC was registered. Respondent No. 1 informed the petitioner-Insurance Company about the theft of tractor and has submitted all the relevant papers in its office for claiming the claim of theft. The claim of respondent No. 1 was however rejected by the petitioner-Insurance Company on the ground that he was responsible for the theft of the insured vehicle and further it was averred that respondent No. 1 had not informed about the theft of tractor in time. The petitioner-Insurance Company thus could not appoint the surveyor and investigator to investigate the theft. Thereafter, respondent No. filed a complaint u/s 22C of the Legal Services Authority Act for 2002 for Public Utility Service before Permanent Lok Adalat (Public Utility Services), Gurgaon and the Permanent Lok Adalat came to a conclusion that theft took place on 11.11.2007 and the matter was reported to the police on 17.11.2007. The untraced report is dated 15.02.2009. There was some lapse on part of complainant/respondent No. 1 for giving information to the police and the petitioner-insurance company. Hence after deducting 25% of the value insured as Rs. 1,66,000/- and a sum of Rs. 1000/- was deducted as excess clause. The petitioner-Insurance Company was directed to pay a sum of Rs. 1,23,500/-. 2. There was some lapse on part of complainant/respondent No. 1 for giving information to the police and the petitioner-insurance company. Hence after deducting 25% of the value insured as Rs. 1,66,000/- and a sum of Rs. 1000/- was deducted as excess clause. The petitioner-Insurance Company was directed to pay a sum of Rs. 1,23,500/-. 2. Learned counsel for the petitioner has argued that as per policy (P-2), the claim for benefit of a vehicle was not possible if the theft was not reported tot he Company in 48 hours of the occurrence. 3. Reference has been made to the instructions issued by Insurance Regulatory and Development Authority on 20.09.2011 to all the insurance companies. As per this insurance this condition should not prevent settlement of genuine claims particularly when this delay in intimation or in submission of documents is due to unavoidable circumstances. The companies were advised that they must not repudiate such claims on the ground of delay. Keeping in view the above instructions, the PLA has given a direction to petitioner-Insurance Company to pay an amount of Rs. 1,23,500/- within one month from the date of award failing which respondent No. 1 shall be entitled to recover the amount along with interest at the rate of 9% per annum w.e.f. 15.05.2009 till payment. 4. Recently, Hon'ble the Supreme Court of India in a case of Bar Council of India Vs. Union of India (UOI), AIR 2012 SC 3246 had examined the provisions of the State Legal Services Authorities Act in detail and considered the object of Section 22(c) which provides for procedure to raise dispute on a pre-litigation stage. Chapter VI-A has been inserted which provides for pre-litigation conciliation and settlement procedure. The litigation is sought to be nipped in the bud by first affording the parties to such dispute an opportunity to settle their dispute through the endeavours of the Permanent Lok Adalat and if such efforts fails then to have the dispute between the parties adjudicated through the decision of the Permanent Lok Adalat. The provisions of Section 22(c) is followed by Section 22(d) of the Act which inter alia provides that while deciding the dispute in merits, the PLA shall not be bound by the CPC, 1908 and the Evidence Act, 1872. The provisions of Section 22(c) is followed by Section 22(d) of the Act which inter alia provides that while deciding the dispute in merits, the PLA shall not be bound by the CPC, 1908 and the Evidence Act, 1872. Section 22-e accords finality to the award of PLA under Sub-Section 1 and the provision made in sub Section 4 that every award made by the PLA shall be final and hence shall not be called in question in any original suit, application or execution proceedings form mainly bone of contention. While explaining the object of Chapter VI-A, Hon'ble the Supreme Court has observed in paragraph 22 as under:- "22. It is necessary to bear in mind that the disputes relating to public utility services have been entrusted to Permanent Lok Adalats only if the process of conciliation and settlement fails. The emphasis is on settlement in respect of disputes concerning public utility services through the medium of Permanent Lok Adalat. It is for this reason that sub-section (1) of Section 22-C states in no unambiguous terms that any party to a dispute may before the dispute is brought before any court make an application to the Permanent Lok Adalat for settlement of dispute. Thus, settlement of dispute between the parties in matters of public utility services is the main theme. However, where despite the endeavours and efforts of the Permanent Lok Adalat the settlement between the parties is not through and the parties are required to have their dispute determined and adjudicated, to avoid delay in adjudication of disputes relating to public utility services, the Parliament has intervened and conferred power of adjudication upon the Permanent Lok Adalat. Can the power conferred on Permanent Lok Adalats to adjudicate the disputes between the parties concerning public utility service upto a specific pecuniary limit, if they do not relate to any offence, as provided u/s 22-C(8), be said to be unconstitutional and irrational? We think not. It is settled law that an authority empowered to adjudicate the disputes between the parties and act as a tribunal may not necessarily have all the trappings of the court. What is essential is that it must be a creature of statute and should adjudicate the dispute between the parties before it after giving reasonable opportunity to them consistent with the principles of fair play and natural justice. What is essential is that it must be a creature of statute and should adjudicate the dispute between the parties before it after giving reasonable opportunity to them consistent with the principles of fair play and natural justice. It is not a constitutional right of any person to have the dispute adjudicated by means of a court only. Chapter VI-A has been enacted to provide for an institutional mechanism, through the establishment of Permanent Lok Adalats for settlement of disputes concerning public utility service before the matter is brought to the court and in the event of failure to reach any settlement, empowering the Permanent Lok Adalat to adjudicate such dispute if it does not relate to any offence." 5. In the present case, the theft took place on 11.11.2007 and the complainant reported the matter to the police on 17.11.2007. There was some lapse on part of the complainant to inform the police and to the Insurance Company. This lapse has to be ignored by the Insurance Company as per the instructions issued by Insurance Regulatory and Development Authority on 20.09.2011 to all the insurance companies. In view of the above, the claim has been rightly answered in favour of respondent No. 1 and therefore, no ground is made out to interfere in the order dated 19.08.2010 (P-6) passed by respondent No. 2. The writ petition is dismissed.