Karnataka High Court
The Deputy Commissioner vs M/S Kushal Enterprises on 3 August, 2020
Author: John Michael Cunha
Bench: John Michael Cunha
R
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 03RD DAY OF AUGUST 2020
BEFORE
THE HON'BLE MR. JUSTICE JOHN MICHAEL CUNHA
WRIT PETITION NO.2715/2020(GM-RES)
C/W
WRIT PETITION NO.2868/2020(GM-RES)
WRIT PETITION NO.2876/2020(GM-RES)
WRIT PETITION NO.2878/2020(GM-RES)
WRIT PETITION NO.2937/2020(GM-RES)
IN WP.No.2715/2020
BETWEEN:
1. THE DEPUTY COMMISSIONER
MYSURU DISTRICT
MYSURU-570005
2. THE TAHSILDAR
PERIYAPATNA TALUK OFFICE
PERIYAPATNA TALUK
MYSURU DISTRICT-570071
...PETITIONERS
(BY SMT: PRAMODHINI KISHAN, AGA)
AND:
M/s KUSHAL ENTERPRISES
PROP K.R. CHIDAMBARA
# 13/1, 12TH CROSS, V.V.PURAM
MYSURU-570002
...RESPONDENT
(BY SRI: RADHA KRISHNA, ADVOCATE)
2
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227
OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED
ORDER PASSED BY THE PERMANENT LOK-ADALAT AT MYSURU IN
PROCEEDING DATED 30.09.2019 MARKED AS ANNEXURE-B.
ALTERNATIVELY ISSUE ANY WRIT, ORDER OR DIRECTION AND SET-
ASIDE THE ORDER PASSED BY THE PERMANENT LOK-ADALAT AT
MYSURU DATED 30.09.2019 AND REMAND MATTER TO THE
PERMANENT LOK-ADALAT AT MYSURU FOR AFFORDING OPPORTUNITY
TO THE PETITIONERS TO CONTEST THE PROCEEDINGS INITIATED BY
THE RESPONDENT ON MERITS OF THE CASE.
IN WP.No.2868/2020
BETWEEN
1. THE DEPUTY COMMISSIONER
MYSURU DISTRICT
MYSURU-570005
2. THE TAHSILDAR
T.NARASIPURA TALUK OFFICE
T.NARASIPURA TALUK
MYSURU DISTRICT-570071
...PETITIONERS
(BY SMT: PRAMODHINI KISHAN, AGA)
AND:
M/s KUSHAL ENTERPRISES
PROP K.R. CHIDAMBARA
# 13/1, 12TH CROSS, V.V.PURAM
MYSURU-570002
...RESPONDENT
(BY SRI: RADHA KRISHNA, ADVOCATE)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227
OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED
ORDER PASSED BY THE PERMANENT LOK-ADALAT AT MYSURU IN
PROCEEDING DATED 30.09.2019 MARKED AS ANNEXURE-B.
3
ALTERNATIVELY ISSUE ANY WRIT, ORDER OR DIRECTION AND SET-
ASIDE THE ORDER PASSED BY THE PERMANENT LOK-ADALAT AT
MYSURU DATED 30.09.2019 AND REMAND MATTER TO THE
PERMANENT LOK-ADALAT AT MYSURU FOR AFFORDING OPPORTUNITY
TO THE PETITIONERS TO CONTEST THE PROCEEDINGS INITIATED BY
THE RESPONDENT ON MERITS OF THE CASE.
IN WP.No.2876/2020
BETWEEN
1. THE DEPUTY COMMISSIONER
MYSURU DISTRICT
MYSURU - 570 005
2. THE TAHSILDAR
K.R.NAGAR TALUK OFFICE
K.R.NAGAR TALUK
MYSURU DISTRICT - 570 071
...PETITIONERS
(BY SMT: PRAMODHINI KISHAN, AGA)
AND:
M/s KUSHAL ENTERPRISES
PROP K.R. CHIDAMBARA
# 13/1, 12TH CROSS, V.V.PURAM
MYSURU-570002
...RESPONDENT
(BY SRI: RADHA KRISHNA, ADVOCATE)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227
OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED
ORDER PASSED BY THE PERMANENT LOK-ADALAT AT MYSURU IN
PROCEEDING DATED 30.09.2019 MARKED AS ANNEXURE-B.
