Jammu & Kashmir High Court
National Insurance Co. Ltd. vs Presiding Officer, Mact Poonch And Ors on 19 September, 2017
Author: B. S. Walia
Bench: B. S. Walia
HIGH COURT OF JAMMU AND KASHMIR AT JAMMU
OWP No. 1415/2011, MP No. D-1951/2011
Date of order: 19.09.2017
National Insurance Co. Ltd vs. Presiding Officer, MACT Poonch and ors
Coram:
Hon'ble Mr. Justice B. S. Walia, Judge
Appearing counsel:
For petitioner (s) : Mr. Baldev Singh Advocate.
For respondent(s) : Mr. S.H.Rather Advocate.
Mr. Ashok Sharma Advocate.
i/ Whether to be reported in Yes/No
Press/Media?
ii/ Whether to be reported in Yes/No
Digest/Journal?
Oral.,
1. Brief facts of the case leading to the filing of the instant writ petition are that Mohd Rashid and others filed a Claim Petition under Sections 166 and 140 of the Motor Vehicles Act on 22.07.2003 before MACT Poonch. An ex- parte award dated 27.12.2006 was passed in favour of the claimant respondents and against the Insurance Company directing it to pay an amount of Rs.4,68,000/- besides a sum of Rs.20,000/- on account of loss of consortium and Rs.6000/- on account of funeral expenses along with interest @ 6%. Application dated 28.07.2007 was filed by the Insurance Company for setting aside of the ex parte award. During the pendency of the said application, the matter was listed before the Lok Adalat.
2. Learned counsel for the petitioner-Insurance Company contends that as per practice, a claim is taken before the Lok Adalat on the written request of the Insurance Company after due investigation and on reaching a conclusion that the insured has not committed any violation of the terms and conditions of the Policy. Learned counsel for the petitioner further contended that the petitioner-Insurance Company had not authorized the counsel for getting the matter listed before the Lok Adalat for entering into a settlement and the counsel engaged by the Insurance Company, on his own without any permission from the Insurance OWP 1415/2011 Page 1 of 7 Company made a false statement before the Court that he had been instructed by the Insurance Company to negotiate the claim petition. Learned counsel for the petitioner-Insurance Company has referred to Clause-3 of the Vakaltanama given by the petitioner Insurance Company in favour of repsondent No.12 i.e Advocate engaged by it before the MACT as per which a claim could be compromised by respondent No.12 only with the prior approval of the Insurance Company. Relevant extract of Clause 3 of the Vakalatnama is reproduced hereunder:
"To withdraw or compromise with the prior approval of the Company, the said case or submit to arbitration and differences or dispute that shall arise touching on any manner relating to the said case"
3 Learned counsel for the petitioner-Insurance Company further referred to communication addressed by the Insurance Company to respondent No.12 dated 25.05.2007 requesting him to appear before the Court on 28.05.2007 for hearing and setting aside exparte award against the Insurance Company and to inform it accordingly and also enclosing Power of Attorney duly signed in his favour for appearance on behalf of the Insurance Company and also requesting him to be in touch with the Company and to inform it about the latest status of the case. Copy of the aforementioned communication dated 25.05.2007 as also Power of Attorney in favour of respondent No.12 is taken on record. Copy thereof handed over to learned counsel for respondent No.12.
4 Learned counsel for the petitioner-Insurance Company contended that in the circumstances, the counsel engaged by the Insurance Company before the MACT Poonch had on his own without any authority admitted that the Insurance Company was ready to pay the awarded amount of Rs.4,94,000/- along with interest @ 6% per annum to the claimant from the date of presentation of the claim petition, whereas the statement so made by learned counsel for the Insurance Company was false and incorrect and the Lok Adalat set aside the ex parte award dated 27.12.2006 and disposed the claim in the light of statement made by the counsel for the Insurance Company. Learned Counsel for the petitioner contended that the counsel engaged by the Insurance Company before OWP 1415/2011 Page 2 of 7 the MACT Poonch did not inform of the proceedings taken out by the Lok Adalat and the Insurance Company came to know about the same only on 15.09.2008 on receiving a copy of the award from the counsel for the claimant i.e. Shri Raja M.A.Khan from Poonch where - after correspondence was made with respondent No. 12 for a certified copy of the award as to proceed in the matter as the copy sent by the counsel for the claimant was a photostat copy with certain insertions. Respondent No. 12 was also approached on phone to ascertain as to how he had entered into a compromise without the knowledge and consent of the Insurance Company and that the said action had been viewed by the Insurance Company very very seriously and it was not fair on his part to have settled the case for the amount as agreed by him along with interest in Lok Adalat for which the Company could sue him in proper forum. He was also sent a communication dated 16.10.2008 asking him to forward a certified copy of the award so as to enable the petitioner to proceed in the matter in accordance with law. It is contended that reply was received from respondent No. 12. However, the same is not on record.
