Abhaya Enterprises vs Corporation Bank

S. Abdul Nazeer, J.—This writ petition is directed against the order in PLD No. 14/2011 dated 12.4.2011 passed by the Permanent Lok Adalath, Mangalore, Dakshina Kannada District.

The first respondent-Bank moved an application under Section 22-C(1) of the Legal Services Authorities Act, 1987 (for short ''the Act'') before the Permanent Lok Adalath for awarding a sum of Rs. 3,65,297/- with future interest from the date of the petition at the rate of 6% per annum till the realization of the award amount from the petitioner and the second respondent herein (respondent Nos. 1 and 2 before the Permanent Lok Adalath). The Permanent Lok Adalath placed the petitioner and the second respondent herein exparte since they failed to appear in the said proceedings. An exparte order was passed awarding a sum of Rs. 3,65,297/- with interest at 6% per annum from the date of the said order till the date of realization.

Sri G. Balakrishna Shastry, learned Counsel for the petitioner submits that the Central Government has not issued a notification including the banking service as a public utility service for the purpose of Chapter -VIA of the Act. Therefore, the Permanent Lok Adalath has no jurisdiction to entertain the petition. Secondly, it is argued that the above conciliation proceedings could not have been taken up for consideration by the Permanent Lok Adalath since respondents therein have not participated in the proceedings.. It is argued that notice has not been served to the petitioner in the said proceedings.

On the other hand, learned Counsel appearing for the first respondent-Bank has sought to justify the impugned order.

I have carefully considered the arguments of the learned Counsel made at the Bar and perused the materials placed on record.

Chapter VIA of the Act provides for pre-litigation, conciliation and settlement. Section 22-A(b) defines ''public utility service'' as under:

"22A(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."

The definition ''public utility service'' is an inclusive definition. Apart from the services in 22-A(b)(i) to (vi), it 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 said Chapter. Central Government has not issued any notification bringing within the definition ''public utility service'' the Banking Institutions.

In Thimmyya Vs. State Bank of India, , this Court has considered an identical question. It has been held thus:

"4. Therefore, for the permanent Lok Adalat to exercise its power under the Act, one of the parties to the proceedings before it, should be a public utility service. The above definition of ''public utility service'' does not include Banking Institutions. From the definition of ''Public Utility Services'', it is clear that after expressly setting out the six services as Public Utility Services, the definition makes it clear that any services, which the Central Government or the State Government as the case may be, may, in the public interest by notification, declare to be public utility service for the purposes of this Chapter. The reason why such a power is conferred on Central Government as well as the State Government is though this is a Parliamentary Legislation, if a particular service is under the control of the Central Government, it is the Central Government, which is empowered to include such service as a public utility service. If such a service is under the control of the State Government, it is the State Government, which is empowered to include such service as a public utility service.

The Government of Karnataka issued a notification as per Annexure ''H'' on 13th March 2008 in exercise of the powers conferred under Section 22-A of the Legal Services Authorities Act agreeing to include Banking and Financial Institutions in the State for ''Lok Adalat'' under the category ''Public Utility Service'' for the purpose of Chapter VI-A of Legal Services Authorities Act of 1987. The public utility service referred to is, the State Bank of India. It comes under the jurisdiction of the Central Government. State Government has no jurisdiction. That is why in the notification the State Government has explicitly stated that they agree to include Banking and Financial Institutions in the State for ''Lok Adalat'' under the category of public utility service. Therefore, State Bank of India is not an institution falling under the State. That notification has no application. Central Government has not issued any notification bringing within the definition of ''public utility service'', the Banking Institutions. Under these circumstances, Lok Adalat was not justified in entertaining the suit filed by the State Bank of India and further erred in holding that because of the aforesaid notification issued by the State Government, Banking Institutions are also brought within the ''public utility service''. From the aforesaid material on record, it is clear that the Lok Adalat has no jurisdiction to entertain the suit, which is clear from the averments of the plaint itself. Therefore, without any further enquiry, the Lok Adalat ought to have allowed the application and dismissed the suit. Hence, the impugned order passed by the Lok Adalat is illegal and requires to be set aside."

Thus, it is clear that the banking service by the first respondent is not a public utility service for the purpose of Chapter VI-A of the Act. Therefore, initiation of the proceedings for recovery of the amount by the first respondent before the Permanent Lok Adalath is without authority of law and the order passed by the Permanent Lok Adalath at Annexure ''A'' is without jurisdiction.

In view of the aforesaid conclusion, it is unnecessary to consider the other contentions urged by the learned Counsel for the petitioner.

In the result, the writ petition succeeds and it is accordingly allowed. The order passed by the Permanent Lok Adalath at Annexure ''A'' dated 12.4.2011 is hereby quashed. No costs.