IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HON'BLE THE CHIEF JUSTICE MR.S.R.BANNURMATH & THE HONOURABLE MR. JUSTICE KURIAN JOSEPH MONDAY, THE 10TH AUGUST 2009 / 19TH SRAVANA 1931 WA.No. 316 of 2009() -------------------- AGAINST THE JUDGEMENT/ORDER IN WPC.33438/2008 Dated 09/12/2008 AND JUDGMENT DT. 11.11.2008 IN W.P.(C) 30059/08) .................... APPELLANT(S): -------------- BHOOPESH, S/O.THANKAPPAN, ITTYSEREYIL HOUSE, KUTTIPANGODE P.O., KOOTIKAL, IDUKKI DIST. BY ADV. SRI.RAJESH P.NAIR RESPONDENT(S): --------------- 1. M/S.NEW INDIA ASSURANCE COMPANY LTD., II FLOOR, REMA PLAZA, AYYAPPAN COIL ROAD, THIRUVANANTHAPURAM, REP. BY ITS MANAGER. 2.JOSE M.JACOB, S/O.JACOB, HOUSE NO.1/68, MARY BHAVAN, KEEZHAVOOR P.O., THIRUVANANTHAPURAM. 3.VISWAN G., S/O.GOPAN, NELLIVILA PUTHEN VEEDU, ANTHIYOOR, BALARAMAPURAM, NEYYATTINKARA, THIRUVANANTHAPURAM. 4.THE PERMANENT LOK ADALATH FOR PUBLIC UTILITY SERVICES, THIRUVANANTHAPURAM, REP. BY ITS CHAIRMAN. ADV. SRI.KKM.SHERIF FOR R1 SRI.A.A.ZIYAD RAHMAN FOR R1 GOVT.PLEADER SMT.K.MEERA. THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 24.7.2009 ALONG WITH WPC NO.30239/2007 & CONNECTED CASES, THE COURT ON 10.8.2009 DELIVERED THE FOLLOWING: C.R. S.R.BANNURMATH, C.J. & KURIAN JOSEPH, J. ---------------------------------------------- W.A. No.316 of 2009 & W.P.(C) Nos.30239 of 2007, 9158, 22116, 22153, 24118, 24130, 24141, 24174 & 33258 of 2008 and 5887, 7724 & 9687 of 2009 ---------------------------------------------- Dated 10th August, 2009. J U D G M E N T Kurian Joseph, J. Whether the Permanent Lok Adalat constituted under Section 22B of the Legal Services Authorities Act, 1987 (hereinafter referred to as ‘the Act’) has jurisdiction to entertain a claim for compensation under the provisions of the Kerala Motor Vehicles Act, 1988 is the question to be considered in these cases. The learned Single Judge has held that the Permanent Lok Adalat under Section 22B of the Act has no such jurisdiction and hence the appeal. (The decision of the learned Single Judge is reported in New India Assurance Company Ltd. v. Jameela WA NO.316/09 & connected cases 2 (2009(1) KLT 153). Since the same issue was pending before the learned Single Judge in other writ petitions, those cases also have been tagged along with the appeal. 2. Permanent Lok Adalat is a new concept introduced under the Legal Services Authorities Act, 1987, by Act 37 of 2002. The Legal Services Authorities Act, 1987 was enacted to constitute Legal Services Authorities for providing free and competent legal service to the weaker sections of the society to ensure that opportunities for securing justice are not denied to any citizen by reason of economic or other disabilities, and to organize Lok Adalats to secure that the operation of the legal system promotes justice on a basis of equal opportunity. The source of inspiration and the obligation is Article 39A of the Constitution of India, which reads as follows:- “39A. Equal justice and free legal aid.--The State shall secure that the operation of the legal system promotes justice, on a basis of equal opportunity, and shall, in particular, provide free legal aid, by suitable legislation or schemes or in any other way, to ensure that opportunities for securing justice are not denied to any citizen by reason of economic or other disabilities.” WA NO.316/09 & connected cases 3 3. Lok Adalat is an old form of adjudicating system prevailed in ancient India. The expression literally means 'people court'. People find solution by themselves, appropriately aided by lawmen and elders. It provides for alternative resolution of disputes. It has been found to be viable, economic, efficient and informal. Parties to the dispute directly interact with the Presiding Officer and through such informal discussions, arrive at a settlement. The compromise or settlement is made an award of the Lok Adalat which has the status and force of a decree under the Code of Civil Procedure. There is no rancour to any parties since both parties win and none goes as vanquished. Thus unless there is compromise or settlement between the parties, the Lok Adalat cannot pass an award and the case has to go back to the court or the parties will have to be advised to seek their remedy in a court of competent jurisdiction, in case the latter is a pre- litigation adalat. In that background, it was thought that at least in the case of disputes pertaining to notified public utilities, designated Lok Adalat can be given the jurisdiction to decide the disputes involving a property dispute and valued upto Rs.10 lakhs WA NO.316/09 & connected cases 4 in the event of the parties failing to reach a settlement despite the conciliation and Chapter VI-A was introduced by way of an amendment comprising of Sections 22A to 22E. Section 22A deals mainly with the definition of public utility service, which reads as follows :- “22A.Definitions-In this Chapter and for the purposes of section 22 and 23, unless the context otherwise requires,- (a) ----- (b) “public utility service” means any- (i) transport service for the carriage of passengers or goods by air, road or water; or (ii) postal, telegraph or telephone service; or (iii) supply of power, light or water to the public by any establishment; or (iv) system of public conservancy or sanitation; or (v) service in hospital or dispensary; or (vi) insurance service, and includes any service which the Central Government or the State Government, as the case may be, may, in the public interest, by notification, declare to be a public utility service for the purposes of this Chapter.” Section 22B provides for establishment of permanent Lok Adalath which reads as follows :- 22B. Establishment of Permanent Lok Adalats.