ALTERNATIVELY ISSUE ANY WRIT, ORDER OR DIRECTION AND SET-
ASIDE THE ORDER PASSED BY THE PERMANENT LOK-ADALAT AT
MYSURU DATED 30.09.2019 AND REMAND MATTER TO THE
PERMANENT LOK-ADALAT AT MYSURU FOR AFFORDING OPPORTUNITY
4
TO THE PETITIONERS TO CONTEST THE PROCEEDINGS INITIATED BY
THE RESPONDENT ON MERITS OF THE CASE.
IN WP.No.2878/2020
BETWEEN
1. THE DEPUTY COMMISSIONER
MYSURU DISTRICT
MYSURU-570005
2. THE TAHSILDAR
NANJANGUD TALUK OFFICE
NANJANGUD TALUK
MYSURU DISTRICT-570071
...PETITIONERS
(BY SMT: PRAMODHINI KISHAN, AGA)
AND:
M/s KUSHAL ENTERPRISES
PROP K.R. CHIDAMBARA
# 13/1, 12TH CROSS, V.V.PURAM
MYSURU-570002
...RESPONDENT
(BY SRI: RADHA KRISHNA, ADVOCATE)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227
OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED
ORDER PASSED BY THE PERMANENT LOK-ADALAT AT MYSURU IN
PROCEEDING DATED 30.09.2019 MARKED AS ANNEXURE-B.
ALTERNATIVELY ISSUE ANY WRIT, ORDER OR DIRECTION AND SET-
ASIDE THE ORDER PASSED BY THE PERMANENT LOK-ADALAT AT
MYSURU DATED 30.09.2019 AND REMAND MATTER TO THE
PERMANENT LOK-ADALAT AT MYSURU FOR AFFORDING OPPORTUNITY
TO THE PETITIONERS TO CONTEST THE PROCEEDINGS INITIATED BY
THE RESPONDENT ON MERITS OF THE CASE.
5
IN WP.No.2937/2020
BETWEEN
1. THE DEPUTY COMMISSIONER
MYSURU DISTRICT
MYSURU-570005
2. THE TAHSILDAR
H D KOTE TALUK OFFICE
H D KOTE TALUK
MYSURU DISTRICT-570071
...PETITIONERS
(BY SMT: PRAMODHINI KISHAN, AGA)
AND:
M/s KUSHAL ENTERPRISES
PROP K.R. CHIDAMBARA
# 13/1, 12TH CROSS, V.V.PURAM
MYSURU-570002
...RESPONDENT
(BY SRI: RADHA KRISHNA, ADVOCATE)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227
OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED
ORDER PASSED BY THE PERMANENT LOK-ADALAT AT MYSURU IN
PROCEEDING DATED 30.09.2019 MARKED AS ANNEXURE-B.
ALTERNATIVELY ISSUE ANY WRIT, ORDER OR DIRECTION AND SET-
ASIDE THE ORDER PASSED BY THE PERMANENT LOK-ADALAT AT
MYSURU DATED 30.09.2019 AND REMAND MATTER TO THE
PERMANENT LOK-ADALAT AT MYSURU FOR AFFORDING OPPORTUNITY
TO THE PETITIONERS TO CONTEST THE PROCEEDINGS INITIATED BY
THE RESPONDENT ON MERITS OF THE CASE.
THESE WRIT PETITIONS HAVING BEEN HEARD AND RESERVED
FOR ORDERS ON 23.07.2020 AND COMING ON FOR
PRONOUNCEMENT OF ORDER, THROUGH VIDEO CONFERENCE, THIS
DAY, JOHN MICHAEL CUNHA. J, MADE THE FOLLOWING:-
6
ORDER
These five petitions are arising out of five identical awards, dated 30.09.2019, passed by the Permanent Lok Adalat at Mysuru. The details of the award and the respective claim made in each of the petitions are as follows:-
W.P. No. PLAP. No. Claim of Award
Respondent
2715/2020 453/2019 Rs.5,98,400/- Rs.3,98,400/- together
with interest at 15%
p.a. with quarterly rests
from the date of
submitting the bill i.e.
