Karnataka High Court
M/S Mac Charles (I) Ltd vs M/S Bharat Sanchar Nigam Ltd on 14 February, 2019
Equivalent citations: AIR 2019 (NOC) 568 (KAR), AIRONLINE 2019 (NOC) 568 (KAR), 2019 (2) AKR 377, (2019) 2 KCCR 1439, (2019) 3 ICC 314
Author: H T Narendra Prasad
Bench: H. T. Narendra Prasad
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R
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 14TH DAY OF FEBRUARY 2019
BEFORE
THE HON'BLE MR. JUSTICE H. T. NARENDRA PRASAD
WRIT PETITION No.29708 OF 2013 (GM-RES)
BETWEEN:
M/s. MAC CHARLES (I) LTD
A Company Registered
Under the Companies Act, 1956
Having its Registered Office at:
P.B. No. 174, No.28, Sankey Road,
Bengaluru-560 052,
Represented by its:
Managing Director:
Ms. Sangeetha C. Pardhanani,
Aged bout 43 years,
D/of: Mr. C.B.Pardhanani. ..... Petitioner
(By Sri. B.S.Satyanand, Advocate)
AND:
M/s. Bharat Sanchar Nigam Ltd.,
Bangalore Telecom District,
Office of the Dy. General Manager,
(Now) (Central), Telephone Exchange,
4th Floor, Samapangirama Nagara,
Bengaluru-560 027. ...Respondent
(By Sri. Y.Hariprasad, Advocate)
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This Writ Petition is filed under Articles 226 and 227 of
the Constitution of India, praying to quash the impugned
order dated 21.05.2013, passed in P.L.A Petition
No.7799/2012, issued by the Additional Permanent Lok
Adalat at Bengaluru and produced at Annexure-Q and etc.,
This Writ Petition coming on for Preliminary Hearing in
'B' group this day, the Court made the following:
ORDER
This writ petition is directed against the order dated 21.05.2013 passed by the Additional Permanent Lok Adalath at Bangalore in PLA Petition No.7799/2012 whereby, application filed by the respondent has been allowed.
2. Brief facts are :-
The petitioner is a company duly registered under the Companies Act, 1956. The petitioner- M/s. Mac Charles (I) Ltd (Company) has subscribed the telephone lines from respondent-M/s Bharat Sanchar Nigam Ltd.,(BSNL) for the purpose of its business right from the date of its incorporation, for various business needs. The petitioner-3
Company was and even now is regularly making payments of all the bills as and when raised by respondent-BSNL.
There was a dispute between the petitioner and respondent-BSNL in respect of certain dues concerning the bill for the year 1989 and pertaining to telephone lines 77934, 77936 and 73248. A dispute was raised by the petitioner in O.S.No.31/1989 before the City Civil Court, Bengaluru whereby, the Court was pleased to direct the petitioner to deposit a sum of Rs.30,000/- and then raised a dispute before the Arbitrator in accordance with Section 7B of the Telegraphic Act. Accordingly, a dispute was raised before the Departmental Arbitrator who, after hearing both the parties on 01.05.2003, rejected the claim of the petitioner and directed them to pay an amount of Rs.99,703/-. Accordingly, the petitioner has paid entire due amount. After lapse of years, the respondent-BSNL has filed an application before the Permanent Lok Adalat under Section 22C(1) of the Legal Services Authorities Act, 1987 4 ('the Act' for brevity). Pursuant to that application which has been numbered as PLA Petition No.7799/2012, the Permanent Lok Adalat, Bangalore has issued a notice under the said Act. After service of notice dated 30.11.2012 as per Annexure L the petitioner has submitted his reply by Annexure-P dated 04.04.2013. Subsequently, by order dated 21.05.2013, the Additional Permanent Lok Adalat, Bangalore, passed a final award by allowing the petition filed by respondent-BSNL. Aggrieved by the same, the petitioner has filed this writ petition.
3. Sri. B.S.Satyanand, learned counsel for the petitioner submits that pursuant to the notice issued by the Permanent Lok Adalat, the petitioner has filed a reply on 04.04.2013 and also requested the Permanent Lok Adalat to grant some more time for filing detailed reply. Subsequently, the permanent Lok Adalat without conducting any conciliation proceeding as per the provisions of Section 22C(4), (5) and (6) of the Act and without giving 5 any opportunity to the petitioner has passed the impugned award at Annexure-Q dated 21.05.2003. The same is contradictory to the provisions of the Act. Hence, the petitioner sought for allowing the writ petition.
