Punjab-Haryana High Court
Reliance Life Insurance Company … vs Permanent Lok Adalat (Public Utility … on 17 February, 2025
Neutral Citation No:=2025:PHHC:022955
CWP-24338
24338-2016 (O&M) and 1
CWP-24339
24339-2016 (O&M)
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
(217) Date of Decision : 17.02.2025
1. CWP-24338
24338-2016 (O&M)
Reliance Life Insurance Company Ltd. and others ...Petitioner
Petitioners
Versus
Permanent Lok Adalat and another ...Respondents
...Respondent
2. CWP-24339
24339-2016 (O&M)
Reliance Life Insurance Company Ltd. and others ...Petitioners
Petitioners
Versus
Permanent Lok Adalat and another ...Respondents
...Respondent
CORAM: HON'BLE MR. JUSTICE KULDEEP TIWARI
Present: Ms. Neha Jain, Advocate for
Mr. Manish Dadwal, Advocate
for the petitionerss in both the cases
cases.
Mr. Aakash Singla, Advocate and
Ms. Vaishali Singla, Advocate
for respondent No.2, in both the cases.
****
KULDEEP TIWARI,
TIWARI J.(ORAL)
1. Both the instant writ petition(s) are amenable to be decided
together, as the common issue has been raised, therefore, both the instant
petitions are taken up together for adjudication.
2. Though,, different awards has been challenged, however, the
common issue which has been raised through the instant petition(s), is that the
provisions of Section 22-C
22 of The Legal Service Authorities Act, 1987, has
not been meticulously complied with,
with therefore,
herefore, the Permanent Lok Adalat,
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Patiala, does
es not have any jurisdiction, to decide the issue
issue, on merits.
3. Learned counsel for the petitioner, in order to substantiate the
submissions draws the attention of this Court, towards the interim orders
submissions, order
passed by the learned Permanent Lok Adalat concerned,, on dated 23.03.2016
and 16.04.2016, to submit that no possible terms of settlement has been
framed, before proceeding towards the conciliation proceedings, and
therefore, in the absence of laying down the terms of settlement, simply fixing
the matter for conciliation, is of no consequence. She further referred to the
impugned award,
award to submit that no possible terms of settlement has been
mentioned,, therefore, the Permanent Lok Adalat concerned, do
does not have
further jurisdiction, to decide the issue, on merits
merits, before making meticulous
compliance of the provisions of Section 22-C
C of the ibid Act.
4. Therefore, in the absence of framing of any terms of settlement,
settlement
the Permanent Lok Adalat concerned, does not have any vested jurisdiction to
adjudicate the matter in dispute. The Hon’ble Supreme Court in ‘United India
Insurance Company Ltd. vs. Ajay Singh and another‘ 2008 (7) SCC 454
454,, has
held that the Permanent Lok Adalat, must not give any impression to any of
the disputants that it has adjudicator’s role from the very beginning. The
relevant paragraphs are extracted hereinafter ::-
“21.
21. The term “conciliation” is not defined under the Act.
It should, therefore, be considered from the perspective
of Arbitration and Conciliation Act, 1996. In order to
understand what Parliament meant by `Conciliation’, we
have necessarily to refer to the functions of a `Conciliator’
as visualized by Part III of the 1996 Act. Section 67
6
describes the role of a conciliator. Sub
Sub-section
section (1) states
that he shall assist parties in an independent and impartial
manner. Subsection (2) states that he shall be guided by2 of 10
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consideration, among other things, to the rights and
obligations of the parties, the usages of the trade
concerned and the circumstances surrounding the dispute,
including any previous business practices between the
parties. Sub-section
section (3) states that he shall take into
account
unt “the circumstances of the case, the wishes the
parties may express, including a request for oral
statements”. Sub-section
section (4) is important and permits the
`conciliator’ to make proposals for a settlement. This
section is based on Article 7 of UNICTRAL Conciliation
Rules.
Section 73, which is important, states that the conciliator
can formulate terms of a possible settlement if he feels that
there exists elements of settlement. He is also entitled to
`reformulate the terms’ after receiving the observatio
observations
ns of
the parties. The above provisions in the 1996 Act make it
clear that the `Conciliator’ under the said Act, apart from
assisting the parties to arrive at a settlement, is also
permitted to make “proposals for a settlement” and
“formulate the terms of a possible settlement” or
“reformulate the terms”. This is indeed the UNCITRAL
concept.
22. Section 89 of the Code of Civil Procedure inter alia
was enacted to promote resolution of disputes through
mutual settlement. Chapter VI
VI-A of the Act seeks to achieve
a different purpose. It not only speaks of conciliation qua
conciliation but conciliation qua determination.