05.12.2013 till the date
of actual payment i.e.,
within 60 days, and
Rs.1000/- towards
litigation expenses
2868/2020 257/2019 Rs.7,13,600/- Rs.3,13,600/- together
with interest at 15%
p.a. with quarterly rests
from the date of
submitting the bill i.e.
26.12.2013 till the date
of actual payment i.e.,
within 60 days, and
Rs.1000/- towards
litigation expenses
2876/2020 452/2019 Rs.8,20,800/- Rs.4,20,800/- together
with interest at 15%
p.a. with quarterly rests
from the date of
7
submitting the bill i.e.
25.11.2013 till the date
of actual payment i.e.,
within 60 days, and
Rs.1000/- towards
litigation expenses
2878/2020 450/2019 Rs.4,50,400/- Rs.2,50,400/- together
with interest at 15%
p.a. with quarterly rests
from the date of
submitting the bill i.e.
26.11.2013 till the date
of actual payment i.e.,
within 60 days, and
Rs.1000/- towards
litigation expenses
2937/2020 451/2019 Rs.8,58,400/- Rs.4,58,400/- together
with interest at 15%
p.a. with quarterly rests
from the date of
submitting the bill i.e.
26.11.2013 till the date
of actual payment i.e.,
within 60 days, and
Rs.1000/- towards
litigation expenses
2. The outline facts of the case are that the respondent herein namely, M/s.Kushal Enterprises filed five separate applications before Permanent Lok Adalat at Mysuru under section 22C(1) of the Legal Services Authorities Act, 1987 (for short "Act") claiming hire charges or rental charges towards 8 supply of UPS. The claim petitions were filed on 20.04.2019. On receipt of the same, Permanent Lok Adalat at Mysuru ordered issuance of notices and fixed the date of hearing on 20.06.2019. It is the case of the petitioners that on receipt of notices/summons from Permanent Lok Adalat, petitioner No.1 entered correspondence with the Director, Directorate of Atalji Janasnehi, K.R.Circle, Bengaluru and intimated about the filing of the claim petitions by the respondent. Further, petitioner No.1 requested for release of Rs.11,24,000/- as per the reports of the various Tahsildars of Mysuru District being the actual rental charges to be paid in favour of the respondent and was eagerly waiting reply from the Director, Directorate of Atalji Janasnehi, K.R. Circle, Bengaluru, but the Permanent Lok Adalat proceeded with the proceedings and on placing the petitioners absent on all dates of hearing, based on the affidavit filed by the respondent, passed the impugned orders directing the petitioners to pay the aforesaid amounts with interest and the litigation charges as mentioned in the above table.
9
3. The contentions of the petitioners, in all the above petitions are that:
(i) Impugned orders are bad in law and opposed to the principles of natural justice inasmuch as Permanent Lok Adalat proceeded to decide the dispute on merits of the case without conducting any conciliation proceedings. They are exparte orders. Permanent Lok Adalat has no jurisdiction to pass exparte orders. The impugned orders are also violative of the principles of natural justice and are liable to be set-aside on that score alone.
(ii) The Permanent Lok Adalat erred in entertaining the claim petitions without considering the fact that the claims put forward by the petitioners were hopelessly barred by time. The respondent had submitted the bills claiming rental charges on 01.10.2013. The claims were made after a lapse of more than 5 years 6 months from the date of submission of the bills.
Therefore, the claim petitions ought to have been dismissed as barred by time.
10
(iii) The claim petitions were bad for non-impleadment of proper and necessary parties. The order for securing of UPS on rental basis was placed by the petitioners as per the direction issued by the Directorate of Atalji Janasnehi Kendra, Bengaluru, which was a necessary party to the proceedings and hence, the impugned orders passed against the present petitioners are illegal and are liable to be set-aside.
(iv) Permanent Lok Adalat has no jurisdiction to entertain the claim petitions and pass the impugned orders since supply of UPS on rental basis to the respective Nadakacheris cannot be said to be "public utility service" falling under section 22A of the Act. Permanent Lok Adalat is entitled to entertain the dispute and to conduct settlement via conciliation only in respect of "public utility service" notified or declared to be a public utility service for the purpose of Chapter VIA of the Legal Services Authorities Act, 1987. Supply of UPS does not fall within section 22A of the Act.
