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Judgment
Heard Mr. D.C. Ghosh, counsel appearing on behalf of the petitioner.Â
Heard Mr. Prabhat Kumar Sinha, counsel appearing on behalf of the respondent nos. 6 and 7.Â
Heard Mr. Vishal Kumar Trivedi, counsel appearing on behalf of respondent nos. 1 to 5.Â
The petitioner is an insurance company. The respondent nos. 1 to 5 are the claimants and respondent no. 6 and 7 are the owner and driver of the
Bus bearing registration no. BR-13 B-0189 respectively.
This writ petition has been filed by the writ petitioner challenging the order dated 23.11.2009 passed in P.L.A.(M.A.C.T.) Case No. 68 of 2007 by
the learned Permanent Lok Adalat, Giridih.
Counsel for the petitioner submits as under:-Â
a. The impugned order has been passed in total disregard of the provisions of Section 22 C(8) of the Legal Services Authorities Act, 1984 and
accordingly the impugned order is perverse.
b. Further on the merits of the case, the counsel has submitted that the insurance company is entitled for the right to recovery under the facts and
circumstances of this case in view of the full bench judgment passed by this court reported in 2005 (3) JLJR 24 (Jhr).
c. Counsel for the petitioner has referred to the judgment passed by this court in L.P.A. No. 53 of 2013 and in L.P.A. No. 52 of 2013 and has
referred to paragraph no. 8 of the said judgment wherein following issues were framed for determination.Â
(i) Whether the Permanent Lok Adalat had the jurisdiction to decide the matter on merit by going into the disputed question of fact;
(ii) Whether the writ petition is maintainable as against the award passed by the Permanent Lok Adalat; andÂ
(iii) Whether there was suppression of material facts by the Life Assured relating to his health as alleged by the appellant.Â
d. Counsel for the petitioner has also referred to paragraph no. 18 of the said judgement which deals with the maintainability of the writ application
as against the award passed by the Permanent Lok Adalat and submitted that it has been held that although the award passed by the Permanent Lok
Adalat is final and cannot be questioned in any suit, application or execution proceeding, but the same cannot be taken away the power of the High
Court under Article 226 of the Constitution and any party cannot be left remediless where there are sufficient grounds to set aside the award or to
interfere with the award.
e. Counsel for the petitioner by referring to the judgment passed by the full bench of this Hon’ble Court reported in 2005 (3) JLJR 24 (Jhr), has
submitted that although the Permanent Lok Adalat has taken care regarding the liability of the insurance company on the basis of the aforesaid full
Bench judgment, but has totally ignored the right to recovery which has been upheld in the very same judgment.
f. Counsel for the petitioner submits that specific finding has been recorded in the impugned award passed by the Permanent Lok Adalat that the
deceased was travelling on the roof top of the vehicle and he submits that the same is against the policy itself. He further submits that although the
liability of the owner of the vehicle has been fixed by the impugned award, but since the vehicle is insured, the insurance company has been directed
to pay to the claimant, but the right to recovery has not been considered and accordingly not granted to the petitioner insurance company.
g. Counsel submits that on this account, the impugned order is perverse and instant case is fully covered by the aforesaid full Bench judgment, as
admittedly the deceased was travelling on the roof top, therefore the right to recovery ought to have been considered and granted to the insurance
company and that having not been done, he submits that the jurisdiction of this Court under Article 226 of the Constitution of India is required to be
exercised.Â
Counsel for the claimants i.e respondent no. 1 to 5 on the other hand submits as under:-Â
a) The amount which has been awarded has not yet been paid to him on account of pendency of this writ petition. He further submits that the
impugned order has been rightly passed and he refers to the following passage in the impugned order.
  “After perusing the claim petition, written statement/show cause filed by them, conciliation proceeding was conducted amongst the parties to
the dispute as provided under Section 22 C(4) to (7) of Legal Services Authority Act 1987. Though the parties participated in the conciliation
proceeding through their learned Advocates and the court also assisted them for it but they failed to reach at an agreement on the settlement of
dispute. However, the parties agreed to get this dispute decided on merit as provided under Section 22 C (8)Â of Legal Services Authority Act
1987.â€
b) Counsel for the claimant further submits that as the Permanent Lok Adalat has clearly recorded the aforesaid finding and the court proceeded to
decide the case on merits with the consent of the parties under Section 22 C (8) of Legal Services Authorities Act 1987 after the conciliation
proceeding failed, therefore the impugned order has been rightly passed on the merits of the matter.Â
c) He further submits that so far as the point regarding recovery as argued by the petitioner is concerned, he has got nothing to say, as he has to
simply receive the same from the insurance company. It is for the insurance company to take steps for the purpose of recovery. He submits that the
insurance company has been rightly asked to pay the amount in view of the full Bench judgment. Â
Counsel for the owner of the vehicle and driver submits as under:-Â
(a) Although the finding has been recorded that the deceased was travelling on the roof top, but the same was on the basis of F.I.R. lodged and there
is no evidence on record to show that the deceased was travelling on the roof top. He further submits that it was for the insurance company to prove
that the deceased was travelling at the roof top and there was no sufficient material on record to show that the deceased was travelling on the roof
top of the vehicle. He further submits that there is no such prayer made in the writ petition regarding the entitlement of the writ petitioner for recovery
from the owner of the vehicle.