5. Learned counsel for the petitioner-Insurance Company has also referred to the objections filed by respondent No.12. Paragraph No.06 of the same records that respondent No.12 was engaged by the Insurance Company to attend the case before the MACT Poonch and he discussed the matter with the concerned officers of the Insurance Company who permitted him to go ahead and get the ex- parte award set aside and to negotiate in the matter and further that he had not moved any application for reference of the matter before the Lok Adalat and the Presiding Officer of MACT Poonch of his own had placed the matter before the Lok Adalat in which respondent No.12 appeared and got the ex parte order set aside and as per the instructions of the Insurance Company agreed to the genuineness of the ex-parte award already passed and that whatever respondent No.12 had agreed was in accordance with the advice of the Insurance Company. Learned counsel contends that this on the face of it is contrary to the mandate of the authority given to the counsel by the Insurance Company before the MACT OWP 1415/2011 Page 3 of 7 Poonch vide letter dated 25.05.2007 and the Vakalatnama. Learned counsel contended that as per the terms and conditions of engagement, respondent No.12 was directed to appear before the Court on 28.05.2007 i.e the next date fixed for hearing and setting aside of exparte award and to inform the company accordingly and further that as per the Vakalatnama given by the Insurance Company to respondent No.12, compromise could be recorded by respondent No.12 only with the prior approval of the Company and no consent or approval of the Company had ever been given by the Company to respondent No.12. Rather the Company on coming to know about the conduct of respondent No.12 viewed the same very seriously and sought his comments as to how he had arrived at the settlement with the claimants without the prior consent and approval of the company. Learned counsel further contended that the counsel for the Insurance Company before the Lok Adalat could not have compromised the matter even otherwise since the compromise was in violation of statutory provisions as the Insurance Company was not liable to pay any compensation on account of driving licence of the driver of the offending vehicle not being valid. Learned counsel has also referred to communication Annexure D dated 28.01.2009 whereby it had been communicated to respondent No. 12 that it was not fair on his part to have settled the case for the amount as agreed by him along with interest in the Lok Adalat for which the Insurance Company would sue him in an appropriate forum and also how he had arrived at the settlement and agreed for the amount along with interest @ 6% in the Lok Adalat without the prior permission of the Insurance Company. Learned counsel by relying upon Section 19(i)(b) of the Legal Services Authorities Act contended that the matter could be referred to the Lok Adalat only when one of the parties thereof made an application to the Court for referring the case to the Lok Adalat for settlement provided further that the Court to which the application was made was prima facie satisfied that there were chances of such settlement. Learned counsel further contended that the Insurance Company had neither requested nor authorized reference of the matter to the Lok Adalat and as per respondent No. 12 the matter was referred by the learned Presiding Officer of OWP 1415/2011 Page 4 of 7 MACT Poonch to the Lok Adalat on his own. Learned counsel contends that it was, therefore, apparent that reference of the matter to the Lok Adalat was without any authority of law, consequentially was in derogation of the provisions of Section 19(i)(b) of the Act (ibid).
6. Learned counsel for the claimant, on the other hand, defended the award by stating that the counsel engaged by the Insurance Company had made a statement before the Lok Adalat, therefore, the Insurance Company was bound by the same.
7. Learned counsel for respondent No.12 has reiterated the stand as has already been referred to paragraph 6 of the objections filed by him.
