Legal Services Authority Act, 1987 - Section 22 C
- Cognizance of cases by Permanent Lok Adalat.
The power of cognizance of cases has been provided to the Permanent Lok Adalat in matters relating to offence which are compoundable and also in cases where the valuation of the property in dispute is of Rs.1 crore and are also those which are relating to public utility. Sub-section 1 of Section 22-C provides that any party to the dispute may make an application for settlement of the dispute, before the dispute is brought before any Court. Sub-section 2 provides that if an application is so made the said party would be prevented from invoking jurisdiction from any Court with regard to the same dispute. The procedure as laid down under Section 22-C (Subsection 3) and the other party to the dispute is directed by the Permanent Lok Adalat to file reply to the application in a manner of written statement as provided in Sub-section 3(a) and thereafter allowed the party, who moved the application to file additional statement and reply thereto. When all the said pleadings are complete, sub-section 4 goes into operation i.e. conducting of conciliation proceedings. Thus viewed, it is only when the pleadings being completed with the Permanent Lok Adalat proceedings for conciliation, it is at that stage, therefore, with the consent of the parties, conciliation proceedings may be proceeded for.
Legal Services Authority Act, 1987 - Section 22 C - Cognizance of cases by Permanent Lok Adalat - No party can by its conduct oust the jurisdiction of the adjudicating authority.
No party can be stopped from moving an application before the Permanent Lok Adalat. The stage of conciliation is subsequent, the other party cannot wriggle out itself from the jurisdiction of the Permanent Lok Adalat merely by saying that it does not want to participate in the conciliation proceedings and the jurisdiction of the Permanent Lok Adalat, therefore, cannot be said to have been ousted. The very purpose of Section 22-C would be rendered redundant if a view is taken that both parties consent has to be taken before proceeding to take cognizance under Section 22-C. The only requirement for taking cognizance by Permanent Lok Adalat are the two criterias, namely offence is compoundable or it is affecting public utility and secondly the valuation of dispute. So far as the failure of conciliation proceedings are concerned they may be occasioned either on account of refusal to participate in the conciliation or on account of not accepting the settlement conditions by both the parties. In both the cases, the conciliation would be treated as having failed and the Permanent Lok Adalat would thereafter proceed to adjudicate the dispute immediately thereto in terms of Section 22-C (8). The purpose of Permanent Lok Adalat is to provide speedy remedy and writ petition preferred before this Court appears to be only with purpose to stall the proceedings. Accordingly, the writ petition is dismissed with cost of Rs.25,000/- which is to be paid to the respondents.
HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR
HON'BLE MR. JUSTICE SANJEEV PRAKASH SHARMA
11 th September, 2018
S.B. Civil Writ Petition No.16279/2018
Royal Living Homes Pvt. Limited Vs. Aseem Kumar Sharma
For Petitioner(s) : Mr. Prateek Kasliwal, Adv.
For Respondent(s) : Mr. T.C. Vyas, Adv.
O R D E R
1.
The petitioner assails the order dated 08.06.2018
passed by the Permanent Lok Adalat whereby the petitioner is being asked to forcefully
participate in the conciliation proceedings.
2.
Learned counsel for the petitioner submits that
the Permanent Lok Adalat does not have the jurisdiction to hear the case and it
could not have directly invoked the provisions of Section 22-C and decide the
dispute against the wishes of the party. Learned counsel submits that the
Chapter VI A enacted in the Legal Services Authority Act, 1987 is incorporated
essentially with the object and power to settle disputes at the pre-litigation stage
and for the said purpose sub-Sections 4 to 7 of Section 22-C require
conciliation proceedings to be conducted, however, as the petitioner does not
want to enter into conciliation proceedings, the Permanent Lok Adalat cannot
force the petitioner to participate in the proceedings initiated by the
respondents under Section 22-C itself.
3.
Learned counsel submits that the Supreme Court in
the case of United
Insurance Company Versus Ajay Sinha And Another, 2008 (7) SCC 454 has observed that no one can be forced to
participate in the conciliation proceedings and the Permanent Lok Adalat was
required to first take consent of the parties before taking up the proceedings
under Section 22-C wherein the Apex Court states as under:-
“22. The
term "conciliation" is not defined under the Act. It should,
therefore, be considered from the perspective of Arbitration and Conciliation
Act, 1996. In order to understand what Parliament meant by 'Conciliation', we
have necessarily to refer to the functions of a 'Conciliator' as visualized by
Part III of the 1996 Act. Section 67 describes the role of a conciliator.