(b) Counsel has relied upon the judgment reported in (2013) 10 SCC 217 and has referred to paragraph no. 10 of the said judgment which reads as
follows:-
“10. In a claim for compensation, it is certainly open to the insurer under Section 149(2)(a)(ii) to take a defence that the driver of the vehicle
involved in the accident was not duly licensed. Once such a defence is taken, the onus is on the insurer. But even after it is proved that the licence
possessed by the driver was a fake one, whether there is liability on the insurer is the moot question. As far as the owner of the vehicle is concerned,
when he hires a driver, he has to check whether the driver has a valid driving licence. Thereafter he has to satisfy himself as to the competence of the
driver. If satisfied in that regard also, it can be said that the owner had taken reasonable care in employing a person who is qualified and competent to
drive the vehicle. The owner cannot be expected to go beyond that, to the extent of verifying the genuineness of the driving licence with the licensing
authority before hiring the services of the driver. However, the situation would be different if at the time of insurance of the vehicle or thereafter the
insurance company requires the owner of the vehicle to have the licence duly verified from the licensing authority or if the attention of the owner of
the vehicle is otherwise invited to the allegation that the licence issued to the driver employed by him is a fake one and yet the owner does not take
appropriate action for verification of the matter regarding the genuineness of the licence from the licensing authority. That is what is explained in
Swaran Singh case5. If despite such information with the owner that the licence possessed by his driver is fake, no action is taken by the insured for
appropriate verification, then the insured will be at fault and, in such circumstances, the Insurance Company is not liable for the compensation.â€
(c) Counsel for the respondent has also referred to the judgment reported in 2017 SCC Online S.C. 1479 of paragraph no. 9 which reads as follows:-
Â
“The High Court has proceeded to reverse the finding of the Tribunal purely on the basis that the FIR which was lodged on the complaint of the
appellant contained a version which was at variance with the evidence which emerged before the Tribunal. The Tribunal had noted the admission of
RW 1 in the course of his cross-examination that the insurer had maintained a separate file in respect of the accident. The Insurer did not produce
either the file or the report of the Investigator in the case. Moreover, no independent witness was produced by the insurer to displace the version of
the incident as deposed to by the appellant and by PW 3. The cogent analysis of the evidence by the Tribunal has been displaced by the High Court
without considering material aspects of the evidence on the record. The High Court was not justified in holding that the Tribunal had arrived at a
finding of fact without applying its mind to the documents produced by the claimant or that it had casually entered a finding of fact. On the contrary,
we find that the reversal of the finding by the High Court was without considering the material aspects of the evidence which justifiably weighed with
the Tribunal. We are, therefore, of the view that the finding of the High Court is manifestly erroneous and that the finding of fact by the Tribunal was
correct.â€Â
After hearing counsel for the parties and after considering the materials on record and facts and circumstances of the case, this court finds that
following issues arise for determination by this court:-Â
A. Whether the learned permanent lok adalat has rightly exercised its jurisdiction under section 22 C (8) of Legal Services Authorities Act 1987?
B. Whether there is any perversity in the impugned award calling for interference under Article 226 of the constitution of India? C. To what relief
the petitioner is entitled?Â
So far as issue no A is concerned this court is inclined to hold that the Permanent Lok Adalat has rightly exercised its jurisdiction under Section 22
C(8) of the Legal Services Authorities Act 1987 on the account of following facts and reasons.Â
(a) So far as provisions of Section 22 C (8) of Legal Services Authorities Act 1987 is concerned, the same was subject matter of challenge and
interpretation by the Hon’ble Supreme Court in the case reported in Bar Council of India versus Union of India reported in (2012) 8 SCC 243
wherein it has been held that once the conciliation proceeding fails, the Permanent Lok Adalat acquires jurisdiction to decide the case on merit. It
would be useful to quote para 26 and 27 of the said judgment which reads as follows:-
It is necessary to bear in mind that the disputes relating to public utility services have been entrusted to Permanent Lok Adalats only if the process
of conciliation and settlement fails. The emphasis is on settlement in respect of disputes concerning public utility services through the medium of
Permanent Lok Adalat. It is for this reason that sub-section (1) of Section 22-C states in no unambiguous terms that any party to a dispute may before
the dispute is brought before any court make an application to the Permanent Lok Adalat for settlement of dispute. Thus, settlement of dispute
between the parties in matters of public utility services is the main theme. However, where despite the endeavours and efforts of the Permanent
Lok Adalat the settlement between the parties is not through and the parties are required to have their dispute determined and adjudicated, to avoid
delay in adjudication of disputes relating to public utility services, Parliament has intervened and conferred power of adjudication upon the Permanent
Lok Adalat.