Jurisdiction of Permanent Lok Adalat, although is limited
but they are of wide amplitude. The two provisos appended
to Section 22-C (1) of the Act curtail the jurisdiction of the
Permanent Lok Adalat which are as under ::-
Provided that the Permanent Lok Adalat shall not have
jurisdiction in respect of any matter relating to an offence3 of 10
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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:
23. Chapter VI-A
A stands independently. Whereas, the
heading of the Chapter talks of pre
pre-litigation,
litigation, conciliation
and settlement, Section 22
22-C (8) of the Act speaks of
determination. It creates another adjudicatory authority,
the decision of which by a legal fiction would be a decision
of a civil court. It has the right to decide a case. The term
`decide’ means to determine ; to form a definite opinion ;
to render judgment. (See Advanced Law Lexicon 3rd
Edition 2005 at 1253). Any award made by the Permanent
Lok Adalat is executable as a decree. No appeal
thereagainst shall lie. The decision of the Permanent Lok
Adalat is finall and binding on parties. Whereas on the one
hand, keeping in view the Parliamentary intent, settlement
of all disputes through negotiation, conciliation,
medication, Lok Adalat and Judicial Settlement are
required to be encouraged, it is equally well sett
settled
led that
where the jurisdiction of a court is sought to be taken
away, the statutory provisions deserve strict construction.
A balance is thus required to be struck. A court of law can
be created under a statute. It must have the requisite
infrastructure therefor.
herefor. Independence and impartiality of
Tribunal being a part of human right is required to be
taken into consideration for construction of such a
provision. When a court is created, the incumbents must be
eligible to determine the lis.
xxx xxx
25. Sub-section (1) of Section 22
22-C speaks of settlement of
disputes. The authority has to take recourse to conciliation
mechanism. One of the essential ingredients of the
conciliation proceeding is that nobody shall be forced to
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take part therein. It has to be vol
voluntary
untary in nature. The
proceedings are akin to one of the recognized ADR
mechanism which is made of Medola. It may be treated at
par with Conciliation and Arbitration. In such a case the
parties agree for settlement of dispute by negotiation,
conciliation orr mediation. The proceedings adopted are
not bending ones, whereas the arbitration is a binding
procedure. Even in relation to arbitration, an award can
be the subject matter of challenge. The provisions of
the Arbitration and Conciliation Act, 1996 shall apply
thereto. The jurisdiction in terms of Section 34 of the
Arbitration and Conciliation Act, 1996 is wide. The court
in exercise of the said jurisdiction may not enter into the
merit of the case but would be entitled to consider as to
whether the arbitrator
ator was guilty of misconduct. If he is
found to be biased, his award would be set aside. The
scope of voluntary settlement through the mechanism of
conciliation is also limited. If the parties in such a case can
agree to come to settlement in relation to the principal
issues, no exception can be taken thereto as the parties
have a right of self determination of the forum, which shall
help them to resolve the conflict, but when it comes to some
formal differences between the parties, they may leave the
matter
er to the jurisdiction of the conciliator. The
conciliation only at the final stage of the proceedings
would adopt the role of an arbitrator.
26. Here, however, the Permanent Lok Adalat does not
simply adopt the role of an Arbitrator whose award could
be the
he subject matter of challenge but the role of an
adjudicator. The Parliament has given the authority to the
Permanent Lok Adalat to decide the matter. It has an
adjudicating role to play.
play.”
5. The coordinate Bench of this Court in ‘United India Insurance
Company Ltd. vs. Ranjit Singh and another‘ 2013 (3) R.C.R. (Civil) 325
325,, has
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also held that if the Permanent Lok Adalat, has not framed any proposal for
settlement, the Permanent Lok Adalat loses the jurisdiction. The relevant
paragraphs is extracted hereinafter
herei :-
11. Now coming to the other questions, “whether the Lok
Adalat had the jurisdiction to decide the dispute on merits
without forming an opinion that there was proposal for
settlement and the settlement had failed” and regarding the
true interpretation of the words “where the parties failed to
compromise, the Court would proceed to decide the
dispute.” Section 22-C of the Legal Services Authorities
Act, 1987 (for brevity ‘the Act’) requires to be reproduced
as under:-
“22C. Cognizance of cases
ases by Permanent Lok Adalat:
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 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 whether the value of the
property in dispute exceeds ten lakh rupees:
Provided also that
hat 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
sub-section
section (1) to
the Permanent Lok Adalat, no party tto
o 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
it-
(a) shall direct each party to the application to file before
it a written statement, stat
stating
ing therein the facts and nature
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of dispute under the application, points or issues in such
dispute and grounds relied in support of or in opposite to,
such points or issues, as the case may be, and such party
may supplement such statement, with any docume
document
nt 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
ty to present reply thereto.
(4) When statement, additional statement and reply, if any,
have been filed under sub
sub-section
section (3), to the satisfaction of
the Permanent Lok Adalat, it shall conduct conciliation
proceedings between the parties to the application
n in such
manner as it thinks appropriate taking into account the
circumstances of the dispute.
