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Jharkhand High Court · body

2016 DIGILAW 1412 (JHR)

National Insurance Company Ltd. v. Kuldeep Kaur

2016-09-22

APARESH KUMAR SINGH

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ORDER : Heard learned counsel for the parties. 2. The Permanent Lok Adalat, Jamshedpur by the impugned order dated 24th January, 2008 (Annexure-6) passed in P.L.A Case no. 313/07 has awarded compensation to the tune of Rs. 35,000/with interest in a case of Motor Vehicle Accident on the claim petition of the applicant/respondent herein. 3. The applicant made insurance claim for certain damages said to have been caused to the vehicle bearing Registration no. JH-05N-2947. On notice, the opposite party Insurance Company/petitioner herein filed its written statement objecting to the claim petition on merits as the applicant had failed to furnish the driving license of the driver, who was driving the vehicle at the relevant time of accident as per requisite condition of the Insurance Policy. For failure to fulfill the aforesaid condition, the Insurance Company had repudiated the claim. 4. From perusal of the materials on record including the impugned order, it is apparent that Permanent Lok Adalat did make effort for conciliation of the matter, to which the Insurance Company objected on the grounds that the essential conditions of the policy document were not complied by the applicant. However, Permanent Lok Adalat thereafter straightaway proceeded to decide the claim on merits under Section 2(C) (8) of Legal Services Authority Act, 1987. The Permanent Lok Adalat therefore failed to follow the procedure mandated under Section 22 (C) (4) to (7) as interpreted by a Coordinate Bench of this Court in the case of State Bank of India, Dhanbad Vs. State of Jharkhand and another reported in (2009) 3 JCR 374 (Jhr) and also followed in subsequent judgment. The relevant extract of the said judgment is quoted hereunder: “(vii) Now the question arises how a Permanent Lok Adalat can switch over to subsection (8) of Section 22C of the Act, 1987, for playing its adjudicatory role. It appears from subsection (8) of Section 22C of the Act, 1987, that Permanent Lok Adalat can decide the dispute if the dispute is not relating to any offence and if no settlement has been arrived at, after following the procedure under subsection (7) of Section 22C of the Act, 1987. As per Section 22D of the Act, 1987, neither the provisions of the Code of Civil Procedure, 1908 are applicable, nor the provisions of Indian Evidence Act, 1872 are applicable. As per Section 22D of the Act, 1987, neither the provisions of the Code of Civil Procedure, 1908 are applicable, nor the provisions of Indian Evidence Act, 1872 are applicable. Likewise, the order passed by the Permanent Lok Adalat, as per Section 22E of the Act, 1987, is not an appellable order and, therefore, the Permanent Lok Adalat must make the parties aware of the aforesaid aspect and, even if, they are giving consent for playing an adjudicatory role by the Permanent Lok Adalat, then only the Permanent Lok Adalat can decide the dispute on merits. Thus, under subsection (7) of Section 22C of the Act, 1987 Permanent Lok Adalat must offer the terms of settlement on its own. If the settlement is not arrived at, then the Permanent Lok Adalat should inform the parties that whether they wish that dispute may be decided on merits by Permanent Lok Adalat. This option ought to have been given and there must be a positive answer from both the parties. If one of the parties to the dispute is denying the adjudication of the dispute, Permanent Lok Adalat shall not decide the dispute on merits. Permanent Lok Adalat shall also make the parties aware that it is not bound by the provisions of the Code of Civil Procedure and likewise, it is also not bound by the provisions of Indian Evidence Act. Permanent Lok Adalat will also make the parties aware before exercising powers under subsection (8) of Section 22C of the Act, 1987, that the award, passed by the Permanent Lok Adalat, will be a final one and no appeal shall lie and despite this awareness, if both the parties to the dispute are giving consent that Permanent Lok Adalat can decide the dispute on merits, then only Permanent Lok Adalat shall decide the dispute on merits, otherwise the matter will again go to the normal course or the parties will be free to take recourse under the law. This Safeguard is necessary to make the parties award, because several parties to the dispute may not