National Insurance Company Limited v. K. P. S Educational Trust
2022-11-14
PRAKASH PADIA
body2022
DigiLaw.ai
JUDGMENT : 1. Heard Sri Ashok Kumar Srivastava, learned counsel for the petitioner and Sri Kartikeya Saran and Sri Vinay Kumar Singh, learned counsel for the respondents. 2. The petitioner has preferred the present writ petition with the prayer to quash the ex-parte judgement and order dated 29.06.2022 passed by Permanent Lok Adalat, Agra in Complaint Case No.35 of 2020 (K.P.S Educational Trust Vs. National Insurance Company Limited and another). 3. It is argued by learned counsel for the petitioner that the order impugned has been passed by the Permanent Lok Adalat, Agra without providing any opportunity of hearing to the petitioner. It is further argued that no reasons whatsoever has been recorded in the order impugned. Hence, on both the grounds, the order passed by the Permanent Lok Adalat, Agra dated 29.06.2022 is liable to be set aside. 4. On the other hand, it is argued by Sri Kartikeya Saran, learned counsel for the respondents that if the order impugned has been passed in the absence of the petitioner, the only remedy lies with the petitioner to move a recall application before the Permanent Lok Adalat, concerned. 5. Heard learned counsel for the parties present. With the consent of learned counsel for the parties present, the present writ petition is disposed of at the admission stage itself. 6. From perusal of he order passed by the Permanent Lok Adalat, Agra, it appears that the same has been passed without providing opportunity of hearing to the petitioner. After going through the aforesaid order, the Court is of the firm opinion that no reasons whatsoever has been given while allowing the petition filed by the claimant-respondent. A complete procedural has been prescribed under Section 22(C) of the Legal Services Authorities Act, 1987 (In short "Act, 1987") to decide the dispute by the Permanent Lok Adalat and Section 22 (C) of the Act, 1987 provided that conciliation proceedings are mandatory, thereafter the Permanent Lok Adalat have adjudicatary function under Legal Services Act. Section 22 outlines the powers of the Lok Adalats and Permanent Lok Adalats. Section 22 is extracted below: Section 22.
Section 22 outlines the powers of the Lok Adalats and Permanent Lok Adalats. Section 22 is extracted below: Section 22. Powers of Lok Adalats.— (1) The Lok Adalat or Permanent Lok Adalat shall, for the purposes of holding any determination under this Act, have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908) while trying a suit in respect of the following matters, namely:— (a) the summoning and enforcing the attendance of any witness and examining him on oath; (b) the discovery and production of any document; (c) the reception of evidence on affidavits; (d) the requisitioning of any public record or document or copy of such record or document from any court or office; and (e) such other matters as may be prescribed. (2) Without prejudice to the generality of the powers contained in sub-section (1), every Lok Adalat or Permanent Lok Adalat shall have the requisite powers to specify its own procedure for the determination of any dispute coming before it. (3) All proceedings before the Lok Adalat or Permanent Lok Adalat shall be deemed to be judicial proceedings within the meaning of Sections, 193, 219 and 228 of the Indian Penal Code (45 of 1860) and every Lok Adalat shall be deemed to be a civil court for the purpose of Section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973 (2 of 1974)." 7. Section 22-C of the Legal Services Authorities Act, 1987 stipulates the instances in which Permanent Lok Adalats can take cognizance of cases. Section 22-C provides as follows: "22-C. Cognizance of cases by Permanent Lok Adalat.— (1) Any party to a dispute may, before the dispute is brought before any court, make an application to the Permanent Lok Adalat for the settlement of dispute: Provided that the Permanent Lok Adalat shall not have jurisdiction in respect of any matter relating to an offence not compoundable under any law: Provided further that the Permanent Lok Adalat shall also not have jurisdiction in the matter where the value of the property in dispute exceeds ten lakh rupees: Provided also that the Central Government, may, by notification, increase the limit of ten lakh rupees specified in the second proviso in consultation with the Central Authority.