(v) The claims raised by the respondent exceeded Rs.10 Lakhs. As per Section 22C of the Act, Permanent Lok Adalat 11 gets jurisdiction to decide the disputes only with regard to the claim below Rs.10 Lakhs.
(vi) The impugned orders are not sustainable in law inasmuch as the procedure contemplated under section 22C of the Act has not been followed by Permanent Lok Adalat in conducting the proceedings. In terms of Section 22C of the Act, it was incumbent upon Permanent Lok Adalat for formulating the points of possible settlement of the dispute between the parties. It failed to formulate the points of settlement; instead, proceeded to decide the dispute on merits of the case by placing the petitioners as absent, contrary to the provisions of the Act.
(vii) Interest awarded by Permanent Lok Adalat by placing reliance on the provisions of the Micro, Small and Medium Enterprises Development Act, 2006 is improper. In order to make applicable the provisions of the Act of 2006, the establishment is required to be registered under section 8 of the said Act. The respondent did not produce any certificate nor did he lay a claim to the interest at 15% based on the provisions of the Micro, Small and Medium Enterprises Development Act, 12 2006. Therefore, the interest awarded by Permanent Lok Adalat being bad and without any legal basis is liable to be set-aside.
(viii) The decision relied on by Permanent Lok Adalat in the case of SOVINTORG (India) Ltd., vs. STATE BANK OF INDIA, New Delhi, 1996(6) SCC PH 406 is not applicable to the facts of the case.
Thus the petitioners have sought to set-aside the impugned orders and alternatively, to remand the matters to Permanent Lok Adalat at Mysuru for affording opportunity to the petitioners to contest the proceedings.
4. Respondent has filed detailed statement of objections in the respective petitions inter alia contending that he had supplied and installed UPS and accessories at various Nadakacheris at different Taluks of Mysuru pursuant to the indent placed by petitioner No.2 and maintained the UPS in working condition throughout their usage. After return of the UPS and accessories, he submitted the bills to petitioner No.2 claiming rental charges for UPS and accessories, on 05.12.2013. 13 Since petitioner No.2 failed to settle the bill amount, he served legal notices on the second petitioner on various dates. In spite of receipt of the said notices, the claims having not been settled, he approached Permanent Lok Adalat making applications under section 22C(1) of the Act. Permanent Lok Adalat issued notices to the petitioners. Pursuant to the notices, one Smt.Treeza, Sheristedar attached to the office of petitioner No.2 appeared before the Permanent Lok Adalat, Mysuru along with a letter of authorization and admitted the claims of the respondent and took time to arrange payment. However, the petitioners did not arrange for payment nor filed any objections and failed to appear before the Permanent Lok Adalat on subsequent dates and hence, considering the material produced by the respondent in support of the claim petitions, awards were passed by Permanent Lok Adalat. Respondent served copy of the order/award of Permanent Lok Adalat on 17.10.2019 requesting the petitioners to pay the decretal amount. Since the petitioners ignored the order of Permanent Lok Adalat, respondent filed execution proceedings before the Learned II Addl. ACJ & CJM, Mysuru in Execution Petition Nos.228/2019, 229/2019, 14 227/2019, 230/2019 and 231/2019 for recovery of the amount. Learned II Addl. ACJ & CJM, Mysuru issued warrant attaching the movables found in the office of the second petitioner and it is at that stage, petitioners moved this Court seeking recall of the warrants.
5(i) In the objection statement, respondent specifically denied the allegation that the impugned orders have been passed exparte in violation of principles of natural justice. According to the respondent, the notices of the proceedings were duly served on the petitioners and the Sheristedar attached to the office of petitioner No.2 participated in the proceedings and therefore the contention urged by the petitioners that the impugned orders are exparte and are violative of the principles of natural justice is contrary to true facts.
5(ii) Insofar as the plea of limitation is concerned, in the objection statement the respondent emphasized that the petitioners having admitted the claims before the Permanent Lok Adalat and having undertaken to make the payment in the execution petitions, the plea of limitation is not tenable. 15
5(iii) With regard to impleadment of proper and necessary party is concerned, the respondent contends that the indent to supply UPS and accessories was placed on the respondent and not upon the Director, Atalji Janasnehi Kendra. The bills were required to be paid by the petitioners. The Director, Atalji Janasnehi Kendra, Bengaluru is a third party to the transaction between the petitioners and the respondent, and therefore, Atalji Janasnehi Kendra is not a necessary party to the proceedings.