be agreeable for their matters to be decided by the Permanent Lok Adalat, where neither the provisions of Code of Civil Procedure nor the provisions of Indian Evidence Act is applicable. Even no appeal is provided under the Act, 1987 against the award of Permanent Lok Adalat under Section 22E of the Act, 1987. Even no appeal is provided under the Act, 1987 against the award of Permanent Lok Adalat under Section 22E of the Act, 1987. (viii) Looking to the scheme of the Act, it appears that any of the parties to a dispute can make an application to a Permanent Lok Adalat for settlement of the dispute, as per subsection (1) of Section 22C of the Act. Thus, any complex matter may come to the Permanent Lok Adalat unilaterally, upon an application by a single party, or without a joint application by the parties to the dispute also, any party can prefer an application before the Permanent Lok Adalat for settlement of the dispute and, therefore, Permanent Lok Adalat ought to follow, as stated hereinabove, the procedure and the requirement of subsection (7) of Section 22C of the Act, 1987, and if no settlement is arrived at, then again, option should be given to the parties to the dispute, after making them aware of the non-applicability of the provisions of the Code of Civil Procedure and the provisions of Indian Evidence Act and also that there shall be no appeal against the award, passed by the Permanent Lok Adalat, and even after his awareness, if both the parties given consent that Permanent Lok Adalat may decide the dispute on merits, then only Permanent Lok Adalat shall exercise powers under subsection (8) of Section 22C of the Act, 1987, but if one of the parties is refusing for adjudication, on merits, of the dispute by Permanent Lok Adalat, it shall not decide the dispute on merits. The Primary role of the Permanent Lok Adalat is settlement and it can wear a rob of the Court for playing adjudicatory role, only upon consent of all the parties to the dispute and not otherwise. (ix) In the facts of the present case, neither the procedure, as stated hereinabove, under subsection (7) of Section 22C of the Act, 1987, has been followed i.e. giving the terms of settlement, by Permanent Lok Adalat to the parties to the dispute, nor their consent has been taken prior to playing an adjudicatory role under subsection (8) of Section 22C of the Act. Consent or sanction of all the parties to the dispute before adjudication on merits under subsection (8) of Section 22C of the Act, 1987, is a condition precedent. Consent or sanction of all the parties to the dispute before adjudication on merits under subsection (8) of Section 22C of the Act, 1987, is a condition precedent. Willingness of the parties to the dispute for adjudication, on merits, of a dispute, is at a pivotal position. Permanent Lok Adalat is basically not a Court at all. Only as an exceptional case, with consent of the parties, the Permanent Lok Adalat can play an adjudicatory role. It is a prime duty, vested in the Permanent Lok Adalat, before exercising powers under subsection (8) of Section 22C of the Act, 1987, to make the parties aware about non-applicability of the provisions of code of Civil Procedure and the provisions of the Indian Evidence Act and also that the award, passed by the Permanent Lok Adalat, is a non-appellable order and, thereafter, the Permanent Lok Adalat must ask for the consent of the parties to the dispute. Such consent must be reduced in writing by the parties, so as to avoid future complications and upon taking such pursis/joint application, signed by both the parties to the dispute that they are ready and willing for getting decision on merits, by the Permanent Lok Adalat, of their dispute, and they are aware that the provisions of the Code of Civil Procedure and the provisions of Indian Evidence Act are not applicable and the award, passed by the Permanent Lok Adalat, is also not appellable, this type of written joint pursis/joint application, signed by both the parties, must be taken on record, henceforth, by the Permanent Lok Adalat, and thereafter only, it shall exercise the powers of deciding, on merits, the dispute or disputes between the parties under subsection (8) of Section 22C of the Act, 1987.If there is no consent by any of the parties to the dispute, Permanent Lok Adalat shall refrain itself, from exercising powers under subsection (8) of Section 22C of the Act, 1987. It has also been held by the Hon'ble Supreme Court in the case of State of Punjab v. Jalour Singh, (Supra), as