Allahabad High Court
The N.I.A.C.L. And Another vs M/S Siddharth Associate And Another on 29 January, 2018
HIGH COURT OF JUDICATURE AT ALLAHABAD Court No. 2 Reserved AFR Case :- WRIT- C No. - 44245 of 2016 Petitioner:- The N.I.A.C.L. And Another Respondent :- M/S Siddharth Associate And Another Counsel for Petitioner :-Subhash Chandra Srivastava Counsel for Respondent :- C.S.C., Ashish Kumar Gupta Hon'ble Ram Surat Ram (Maurya),J.
1. Heard Sri Subhash Chandra Srivastava, for the petitioners and Sri Ashish Kumar Gupta, for respondent-1.
2. The writ petition has been filed against the award of Permanent Lok Adalat, dated 15.06.2016, passed in P.L.A. Case No. 69 of 2014, directing for payment of Rs. 242013/- along with simple interest at the rate of 7% per annum and costs of Rs. 200/- to respondent-1 by way of reimbursement.
3. M/S Siddharth Associate through its proprietor Smt. Anita Bajpayee (respondent-1) filed an application (registered as P.L.A. Case No. 69 of 2014) for compensation of Rs. 242013/- along with costs. It has been stated that respondent-1 was owner of Highba Dumper U.P.-27 T-5421, which was insured with the appellant. On 09.09.2013, when the driver of aforesaid dumber was unloading ply S at Azizganj turn, in between showroom of JCB and Tata Company, Bareilly, its body was detached from chassis and was damaged. The claimant informed the petitioner about this accident. On which the petitioner sent its official surveyor and obtained a survey report and sent the vehicle for repair to authorized service center of the company i.e. Visheshwar Motors, Bareilly on 10.09.2014. In repair, Visheshwar Motors, Bareilly charged Rs.242013/- of which he has given him bill, boucher and receipt. The claimant informed the petitioner on 26.11.2013, to get fresh survey report of the vehicle after repair. The claimant along with relevant documents submitted its claim to the petitioner for reimbursement, however the petitioner sanctioned only Rs. 26590/-, which was not accepted by her. The petitioner filed applications dated 06.06.2014 and 10.06.2014 to sanction for the entire amount incurred in repair of the vehicle but it was not accepted. On these allegations claim petition was filed.
4. The petitioner filed its written statement and contested the matter. The petitioner stated that amount of the claim on the basis of invoice report given by Visheshwar Service Center, Bareilly was a collusive report. The surveyor of the petitioner has assessed actual damage to the vehicle to the tune of Rs. 26590/- which was offered to the claimant. In the absence of any consent by the petitioner, Permanent Lok Adalat had no jurisdiction to decide the case on merit.
5. Permanent Lok Adalat, in the impugned order, has noticed that after formulation of points on the basis of pleading of the parties, effort for compromise was made between the parties on 12.12.2014, 01.04.2015, 06.01.2016 and 25.05.2016 but it could not succeed. Both the parties adduced oral and documentary evidence in support of their case. Permanent Lok Adalat found that damages of the vehicle due to accident, has not been denied. There is no reason to disbelieve the bill and boucher issued by Visheshwar Service Center, Bareilly in respect of repair of the vehicle. On these findings, the claim petition was decreed and the petitioner was directed to pay Rs. 242013/- along with simple interest at the rate of 7% per annum and costs of Rs. 200/- to respondent-1. Hence this writ petition has been filed.
6. The counsel for the petitioner submitted that the petitioner has never given consent to adjudicate the dispute on merit. On the other hand, the petitioner made a declaration that loss caused to the vehicle of the claimant has already been assessed and offered and there was no deficiency of service on behalf of the petitioner. The excess claim made of respondent-1 was not legally payable, which also implies that the petitioner never gave consent to Permanent Lok Adalat to adjudicate the dispute as such it has no jurisdiction to pass the award on merit. He relied upon judgment of Jharkhand High Court in Divisional Manager, New India Assurance Co. Ltd. Vs. Urmila Devi, AIR 2010 Jharkhand 133, in which it has been held that for exercising jurisdiction of Permanent Lok Adalat for deciding the dispute, two essential conditions must be fulfilled i.e. (i) the parties should give consent that their dispute be decided by Permanent Lok Adalat and (ii) before deciding the dispute on merit Permanent Lok Adalat should first formulate and offer the terms of settlement to the disputing parties and make and endeavour to resolve the dispute through conciliation. Damages caused to chassis, sub-frame, tipping cylinder and assembly link rod were mechanical breakdown and are covered under exclusion clause of the terms of policy. The petitioner is not liable to reimbursement the damages as mentioned above. Permanent Lok Adalat has illegally failed to take notice of exclusion clause of the policy. Permanent Lok Adalat has no jurisdiction to award interest under Legal Services Authority Act, 1987, award of interest is without jurisdiction.
7. I have considered the arguments of the counsel for the parties and examined the record. Section 22-C of Legal Services Authority Act, 1987, is quoted below:-
Section 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.
(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. Supreme Court in United India Insurance Co. Ltd. v. Ajay Sinha, (2008) 7 SCC 454, held that we must guard against construction of a statute which would confer such a wide power in the Permanent Lok Adalat having regard to sub-section (8) of Section 22-C of the Act. The Permanent Lok Adalat must at the outset formulate the questions. We, however, do not intend to lay down a law, as at present advised, that Permanent Lok Adalat would refuse to exercise its jurisdiction to entertain such cases but emphasise that it must exercise its power with due care and caution. It must not give an impression to any of the disputants that it, from the very beginning has an adjudicatory role to play in relation to its jurisdiction without going into the statutory provisions and restrictions imposed thereunder.
