Partly allowed

United India Insurance Co. Ltd. v. Smt. Champa Bai and Ors.

Rajasthan HC4 May 2018CMAP/29/2018

Case brief

AI extract

What is this about?

The High Court recalled an order of reference to the National Lok Adalat and set aside an agreed award of enhancement. The petitioner insurance company, unaware of a pending appeal challenging the compensation quantum, erroneously consented to an enhancement, which the court allowed to be withdrawn under inherent powers.

What did the court decide?

Order of reference to National Lok Adalat dated 18.11.2017 was recalled; Lok Adalat award dated 09.12.2017 set aside; pending appeal restored and listed for hearing.

United India Insurance Co. Ltd. Vs Smt… — Civil Procedure and Limitation | Rajasthan HC (2018)

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1HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR

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S.B. Misc. Application No. 29 / 2018

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United India Insurance Company Limited, Through Its Legally Constituted Authority, T.P. Hub 74A, Bhati-N-Plaza, Pal Road, Jodhpur.

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----Petitioner

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Versus

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Smt. Champa Bai W/o Late Veer Ji Meena.

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Nana Lal S/o Late Veer Ji Meena.

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Surajmal S/o Late Veer Ji Meena., All Residents of Jawar Fala Wada, Jawar Mata, Tehsil Girwa, District Udaipur.

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Jogendra Singh S/o Keshar Singh Ranawat, By Caste Rajput, Resident of Barodiya, P.S. Kheroda, Tehsil Vallabhnagar, District Udaipur (Driver).

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Vijay S/o Shri Bhagwandas Gopaliya, Resident of 3-A, Magrawadi, Udaipur. (Owner).

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----Respondents

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For Petitioner(s) : Mr. Jagdish Vyas

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For Respondent(s) : Mr. Manish Pitaliya

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JUSTICE DINESH MEHTA

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Judgment / Order

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Approved for Reporting 04/05/2018

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The present application under Section 151 of the Code of Civil Procedure, 1908 has been filed by the applicant – Insurance Company, seeking recalling of the award dated 09.12.2017 passed by National Lok Adalat (Bench comprising of Hon’ble Mr. Justice M.K. Garg as Chairman and Mr. J.L. Purohit as Member) in Civil Misc. Appeal No.115/2015.

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(2 of 8)

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[CMAP-29/2018]

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The facts appertain to the present application are that the claimants had filed an appeal under Section 173 of the Motor Vehicles Act, 1988, seeking enhancement of the amount awarded vide the judgment and award dated 19.09.2014 passed by the Motor Accident Claims Tribunal No.2, Udaipur whereby a sum of Rs.29,54,000/- has been awarded. The appeal so filed by the claimants was registered as Civil Miscellaneous Appeal No.115/2015.

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During the pendency of the said appeal, this Court vide its order dated 18.11.2017 referred the matter to the National Lok Adalat scheduled to be held on 09.12.2017.

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When the matter was taken up by the concerned Bench of National Lok Adalat on 09.12.2017, the parties agreed for enhancement of the compensation by a sum of Rs.25,000/- and accordingly an agreed award dated 09.12.2017 came to be passed, vide which the compensation came to be enhanced by a sum of Rs.25,000/-.

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The applicant – Insurance Company through its Regional Manager and the counsel had bonafidely given their consent for enhancement of a sum of Rs.25,000/-, in the spirit of Lok Adalat, completely being oblivious of the fact that their appeal, challenging the quantum of compensation was pending and the settlement or compromise so arrived, would prejudice their appeal filed against the judgment and award dated 19.09.2014.

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After some time, when the Insurance Company realised their mistake of giving the consent in ignorance of the pendency

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(3 of 8)

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[CMAP-29/2018]

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of their Appeal being CMA No.1906/2014 (United India Insurance Company Vs. Champa Bai & Ors.), the applicant – Insurance Company has filed the present application inter alia indicating that during the proceedings before the National Lok Adalat on 9.12.2017, they did not realise/recollect that the applicant – Insurance Company has already challenged the quantum of award dated 19.09.2014 by way of filing the appeal (being Appeal No.1906/2014), and the same was pending consideration.

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Mr. Vyas, learned counsel for the applicant – Insurance Company submitted that the consent to enhance the compensation by Rs.25,000/- was given bonafidely, which consent the Insurance Company wants to withdraw.

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Mr. Manish Pitaliya, learned counsel for the respondents, on the other end opposed the maintainability of the application and submitted that the award passed by the National Lok Adalat firstly cannot be reviewed, as the same is final and binding as provided under Section 22-E of the Legal Service Authorities Act, 1987; and contended that without prejudice to his first argument, even if, the said award is to be recalled, the same can be done in the “Lok Adalat” only and that too by the same Bench, which had passed the order/award dated 09.12.2017.

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Joining the debate, in rejoinder, Mr. Vyas submitted that it is not for the first time, that the Court is required to deal with such application; this Court has on earlier occasions recalled the order(s)/award(s) passed by the Lok Adalat. He cited an order dated 07.09.2015 passed by this Court in Civil Misc. Application No.94/2014.

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(4 of 8)

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[CMAP-29/2018]

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I have heard learned counsel for the parties and perused the material available on record, and the law on the subject.