Sub-section (1) states that he shall assist parties in an independent and
impartial manner. Subsection (2) states that he shall be guided by principles
of objectivity, fairness and justice, giving consideration, among other things,
to the rights and obligations of the parties, the usages of the trade concerned
and the circumstances surrounding the dispute, including any previous business
practices between the parties. Sub-section (3) states that he shall take into
account "the circumstances of the case, the wishes the parties may
express, including a request for oral statements". Sub-section (4) is important
and permits the 'conciliator' to make proposals for a settlement. This section
is based on Article 7 of UNICTRAL Conciliation Rules.
25. Chapter
VI-A stands independently. Whereas, the heading of the Chapter talks of
pre-litigation, conciliation and settlement, Section 22-C(8) of the Act speaks
of determination. It creates another adjudicatory authority, the decision of
which by a legal fiction would be a decision of a civil court. It has the right
to decide a case. The term 'decide' means to determine ; to form a definite
opinion ; to render judgment. (See Advanced Law Lexicon 3rd Edition 2005 at
1253). Any award made by the Permanent Lok Adalat is executable as a decree. No
appeal thereagainst shall lie. The decision of the Permanent Lok Adalat is
final and binding on parties. Whereas on the one hand, keeping in view the
Parliamentary intent, settlement of all disputes through negotiation, conciliation,
medication, Lok Adalat and Judicial Settlement are required to be encouraged,
it is equally well settled that where the jurisdiction of a court is sought to
be taken away, the statutory provisions deserve strict construction. A balance
is thus required to be struck. A court of law can be created under a statute.
It must have the requisite infrastructure therefor. Independence and
impartiality of Tribunal being a part of human right is required to be taken
into consideration for construction of such a provision. When a court is
created, the incumbents must be eligible to determine the lis.
26. An
option is given to any party to a dispute. It may be a public utility service
provider or a public utility service recipient. The service must have some relation
with public utility. Ordinarily, insurance service would not come within the
public utility service. But having regard to the statutory scheme, it must be
held to be included thereunder. It is one thing to say that an authority is
created under a statute to bring about a settlement through Alternate Dispute Resolution
mechanism but it is another thing to say that an adjudicatory power is
conferred on it. Chapter VI-A, therefore, in our opinion, deserves a closure scrutiny.
In a case of this nature, the level of scrutiny must also be high. (See Anuj
Garg and Ors. v. Hotel Association of India and Ors., (2008) 3 SCC 1).
27. Sub-section
(1) of Section 22C speaks of settlement of disputes. The authority has to take recourse
to conciliation mechanism. One of the essential ingredients of the conciliation
proceeding is that nobody shall be forced to take part therein. It has to be
voluntary in nature. The proceedings are akin to one of the recognized ADR
mechanism which is made of Medola. It may be treated on a par with Conciliation
and Arbitration. In such a case the parties agree for settlement of dispute by negotiation,
conciliation or mediation. The proceedings adopted are not binding ones,
whereas the arbitration is a binding procedure. Even in relation to
arbitration, an award can be the subject matter of challenge. The provisions of
the Arbitration and Conciliation Act, 1996 shall apply thereto. The jurisdiction
in terms of Section 34 of the Arbitration and Conciliation Act, 1996 is wide.
The court in exercise of the said jurisdiction may not enter into the merit of
the case but would be entitled to consider as to whether the arbitrator was
guilty of misconduct. If he is found to be biased, his award would be set
aside. The scope of voluntary settlement through the mechanism of conciliation
is also limited. If the parties in such a case can agree to come to settlement
in relation to the principal issues, no exception can be taken thereto as the
parties have a right of self-determination of the forum, which shall help them
to resolve the conflict, but when it comes to some formal differences between
the parties, they may leave the matter to the jurisdiction of the conciliator.
The conciliatior only at the final stage of the proceedings would adopt the
role of an arbitrator.”
4.
Learned counsel also relies on the judgment
passed by the High Court of Jharkhand in the case of National Insurance Co. Ltd. Vs. Arti
Banerjee and Ors., decided on
15.03.2010 wherein the High Court has observed as under:-
“6.
It is also submitted by the learned Counsel for the petitioner that the role of
the Permanent Lok Adalat is not of an adjudicator, but, is of a conciliator.
Never any terms of settlement were offered by the Permanent Lok Adalat, as
required under Sub-section (7) of Section 22C of the Legal Services Authority
Act 1987 and therefore, also the impugned order deserves to be quashed and set aside.