5(iv) With regard to jurisdiction of Permanent Lok Adalat to entertain the dispute, it is contended that the respondent is an establishment engaged in supply of power to general public and to the public offices doing public service. The procurement and installation of UPS and accessories was for the purpose of ensuring uninterrupted power supply to the Atalji Janasnehi Kendra so as to enable the Kendra to provide continuous trouble-free services to the general public and hence, the services rendered by the respondent is a "public utility service"
as defined in section 22A(b)(iii) of the Act, as such, there is no merit in the contention urged by the petitioners in this regard.16
5(v) Lastly, with regard the pecuniary jurisdiction, respondent has referred to the Gazette Notification vide S.O.803(E) dated 20.03.2015 whereby the Central Government, in consultation with the Central Authority, has increased the limit of value of the property in dispute for the purpose of determining the jurisdiction of Permanent Lok Adalat to "One Crore Rupees" with effect from 20.03.2015. Thus, the respondent has sought to dismiss the above petitions.
6. Learned AGA appearing for the petitioners and learned counsel for respondent have addressed arguments in line with the contentions urged in the petitions and the statement of objections. Learned AGA has referred to the decision of the Hon'ble Supreme Court in the case of M/s.INTERGLOBE AVIATION Ltd., vs. N.SATCHIDANAND, (2011) 7 SCC 463 (in Civil Appeal No.4925 of 2011 disposed of on 04.07.2011) to drive home the point that Permanent Lok Adalat could not have passed the impugned awards exparte, since the nature of proceedings before Permanent Lok Adalat is essentially conciliatory and non-adjudicatory in nature, and therefore, only 17 when the parties failed to reach an agreement by conciliation, the Permanent Lok Adalat could have proceeded to adjudicate the dispute.
7. On the question as to whether the Permanent Lok Adalat had jurisdiction to pass an exparte award in the absence of either of the parties, learned AGA has referred to the decision of the Hon'ble Orissa High Court in the case of EXECUTIVE ENGINEER ELECTRICAL (NESCO), Baripada Electrical Division, at/PO: Baripada, District Mayurbhanj vs. CHAIRPERSON, PERMANENT LOK ADALAT (P.U.S.), Mayurbhanj, Baripada, AIR 2013 Orissa 121 (in W.P.(C) No.12891/2012, disposed of on 14.02.2013).
8. Learned counsel for respondent, however, has argued in support of the impugned awards and reitierated that the petitioners themselves having given an undertaking before the executing court and having made part of the payment, none of the contentions urged in the petitions merit acceptance.
9. In the light of the above submissions, the points that arise for consideration are:18
1) Whether Permanent Lok Adalat has jurisdiction to pass ex-parte award under section 22C of the Legal Services Authorities Act, 1987?
2) Whether Permanent Lok Adalat is required to give reasons in support of its decision or award?
3) Whether the Statute empowers Permanent Lok Adalat to award interest and costs?
4) Whether the impugned awards are sustainable in law and facts of this case?
I propose to discuss all these points together as common discussion would lead to the answers to the above questions.
10. At the outset, it has to be noted that Permanent Lok Adalats came to be established by virtue of insertion of Chapter VIA to the Legal Services Authorities Act, 1987 with effect from 11.06.2002. From its statement of Objects and Reasons, it could be gathered that Chapter VIA was introduced in the Act of 1987 for establishment of Permanent Lok Adalats to set right / correct the drawbacks in the scheme of organization of Lok 19 Adalats as it was noticed that Lok Adalats were mainly based on compromises and settlements between the parties. If the parties did not arrive at any compromise or settlement, the cases were returned to the court of law. Since this caused delay in the dispensation of justice, it was felt necessary to give power to Lok Adalats to decide cases on merits in the event the parties failed to arrive at any compromise or settlement. Further it was felt necessary that matters relating to public utility services including supply of power, light or water to public by an establishment needed to be settled urgently at pre-litigation stage which would result in reducing the workload of the regular courts to a great extent and therefore, it was proposed to amend the Legal Services Authorities Act, 1987 so as to set up Permanent Lok Adalats for providing compulsory pre-litigation mechanism for conciliation and settlement of cases relating to public utility services. But the fallout of this amendment was that it gave rise to two types of Lok Adalats namely,
(i) Lok Adalats constituted under section 19 of the Act,
(ii) Permanent Lok Adalats constituted under section 22B(1) of the Act.