Can the power conferred on Permanent Lok Adalats to adjudicate the disputes between the parties concerning public utility service up to a
specific pecuniary limit, if they do not relate to any offence, as provided under Section 22-C(8), be said to be unconstitutional and irrational? We think
not. It is settled law that an authority empowered to adjudicate the disputes between the parties and act as a tribunal may not necessarily have all the
trappings of the court. What is essential is that it must be a creature of statute and should adjudicate the dispute between the parties before it after
giving reasonable opportunity to them consistent with the principles of fair play and natural justice. It is not a constitutional right of any person to have
the dispute adjudicated by means of a court only. Chapter VI-A has been enacted to provide for an institutional mechanism, through the establishment
of Permanent Lok Adalats for settlement of disputes concerning public utility service before the matter is brought to the court and in the event of
failure to reach any settlement, empowering the Permanent Lok Adalat to adjudicate such dispute if it does not relate to any offence.
 (b) It has been specifically recorded in the impugned award as follows:- “After perusing the claim petition, written statement/show cause filed
by them, conciliation proceeding was conducted amongst the parties to the dispute as provided under Section 22 C(4) to (7) of Legal Services
Authority Act 1987. Though the parties participated in the conciliation proceeding through their learned Advocates and the court also assisted them for
it but they failed to reach at an agreement on the settlement of dispute. However, the parties agreed to get this dispute decided on merit as provided
under Section 22 C (8) of Legal Services Authority Act 1987.â€
From the aforesaid passage it is apparent that the conciliation proceeding had failed and the parties have agreed to get the dispute decided on merits
as provided under Section 22 C (8) of the Legal Services authorities Act 1987. In such circumstances this court is of the view that Permanent Lok
Adalat has rightly entered into the dispute and decided the case on merits and accordingly point of jurisdiction as raised by the petitioner is hereby
rejected and the issue no A stands decided against the petitioner.Â
So far as issue no B on the merits of the case is concerned, this court is inclined to interfere with the impugned award under Article 226 of the
constitution of India on account of following facts and reasons:-Â
I. There is a specific finding recorded by the Permanent Lok Adalat that the deceased was travelling on the roof top of the Bus, and in view ofÂ
this fact, the Permanent Lok Adalat was pleased to direct the petitioner insurance company to pay to the claimant in the light of the aforesaid full
Bench judgment passed by this Hon’ble Court. This Court further finds that the Permanent Lok Adalat while relying upon the aforesaid full Bench
judgment has held as under :-Â
“Though the victim was travelling on the roof of the bus but in view of Full Bench judgment of Hon’ble Jharkhand High Court passed in
Appeal from Original order no. 292 of 2003 with 399 of 1999 on 29/04/2005 as reported in 2005(3) JLJR page No. 24 to 35 in which it was held, that
carrying passengers more than covered by the insurance company can not be absolved from its liability to pay compensation with respect to the
person exceeding the number covered by the policy. In case insurance company is permitted to raise defence of limited liability on the basis of terms
of policy object of Section 147 would stand frustrated. Even otherwise alleged breach of terms of policy by the insured may be an offence under the
provision of the Act, but surely that does not fall under section 149(2) of the Act.Â
In view of above full Bench judgment we unanimously agree that the claimants are entitled to get compensation though the deceased was travelling on
the roof of the bus. Now for deciding the amount of compensation two other factors are to be considered, firstly the age of the victim and secondly
the income of the victim.â€
II. However , while considering the said full bench judgment the learned permanent lok adalat has totally failed to consider the right of recovery of the
insurance company which is apparent from concluding para 32(ii) of the said full bench judgment which reads as follows:- Â
“The insurer can avoid its liability only if the conditions specified in Section 149(2) are satisfied, and not otherwise. The statute recognizes no other
condition for an insurer to escape its liability except those given in Section 149(2) whatever the terms and conditions between the insurer and the
insured may be. The terms of contract between the insured and the insurer determining their rights and liabilities towards each other are not and
should not be confused with the statutory liability of the insurer for the third party risk. If there is a breach of contract on the part of the insured, the
insurer may proceed against the insured. As far as third party risk is concerned, the liabilities being statutory, it cannot be overridden by terms of the
contract of insurance between the parties.â€Â
This aspect of the matter has been totally overlooked by the Permanent Lok Adalat which makes the impugned order perverse and calls for an
interference under Article 226 of the constitution of India. This court is inclined to exercise its powers under Article 226 of the constitution of India in
view of the aforesaid judgment passed by this court in L.P.A. No. 53 of 2013 and in L.P.A. No. 52 of 2013 wherein at para 18 it has been held as
under:-Â
“18. Maintainability of writ application as against the award passed by the Permanent Lok Adalat.