8. I have heard learned counsel for the parties, considered the submissions made, perused the record and am of the considered view that in the facts and circumstances of the case, order dated 28.07.2008 passed by the Lok Adalat and order dated 11.05.2011 passed by the MACT Poonch is liable to be set aside and the matter remitted to the MACT Lok Adalat Poonch to consider the plea of the petitioner Insurance Company for setting aside of ex parte award in view of the stand of the petitioner Insurance Company that it had not authorised its counsel to enter into a compromise and that the same could be entered into only on prior approval as per authority in terms of the Vakaltanama which, in the present case, is missing. That apart, it does not stand to reason that on the Insurance Company having moved an application for setting aside of exparte award, the matter would be compromised by it before the Lok Adalat without seeking variation of the award.
09. The Hon'ble Supreme Court in Y. Sleebachen and others vs. State of Tamil Nadu, reported as (2015) 5 Supreme Court Cases 747 held that counsel appearing for a party is fully competent to put his signature to the terms of any compromise upon which a decree can be passed in proper compliance with the provisions of Order 23 Rule 3 CPC and such decree is perfectly valid depending OWP 1415/2011 Page 5 of 7 on the authority conferred on the counsel in terms of the Vakalatnama. Relevant extract of said decision is reproduced hereunder :
"15. The only ground which has prevailed with the High Court in accepting the appeals of the respondents against the aforesaid orders are that the Government pleader was not authorised by the respondents to enter into such a settlement. It is difficult to accept this reasoning, in the scenario which prevails on the record. In the first instance, it is to be kept in mind that nothing has been brought out by the respondents which would show that advocate was not authorised to enter into such a settlement. On the perusal of the grounds of appeal submitted before the High Court by the respondents and even in the counter affidavit filed in this appeal, there is no allegation of any sort against the Government pleader. On the contrary, a categorical statement has been made that "the action of the respondent was fair and just in this regard as the respondent has not initiated any proceeding against the District Government Pleader." Furthermore, and most importantly, there is not even an iota of a pleading explaining as to how the Government Pleader was not authorised to record consent or that he in any manner lacked authority. It is not even remotely suggested in any of these grounds that the Government Pleader had acted improperly. On the contrary, what is sought to be suggested is that there was a failure of compromise, or that no compromise was recorded or agreed upon before the Court, which is contrary to the record of the Court and the statements recorded in the judgment of the District Court, and therefore impermissible as a ground of challenge.
17. It is also pertinent to point out that here also, no application was filed by the respondents before the District Court immediately after the passing of decrees in compromise terms, or even thereafter, for recall of the compromise order with the plea that such a compromise was unacceptable as the Government Pleader was not authorised to enter into any such settlement. Instead appeals were filed before the High Court. We are of the opinion that respondents should have approached the trial court in the first instance as it is the trial judge before whom the compromise was recorded and as he was privy to events that led to the compromise order, he was in a better position to deal with this aspect.
10. However, in the facts of the present case, the petitioner by reference to the terms and conditions of the authority conferred on the counsel i.e respondent OWP 1415/2011 Page 6 of 7 No.12 by way of Vakalatnama has vehemently denied responent No.12 as having the authority of the Insurance Company for entering into a compromise with the claimant. Respondent No. 12 also did not inform the petitioner Insurance Company of his having compromised the matter and the Insurance Company came to know about the Award much later and that too, only on intimation from the counsel for the claimant whereupon it immediately sought certified copy of the Award from respondent No. 12 as also sought to know as to how he had entered into compromise with the claimant without its authority and also of the Insurance Company reserving its right to sue him before an appropriate forum for having compromised the matter without authorization. In the given set of circumstances and in the light of the decision of the Hon'ble the Supreme Court in Sleebachen's case (Supra), order dated 28.07.2008 passed by the Lok Adalat as also order dated 11.05.2011 passed by respondent No.1 by virtue of which the application for review of the ex parte award was dismissed are set aside and the matter is remitted to MACT Poonch to consider and decide the application of the petitioner-Insurance Company for setting aside of ex-parte award dated 27.12.2006 in accordance with law after affording opportunity of hearing to the parties after due notice of date of hearing. Let the aforesaid exercise be carried out within a period of three months from today.
Writ petition is disposed of in the aforementioned terms.
In view of request of learned counsel for the petitioner, copy of this order be provided to him under the seal and signatures of Reader of this Court.
Record be sent back to MACT Poonch. Copy of this order be also forwarded to MACT Poonch forthwith.
(B. S. Walia) Judge Jammu 19.09 .2017 Sanjeev OWP 1415/2011 Page 7 of 7