4. Per contra, Sri Y.Hari Prasad, the learned counsel for the respondent submits that pursuant to the notice, the petitioner has given a reply. Subsequently, the matter was called on 15.04.2013, petitioner was absent on that date and the matter was adjourned to 24.04.2013, on the said date also none appeared for the petitioner. Hence, the Permanent Lok Adalat has rightly passed the award in accordance with the provisions of the Act. Hence, he sought for dismissal of the writ petition.
5. Heard learned counsel for the parties and perused the records.
6. The Parliament has enacted a law called Legal Services Authorities Act, 1987 with an object to provide 6 free and competent legal service to the weaker sections of the society to ensure that opportunities for securing justice are not denied to any citizen by reason of economic or other disabilities, and to organize Lok Adalats to secure that the operation of the legal system promotes justice on a basis of equal opportunity. Before deciding the case, for better understanding relevant provisions of Legal Services Authorities Act are extracted.
7. Chapter VI relates to Lok Adalats. Section 19 is related to organization of Lok Adalats. Section 20 deals with cognizance of cases by Lok Adalats. Section 20 is extracted hereinbelow:
"20. Congnizance of cases by Lok Adalats-
(1) Where in any case referred to in clause(i) of sub-section (5) of section 19-
(i) (a) the parties thereof agree; or
(b) one of the parties thereof makes an application to the Court, for referring the case to 7 the Lok Adalat for settlement and if such court is prima facie satisfied that there are chances of such settlement; or
(ii) the Court is satisfied that the matter is an appropriate one to be taken cognizance of by the Lok Adalat, the Court shall refer the case to the Lok Adalat:
Provided that no case shall be referred to the Lok Adalat under sub-clause (b) of clause(i) or clause (ii) by such Court except after giving a reasonable opportunity of being heard to the parties.
(2) Notwithstanding anything contained in any other law for the time being in force, the Authority or Committee organizing the Lok Adalat under sub-section (1) of section 19 may, on receipt of an application from any one of the parties to any matter referred to in clause (ii) of sub-section (5) of section 19 that such matter needs to be determined by a Lok Adalat, refer such matter to the Lok Adalat, for determination:8
Provided that no matter shall be referred to the Lok Adalath except after giving a reasonable opportunity of being heard to the other party.
(3) Where any case is referred to a Lok Adalat under sub-section (1) or where a
reference has been made to it under sub-section (2), the Lok Adalat shall proceed to dispose of the case or matter and arrive at a compromise or settlement between the parties.
(4) Every Lok Adalat shall, while determining any reference before it under this Act, act with utmost expedition to arrive at a compromise or settlement between the parties and shall be guided by the principles of justice, equity, fair play and other legal principles.
(5) Where no award is made by the Lok Adalat on the ground that no compromise or settlement could be arrived at between the parties, the record of the case shall be returned by it to the court, from which the reference has been received under sub-section (1) for disposal in accordance with law.
(6) Where no award is made by the Lok Adalt on the ground that no compromise or 9 settlement could be arrived at between the parties, in a matter referred to in sub-section (2), that Lok Adalt shall advice the parties to seek remedy in a court.
(7) Where the record of the case is returned under sub-section(5) to the court, such court shall proceed to deal with such case from the stage which was reached before such reference under sub-section(1)".
8. Under Section 20 of the Act, the Court hearing the case with the consent of the parties can refer the case to the Lok Adalat. Having received the reference the Lok Adalat shall formulate the term of a possible settlement and explore the possibility of settlement between the parties. If parties reach a settlement, Lok Adalat shall pass an award. However, if no settlement is reached it shall return the reference to the Court.
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9. This view is supported by the Hon'ble Apex Court in the case of STATE OF PUNJAB AND OTHERS vs. GANPAT RAJ reported in (2006) 8 SCC 364. At para 7 of the said judgment it is observed as under:
"7. The specific language used in sub- section (3) of Section 20 makes in clear that the Lok Adalat can dispose of a matter by way of a compromise or settlement between the parties. Two crucial terms in sub-sections (3) and (5) of Section 20 are "compromise" and "settlement". The former expression means settlement of differences by mutual concessions. It is an agreement reached by adjustment of conflicting or opposing claims by reciprocal modification of demands. As per Termes de la Ley, "compromise is a mutual promise of two or more parties that are at controversy". As per Bouvier it is "an agreement between two or more persons, who, to avoid a law suit amicably settle their differences, on such terms as they can agree upon". The word "compromise" implies some element of accommodation on each side. It is 11 not apt to describe total surrender. (see NFU Development Trust Ltd., Re). A compromise is always bilateral and means mutual adjustment. "Settlement" is termination of legal proceedings by mutual consent. The case at hand did not involve compromise or settlement and could not have been disposed of by the Lok Adalat. If no compromise or settlement is or could be arrived at, no order can be passed by the Lok Adalat.."
