Jharkhand High Court
National Insurance Co.Ltd. Thr vs Niwas Chandra Chakravarty & Or on 15 September, 2016
Equivalent citations: 2017 (2) AJR 19, (2017) 172 ALLINDCAS 392 (JHA) (2017) 1 JCR 26 (JHA), (2017) 1 JCR 26 (JHA)
Author: Aparesh Kumar Singh
Bench: Aparesh Kumar Singh
1
W.P.(C) No. 3032 of 2010
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W.P.(C) No. 3032 of 2010
National Insurance Co. Ltd. through Asstt. Manager
having its office at S.N.Ganguly Road, Ranchi. ... ... ... Petitioner
V e r s u s
1. Niwas Chandra Chakravarty
2. Smt. Niwas Chandra Chakravarty, wife of Niwas Chandra Chakravarty
3. Chandra Shekhar (wrongly mentioned as Ravi Shekhar Guin)
4. Oriental Insurance Company Ltd., near Canara Bank, Hinoo, Ranchi
5. Nav Kumar Bannerjee, son of Devendra Chandra Bannerjee.
... ... ... Respondents .
CORAM: HON'BLE MR. JUSTICE APARESH KUMAR SINGH
For the Petitioner : Mr. Alok Lal, Advocate.
For the R. No. 4 : Mr. D.C. Ghose, Advocate.
7/15.09.2016Heard learned counsel for the petitioner and learned counsel for the respondent no. 4.
2. Earlier notices were issued upon the respondents and as per the office note, service of notice on respondent nos. 1, 2 and 5 were effected. Service of notice on respondent no. 3 was thereafter effected by the petitioner through paper publication as per provision of Order 5 Rule 20 CPC. However, no one has entered appearance on behalf of these respondents.
3. The Award dated 06.03.2010 (Annexure2) passed by Permanent Lok Adalat, Ranchi in P.L.A. Case No. 905 of 2007 is under challenge by the petitioner - National Insurance Company on the ground that in a motor vehicle accident claim raised by the claimant/ respondent nos. 1 and 2, the learned Permanent Lok Adalat has awarded interim compensation to the tune of Rs.25,000/ under Section 140 of the Motor Vehicles Act, 1988 while also awarding the same amount to be paid by respondent no. 4 - Oriental Insurance Company Ltd. in teeth of the procedure prescribed under Section 22(C) (4) to (7) of the Legal Services Authority Act, 1987 and the law laid by the Court.
4. Two vehicles bearing registration nos. JH 01M 6531 (Maruti Alto Car) and BR 14C 8108 (Truck) were involved in an accident which led to death of the daughter and son of the claimant nos. 1 and 2 namely Mitali Bannerjee and Vijay Kumar Chakravarty respectively. The incident occurred on 04.08.2006 at about 9:30 am near Chema Chowk, Chanho Police Station within the district of Ranchi. The impugned Award has been primarily challenged on the ground that the learned Permanent Lok Adalat failed to follow the mandatory procedure 2 W.P.(C) No. 3032 of 2010 under Section 22(C) (4) to (7) of the Legal Services Authority Act, 1987 before proceeding to award the interim compensation under Section 140 of the Motor Vehicle Act. Reliance has been placed on the Judgment rendered by the learned Single Judge of this Court reported in 2009(3) JCR 374 (Jhar.) wherein Hon'ble Court has been pleased to interpret relevant provisions of the Act of 1987 whereunder the Permanent Lok Adalat may proceed to decide the dispute on merits under Section 22(C)(8) of the Legal Services Authority Act, 1987. However, such decision on merits has to be rendered by following the procedure under Section 22(C) (4) to (7) of the Legal Services Authority Act, 1987.
5. It is submitted that neither was any conciliation undertaken nor any terms of settlement framed and offered to the parties before proceeding to decide the claim on merits. Therefore, the impugned Award is not tenable in law. Reliance has also been placed in an unreported Judgment dated 22.08.2012 passed by this Court in the case of Radheshyam Kumar Ram Vs. Gurubari Hoe and another in W.P.(C) No. 1297 of 2007 and other analogous cases.
Learned counsel for the petitioner does not have the instruction to say whether the amount awarded has been actually distributed to the claimant or not during pendency of the writ petition.
6. Upon hearing counsel for the petitioner and respondent no. 4 and on perusal of materials on record including the impugned Award, it does not appear that the learned Permanent Lok Adalat while adjudicating the claim on merits made any effort to enable the parties to arrive at a conciliation. It also does not appear that any terms of settlement were framed for that purpose. The maintainability of claims before Permanent Lok Adalat arising out of the motor vehicle accident is however no longer resintegra in view of the Judgment dated 30.04.2012 rendered by Division Bench of this Court in the case of M/s. Oriental Insurance Company Limited Vs. Bodya Oraon and another passed in W.P.(C) No. 1975 of 2007. It has relied upon the Judgment rendered by the Apex Court in the case of Interglobe Aviation Limited Vs. N. Satchidanand reported in (2011) 7 SCC 463. The question relating to the procedure required to be followed by the Permanent Lok Adalat while adjudicating prelitigation applications under Section 22(C) of the Legal 3 W.P.(C) No. 3032 of 2010 Services Authority Act, 1987 has been considered and decided 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). The relevant extract of the said Judgment is quoted hereunder: "(viii) 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. 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.
(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 4 W.P.(C) No. 3032 of 2010 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 nonapplicability 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 sub section (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 nonappellable 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 5 W.P.(C) No. 3032 of 2010 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. 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 prelitigation 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 nonapplicability 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. 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 6 W.P.(C) No. 3032 of 2010 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".
7. It is, therefore, clear that the learned Permanent Lok Adalat in the instant case failed to follow the procedure prescribed under Section 22(C) (4) to (7) of the Legal Services Authority Act, 1987 before passing an order on merit in the matter of award of compensation to claimant. The impugned Award, therefore, suffers from inherent flaw in the decision making process by not following the procedure prescribed under the Act as upheld by the Judgment of this Court.
The Permanent Lok Adalat has contravened the jurisdiction conferred upon it by the Act of 1987 wherein it has been created and has also acted contrary to the said legal position.
8. In the circumstances, the impugned Award is set aside as being legally unsustainable. However, respondentclaimants are allowed liberty to move before the competent Tribunal for adjudication of the dispute, which may decide such claim, if permissible under the law, and in accordance with law. Learned counsel for the petitioner submits that liberty may be granted to recover the amount, if already paid, from owner of the vehicle. It is open for the petitioner - Insurance Company to do so if permissible in law.
9. This writ petition is accordingly allowed.
RC/ (Aparesh Kumar Singh, J.)