reported in (2008) 2 SCC 660 , in paragraph No. 9, as under: “9. It has also been held by the Hon'ble Supreme Court in the case of State of Punjab v. Jalour Singh, (Supra), as reported in (2008) 2 SCC 660 , in paragraph No. 9, as under: “9. But we find that many sitting or retired Judges, while participating in the Lok Adalats as members, tend to conduct the Lok Adalats like Courts, by hearing parties, and imposing their views as to what is just and equitable on the parties. Sometimes they get carried away and proceed to pass orders on merits, as in this case, even though there is no consensus or settlement. Such acts, instead of fostering alternative dispute resolution through the Lok Adalats, will drive litigants away from the Lok Adalats. The Lok Adalats should resist their temptation to play the part of judges and constantly strive to function as conciliators. The endeavour and effort of the Lok Adalats should be to guide and persuade the parties, with reference to principles of justice, equity and fair play to compromise and settle the dispute by explaining the pros and cons, strengths and weaknesses, advantages and disadvantages of their respective claims.” (Emphasis supplied) (x) If against the desire of the parties, a dispute is decided on merits under subsection (8) of Section 22C of the Act, 1987, where neither the provisions of the Code of Civil Procedure are applicable, nor the provisions of Indian Evidence Act are applicable, nor the order is appellable (as per Sections 22D and 22E of the Act, 1987), then no party will come for settlement of the dispute at a pre-litigation stage. (xi) It appears that in the present case the primary role has been forgotten by the Permanent Lok Adalat. Adjudicatory role under Section 22C (8) of the Act, 1987, always depends upon the consent of all the parties to the dispute. If there is a consent by all he parties, then only Permanent Lok Adalat an decide the dispute on merits and that too, after making the parties to the dispute fully aware of non-applicability of the provisions of Code of Civil Procedure and the provisions of Indian Evidence Act and after making aware the parties to the dispute that there shall be no appeal against the award, passed by the Permanent Lok Adalat. (xii) It has been held by the Hon'ble Supreme Court in the case of United India Insurance Co. (xii) It has been held by the Hon'ble Supreme Court in the case of United India Insurance Co. Ltd. v. Ajay Sinha, as reported in (2008) 7 SCC 454 , in paragraph Nos. 25, 26 and 41, as under: 7. Thus, in view of the aforesaid decision also, adjudicatory role should not be played, so hurriedly, unless the independence and impartiality of the Tribunal is properly established, unless the incumbents are found eligible to determine the lis. Thus, a precaution and warning has been given in the aforesaid paragraphs, of an inbuilt danger for playing an adjudicatory role, under Section 22C (8) of the Act, 1987 and, therefore, written joint consent by all the parties is a minimum requirement, over and above, impartiality and capability of the members of the Permanent Lok Adalat. None of the aforesaid aspects has been properly appreciated by the Permanent Lok Adalat in the facts and circumstances of the present case and, therefore, I hereby quash and set aside the order passed by the permanent Lok Adalat, Dhanbad, dated February 8, 2008, in Permanent Lok Adalat Case No. 91 of 2007, which is Annexure 2 to the memo of present writ petition”. 5. It did not frame any terms of any settlement and offered it to the rival parties to arrive at amicable resolution of the dispute. The opposite party-Insurance Company also did not offer any consent for deciding the dispute on merits as it has strong objection to the claim of the claimant/respondent herein. The Permanent Lok Adalat being a creature of the statute was obliged to follow the procedure mandated under the law which has failed to do and thereby committed serious error of jurisdiction. 6. In such circumstances, the impugned award cannot be sustained in the eye of law. It is accordingly quashed. The awarded amount deposited before Permanent Lok Adalat pursuant to the interim order dated 11th November, 2009 shall be returned to the petitioner by Permanent Lok Adalat, Jamshedpur. 7. The respondent may have liberty to approach the appropriate Forum, if permissible in law, for redressal of her aforesaid claim. 8. Accordingly, the writ petition 2670 is allowed in the manner and to the extent indicated hereinabove. Petition allowed