10. The Parliament by Act 37/2002 has amended the Legal Services Authorities Act, 1987 to introduce Chapter VIA related to Pre-litigation conciliation and settlement. Section 22B relates to establishment of Permanent Lok Adalats. Section 22C deals with cognizance of cases by Permanent Lok Adalath. Section 22C is extracted hereinbelow:
"22C. Cognizance of cases by Permanent Lok Adalat.--
(1) Any party to a dispute may, before the dispute is brought before any court, make an 12 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 13 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.
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(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.
(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 15 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."
11. As per the Act there are two stages to refer the disputes to the Lok Adalat or Permanent Lok Adalat under Sections 20 and 22C, respectively. Under Section 22C(1) of the Act, at the pre litigation stage for the settlement of dispute by moving appropriate application. Having received application PLA under sub-section (3) shall direct both the parties to file their statements in writing supported by any document or evidence which parties intend to file in support of their respective claims. Having received statements and evidence PLA under sub-sections (4) and (5) of Section 22C shall commence conciliation proceedings and assist the parties to reach an amicable settlement of the dispute in an independent impartial manner. While assisting the parties 16 to reach to an amiable settlement Lok Adalat shall not use any coercion or pressure on the parties concerned. If during the conciliation proceeding Lok Adalat finds that their exist elements of settlement which may be acceptable to the parties, shall formulate the terms of a possible settlement of the dispute and supply to the parties concerned enabling them to reach an agreement on the settlement of dispute. If settlement is arrived at between the parties with the assistance of the PLA an award shall be passed by the PLA as per the terms and conditions of the settlement between the parties.
12. If the parties fail to reach at an agreement under sub-section (7) then only the Permanent Lok Adalat will get jurisdiction to decide the dispute under sub-section (8).
13. Section 22D is extracted hereinbelow:
"22D. Procedure of Permanent Lok Adalat - The Permanent Lok Adalat shall, while conducting conciliation proceedings or deciding a 17 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)."
14. By reading the above provision, in my opinion, it is clear that if parties during the conciliation proceeding held under sub-sections (4), (5), (6) and (7) of Section 22C of the Act have failed to reach the final conclusion, it shall give jurisdiction to Permanent Lok Adalat to invoke sub- section (8) to decide the dispute by applying the principles of fair play, equity, natural justice and objectivity as provided under Section 22D of the Act.
15. In this case, it is not in dispute that the respondent has filed an application under Section 22C(1) of the Act. Pursuant to that application, the Permanent Lok 18 Adalat, Bangalore has issued the notice to the petitioner under Section 22C(3) and the petitioner herein has replied to the notice. The Permanent Lok Adalat, without following the procedure under Section 22C(4), (5) and (6) has passed the award.
16. As per the provisions of Section 22C (4), (5), (6) and (7) of the Act, the Permanent Lok Adalat has to first conduct the conciliation proceedings, if the parties agree, then they have to reach at an agreement of the settlement of the dispute, in terms of settlement a final award has to be passed. If parties fail to reach at an agreement, under the provisions of Section 22C(7) of the Act, then only the Permanent Lok Adalat, Bangalore will get jurisdiction to decide the dispute. The Permanent Lok Adalat passed the impugned award without following the procedure provided under 22C (4), (5), (6) and (7) of the Act. The impugned award at Annexure-Q is passed without jurisdiction. 19
17. As per Section 22D of the Act, it is very clear that while Lok Adalat conducts the conciliation proceedings, or deciding the dispute on merits, under the said Act, they have to follow the principles of natural justice. In the case on hand, after the petitioner herein has given a reply, no conciliation proceedings has been conducted. The Permanent Lok Adalat has directly invoke the provisions of Section 22C(8) of the Act and passed the award which is contrary to provisions of Section 22C and 22D of the Act. Hence, the impugned award at Annexure-Q is unsustainable.
18. Accordingly, the writ petition is allowed. The award dated 21.05.2013 on the file of the Additional Permanent Lok Adalat, Bangalore at Annexure-Q is set aside. The matter is remanded back to the Permanent Lok Adalat, Bangalore with a direction to decide the dispute in accordance with the provisions of Sections 22C and 22D of the Act Since the matter is very old, without notice the 20 parties are directed to appear before the Permanent Lok Adalat on 08.03.2019. On that day, if the Permanent Lok Adalat, Bangalore has any inconvenience fix the next date of hearing and proceed further.
Sd/-
JUDGE RB