20In order to obviate any confusion in this regard, Hon'ble Supreme Court in its decision in M/s.INTERGLOBE AVIATION Ltd., referred to supra, clarified the legal position in the following words:-
"19. We may also at this juncture refer to the confusion caused on account of the term Permanent Lok Adalat being used to describe two different types of Lok Adalats. The LSA Act refers to two types of Lok Adalats. The first is a Lok Adalat constituted under Section 19 of the Act which has no adjudicatory functions or powers and which discharges purely conciliatory functions. The second is a Permanent Lok Adalat established under section 22B(1) of LSA Act to exercise jurisdiction in respect of public utility services, having both conciliatory and adjudicatory functions. The word Permanent Lok Adalat should refer only to Permanent Lok Adalats established under section 22B(1) of the LSA Act and not to the Lok Adalats constituted under section 19. However in many states, when Lok Adalats are constituted under section 19 of LSA Act for regular or continuous sittings (as contrasted from periodical sittings), they are also called as Permanent Lok Adalats even 21 though they do not have adjudicatory functions. In LIC of India vs. Suresh Kumar - 2011 (4) SCALE 137, this court observed: 'It is needless to state that Permanent Lok Adalat has no jurisdiction or authority vested in it to decide any lis, as such, between the parties even where the attempt to arrive at an agreed settlement between the parties has failed.' The said decision refers to such a `Permanent Lok Adalat' organized under section 19 of the Act and should not be confused with Permanent Lok Adalats constituted under section 22B(1) of the Act. To avoid confusion, the State Legal Services Authorities and the High Courts may ensure that Lok Adalats other than the Permanent Lok Adalats established under section 22B(1) of the Act in regard to public utility services, are not described as Permanent Lok Adalats. One way of avoiding the confusion is to refer to the Lok Adalats constituted under section 19 of the Act on a regular or permanent basis as `Continuous Lok Adalats'. Be that as it may."
11. From the above decision, is now clear that unlike Lok Adalats constituted under section 19 of the LSA Act, Permanent Lok Adalat constituted under section 22B(1) of the LSA Act is conferred with both conciliatory and adjudicatory 22 functions; and Permanent Lok Adalat is invested with the power and jurisdiction to pass an award on merits as provided under sub-section (8) of section 22C after observing or following the procedure prescribed under section 22C of the LSA Act. Sub- section (8) of section 22C specifically provides that, "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."
12. The Act is silent as to whether Permanent Lok Adalat could proceed to decide the dispute ex-parte in the absence of the parties. But a conjoint reading of section 22C and section 22D of the Act which deals with the procedure of Permanent Lok Adalat, makes it evident that while conducting the conciliation proceedings or deciding a dispute on merit under the Act, Permanent Lok Adalat shall be guided by the principles of natural justice, objectivity, fair play, equity and other principles of justice and shall not be bound by the Code of Civil Procedure, 1908 and the Indian Evidence Act, 1872. There is nothing in the amended Chapter VIA to suggest that if any of the parties fail to 23 respond to the notice or fail to participate in the proceedings, Permanent Lok Adalat is disabled to decide the dispute or pronounce the order. The only requirement laid down under section 22D of the amended Act is that while deciding the dispute, Permanent Lok Adalat shall be guided by the principles of natural justice, objectivity, fair play, equity and other principles of justice and nothing more. The Act does not prohibit Permanent Lok Adalat from passing any ex-parte award. If such restriction is read into the Act, it would frustrate the very object of constituting Permanent Lok Adalat, as the respondent in every case who is invariably interested in defeating the claim of the petitioner, may thwart the impending action or decision by Permanent Lok Adalat, by successfully evading service of notice or remaining absent during the conduct of the proceedings. Therefore, the argument of learned counsel for petitioners that Permanent Lok Adalat has no jurisdiction to pass exparte award does not find support from any provisions of the Act or the Rules framed thereunder.
