Punjab-Haryana High Court
Syndicate Bank vs Permanent Lok Adalat And Ors on 11 March, 2024
Neutral Citation No:=2024:PHHC:035841
Neutral Citation No. 2024:PHHC:035841
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
204
CWP-26019-2017
Date of decision: 11.03.2024
SYNDICATE BANK ......Petitioner
VERSUS
PERMANENT LOK ADALAT AND OTHERS .......Respondents
CORAM : HON'BLE MR. JUSTICE VINOD S. BHARDWAJ
*****
Present: - Mr. Sandeep Verma, Advocate for
Mr. Pawan Nanda, Advocate
for the petitioner.
Mr. Alankar Narula, Advocate
for respondent No.3.
*****
VINOD S. BHARDWAJ, J. (Oral)
1. Challenge in the present writ petition is to the award dated
19.06.2017 passed by the Permanent Lok Adalat (Public Utility Services),
Chandigarh whereby an application preferred by the respondent No.3-
applicant M/s Irush India under Section 22-C of the Legal Services
Authorities Act, 1987 has been allowed and the petitioner-Bank has been
directed to release a sum of Rs. 2,78,720/- in favour of respondent No.3-
applicant alongwith interest @ 9% per annum. A further compensation of
Rs. 15,000/- towards mental agony and physical harassment alongwith
Rs. 10,000/- towards litigation expenses has also been awarded.
2. Briefly summarized the facts of the present case are that
respondent No. 3-applicant had submitted an application for grant of loan
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for a sum of Rs. 10 lacs to the petitioner-Bank for purchasing certain
machines under the Technology Up gradation Scheme of Credit Linked
Capital Subsidy Scheme (CLCSS) framed by the Small Scale Industries
and ARI Government of India. The respondent No.2 i.e. the Small Industries
Development Bank of India- was appointed as the Nodal Agency to
channelize the Credit Linked Capital Subsidy. The documents in support of
said benefits had been claimed to be submitted by the respondent-applicant
and on finding the same to be in order, the loan was sanctioned on
27.03.2012. After the disbursement of the loan amount in account of the
respondent No.2, the procedure for subsidy was taken up and the matter was
referred to the Nodal Agency, however, the claim of respondent No.3-
applicant was rejected by respondent No.2. Aggrieved of denial of the
subsidy by the Bank, a complaint was filed by respondent No.3-applicant
before the District Consumer Disputes Redressal Forum-1, U.T. Chandigarh
bearing Consumer Complaint No.CC/310/2014. After consideration of the
claims by the respective parties, the Consumer Disputes Redressal Forum,
U.T. Chandigarh dismissed the above said complaint leaving the parties to
pursue their grievance before a Civil Court since the respondent No.3-
applicant was not found to be a consumer qua respondent No.2-Nodal
Agency.
3. After dismissal of the said complaint by the Consumer Disputes
Redressal Forum-1, U.T. Chandigarh, the present application was filed,
wherein the respondent No.3-applicant reiterated the above sequence of facts
and it was further stated that the applicant was found entitled for subsidy to
the extent of 15% on the asset value that was worked out to be
Rs.2,78,720/- and an agreement in this regard was also executed on
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27.03.2012 between the Bank and the applicant. The Nodal Agency-
respondent No.2 i.e. SIDBI however rejected the claim and returned the case
for completion of some discrepancies. The information was sought by the
respondent-applicant as to the reasons for such rejection, however, the
respondent No.2 chose not to respond to the same. After a lot of persuasion
and efforts made by the applicant, it was informed vide letter dated
07.05.2013 that the SIDBI had advised not to send any old case whose
reference date is prior to 01.04.2012. The claim was rejected and
information was sent vide communication dated 08.08.2013 on account of
the case having been sent beyond the limitation. Alleging that the rejection
was not attributable to the lapse on the part of applicant and hence the
subsidy ought to be released. Hence the said application had been moved.
On receipt of notice, the petitioner Bank filed its reply raising objections to
the maintainability of the proceedings. It was also alleged that the Permanent
Lok Adalat had no jurisdiction since it was a claim for release of subsidy
and not a Public Utility Service. It was also submitted that the Bank had no
obligation to release subsidy and the same was to be released by the
Government.
4. A separate reply was also submitted by the SIDBI wherein it
raised an additional objection that it was only a nodal agency and that the
subsidy was to be released by the Government of India which had not been
impleaded as a party. The claim was sent to SIDBI on 13.06.2012 and was
returned to the Bank with certain observations on 16.10.2012. The reference
date in the case was 27.03.2012 and as per the circular dated 07.09.2012, the
documents should have been sent by the Bank by 30.06.2012 but by the
Bank submitted the same after the above date, the claim was rejected.
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5. Efforts were made for conciliation but the same failed.
Adjudication under Section 22-C (8) was accordingly undertaken by the
Permanent Lok Adalat (Public Utility Services).
