National Insurance Co. Ltd. ... vs Laxmi Narayan Mishra
2023 Latest Caselaw 630 Jhar

                 IN THE HIGH COURT OF JHARKHAND AT RANCHI

                                  W.P.(C) No. 6219 of 2016

                National Insurance Co. Ltd. having its Divisional Office at S.N.
                Ganguly Road, Ranchi, through A.K. Mohanty, Deputy Manager,
                Jharkhand Legal Cell at Kutchery Road, Ranchi
                                                             ...     ...  Petitioner
                                         Versus
                1. Laxmi Narayan Mishra, S/o Sri Satya Deo Mishra, resident of
                   Namkum Road, Doranda, P.S. - Doranda, P.O. - Hinoo, District -
                   Ranchi
                2. Basanti Devi, w/o Ashok Kumar Singh, resident of Kusai chowk,
                   P.O. - Hinoo, P.S. - Doranda, District - Ranchi
                                                     ...         ...     Respondents
                                         ---

CORAM: HON'BLE MRS. JUSTICE ANUBHA RAWAT CHOUDHARY

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                For the Petitioner    : Mr. Alok Lal, Advocate
                For the Resp. No.1    : Mr. K.K. Singh, Advocate
                                      : Mr. S. Bhowmik, Advocate
                For the Resp. No.2    : None
                                      ---
09/07.02.2023         Heard Mr. Alok Lal, learned counsel appearing on behalf of the
                petitioner along with Mr. Santosh Kumar, Advocate.

2. Mr. K.K. Singh, learned counsel for the respondent no.1, the claimant, is present.

3. Nobody appears on behalf of the respondent no.2- the owner of the vehicle , in spite of service of notice.

4. This writ petition has been filed for the following relief: "For quashing / setting aside of the order dated 23.06.2016 (Annexure - 1) passed by the permanent Lok Adalat, Ranchi, in PLA Case No.2 and 3 of 2005 whereby and where under the Permanent Lok Adalat, Ranchi, (hereinafter referred to as the Court below for the sake of brevity) in exercise of its power under the Legal Services Authority Act, 1987 (hereinafter referred to as the Act) has allowed the application filed by the respondent no.1 u/s 166 of the M.V. Act directing the insurer to pay sum of Rs.3,50,500/- on account of injury sustained by the respondent no.1 in an accident caused by the Maruti Van insured with the petitioner."

Arguments of the Petitioner

5. Learned counsel for the petitioner has submitted that the impugned order is perverse on account of the fact that the required procedure under the provisions of Section 22 C of the Legal Services Authority Act, 1987, has not been followed.

6. Learned counsel has submitted that para 1 of the impugned order indicates that the notice was validly served upon the owner of the vehicle, but he failed to appear and contest the case and hence the matter proceeded ex parte against him. Learned counsel has further submitted that once the

party is not appearing before the permanent Lok Adalat, the only option before the permanent Lok Adalat was to leave the parties to get their dispute adjudicated through the tribunal. He submits that in absence of the opposite party before permanent Lok Adalat, there could not have been any proceedings for conciliation etc. and therefore, no award could have been passed by the permanent Lok Adalat.

7. Learned counsel has further submitted that even if it is held that permanent Lok Adalat could have proceeded, then also the terms of settlement should have been forwarded to the non-appearing owner of the vehicle. He submits that from perusal of para 4 of the impugned order , it appears that the terms of settlement was only forwarded to the insurance company and the claimant but not to the owner of the vehicle and therefore, otherwise also, the impugned order by which the Permanent Lok Adalat proceeded to decide the case on merit, is not sustainable in the eyes of law on account of serious procedural irregularity and consequent violation of the provision of law governing the proceedings before Permanent Lok Adalat.

8. During the course of hearing, this Court has drawn the notice of the learned counsel for the petitioner on the recent judgment passed by Hon'ble Supreme Court reported in (2022) 7 SCC 776 (Canara Bank v. G.S. Jayarama) particularly para 34 and 36 of the said judgment. In response, learned counsel for the petitioner has submitted that even in view of the aforesaid judgment, the terms of settlement ought to have been forwarded to the owner of the vehicle, which has been admittedly not forwarded in the instant case.

Arguments of the Respondent.

9. Learned counsel for the respondent no.1 has also referred to para 16 and 17 of the aforesaid judgment reported in (2022) 7 SCC 776 (supra) and has submitted that wide powers have been vested on Permanent Lok Adalat and there has been no illegality or perversity or procedural irregularity in the impugned order calling for interference by this Court in writ jurisdiction. Learned counsel has also submitted that the judgment passed by the Permanent Lok Adalat is final and no appeal lies against the same and in absence of any perversity, no interference is called for under Article 226 of the Constitution of India.

Findings of this court.

10. This Court finds that the entire scheme of the Act has been considered by the Hon'ble Supreme Court in the judgment reported in (2022) 7 SCC 776 (supra) and the Hon'ble Supreme Court has also enumerated step by step procedure to be undertaken under the provisions of Section 22 C of permanent Lok Adalat while dealing with the mandatory nature of the conciliation proceedings. Para 34 of the aforesaid judgment is quoted as under:

"34. This issue is clearly resolved from a bare reading of Section 22-C. Section 22-C provides a step-by-step scheme on how a matter is to proceed before the Permanent Lok Adalat. The first step is the filing of the application which ousts the jurisdiction of other civil courts, in accordance with sub-sections (1) and (2). The second step is the parties filing requisite submissions and documents before the Permanent Lok Adalat, in accordance with sub-section (3). On the completion of the third step to its satisfaction, the Permanent Lok Adalat can move to the fourth step of attempting conciliation between the parties, in accordance with sub-sections (4), (5) and (6). Subsequently, in the fifth step in accordance with sub-section (7), the Permanent Lok Adalat has to draw up terms of settlement on the basis of the conciliation proceedings, and propose them to the parties. If the parties agree, the Permanent Lok Adalat has to pass an award on the basis of the agreed upon terms of settlement. Only if the parties fail to reach an agreement on the fifth step, can the Permanent Lok Adalat proceed to the final step and decide the dispute on its merits."