- (1) Notwithstanding anything contained in Section 19, the Central Authority or, as the case may be, every State Authority shall, by notification, establish WA NO.316/09 & connected cases 5 Permanent Lok Adalats at such places and for exercising such jurisdiction in respect of one or more public utility services and for such areas as may be specified in the notification. (2) Every Permanent Lok Adalat established for an area notified under sub-section (1) shall consist of-- (a) a person who is, or has been, a district judge or additional district judge or has held judicial office higher in rank than that of a district judge, shall be the Chairman of the Permanent Lok Adalath; and (b) two other persons having adequate experience in public utility service to be nominated by the Central Government or, as the case may be, the State Government on the recommendation of the Central Authority or, as the case may be, the State Authority, appointed by the Central Authority or, as the case may be, the State Authority, establishing such Permanent Lok Adalat and the other terms and conditions of the appointment of the Chairman and other persons referred to in clause (b) shall be such as may be prescribed by the Central Government. Section 22C deals with cognizance of cases by Permanent Lok Adalat, which reads as follows:- 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 Adalath for the settlement of the dispute; Provided that the permanent Lok Adalat shall not have jurisdiction in respect of any matter relating to an offence not compoundable under any WA NO.316/09 & connected cases 6 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; © shall communicate any document or statement received by it from any party to the application to the WA NO.316/09 & connected cases 7 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 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 WA NO.316/09 & connected cases 8 under sub-section (7), the Permanent Lok Adalat shall, if the dispute does not relate to any offence, decide the dispute. 4. As far as regular Lok Adalat under Chapter VI is concerned, the cognizance is under Section 20 coming under Chapter VI which reads as follows :- 20. Cognizance of cases by Lok Adalats.- (1) Where in any case referred to in clause (i) of sub-section (5) of Section 19- (i) (a) the parties thereof agree; or (b) one of the parties thereof makes an application to the court, for referring the case to the Lok Adalat for settlement and if such court is prima facie satisfied that there are chances of such settlement; or (ii) the court is satisfied that the matter is an appropriate one to be taken cognizance of by the Lok Adalat, the court shall refer the case to the Lok Adalat: Provided that no case shall be referred to the Lok Adalat under sub-clause (b) of clause (i) or clause (ii) by such court except after giving a reasonable opportunity of being heard to the parties. (2) Notwithstanding anything contained in any other law for the time being in force, the Authority or Committee organizing the Lok Adalat under sub- section (1) of Section 19 may, on receipt of an application from any one of the parties to any matter referred to in clause (ii) of sub-section (5) of Section 19 WA NO.316/09 & connected cases 9 that such matter needs to be determined by a Lok Adalat, refer such matter to the Lok Adalat, for determination : Provided that no matter shall be referred to the Lok Adalat except after giving a reasonable opportunity of being heard to the other party. (3) Where any case is referred to a Lok Adalat under sub-section (1) or where a reference has been made to it under sub-section(2), the Lok Adalat shall proceed to dispose of the case or matter and arrive at a compromise or settlement between the parties. (4) Every Lok Adalat shall, while determining any reference before it under this Act, act with utmost expedition to arrive at a compromise or settlement between the parties and shall be guided by the principles of justice, equity, fair play and other legal principles. (5) Where no award is made by the Lok Adalat on the ground that no compromise or settlement could be arrived at between the parties, the record of the case shall be returned by it to the court, from which the reference has been received under sub-section (1) for disposal in accordance with law. (6) Where no award is made by the Lok Adalat on the ground that no compromise or settlement could be arrived at between the parties, in a matter