1/8 1. S.B. CIVIL Writ Petition No. 1599/2004. (National Insurance Co. Ltd. Vs. Smt. Reshmi Devi Salecha W/o Bheru Lal & Anr.) 2. S.B.Civil Writ Petition No. 444/2007. (National Insurance Co. Ltd. Vs. Smt. Reshmi Devi Salecha W/o Bheru Lal & Anr. ) DATE OF ORDER : 07.01.2008. HON'BLE Dr JUSTICE VINEET KOTHARI Mr Jagdish Vyas, for the petitioner. Mr Rajesh Panwar, for the respondents. 1. Heard the learned counsels. 2. These two writ petitions involve common questions of law and facts, therefore, they are decided by this common order. For convenience, the facts are taken from SB Civil Writ Petition No. 1599/2004. 3. The petitioner National Insurance Co. Ltd. is aggrieved by the award passed by the Permanent Lok Adalat, Balotra on 28.11.2003 making an award of compensation of Rs. 75,000/- for knee replacement of insured Smt. Reshmi Devi (involved in Writ Petition No. 1599/2004) and Rs. 80,000/- (involved in Writ Petition No. 444/2007) for other knee. 4. The contention raised by the learned counsel for the 2/8 petitioner is that in the pre-litigation reference to the Permanent Lok Adalat under Chapter VI-A containing provisions from Section 22A to 22F of the Legal Services Authorities Act, 1987 introduced by Act No. 37 of 2002 w.e.f. 11.6.2002, the Permanent Lok Adalat could not have decided the disputes on merits without mandatorily undertaking the procedure prescribed under sub-section (7) of Section 22C of the said Act. He further submits that since disease in question pre-existed at the time of taking insurance policy in question on 7.7.1999 and this was supported by an opinion of the medical expert produced on record as Annex.4 dated 21.3.2003 wherein one Dr. Ashok Singhvi has opined like this: “In my opinion, Osteoarthritis will not develop within a period of one years time, it take at least 5-6 years to produce the symptoms to need heroic surgery like Total Knee Replacement.” 5. He submits that since the insured did not disclose this pre-existing disease, there was a concealment of fact on the part of the insured, and therefore, the Permanent Lok Adalat could not award the compensation in question. 6. Mr. Rajesh Panwar, learned counsel appearing for the respondent on the side opposite relying on the judgment of 3/8 this Court in National Insurance Co. Vs. State of Rajasthan & ors., 2005(1) WLC 123 submitted that even if the settlement between the parties was not arrived at in the pre- litigation stage before the Permanent Lok Adalat, the Permanent Lok Adalat had the power to decide such disputes on merits in terms of sub-section (8) of Section 22C of the Act. 7. I have heard the learned counsels and perused the record. 8. Section 22C of the said Act deals with cognizance of cases by Permanent Lok Adalat inserted in the Legal Services Authorities Act, 1987 by Act No. 37 of 2002 in the form of Chapter VI-A of Pre-litigation Conciliation and Settlement. Sub- section (7) and (8) of said Section 22C relevant for the present purposes are reproduced hereunder for ready reference:- “(7) When a Permanent Lok Adalat, in the aforesaid conciliation proceedings, is of opinion that there exist elements of settlement in such proceeding 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. 4/8 (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.” 9. A close scrutiny of said provisions disclose that where in the conciliation proceedings, the Permanent Lock Adalat is of the opinion that there exists element of settlement in such proceedings, it may formulate the terms of settlement to be given to respective parties for their observations and comments and in case the parties arrive at an agreement, such settlement may be signed by both the parties which may then become an Award of the Permanent Lok Adalat binding on the parties and executable as a decree of the civil Court in terms of Section 22-C of the Act. Sub-section(8) of Section 22 C provides that where the parties fail to reach to an agreement under sub-section (7), the Permanent Lok Adalat shall if the dispute does not relate to any offence, decide the dispute. 