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The Lok Adalat assumes the jurisdiction to decide a case, pursuant to a reference made to it by the High Court, in accordance with Section 20 of the Legal Services Authorities Act, 1987, which reads thus :-

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“ 20. Cognizance of cases by Lok Adalats. – (1) Where in any case referred to in clause (i) of subsection (5) of Section 19 –

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(i) (a) of the parties thereof agree; or

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(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

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(ii) the court is satisfied that the matter is an appropriate one to be taken cognizance of by the Lok Adalat,

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the court shall refer the case to the Lok Adalat :

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Provided that no case shall be referred to the Lok Adalat under a sub-clause (b) of clause (i) or clause (ii) by such court except after giving a reasonable opportunity of being heard to the parties.

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A bare look at the order of reference dated 18.11.2017 reveals that the parties, including the applicant – Insurance Company had agreed to refer the case to Lok Adalat in accordance with provisions contained in Section 20 (i) (a) of the Act of 1987.

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(5 of 8)

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[CMAP-29/2018]

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A perusal of the award/order under consideration dated 09.12.2017 reveals that the applicant – Insurance Company had given its consent of additional amount of Rs.25,000/- over and above the award of Rs.29,54,000/- passed by the Tribunal in Motor Accident Claim Case No.134/2014.

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The fact that the claimants – appellants in the said appeal have agreed for enhancement of meagre sum of Rs.25,000/- with the claim amount of Rs.29,54,000/- itself, is an indicator of the fact that the claimants were wary of the appeal filed by the Company and that is why they agreed to such a trivial enhancement in their appeal as against the original claim of Rs.66,73,000/-. The Insurance Company has agreed to this marginal enhancement of the amount, being oblivious of the fact that their appeal is pending consideration before this Court on merit.

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This Court can well understand the bonafide mistake on the part of the appellant – Insurance Company, which has to deal with hordes of cases on a particular National Lok Adalat. The consent given by the applicant – Insurance Company therefore, appears to be bonafide and well meaning, unmindful of the pendency of their appeal, wherein even the amount of Rs 29,54,000/- awarded by the Tribunal was under challenge.

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As far as the basic argument advanced by Mr. Pitaliya that this Court cannot recall the order passed by National Lok Adalat is concerned, it is to be noticed that the matter had been referred by a Co-ordinate Bench of this Court to the National Lok Adalat vide its order dated 18.11.2017, in exercise of its power available

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(6 of 8)

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[CMAP-29/2018]

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under Section 20 of the Legal Service Authorities Act, 1987, of course with the consent of the parties.

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It is not in dispute that on the said date, the appeal of the Insurance Company (CMA No.1906/2014) was not listed. Hence, the stand of the applicant can well be understood that it did not occur to the counsel for the Insurance Company that the matter is not fit to be referred to National Lok Adalat, as the appeal filed by the appellant – Insurance Company, challenging the quantum of the award is pending.

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The same mistake persisted, even when the appeal was listed before the Lok Adalat on 09.12.2017. As such in the stride and spirit of Lok Adalat, despite finding the amount to be reasonable, the applicant – Insurance Company agreed for an insignificant increase of Rs.25,000/-.

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In considered opinion of this Court, award passed by Lok Adalat is like a contract between the contesting parties and if there is a mistake of fact quintessential to the consent, the party concerned can apply for recalling of the consent and consequent award. The pendency of the appeal is a relevant, rather basic fact to be borne in mind, while giving consent towards the enhancement, as the same would operate as a res-judicata when the appeal filed by the Insurance Company is heard.

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It is true that award(s) passed by the Lok Adalat are final and binding, but the High Court being Court of record has plenary power to recall or review the order(s) passed by it. Even otherwise, Section 151 of the Code of Civil Procedure; the repository of inherent powers clothes this Court with a power to

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(7 of 8)

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[CMAP-29/2018]

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pass such order(s), which are imperative to meet the ends of justice.

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The other argument of Mr. Pitaliya that if the award/order of the Lok Adalat is to be recalled, the same can be done only by the concerned Bench of the Lok Adalat, though has some substance, but will have no bearing in the present case as I propose to recall the basic order dated 18.11.2017, vide which the reference to Lok Adalat was made; as the consent for reference to Lok Adalat was given by the Counsel/Insurance Company in ignorance of the pendency of their appeal.

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As a word of caution, this Court deems it necessary to add that to maintain the sanctity of Lok Adalat and the importance of the unique dispute resolution mechanism, the Court should not and cannot recall the award(s) passed by Lok Adalat, as a matter of course. The party concerned has to make out an exceptional case, hitting at the very root of the consent or agreement shown by the party during the proceedings of Lok Adalat or at the time of making reference.

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As noticed above, the very reference to Lok Adalat, in the present factual backdrop, so also the award of the Lok Adalat were based on the wrong premise and ignorance of the fundamental fact regarding pendency of the cross appeal, the order of reference dated 18.11.2017 is thus recalled hereby.

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The award passed by the National Lok Adalat on 09.12.2017, shall have no effect, as the foundational order referring the matter to the National Lok Adalat itself has been recalled.

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Needless to observe that as a natural corollary of recalling of

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(8 of 8)

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[CMAP-29/2018]

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the order dated 18.11.2017, the appeal filed by the claimants (SB Civil Misc. Appeal No.115/2015) is revived. The same be restored to its original number and listed for hearing with C.M.A. No.1906/2014 (United India Insurance Company Vs. Smt. Champa Bai & Ors.).

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The application stands disposed of as indicated above.

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(DINESH MEHTA), J.

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Anurag/50

United India Insurance Co. Ltd. v. Smt. Champa Bai and Ors.

Case brief

What is this about?

What did the court decide?

United India Insurance Co. Ltd. v. Smt. Champa Bai and Ors.

Case brief

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What did the court decide?

What the court decided

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