referred to in sub-section (2), that Lok Adalat shall advise the parties to seek remedy in a court. (7) Where the record of the case is returned under sub-section (5) to the court, such court shall proceed to deal with such case from the stage which was reached before such reference under sub-section(1). WA NO.316/09 & connected cases 10 The essential difference between Section 20 Lok Adalat and Section 22B Lok Adalat is that in the former the Lok Adalat has to make an attempt to arrive at a compromise or settlement between the parties guided by the principles of justice, equity, fair play and other legal principles, whereas in the latter, the Permanent Lok Adalat has to conduct conciliation proceedings between the parties in such a manner as it thinks appropriate, taking into account the circumstances of the dispute. In the process, the Permanent Lok Adalat has to make an attempt to reach an amicable settlement of the dispute in an independent and impartial manner. The Permanent Lok Adalat has thereafter to formulate the terms of the possible settlement of the dispute and the parties agreeing for the terms of settlement as formulated by the Lok Adalath, should sign the settlement, and Permanent Lok Adalat passes an award in terms of the settlement. Despite all the attempts for conciliated settlement, in case Permanent Lok Adalat fails to reach an agreement as above, the Permanent Lok Adalat is given jurisdiction to decide the dispute, if the dispute does not relate to an offence and of course WA NO.316/09 & connected cases 11 subject to the monetary value of property being below Rs.10 lakhs. Under Section 22D of the Act, it has also been prescribed that in the conciliation proceedings or in deciding a dispute on merits, the permanent Lok Adalat shall be guided by the principles of natural justice, objectivity, fair play, equity and other principles of justice. The award thus passed by the Permanent Lok Adalat is also having the status and force of the decree. 5. Under Section 22B of the Act, the Permanent Lok Adalat has jurisdiction only in respect of one or more of public utility services as defined under the Act. The dispute in the instant case is as to whether under the notified public utility service-Insurance Service, the permanent Lok Adalat can entertain and decide a dispute relating to a claim for compensation under the Motor Vehicles Act. The expression ‘Insurance Service’ is not defined under the Act. The expression ‘service’ is defined under Section 2(1) of the Consumer Protection Act, 1986, which reads as follows:- 2(1)(o) “service” means service of any description which is made available to potential users and includes, but not limited to, the provision of facilities WA NO.316/09 & connected cases 12 in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing, construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service.” Thus Insurance Service can be understood as a service of any description which is made available to potential users, and includes facilities in connection with insurance. ‘Deficiency’ has also been defined under Section 2(1)(g) as “any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service.” As far as a claim before the Motor Accidents Claims Tribunal is concerned, it is a claim for compensation in respect of accidents involving the death of, or bodily injury to, persons arising out of the use of motor vehicles, or damages to any property of a third party so arising, or both. In Dhulabhai v. State of M.P. (AIR 1969 S.C. 78), the Supreme Court had occasion to consider the question of WA NO.316/09 & connected cases 13 jurisdiction of the special Tribunals. It has been held that “Where the statute gives a finality to the orders of the special tribunals the civil courts' jurisdiction must be held to be excluded if there is adequate remedy to do what the civil court would normally do in a suit. Such provision, however, does not exclude those cases where the provisions of the particular Act have not been complied with or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure“. Thus when a statute creates a special tribunal, only that special tribunal has the jurisdiction to deal with those matters for which the Tribunal is constituted and no other forum, unless the power is specifically conferred on it. No doubt, under Section 25 of the Legal Services Authorities Act, the Act has an overriding effect. Section 25 of the Act reads as follows :- 25. Act to have overriding effect.