(2) After an application is made under sub-section (1) to the Permanent Lok Adalat, no party to that application shall invoke jurisdiction of any court in the same dispute. (3) Where an application is made to a Permanent Lok Adalat under sub-section (1), it— (a) shall direct each party to the application to file before it a written statement, stating therein the facts and nature of dispute under the application, points or issues in such dispute and grounds relied in support of, or in opposition to, such points or issues, as the case may be, and such party may supplement such statement with any document and other evidence which such party deems appropriate in proof of such facts and grounds and shall send a copy of such statement together with a copy of such document and other evidence, if any, to each of the parties to the application; (b) may require any party to the application to file additional statement before it at any stage of the conciliation proceedings; (c) shall communicate any document or statement received by it from any party to the application to the other party, to enable such other party to present reply thereto. (4) When statement, additional statement and reply, if any,have been filed under sub-section (3), to the satisfaction of the Permanent Lok Adalat, it shall conduct conciliation proceedings between the parties to the application in such manner as it thinks appropriate taking into account the circumstances of the dispute. (5) The Permanent Lok Adalat shall, during conduct of conciliation proceedings under sub-section (4), assist the parties in their attempt to reach an amicable settlement of the dispute in an independent and impartial manner. (6) It shall be the duty of every party to the application to cooperate in good faith with the Permanent Lok Adalat in conciliation of the dispute relating to the application and to comply with the direction of the Permanent Lok Adalat to produce evidence and other related documents before it.
(6) It shall be the duty of every party to the application to cooperate in good faith with the Permanent Lok Adalat in conciliation of the dispute relating to the application and to comply with the direction of the Permanent Lok Adalat to produce evidence and other related documents before it. (7) When a Permanent Lok Adalat, in the aforesaid conciliation proceedings, is of opinion that there exist elements of settlement in such proceedings which may be acceptable to the parties, it may formulate the terms of a possible settlement of the dispute and give to the parties concerned for their observations and in case the parties reach at an agreement on the settlement of the dispute, they shall sign the settlement agreement and the Permanent Lok Adalat shall pass an award in terms thereof and furnish a copy of the same to each of the parties concerned. (8) Where the parties fail to reach at an agreement under sub-section (7), the Permanent Lok Adalat shall, if the dispute does not relate to any offence, decide the dispute." 8. Taking into consideration of the aforesaid aspect of the matter, very recently the Hon'ble Supreme Court in the case of Canara Bank Vs. G.S. Jayarama (2022) 7 SCC 776 , it is held that Section 22-C(8) is amply clear that it only comes into effect once an agreement under Section 22-C(7) has failed. The corollary of this is that the proposed terms of settlement under Section 22-C(7), and the conciliation proceedings preceding it, are mandatory. If Permanent Lok Adalats are allowed to bypass this step just because a party is absent, it would be tantamount to deciding disputes on their merit ex parte and issuing awards which will be final, binding and will be deemed to be decrees of civil courts. This was simply not the intention of the Parliament when it introduced the Legal Services Authorities Amendment Act. Its main goal was still the conciliation and settlement of disputes in relation to public utilities, with a decision on merits always being the last resort. Therefore, we hold that conciliation proceedings under Section 22-C of the Legal Services Authorities Amendment Act are mandatory in nature. Paragraph 37 of the aforesaid judgement is reproduced below:- "37. Section 22-C(8) is amply clear that it only comes into effect once an agreement under Section 22-C(7) has failed.
Therefore, we hold that conciliation proceedings under Section 22-C of the Legal Services Authorities Amendment Act are mandatory in nature. Paragraph 37 of the aforesaid judgement is reproduced below:- "37. Section 22-C(8) is amply clear that it only comes into effect once an agreement under Section 22-C(7) has failed. The corollary of this is that the proposed terms of settlement under Section 22-C(7), and the conciliation proceedings preceding it, are mandatory. If Permanent Lok Adalats are allowed to bypass this step just because a party is absent, it would be tantamount to deciding disputes on their merit ex parte and issuing awards which will be final, binding and will be deemed to be decrees of civil courts. This was simply not the intention of the Parliament when it introduced the Legal Services Authorities Amendment Act. Its main goal was still the conciliation and settlement of disputes in relation to public utilities, with a decision on merits always being the last resort. Therefore, we hold that conciliation proceedings under Section 22-C of the LSA Act are mandatory in nature." 9. From perusal of the aforesaid, this Court is of the opinion that the law is now well settled that in the absence of following the prescribed procedure as specially provided under Section 22(C)(7) of the Legal Services Authorities Amendment Act by the Permanent Lok Adalat, the order/award is vitiated. 10. In the present case, Permanent Lok Adalat Agra does not follow the aforesaid procedure as provided under the Legal Services Authorities Amendment Act, therefore, the award is vitiated and illegal in the eyes of law, the same is liable to be set aside and is hereby set aside. 11. Since no reply has been filed by the complainant, he is directed to file reply in the aforesaid case within three week from today. 12. Permanent Lok Adalat Agra is directed to pass fresh order after following the complete procedure under the law as well as the laid down by the Hon'ble Apex Court in the case of Canara Bank (supra) most expeditiously and preferably within a period of three months from the date reply filed by the claimant/respondent.