11. This Court further finds that one of the arguments, which was advanced by the learned counsel for the appellant before the Hon'ble Supreme Court, was that if the opposite party does not appear before Permanent Lok Adalat, it can dispense with the conciliation proceeding and straightway adjudicate the dispute under Section 22 C (8). The said contention was specifically rejected by the Hon'ble Supreme Court and it was held that even if the opposite party does not appear, the permanent Lok Adalat is still bound to follow the step-by- step procedure laid down by Section 22 C. It has been further held that under Section 22 C (3), it would require the party before it to file their submission and arguments and make best efforts to communicate them to the opposite party for their response. If it is satisfied that no response is forthcoming from the absent opposite party, the permanent Lok Adalat shall still attempt to settle the dispute through settlement under Section 22 C (4). It has further observed that it is important to remember that Section 22 C (5) imposes a duty upon the Permanent Lok Adalat to be independent and impartial in attempting to amicably settle the dispute. The Hon'ble Supreme Court while dealing with Section 22 C (6) held that it imposes a duty upon the

party present before permanent Lok Adalat to cooperate in good faith and assist the Permanent Lok Adalat and thereafter the permanent Lok Adalat based on material before it, shall propose the terms of settlement and communicate them to both the parties regardless of whether they participate in the proceedings. It has been further held that if the party present before the Permanent Lok Adalat does not agree or if the absent party does not respond in a sufficient period of time, only then can the Permanent Lok Adalat adjudicate the dispute on its merits under Section 22-C(8). Para 36 of the aforesaid judgment is quoted as under:

"36. The appellant's argument, however, is that if the opposite party does not appear before the Permanent Lok Adalat, it can dispense with the conciliation proceedings and straightaway adjudicate the dispute under Section 22-C(8). We are unable to accept this submission. Even if the opposite party does not appear, the Permanent Lok Adalat is still bound to follow the step-by-step procedure laid down by Section 22-C. Under Section 22-C(3), it would require the party before it to file their submissions and documents, and make the best efforts to communicate them to the opposite party for their response. If it is satisfied that no response is forthcoming from the absent opposite party, the Permanent Lok Adalat shall still attempt to settle the dispute through settlement under Section 22-C(4). It is important to remember that Section 22-C(5) imposes a duty upon the Permanent Lok Adalat to be independent and impartial in attempting to amicably settle the dispute, while Section 22-C(6) imposes a duty upon the party present before the Permanent Lok Adalat to cooperate in good faith and assist the Permanent Lok Adalat. Thereafter, the Permanent Lok Adalat, based on the materials before it, shall propose terms of settlement and communicate them to both parties, regardless of whether they participated in the proceedings. If the party present before the Permanent Lok Adalat does not agree or if the absent party does not respond in a sufficient period of time, only then can the Permanent Lok Adalat adjudicate the dispute on its merits under Section 22-C(8). Keeping in mind the principles enshrined in Section 22-D, the Permanent Lok Adalat shall once again notify the absent party of its decision to adjudicate the dispute on its merits, in case it wishes to join the proceedings at that stage."

12. This Court finds from perusal of the impugned order itself that the notice was validly served upon the owner of the vehicle, but she did not choose to appear before the permanent Lok Adalat . Para 4 of the impugned order reflects that during conciliation proceeding, the appearing parties failed to settle the dispute by mutual consent as such after collecting evidence from both the sides, it was found that there existed element of settlement, so the probable terms of settlement were formulated on 21.09.2013 and a copy thereof was served to the claimants as well as to the insurance company ( the opposite party no.2 before the Permanent Lok Adalat ) for observation and response.

13. This Court finds that the owner of the vehicle-the opposite party no.1 before the Permanent Lok Adalat, who was not appearing before the

permanent Lok Adalat, but the terms of settlement was not forwarded to the owner of the vehicle.

14. In view of the aforesaid judgement passed by the Hon'ble Supreme Court, this Court is of the considered view that in spite of the fact that owner of the vehicle was not appearing before permanent Lok Adalat, still the terms of settlement should have been forwarded to owner of the vehicle to complete the prescribed entire step by step method to get the dispute amicably settled amongst the parties. The step of sending the terms of settlement to the non-appearing party i.e the owner of the vehicle having not been followed , the step taken by the Permanent Lok Adalat to decide the case on merits cannot be sustained in the eyes of law on account of non- adherence of the prescribed procedure. Merely because the owner of the vehicle was not appearing, the same cannot be a reason not to forward the terms of settlement to the owner of the vehicle for his comments. This is in view of the aforesaid judgment passed by the Hon'ble Supreme Court reported in (2022) 7 SCC 776 (supra) wherein, it has been held that the permanent Lok Adalat shall propose the terms of settlement and communicate them to both the parties regardless of whether they are participating in the proceedings. This Court is of the considered view that the terms of settlement having not been forwarded to the owner of the vehicle, the Permanent Lok Adalat has committed error in proceeding further and deciding the case on merit. The condition precedent for entering and deciding the case on merits by the Permanent Lok Adalat was not satisfied.

15. As a cumulative effect of the aforesaid findings, the impugned order cannot be sustained in the eyes of law, which is accordingly set aside. It will certainly be open to the claimant to take steps to get his claim in accordance with law.

16. This writ petition is accordingly disposed of.

17. Pending interlocutory application, if any, stands closed.

(Anubha Rawat Choudhary, J.) Saurav/