24
13. In the instant case, the issue raised by the petitioners may not be germane for consideration as the material on record clearly indicate that the notices of the claims were duly served on the petitioners and on receiving the said notices, the Tahsildar appeared before Permanent Lok Adalat and sought time to make payment, but, thereafter failed to participate in the proceedings, as such, Permanent Lok Adalat could not conciliate the dispute as provided under sub-section (7) of section 22C of the Act. Needless to say that in view of Section 22C of the Act, only when both the parties to the proceedings appear before Permanent Lok Adalat and Permanent Lok Adalat is of opinion that there exists an element of settlement, it may formulate the terms of a possible settlement and give the same to the parties concerned for their observations. When either of the parties remain absent, question of conciliating the dispute does not arise at all. Since the petitioners failed to participate in the proceedings in spite of service of notices and conciliation was rendered impracticable and frustrated, in my view, Permanent Lok Adalat was well within its power to decide the dispute as per sub-section (8) of section 22C of the Act. Therefore, the first 25 contention raised by learned counsel for petitioners is liable to be rejected and is accordingly rejected.
14. Coming to the legality and correctness of the impugned awards are concerned, as already noted above, Section 22D of the Act prescribes the procedure to be followed by Permanent Lok Adalat while conducting the conciliation proceedings or deciding a dispute on merit. The said section reads as under:-
"Section 22D. Procedure of Permanent Lok Adalat. - The Permanent Lok Adalat shall, while conducting conciliation proceedings or deciding a dispute on merit under this Act, be guided by the principles of natural justice, objectivity, fair play, equity and other principles of justice, and shall not be bound by the Code of Civil Procedure, 1908 (5 of 1908) and the Indian Evidence Act, 1872 (1 of 1872)."
In view of the above provision, failure on the part of the Permanent Lok Adalat to observe the principles of natural justice would undoubtedly render the decision or the awards void and illegal. Furthermore, Permanent Lok Adalat having been conferred with the power of adjudication, it follows that the 26 power exercised by Permanent Lok Adalat is in the nature of quasi-judicial function and therefore, its decision should necessarily be informed with reasons as it is now well settled that, "except where the Legislature has expressly or by necessary implication, dispensed with the requirement to give reasons, every judicial or quasi-judicial authority must record reasons for its decision". "Such requirement is based on the need to ensure fair play and to exclude arbitrary action or capricious decision." (MUKHERJEE S.N. vs. UNION OF INDIA, AIR 1990 SC 1984). No doubt the statute does not expressly require Permanent Lok Adalat to give reasons in support of its decision, but having assumed the jurisdiction to adjudicate the disputes touching upon the rights and liabilities of the parties, failure to give reasons would render the decision invalid for the added reason that the appellate or the revisional authority would be deprived of the opportunity to test the correctness or validity of the order passed by Permanent Lok Adalat.
15. The question as to what makes a decision judicial or quasi-judicial has been expounded by the Hon'ble Supreme 27 Court and the broad proposition of law has been settled as under:-
i. If a statute empowers an authority, not being a Court in the ordinary sense, to decide disputes arising out of a claim by one party under the statute which claim is opposed by another party and to determine the respective rights of the contesting parties who are opposed to each other, there is a lis and prima facie and in the absence of anything in the statute to the contrary it is the duty of the authority to act judicially and the decision of the authority is a quasi-judicial act, and ii. If a statutory authority has power to do any act which will prejudicially affect the subject, then although there are not two parties apart from the authority and the contest is between the authority proposing to do the act and the subject opposing it, the final determination of the authority will yet be a quasi-judicial act, provided the authority is required by the statute to act judicially.
iii. The duty to proceed may be laid down by a statute either expressly or by necessary 28 implication. Thus, it may be inferred from the scheme of the statute and its material provisions, where it requires the authority to record reasons for its order.
