Jebby M. Aliyar vs The New India Assurance Company Ltd. & Anr.

Soumen Sen, C.J.

This appeal has arisen from an order dated 31.07.2018 passed by the learned Single Judge in W.P(C)No.7876 of 2007 filed by the Insurance Company, challenging the authority of the Permanent Lok Adalat to decide a dispute as contemplated under Section 22C(8) of the Legal Service Authorities Act, 1987 (for short, ‘the Act’).

The insurer challenged the award of the Permanent Lok Adalat on the ground that it has no authority to adjudicate and decide a dispute which primarily revolved around the validity of a contract.

We are disinclined to agree with the reasoning of the learned Single Judge insofar as it has been held that the Permanent Lok Adalat can only decide the existing rights and liabilities of the parties and cannot enter into the arena of adjudicating disputes between the parties. On a clear reading of Section 22C(7) of the Act, it is made clear that if a conciliation proceeding fails and the parties failed 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. This provision clearly confers right upon the Permanent Lok Adalat to adjudicate disputes between the parties and if no element of adjudicatory power had been conferred upon the Permanent Lok Adalat, the provisions of Sections 22C(3) and 22C(4) would not have been included by the Legislature in the said Act. There is a clear distinction with regard to the powers exercised by the Lok Adalat and the Permanent Lok Adalat. The Permanent Lok Adalat is entrusted with adjudicatory powers and for that precise reason, the Legislature has clearly conferred such power upon the Permanent Lok Adalat to decide disputes, on merits, which do not relate to any offence. Moreover, the power of the Permanent Lok Adalat to adjudicate disputes between the parties has been clearly established by a recent judgment of the Hon’ble Supreme Court in Canara Bank v. G.S.Jayarama^{11.[2022(3)KHC 665]}.

In view thereof, the impugned judgment stands set aside. The Respondent-Insurance Company will have to remit the awarded sum within one week from the date of receipt of a copy of this judgment.

This appeal is accordingly disposed of.