9. In Inter Globe Aviation Ltd. v. N. Satchidanand, (2011) 7 SCC 463 Supreme Court has held that 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 22-B (1) of the LSA Act to exercise jurisdiction in respect of public utility services, having both conciliatory and adjudicatory functions. The expression "Permanent Lok Adalat" should refer only to Permanent Lok Adalats established under Section 22-B (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 the LSA Act for regular or continuous sittings (as contrasted from periodical sittings), they are also called as Permanent Lok Adalats even though they do not have adjudicatory functions.
In LIC v. Suresh Kumar, (2011) 7 SCC 491 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" organised under Section 19 of the Act and should not be confused with Permanent Lok Adalats constituted under Section 22-B (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 22-B (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.
10. Supreme Court in Bar Council of India v. Union of India, (2012) 8 SCC 243, held that the Statement of Objects and Reasons itself spells out the salient features of Chapter VI-A of Legal Services Authorities Act, 1987. By bringing in this law, the litigation concerning public utility service is sought to be nipped in the bud by first affording the parties to such dispute an opportunity to settle their dispute through the endeavours of the Permanent Lok Adalat and if such effort fails then to have the dispute between the parties adjudicated through the decision of the Permanent Lok Adalat.
It is necessary to bear in mind that the disputes relating to public utility services have been entrusted to Permanent Lok Adalats only if the process of conciliation and settlement fails. The emphasis is on settlement in respect of disputes concerning public utility services through the medium of Permanent Lok Adalat. It is for this reason that sub-section (1) of Section 22-C states in no unambiguous terms that any party to a dispute may before the dispute is brought before any court make an application to the Permanent Lok Adalat for settlement of dispute. Thus, settlement of dispute between the parties in matters of public utility services is the main theme. However, where despite the endeavours and efforts of the Permanent Lok Adalat the settlement between the parties is not through and the parties are required to have their dispute determined and adjudicated, to avoid delay in adjudication of disputes relating to public utility services, Parliament has intervened and conferred power of adjudication upon the Permanent Lok Adalat.
11. Section 22 (C) (1) provides that 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. For filing application before Permanent Lok Adalat, consent of the other party to the dispute is not required. Earlier judgment of Supreme Court in respect of jurisdiction of Permanent Lok Adalat has been clarified by Supreme Court in Inter Globe Aviation Ltd.' s case (supra) holding that Permanent Lok Adalats established under Section 22-B (1) of the Act has been conferred adjudicatory jurisdiction. The case law relied upon by the counsel for the petitioner is contrary to the view taken by Supreme Court in aforementioned case.
12. The argument that damages caused to chassis, sub-frame, tipping cylinder and assembly link rod were mechanical breakdown and are covered under exclusion clause of the terms of policy, is concerned, Section-1 of the Policy deals with Loss or Damages to the Vehicle Insured. Clause-1 provides that the Company will indemnify the insured against loss or damage to the vehicle hereunder and/ or its accessories whist thereon .....(vi) by accidental external means. Clause-2, which deals with exclusion clauses, provides that the Company shall not be liable to make any payment in respect of (a) consequential loss, depreciation, wear and tear, mechanical or electrical breakdown failure or breakage nor for damages caused by overloading or strain of the insured vehicle nor for the loss of or damage to accessories by burglary housebreaking or theft unless such vehicle is stolen at the same time. Supreme Court in Regional Director, ESI Corpn. v. Francis De Costa, 1993 Supp (4) SCC 100, held that the popular and ordinary sense of the word ''accident' means the mishap or an untoward happening not expected and designed to have an occurrence is an accident. It must be regarded as an accident, from the point of view of the workman who suffers from it, that its occurrence is unexpected and without design on his part, although either intentionally caused by the author of the act or otherwise. It may also arise in diverse forms and not capable of precise definition. The common factor is somewhat concrete happening at a definite point of time and an injury or incapacity results from such happening.
13. Thus exclusion clause deals with consequential loss. The policy clearly provides for indemnify loss or damages to the vehicle insured caused by accidental external means. The petitioner has claimed that damages caused to the vehicle, caused accidentally and not for consequential loss. The fact that accidental damage was caused to the insured vehicle has not been denied as part of damage was allowed by the petitioner. The part of damage, which is being denied is not a consequential damage but an accidental damage.
14. So far as jurisdiction of Parmanent Lok Adalat to grant interest, is concerned, similar plea that an Abritrator has no jurisdiction to award interest, has been rejected by Supreme Court in State of Haryana v. S.L. Arora & Co., (2010) 3 SCC 690, holding that in the Arbitration Act, 1940 ("the old Act", for short) there was no provision dealing with the power of Arbitral Tribunals to award interest. Section 29 of the old Act merely provided for post-decree interest and authorized the court to direct in the decree, where the award was for payment of money, payment of interest from the date of decree at such rate as the court deemed reasonable, to be paid on the principal sum as adjudged by the award and confirmed by the decree. The power of Arbitral Tribunals to award interest was governed by the provisions of the Interest Act, 1978 and the law enunciated by courts. Division Bench of this Court in Anshuman Singh Vs. State of U.P., 2004 (55) ALR 533 (DB) held that interest is normal accretion of capital. Award for payment of interest which is a normal accretion, cannot be set aside by this Court in exercise of writ jurisdiction.
15. In view of the aforesaid discussions, writ petition has no merit and is dismissed.
Order dated: 29.01.2018 Rahul/-