Allowed

Reliance General Insurance Company Ltd. v. Subhash Gupta and Anr.

Punjab & Haryana HC2 Apr 2012CWP/2518/2011

Case brief

AI extract

What is this about?

Hon'ble Single Judge of the Punjab and Haryana High Court allowed the writ petition filed by an insurance company challenging an award by the Permanent Lok Adalat. The Court held the award invalid because it was passed by the Chairman alone, violating the mandate of Section 22-E(3) requiring a majority of the three-person tribunal. The matter was remanded for fresh adjudication.

What did the court decide?

The Award dated 14.12.2010 passed by the Permanent Lok Adalat was set aside and the matter remanded to the PLA to adjudicate afresh.

Reliance General Insurance Com… — Constitutional and Fundamental Rights | Punjab & Haryana HC (2012)

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CWP No.2518 of 2011 (O & M)

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IN THE PUNJAB AND HARYANA HIGH COURT AT CHANDIGARH

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CWP No.2518 of 2011 (O & M) Date of Decision: April 02, 2012

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Reliance General Insurance Company Limited

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....Petitioner

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Versus

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Subhash Gupta and another

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.... Respondents

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CORAM: HON'BLE MR. JUSTICE AJAY KUMAR MITTAL

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Present: Mr. Subhash Goyal, Advocate, for the petitioner.

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Mr. P.R. Yadav, Advocate, for the respondent No.1.

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AJAY KUMAR MITTAL, J.

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This order shall dispose of CWP Nos.2518 and 3414 of 2011 as counsel for the parties are agreed that identical facts are involved therein. For brevity, the facts are being taken from CWP No.2518 of 2011.

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The Insurance Company has filed this petition under Articles 226/227 of the Constitution of India seeking issuance of a writ of certiorari to quash order dated 14.12.2010 (Annexure P-1) passed by respondent No.2-Permanent Lok Adalat, Gurgaon, (for short 'the PLA).

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CWP No.2518 of 2011 (O & M)

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Briefly the facts may be noticed as narrated in the petition. Respondent No.1-claimant got his vehicle Tavera bearing registration No. HR-55-FT-4929 comprehensively insured with the petitioner-insurance company vide policy No.13067923400028 for the period commencing from 21.05.2009 to 20.05.2010. The said vehicle was stolen on 29.09.2009. An FIR in respect thereof was lodged on 24.11.2009.

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The claimant filed a petition under Section 22-C of the Legal Services Authority Act, 1987 (in short 'the Act') for settlement of the dispute in respect of his claim for Rs.5,32,800/- along with interest at the rate of 18% per annum from the date of claim till its realization. Respondent No.2-The PLA vide its order dated 14.12.2010 (Annexure P-1) directed the petitioner to pay Rs.3,98,600/- to respondent No.1 within a period of 40 days from the date of completion of formalities as required in terms of said order, which has been impugned in this petition.

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Learned counsel for the petitioner referred to Section 22-B of the Act, and submitted that establishment of PLA has been prescribed under sub-section (2) thereof, which envisages that every PLA established for an area notified under sub-section (1) shall consist of three persons as enumerated therein.

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According to the learned counsel, the coram of the PLA is a Chairman and two other persons. He drew the attention of the Court to Section 22-E of the Act where it provides that under subsection (3) thereof, the award made by the PLA under the Act shall be by a majority of the persons constituting the PLA. On the

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CWP No.2518 of 2011 (O & M)

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aforesaid premises, it was argued that the coram for the PLA shall be the Chairman and two other members as mentioned in sub-section (2) of Section 22-B of the Act and the Award dated 14.12.2010 (Annexure P-1) having been passed by the Chairman sitting singly, was legally unsustainable being contrary to the statutory provisions of the Act. On the other hand, learned counsel for the respondent No.1 supported the award passed by PLA.

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After hearing learned counsel for the parties, I find that the Award dated 14.12.2010 (Annexure P-1) was in violation of statutory provisions as it was passed by the Chairman alone.

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It would be advantageous to refer to the provisions of the Act. Section 22-B of the Act reads as under:

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“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 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.”

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(2) Every Permanent Lok Adalat established for an area notified under sub-section (1) shall consist of :-

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(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 Adalat; and

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CWP No.2518 of 2011 (O & M)

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(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,

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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."

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A bare perusal of sub-section (2) of Section 22-B of the Act, shows that PLA is to be constituted of the Chairman and two other persons having adequate experience in Public Utility Services. The Chairman of the PLA shall be a person who is or has been a district judge or additional district judge or who has held judicial office higher in rank than that of a district judge. The other persons are required to have adequate experience of Public Utility Service and shall be nominated by the Central Government or by the State Government on the recommendation of the Central Authority or the State Authority as the case may be.

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Further, Section 22-E of the Act provides that award of the PLA shall be final which is in following terms:-

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“22.E Award of Permanent Lok Adalat to be final. -

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(1) Every award of the Permanent Lok Adalat under this Act made either on merit or in terms

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CWP No.2518 of 2011 (O & M)

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of a settlement agreement shall be final and binding on all the parties thereto and on persons claiming under them.

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(2) Every award of the Permanent Lok Adalat under this Act shall be deemed to be a decree of a civil court.

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(3) The award made by the Permanent Lok Adalat under this Act shall be by a majority of the persons constituting the Permanent Lok Adalat.

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(4) Every award made by the Permanent Lok Adalat under this Act shall be final and shall not be called in question in any original suit, application or execution proceeding.

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(5) The Permanent Lok Adalat may transmit any award made by it to a civil court having local jurisdiction and such civil court shall execute the order as if it were a decree made by that court.”

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A plain reading of sub-section (3) of Section 22-E of the Act depicts that the Award made by the PLA under this Act shall be by a majority of the persons constituting the PLA. It is thus clear that it is contemplated in the Act that the coram for constituting valid PLA is three persons including Chairman and the award shall be by the majority of them.

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In the present case, the Award (Annexure P-1) has been

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CWP No.2518 of 2011 (O & M)

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passed by the Chairman individually. The Chairman alone was not competent to make the award. It is totally in violation of the provisions of the Act, as it does not satisfy the statutory requirement. 13. A Division Bench of this Court in CWP No.2718 of 2002 and other connected petitions titled as “Avtar Singh and others Vs. The District Judge, Rupnagar and others” decided on 26.11.2011, examining the constitution of Tribunal under the Punjab Town Improvement Trust Act, 1922, under similar circumstances held that the award by the President of the Tribunal alone was invalid.

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Accordingly, the Award (Annexure P-1) is hereby set aside and the matter is remanded to the PLA to adjudicate the same afresh in accordance with law.

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Writ petitions are disposed of accordingly.

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(AJAY KUMAR MITTAL) JUDGE

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April 02, 2012 sukhpreet

Reliance General Insurance Company Ltd. v. Subhash Gupta and Anr.

Case brief

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Reliance General Insurance Company Ltd. v. Subhash Gupta and Anr.

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