6. Upon consideration of the claim of the respective parties, the
claim of the respondent No.3-applicant was allowed and it was observed that
the claim was not submitted by the petitioner-Bank in time i.e. before
30.06.2012 and an intimation as regards the rejection of the said subsidy was
sent to the respondent-applicant for the first time only on 08.08.2013, hence,
the Bank was liable to release the sanction subsidy. The deficiency was
hence fastened on the Bank. Aggrieved thereof, the present writ petition has
been filed.
7. Learned counsel appearing on behalf of the petitioner has raised
a twin arguments which are as under:-
i) That the Permanent Lok Adalat (Public Utility Services), had no
jurisdiction to entertain the applications since the proceedings
instituted earlier before the District Consumer Disputes
Redressal Forum-1, U. T, Chandigarh had been dismissed with
liberty to the petitioner to approach the Civil Court. It is thus
contended that as per Section 22 (C), jurisdiction of Permanent
Lok Adalat can be invoked 'before approaching any Court' as
defined under 'Section 2 (aaa)' of the Legal Services
Authorities Act, 1987. Since the respondent-applicant had
already approached the District Consumer Disputes Redressal
Forum without success, hence, the instant application under
Section 22 (c) under the Legal Services Authorities Act, 1987
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could not have instituted before the Permanent Lok Adalat
(Public Utility Services).
ii) It is contended that so far as the question of sanction of subsidy
is concerned, the same is required to be released by the Nodal
Agency-Union of India as per the applicable scheme. The
petitioner-Bank is only a lending institution and the subsidy is
required to be released by the competent authority. Once a
Nodal Agency of the Union of India had declined the claim of
the respondent No.3-applicant and held them to be not entitled
for the subsidy, the petitioner Bank cannot be held liable to
release the said subsidy. The petitioner-Bank is thus not in
default or lapse in performance of any of its obligations.
iii) The release of subsidy was to be sanctioned by the Union of
India which was not a party in the proceedings.
iv) The Bank did not cause any delay in submission of the claim to
the competent authority.
8. Counsel for the respondent No.3-applicant on the other hand
contends that they had made huge investment on the strength of the scheme
so sanctioned and that the respondent No.2 have unilaterally rejected the
application without assigning any valid reasons. The application was
accepted by the Permanent Lok Adalat (Public Utility Services) and after
considering all the objections, the award has been passed. He submits that
the applicant has been pursuing his claim for release of the capital subsidy
for last nearly a decade and that the grievance still remains unredressed. He
further submits that the petitioner Bank erred in not forwarding the claim to
the respondent SIDBI in time and hence a right that had accrued in its favour
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was defeated. He further submitted that the deficiency was thus on the part
of the Bank and that the complaint before the Consumer Court was
determined on technical ground and that the same is not an adjudication on
merits. The award has hence been rightly passed by the Permanent Lok
Adalat and the writ petition deserves to be dismissed.
9. He is however not in a position to controvert that Section 2
(aaa) of the Legal Services Authorities Act, 1987 brings within its hold all
Forums/Tribunal/authorities which perform judicial/quasi judicial functions.
No other argument has been raised or judgment cited by any of the parties.
10. I have heard learned counsel appearing on behalf of the
respective parties and have gone through the documents filed alongwith the
present petition.
11. The primary question which comes up for consideration before
this Court is as to whether the Permanent Lok Adalat (Public Utility
Services) was competent to decide the application preferred by the
respondent No.3-applicant considering that the respondent No.3-applicant
had earlier espoused his grievance for release of the capital subsidy as per
the above said scheme before the District Consumer Disputes Redressal
Forum-1, U.T Chandigarh. Section 22 (C) specifically stipulates that a
person is to approach the Permanent Lok Adalat (Public Utility Services)
'before' approaching any other Court as defined under Section 2 (aaa). The
relevant statutory provisions are extracted as under:-
22C. 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
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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.
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(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.
Section 2- (aaa) "court" means a civil, criminal or revenue
court and includes any tribunal or any other authority
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constituted under any law for the time being in force, to
exercise judicial or quasi-judicial functions;]
(Emphasis supplied)
12. It is evident from a perusal of the above said statutory provision
that the prohibition against entertaining an application by the Permanent Lok
Adalat (Public Utility Services) is attracted once a person has already
approached any other 'Court' for seeking redressal of the said grievance.
The stage for approaching Permanent Lok Adalat prescribed in the statute is
to approach the Permanent Lok Adalat (Public Utility Services) before a
dispute is brought before any Court. Hence, Permanent Lok Adalat (Public
Utility Services) is prohibited from entertaining a dispute after initiation of
proceedings before any other Court as defined under Section 2 (aaa). The
stage for entertaining the application is not qualified or related to the final
outcome of the proceedings that were initiated before approaching the
Permanent Lok Adalat. The prescription of a stage is a conscious act of the
legislature, hence, a subsequent dismissal even on a technical ground, may
not ipso facto be sufficient to over ride the statutory provision enshrined
under Section 22 (C).