7. It has been held by a Division Bench
of this Court in the case of Bharat Sanchar Nigam Ltd. v. State of Jharkhand
and Anr. as reported in 2008(3) J.L.J.R. 513, that it is prime duty of the
Permanent Lok Adalat to offer terms of settlement under Subsection (7) of
Section 22C of the Act, 1987. Thus, the Motor Vehicle Accident Claim Tribunal
being in existence, the Permanent Lok Adalat, Dhanbad cannot decide the
dispute, on merits, and, therefore, the order at Annexure-1 deserves to he quashed
and set aside.
9. It is also submitted by the learned
Counsel for Respondent No. 1 that looking into the written statement, it has
never been stated by the present petitioner (original defendant) that they are
not giving consent for decision, on merits, by the Permanent, Lok Adalat,
Dhanbad.”
5.
Thus, it is prayed to quash and set-aside the
order dated 08.06.2018 and dismiss the application moved by the respondent before
the Permanent Lok Adalat.
6.
Per contra, learned counsel for the respondent submits
that the Constitutional validity of Section 22-C (8) was challenged before the
Supreme Court in the case of Bar
Council of India versus Union of India, AIR 2012 SC 3246 and it held as under:-
“22.
.........Can the power conferred on Permanent Lok Adalats to adjudicate the
disputes between the parties concerning public utility service upto 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.”
7.
Learned counsel submits that in view of Section
22-C after an application has been made by the petitioner before the Permanent
Lok Adalat, it would not have any other remedy available to it and therefore on
the application moved by the respondent, he cannot be ousted on the ground that
the petitioner does not want to submit to the jurisdiction of the Permanent Lok
Adalat.
8.
Having noted the submissions, this Court notes
that Rule 22- C of the Act of 1987 reads as under:-
“22-C. Cognizance of cases by Permanent Lok Adalat.—(1) Any party to a dispute may, before the
dispute is brought before any court, make an application to the Permanent Lok
Adalat for the settlement of dispute: Provided that the Permanent Lok Adalat
shall not have jurisdiction in respect of any matter relating to an offence not
compoundable under any law:
Provided
further that the Permanent Lok Adalat shall also not have jurisdiction in the
matter where the value of the property in dispute exceeds one crore rupees: (as
enhanced from rupees ten lakh to rupees one crore w.e.f. 20.03.2015 vide
gazette notification.)
Provided
also that the Central Government, may by notification, increase the limit of
ten lakh rupees specified in the second proviso in consultation with the
Central Authority.
(2)
After an application is made under sub-section (1) to the Permanent Lok Adalat,
no party to that application shall invoke jurisdiction of any court in the same
dispute.
(3)
Where an application is made to a Permanent Lok Adalat under sub-section (1),
it—
(a)
shall direct each party to the application to file before it a written
statement, stating therein the facts and nature of dispute under the
application, points or issues in such dispute and grounds relied in support of,
or in opposition to, such points or issues, as the case may be, and such party
may supplement such statement with any document and other evidence which such
party deems appropriate in proof of such facts and grounds and shall send a
copy of such statement together with a copy of such document and other
evidence, if any, to each of the parties to the application;
(b)
may require any party to the application to file additional statement before it
at any stage of the conciliation proceedings;
(c)
shall communicate any document or statement received by it from any party to
the application to the other party, to enable such other party to present reply
thereto.
(4)
When statement, additional statement and reply, if any, have been filed under
sub-section (3), to the satisfaction of the Permanent Lok Adalat, it shall
conduct conciliation proceedings between the parties to the application in such
manner as it thinks appropriate taking into account the circumstances of the
dispute.
(5)
The Permanent Lok Adalat shall, during conduct of conciliation proceedings
under sub-section (4), assist the parties in their attempt to reach an amicable
settlement of the dispute in an independent and impartial manner.
(6)
It shall be the duty of the every party to the application to cooperate in good
faith with the Permanent Lok Adalat in conciliation of the dispute relating to
the application and to comply with the direction of the Permanent Lok Adalat to
produce evidence and other related documents before it.
(7)
When a Permanent Lok Adalat, in the aforesaid conciliation proceedings, is of
opinion that there exist elements of settlement in such proceedings which may
be acceptable to the parties, it may formulate the terms of a possible
settlement of the dispute and give to the parties concerned for their observations
and in case the parties reach at an agreement on the settlement of the dispute,
they shall sign the settlement agreement and the Permanent Lok Adalat shall
pass an award in terms thereof and furnish a copy of the same to each of the
parties concerned.
(8)
Where the parties fail 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.