(5) The Permanent Lok Adalat, during conduct of
conciliation proceedings under sub
sub-section
section (4), assist the
parties in their attempt to reach an amicable settlem
settlement
ent 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 the opinion that there exist
elements of settlement in such proceedings whi
which
ch may be
acceptable to the parties, it may formulate the terms of a
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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) When the parties fail to reach at an agreement under
sub-section
section (7), the Permanent Lok Adalat shall, if the
dispute does not relate to aany
ny offence, decide the dispute.”
13. In the instant case, the matter was vehemently
contested; no opinion regarding the hope of compromise
was formed and no terms for such settlement were framed.
The petitioner-company,
mpany, at the very initial stage while
appearing in the Court, had outrightly condemned the
conduct of respondent No.1 and pleaded his ineligibility to
the compensation. As such, to decide the dispute on merits
was not within the purview of the Lok Adalat.
14. At this stage, it would be pertinent to mention here that
in the instant case, the Permanent Lok Adalat never
resorted to the Provisions of sub
sub-sections
sections
3, 4 and 7 of Section 22C of the Act before proceeding to
decide the case on merits. As a matter of fact, the Court
neither complied with the aforesaid provisions nor advised
the parties to seek their remedy before a Court of Law.
While elaborating the scope of jurisdiction of Permanent
Lok Adalat to decide such disputes, the Hon’ble Apex
Court in case State of Punjab & another Vs. Jalour Singh
& others,, 2008 (1) Civil Court Cases 591, observed as
under:-
“8. It is evident from the said provisions that Lok Adalats
have no adjudicatory or judicial functions. Their functions
relate purely to conciliation. A Lok Adalat determines a
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confirmation by making an award in terms of the
compromise or settlement. When the Lok Adalat is not able
to arrive at a settlement or compromise, no award is made
and the case record is returned to the Court from which
the reference
eference was received, for disposal in accordance
with law. No Lok Adalat has the power to ‘hear’ parties to
adjudicate cases as a court does. It discusses the subject
matter with the parties and persuades them to arrive at a
just settlement. In their conc
conciliatory
iliatory role, the Lok Adalats
are guided by principles of justice, equity, fair play. When
the L.S.A. Act refers to ‘determination’ by the Lok Adalat
and ‘award’ by the Lok Adalat, the said Act does not
contemplate nor require an adjudicatory judicial
determination,
ermination, but a non
non-adjudicatory
adjudicatory determination based
on a compromise or settlement, arrived at by the parties,
with guidance and assistance from the Lok Adalat. The
‘award’ of the Lok Adalat does not mean any independent
verdict or opinion arrived at by any decision making
process. The making of the award is merely an
administrative act of incorporating the terms of settlement
or compromise agreed by parties in the presence of the Lok
Adalat, in the form of an executable order under the
signature and seal of the Lok Adalat.”
15. While taking the case from another angle, it transpires
that the Permanent Lok Adalat instead of taking the steps
for settlement between the parties, performed the role and
the duty of the Consumer Redressal Commission under
the Consumer
nsumer Protection Act, 1986, which deal
dealss with the
questions regarding “deficiency in service”, “unfair trade
practice” and “consumer” and the said Act also provides
for compensation and other remedies. But the Legal
Services Authorities Act, 1987, does not define the
aforesaid terminology. As such, the dispute could not be
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dragged to the jurisdiction of the Lok Adalats.
16. Permanent Lok Adalat never assisted or guided the
parties to explore possibility of amicable settlement under
sub-sections (5) and (6). Neither the Permanent Lok Adalat
ever opined that there was possibility of amicable
settlement nor it has formulated terms of possible
settlement as required under sub
sub-section
section (7). Thus, without
following the procedure, as laid down under sub-sections
sections
(4),, (5), (6) and (7) of the Act, the Lok Adalat could not
straightway invoke the provisions of sub
sub-section
section (8) of the
Act. As such, the order could not be sustained. Similar
observations were made by this Court in case Reliance
General Insurance Company Limi
Limited
ted Vs. Vijay Kumar &
another,, CWP No.20825 of 2010 (decided on
04.01.2012).”
6. In view of the settled principles, this Cou
Court
rt deems it fit and
appropriate, to interfere in the impugned awards
awards, therefore, both the impugned
awards,, as challenged before this
thi Court, are hereby set aside.. However, the lis
is remanded back to the Permanent Lok Adalat concerned, to decide the issue
afresh, after adhering to the conditions
nditions laid down in Section 22
22-C
C of the Act
(supra).
7. Consequently, both the instant petition(s) are disposed of.
of
Pending applications, if any, also stands disposed of accordingly.
8. Photocopy of this order be placed on the connected case file.
(KULDEEP TIWARI)
JUDGE
February 17,
7, 2025
Manpreet
Whether speaking/reasoned : Yes/No
Whether reportable : Yes/No
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