13. It is thus not a case where legislature is silent while providing a
stage for approaching the Permanent Lok Adalat, rather, it mandates that
Permanent Lok Adalat can be approached only before approaching any other
Court. It linked the stage of invoking jurisdiction of Permanent Lok Adalat
to the institution of the case and not to a final outcome of the proceeding-
whether on merits or for technical reasons. In exercise of its powers of
judicial review, the Courts may fill up a gap or lacunae or read down a
provision to cater to a situation not contemplated but does not legislate in the
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said process. High Court does not substitute its opinion for the intent of the
legislature. If the stage for approaching the Permanent Lok Adalat was not
intended to be prescribed, there was no occasion or reason to specify the
same. It is well settled role of statutory interpretation that every word or
phrase has been incorporated consciously by the legislature and attempt has
to be given to interpret the clause so as to give effect to it and not to render it
nugatory or otiose. Unless the interpretation runs contrary to the statutory
object and scheme, it must be interpreted in a manner to implement the
same.
14. Under the statutory scheme, it cannot be said that a person
would be left remediless if the remedy provided under the Legal Services
Authorities, Act, 1987 is not made available to him. The intent rather
appears to be that once any other option is exercised, the remedies
prescribed thereunder ought to be availed and pursued. It was thus not a case
of a remedy which could be pursued simultaneously or in substitution and
supersession of a remedy already availed but only as a first option. The
remedy seized to exist thereafter.
15. Even otherwise, once various alternative remedies are available
under different statutory regimes and a litigant exercises his discretion and
elects to pursue his remedy in a particular forum, he is required under
judicial sanctity and discipline to exhaust his remedies under the said
statutory forum alone. It should not ordinarily be permitted or be rule of law
that a person be allowed to switch from one statutory forum to a forum
under different statute when such litigation, elected to be pursued before a
particular forum, does not yield the desired result. Such an attempt, if
permissible, will lead to an anarchy and propagate and promote forum
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shopping at the hands of mischievous litigant. The limitation imposed on the
jurisdiction of the Permanent Lok Adalat (Public Utility Services) under the
statute was thus conscious and only as a first option towards seeking
settlement of dispute and not in the event where a litigant had already
approached any other Court/forum for seeking redressal of the said
grievance.
16. Even though one may contend that where adjudication before a
forum does not happen on merits and such forum declines to pass award on
merits, or the case is withdrawn, proceedings before Permanent Lok Adalat
be permitted to be instituted before the Permanent Lok Adalat, however,
such a concession not only does violence to the statute but also opens way
for mischief of forum shopping and seeking withdrawal of case to pursue
other remedies. There is no reason as to how a grave prejudice and violation
of right to constitutional remedies gets taken away when all other remedies
are still available to the litigant.
17. Besides various other questions also arise:-
i) the claim is for release of subsidy by the Government and
it was required to be also seen whether it was a Public Utility
Services as defined under Section 22-B of the Legal Services
Authorities Act, 1987.
ii) even though the subsidy was to be released by Union of
India, however, the same was not a party.
iii) the claim was declined for late submission of pleadings
shows that the circular for submission of claim before
30.06.2012 was itself circulated in September, 2012. Besides,
the document were forwarded by the Bank to the SIDBI on
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13.06.2012 i.e. before the late date of 30.06.2012. The
deficiency was conveyed only in October, 2012 by the SIDBI,
hence, it was needed to be ascertained as to who would be liable
when deficiency is communicated after the last date and where
even the last date is notified by a later circular. The said issues
could not be determined summarily.
18. Further, even though the above said issue may not have been
agitated before the Permanent Lok Adalat (Public Utility Services),
however, once the fact had been brought to the notice of such authority, the
same being a legal issue, it was required to be determined by the competent
Court. The aspect of jurisdiction is fundamental and would travel to the very
foundation of the case. Defect of jurisdiction, being fundamental, cannot be
cured at any later stage as per the settled position in law.
19. Taking into consideration that the Permanent Lok Adalat
(Public Utility Services) did not have the jurisdiction and noticing that the
respondent No.3-applicant had already preferred a complaint before the
District Consumer Disputes Redressal Forum-1, I am of the opinion that the
exercise of jurisdiction by the Permanent Lok Adalat (Public Utility
Services) was beyond the powers conferred upon it and in violation of the
mandate of Section 22 (C) of the Legal Services Authorities, Act, 1987. The
proceedings thus could not have been initiated or finally determined by the
Permanent Lok Adalat (Public Utility Services).
20. The present writ petition is accordingly allowed and the award
dated 19.06.2017 passed by the Permanent Lok Adalat (Public Utility
Services), U.T. Chandigarh in Application No. 220/2015 is set aside.
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21. Since this Court has allowed the instant writ petition only on the
basis of the maintainability of the proceedings before the Permanent Lok
Adalat (Public Utility Services), U.T. Chandigarh, I do not wish to go into
the merits of the claim of the respective parties which may prejudice the
right of the respective parties, in the event of them pursing the remedies
before an alternative forum, as are available to them under law.
22. It is also reiterated that in the event of respondent No.3-
applicant taking recourse to the alternative remedies available to it as per
law, the period during which the proceedings remain pending before
different forum shall be taken into consideration while computing the
limitation.
(VINOD S. BHARDWAJ)
MARCH 11, 2024 JUDGE
Vishal Sharma
Whether speaking/reasoned : Yes/No
Whether Reportable : Yes/No
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