- The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act. But it has to be seen that the Act itself was introduced for imparting legal service and for organizing Lok Adalats to secure WA NO.316/09 & connected cases 14 that the operation of the legal system promotes justice. That justice is justice in accordance with law. Under law, the very concept of Lok Adalat is compromise or settlement. There is no decision by the Adalat. However, Chapter VI-A has been introduced by Act 37 of 2002, providing for “pre-litigation conciliation and settlement”. To refer to the statement of objects and reasons of the Amending Act 37 of 2002, it is seen that the Amending Act was intended only to petty cases pertaining to public utility services where there is need for urgent settlement of the disputes so that people get justice without delay even at pre- litigation stage. Paragraph 2 of the statement of objects and reasons of the Amending Act 37 of 2002 reads as follows :- 2. However, the major drawback in the existing scheme of organization of the Lok Adalats under Chapter VI of the said Act is that the system of Lok Adalats is mainly based on compromise or settlement between the parties. If the parties do not arrive at any compromise or settlement, the case is either returned to the court of law or the parties are advised to seek remedy in a court of law. This causes unnecessary delay in the dispensation of justice. If Lok Adalats are given power to decide the cases on merits in case parties fail to arrive at any compromise or settlement, this problem can be tackled to a great extent. Further the cases which arise in relation to WA NO.316/09 & connected cases 15 public utility services such as Mahanagar Telephone Nigam Limited, Delhi Vidyut Board, etc. need to be settled urgently so that people get justice without delay even at pre-litigation stage and thus most of the petty cases which ought not to go in the regular Courts would be settled at the pre-litigation stage itself which would result in reducing the workload of the regular Courts to a great extent. It is, therefore, proposed to amend the Legal Services Authorities Act, 1987 to set up Permanent Lok Adalat for providing compulsory pre-litigative mechanism for conciliation and settlement of cases relating to public utility services. 6. The scheme of functioning of the Permanent Lok Adalat as envisaged in the Act would show that it is not intended for adjudication. It is intended to settle the disputes through conciliation. After following the elaborate procedure in the matter of conciliation and settlement of the dispute, in case the parties fail to reach an agreement in respect of the terms of possible settlement as formulated after conciliation, then alone the Permanent Lok Adalat is given power to decide the dispute. In this context, it would be profitable to refer to the bench decision of the Punjab and Haryana High Court reported in Union Territory, Chandigarh v. Permanent Lok Adalat & Another [AIR 2009 (NOC) 496 (Punjab & Haryana)]. It has been held in the WA NO.316/09 & connected cases 16 said decision at paragraph 8 as follows :- “The power to decide dispute under sub- section (8) is not plenary power but will take its colour from the preceding provision of Section 22C.” It has also been held at paragraph 9 as follows :- “9. The Act has been enacted as an alternative dispute resolution for resolving the disputes in a spirit of conciliation outside the Court. Chapter VIA has been introduced with the object that though the system of Lok Adalat is mainly based on compromise or settlement between the parties but if the parties do not arrive at compromise or settlement, the case is either returned to the Court of law or the parties are advised to seek remedy in the Court of law. To avoid unnecessary delay in the dispensation of justice, Lok Adalats were given the powers to decide the cases on merit as well. Still further, the cases of public utility service need to be settled urgently so that people can get justice and most of the petty cases which ought not to go in the regular courts may settle at pre-litigation stage. Therefore, permanent Lok Adalat though has the power to decide the cases on merit but such decision is at pre-litigation stage and where relief claimed is urgent and in petty cases. In the context of the aforesaid principle, present is a case where there are numerous civil court decrees for and against the parties. The decrees cannot be said to be binding on the parties which are not before the Court. Such disputes are not intended to be decided by the Permanent Lok Adalat. Permanent Lok Adalats are not alternative courts but have been established to provide immediate relief to the aggrieved citizens against the inaction or wrongful action of the authorities dealing with public utility service in day to WA NO.316/09 & connected cases 17 day life. The present dispute is beyond the scope of Permanent Lok Adalats.”(emphasis supplied) In United India Insurance Company Limited v. Ajay Sinha and another [(2008)7 Supreme Court Cases 454], the Supreme Court had occasion to consider the scope of the Permanent Lok Adalat. It has been held therein that “With respect to public utility services, the main purpose behind Section 22-C(8) seems to be that most of the petty cases which ought not go in the regular courts, would be settled in the pre-litigation stage itself.” As far as adjudication of claims for compensation is concerned, every claim will have to be considered on merits and on an adversarial basis, the compensation will have to be fixed. That jurisdiction has been exclusively conferred on the Motor Accidents Claims Tribunals set up under Section 165 of the Motor Vehicles Act, 1988. The