10. The creation of Lok Adalats under the Legal Services Authorities Act was with a view to provide an effective, quick and an easily accessible alternative forum to the lengthy procedures in the courts with a view to save time and money involved in protracted litigations. Such effective alternative forums were provided a horizon by amendment in the year 2002 by 5/8 introducing Chapter VI-A in the said Act which provided for pre- litigation conciliation and settlement of the disputes. The teeth of power to resolve such disputes were also given to the Permanent Lok Adalats in the form of first undertaking conciliation proceedings and upon failure of conciliation proceedings even to decide dispute then and there by enacting sub-section (8) of Section 22C. These proceedings before the Lok Adalats were not intended to be provided a forum for trial and error by the authorities and public utility services and then to shift the bulk of litigation from the Lok Adalat to the courts of law. It is in the spirit of settlement, that the Legislature provided alternative forums in the form of Permanent Lok Adalats for the litigations spread in the nook and corners of the country. 11. The objection raised by the learned counsel for the petitioner Insurance Company, a public body rendering public utility services as defined in Section 22-A of the Act that since Permanent Lock Adalat did not formulate the terms of a possible settlement, which should mean that there did not exist any element of settlement, and therefore, the Permanent Lok Adalat could not proceed further on merits, does not impress this Court at all. The findings given by the Permanent Lok Adalat in the impugned order before proceeding to decide dispute on merits in 6/8 Para 3 at Page 2 of the judgment clearly indicates that the Permanent Lok Adalat made its efforts for settlement between the parties and when they arrived at the conclusion that there was no possibility of settlement, they proceeded to hear the objections of the petitioner Company on merits and decide the dispute. Therefore, this Court is of the opinion that the procedure given in sub-section (7) of Section 22C of the Act was duly undertaken by the Permanent Lok Adalat. The use of word `may' in sub-section (7) and 22-C makes it directory rather than mandatory to formulate the terms of the settlement and present it to the parties for their observations and comments. The Permanent Lok Adalat cannot be said to have committed error of jurisdiction if it does not do so. Since sub-section (8) of Section 22-C clearly empowers the Permanent Lok Adalat to decide the dispute on merit as well, in the present case, it cannot be said that the Permanent Lok Adalat has acted without jurisdiction or has erred in invoking power to decide the case on merits under sub-section (8). The Division Bench of this Court while dealing with the similar controversy in the afore-cited judgment in National Insurance Co. Vs. State of Rajasthan & ors., (supra) clearly held that Chapter VI-A which deals with pre- litigation conciliation proceedings clearly empowered the Permanent Lok Adalat to decide the dispute relating to public utility services even where the parties have failed to reach an 7/8 agreement. After going through sub-section (7) and (8) of Section 22-C of the Act, in Para 9 of the judgment, the Court held that in so far as the dispute arising from a public utility services is concerned, the Permanent Lok Adalat can pass an award even without compromise having been arrived at between the parties. Thus, the issue raised by the learned counsel for the petitioner Company is already concluded and decided by the Division Bench of this Court and is no more open to a debate on this issue. 12. On merits, the fact that the Insurance policy was taken by the respondent on 7.7.1999 and renewed from year to year and was in force when the knee replacement operations took place on 22.5.2002 and 20.5.2003, being not in dispute, prima facie there appears to be no reason for the Insurance Company not to comply with the award and pay the compensation in question. Merely because the petitioner Insurance Company obtained an opinion from another medical expert that this kind of disease could have an origin 5-6 years ago in the past, does not rebut or repel the fact of undertaking such knee replacement operations and actually undertaken in the year 2002 and 2003, again a fact which is not in dispute from the side of the petitioner Insurance Company. 8/8 13. Accordingly, these writ petitions are liable to be dismissed and the same are hereby dismissed as this Court finds that neither the Permanent Lok Adalat lacked jurisdiction nor it has committed any error of jurisdiction in passing the Award on merits once it arrived at a conclusion that the compromise between the parties was not possible in the pre-litigation stage in terms of Section 22-C of the Act. The Insurance Company shall pay the amount of compensation to the respondent insured, as determined by the Permanent Lok Adalat within a period of two months from today. No order as to costs. (Dr. VINEET KOTHARI)J. ITEM NO.15-16. gandhi/-