As per sub-section (4) of Section 22E, every award made by Permanent Lok Adalat under the Legal Services Authorities Act, 1987 shall be final
and shall not be called in question in any original suit, application or execution proceeding. On behalf of the appellant, it was contended that Section
22E(4) of the Legal Services Authorities Act, 1987 cannot take away the power of the High Court under Article 226 of the Constitution of India and
the appellant cannot be left remedies where there are sufficient grounds to set aside the award.â€Â
III. So far as contention of the respondent no. 6 and 7 is concerned, the respondent nos. 6 and 7 have not challenged this finding that the deceased
was travelling on the roof top either by filing any writ petition or by filing any Cross Objection in this particular case.
IV. The contention of the respondent nos. 6 and 7 that the petitioner has not claimed any right of recovery in the present writ petition and no such
prayer has been made is also rejected in view of the statement made by the writ petitioner at paragraph no. 15 of the writ petition that it has already
been decided by this Hon’ble Court and it has been held that in case of person travelling by sitting on the roof top of a bus, Insurance company is
entitled for the right of recovery.
V. Regarding reliance as has been placed by the respondent nos. 6 and 7 in the judgment reported in (2013) 10 SCC 217 is concerned, it appears from
paragraph no. 10 of the said judgment itself that it was explained in the case of Swaran Singh’s Case reported in (2004) 3 SCC 297 that in an
appropriate case the insurance company may not be liable to pay the compensation which may include the situation when the owner of the vehicle has
some information that the license possessed by the driver is fake. This judgment reported in (2013) 10 SCC 217 does not help the petitioner in any
manner particularly in the facts and circumstances of this case where as per the finding recorded by the Permanent Lok Adalat the deceased was
travelling on the roof top then the same amounts of violation of the terms and conditions of the policy.
VI. This court is of the considered view that the insurance company has to discharge its statutory liability and in appropriate case of violation of terms
and conditions of contract of insurance, the insurance company has a right of recovery from the insured.Â
VII. So far as judgment relied upon by the counsel for the respondent owner and the driver of the vehicle reported in 2017 SCC Online S.C. 1479 is
concerned, in the said judgment there was no material or conclusive proof to show as to whether the deceased was travelling on the mud gard of the
tractor or he otherwise received injuries and therefore the Hon’ble Supreme Court was of the view that the material aspects of the facts ought to
have been shown by the driver. This judgment does not apply to the facts and circumstances of this case particularly in view of the fact that the
Permanent Lok Adalat has recorded a finding that the deceased was travelling on the roof top. This finding has not been challenged by the owner or
driver of the vehicle either by filing any writ petition or by filing any Cross Objection.Â
VIII. Issue no B is accordingly decided in favour of the petitioner.Â
12. Issue no C After considering the facts and circumstances of the case, this court finds that in view of the uncontroverted facts on record that the
deceased was travelling on the roof top which amounts to violation of the terms and conditions of the policy itself, the insurance company ought to
have been granted right to recovery from the owner of the vehicle.
 Accordingly, this court is inclined to modify the impugned award passed in P.L.A. Claim Case No. 168/2007 by the Permanent Lok Adalat, Giridih
by modifying the impugned order to the extent that the insurance company shall pay the amount to claimant as per the award within a period of four
weeks from the date of receipt of a copy of this order and shall have the right to recovery from the owner of the vehicle.Â
If the amount is not paid by the petitioner (insurance company) within a period of four week from the date of receipt of the copy of this order, the
amount to be paid by the insurance company will carry interest @ 12% per annum from the date of award till the date of payment and the amount of
interest will be borne by the insurance company. The cheque amount will be deposited by the insurance company in the Permanent Lok Adalat in the
name of the claimants as per the award.  Â
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