16. In the light of the above principles, if the awards passed by Permanent Lok Adalat in the instant case are analysed, I find that none of the impugned awards satisfy the requirements of section 22D of the Act nor do they conform to the decisions of a quasi-judicial authority. A reading of the awards, on the face of it, indicate that the Permanent Lok Adalat has allowed the claims made by the respondent solely on the ground that the claims were not opposed by the petitioners. Permanent Lok Adalat appears to have lost sight of the fact that respondent had sought for adjudication of the claims for the money due to him on account of the services rendered by him to the petitioners. Needless to say, Permanent Lok Adalat derived its jurisdiction to resolve the dispute only in respect of "public utility service" as defined under section 22A of the Act. Undeniably, in the instant case, the claims made by the respondent related to supply of DG Sets/UPS and other 29 accessories. There is nothing in the impugned awards to show that Permanent Lok Adalat has come to any definitive finding that the services rendered by the respondent fall within the ambit of "public utility service" as defined under the Act. Without answering this jurisdictional question, Permanent Lok Adalat could not have allowed the claims on the assumption that the service rendered by the respondent is public utility service. That apart, Permanent Lok Adalat has not recorded any finding as to the period during which supplies were made by respondent. Though in the claim petitions the date of supply and the date of return have been specified, yet, no reasons are forthcoming in the impugned awards as to how the claims made by the respondent could be sustained after a delay of more than five years from the date of alleged supply of materials. Permanent Lok Adalat has proceeded on the supposition that merely by raising the bills, petitioners have rendered themselves liable to satisfy the claims without there being any material to show the correctness of the claims made by the respondent. 30
17. With regard to award of interest, Permanent Lok Adalat has noted that Hon'ble Supreme Court has upheld 12% interest awarded by the State Commission and the National Commission in earlier judgments. But no reasons are assigned for awarding interest at the rate of 15% per annum. No doubt, for delay in making payment, a party to the contract may be entitled for contractual rate of interest, and in absence of such stipulation, section 34 of C.P.C. could be resorted to by the courts or the quasi judicial tribunal, but in the instant case, the respondent having not based his claim either on the contract or under section 34 of C.P.C., there was absolutely no basis for Permanent Lok Adalat to award interest at the rate of 15% per annum.
18. For all these reasons, the impugned awards cannot stand the test of law and are therefore liable to be set-aside. As the Permanent Lok Adalat has failed to assign reasons in justification of its decision and having not recorded any finding as to the nature of the services rendered by the respondent, in my view, the impugned orders cannot be sustained. 31
19. It needs to be mentioned that after the parties were heard and the matters were set down for judgment, learned counsel for respondent filed a memo seeking to compromise the matter in terms of the memorandum of settlement dated 25.07.2020. By the said memorandum of settlement, the respondent proposed to to give up his claim for 2% of the total claim amount awarded by the Permanent Lok Adalat, but this memorandum was not signed by the respondent and learned AGA appearing for petitioners was not agreeable for the terms of the settlement proposed by the respondent and as such, it has to be held that there is no element of settlement of the dispute between the parties. As a result, all the claim petitions are required to be remitted to Permanent Lok Adalat, Mysuru, to reconsider the same in the light of the observations made in this order.
Accordingly, all the petitions are allowed. The impugned orders dated 30.09.2019 passed by Permanent Lok Adalat, Mysuru, in PLAP.Nos.453/2019, 257/2019, 452/2019, 450/2019 32 and 451/2019 are set-aside. The matters are remitted to Permanent Lok Adalat, Mysuru, for reconsidering the matters afresh in the light of the observations made in this order. All the factual and legal contentions urged by the respective parties are left open for consideration of Permanent Lok Adalat, Mysuru. In view of failure of settlement, Permanent Lok Adalat being the adjudicatory body, is required to afford an opportunity of hearing to both the parties and pass a reasoned order. However as the claim of the respondent is pending since 2012, Permanent Lok Adalat, Mysuru shall rehear the parties and dispose of the matters as expeditiously as possible, within an outer limit of two months from the date of issuance of certified copy. Permanent Lok Adalat, Mysuru shall pass appropriate orders in respect of the amount already paid by the petitioners in respect of the said transaction and shall also pass necessary orders in respect of the amount deposited by the petitioners before this Court and the same shall be dealt with as per the orders of Permanent Lok Adalat, Mysuru.
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In view of disposal of the petitions, I.A.No.1/2020 filed in all the petitions do not survive for consideration and accordingly, they are also disposed of.
Sd/-
JUDGE Bss