From
its perusal, it is apparent that the power of cognizance of cases has been
provided to the Permanent Lok Adalat in matters relating to offence which are
compoundable and also in cases where the valuation of the property in dispute
is of Rs.1 crore and are also those which are relating to public utility. Sub( 10 of 13) [CW-16279/2018] section 1 of Section 22-C provides that any party
to the dispute may make an application for settlement of the dispute, before
the dispute is brought before any Court. Sub-section 2 provides that if an
application is so made the said party would be prevented from invoking
jurisdiction from any Court with regard to the same dispute. The procedure as
laid down under Section 22-C (Subsection 3) and the other party to the dispute
is directed by the Permanent Lok Adalat to file reply to the application in a
manner of written statement as provided in Sub-section 3(a) and thereafter
allowed the party, who moved the application to file additional statement and
reply thereto. When all the said pleadings are complete, sub-section 4 goes
into operation i.e. conducting of conciliation proceedings.
9.
Thus viewed, it is only when the pleadings being
completed with the Permanent Lok Adalat proceedings for conciliation, it is at that
stage, therefore, with the consent of the parties, conciliation proceedings may
be proceeded for.
As
has been opined by the Apex Court in United Insurance Company Versus Ajay Sinha
(supra) and by the High Court of Jharkhand in National Insurance Co. Ltd. Vs.
Arti Banerjee and Ors. (supra), the parties to the dispute may not agree for conciliation
or may even refuse to participate in the conciliation proceedings.
On
such refusal, or failure of conciliation, sub-section 8 of Section 22-C would
than come into operation and the Permanent Lok Adalat would than decide the
case on relegance and adjudicate the dispute.
The
submission of learned counsel for the petitioner that if one of the party has
refused to participate in conciliation proceedings, the jurisdiction of the
Permanent Lok Adalat itself is ousted and the Permanent Lok Adalat is ought to
be held having no jurisdiction to proceed in the matter, is therefore,
unsustainable in law.
No
party can be stopped from moving an application before the Permanent Lok
Adalat. The stage of conciliation is subsequent, the other party cannot wriggle
out itself from the jurisdiction of the Permanent Lok Adalat merely by saying
that it does not want to participate in the conciliation proceedings and the
jurisdiction of the Permanent Lok Adalat, therefore, cannot be said to have
been ousted. In view of this Court, no party can by its conduct oust the jurisdiction
of the adjudicating authority. The very purpose of Section 22-C would be
rendered redundant if a view is taken that both parties consent has to be taken
before proceeding to take cognizance under Section 22-C.
The
only requirement in view of this Court, for taking cognizance by Permanent Lok
Adalat are the two criterias, namely offence is compoundable or it is affecting
public utility and secondly the valuation of dispute.
10.
The conciliation proceedings are not uncommon
under the various provisions. The conciliation proceedings made under Section
22-C (4) are not only similar to that which one finds in the Arbitration and
Conciliation Act, 1996, but are also found under the Industrial Disputes Act,
1947, Section 10 wherein before the case is taken up by the labour court, the
conciliation proceedings are taken up between the workman and the concerned
employer. Similarly conciliation procedure are provided under Section 18 of the
MSMED Act of 2006 as pre-requisite before sending the dispute to the Arbitrator.
So
far as the failure of conciliation proceedings are concerned they may be
occasioned either on account of refusal to participate in the conciliation or
on account of not accepting the settlement conditions by both the parties. In
both the cases, the conciliation would be treated as having failed and the
Permanent Lok Adalat would thereafter proceed to adjudicate the dispute immediately
thereto in terms of Section 22-C (8). My view is advised by observations as
made by Supreme Court in Bar Council of India Versus Union of India (supra).
11.
The next submission of the counsel for the
petitioner that if the petitioner agrees to the jurisdiction of the Permanent
Lok Adalat no right of appeal would available to him, has been aptly answered
by the Apex Court in Bar Council of India Versus Union of India (supra), held
as under:-
“33.
There is no inherent right of appeal. Appeal is always a creature of statute
and if no appeal is provided to an aggrieved party in a particular statute,
that by itself may not render that statute unconstitutional. Section 22-E(1)
makes every award of the Permanent Lok Adalat under 1987 Act either on merit or
in terms of a settlement final and binding on all the parties thereto and on persons
claiming under them. No appeal is provided from the award passed by the
Permanent Lok Adalat but that, in our opinion, does not render the impugned
provisions unconstitutional. In the first place, having regard to the nature of
dispute upto a specific pecuniary limit relating to public utility service and
resolution of such dispute by the procedure provided in Section 22-C(1) to 22-C(8),
it is important that such dispute is brought to an end at the earliest and is
not prolonged unnecessarily. Secondly, and more importantly, if at all a party
to the dispute has a grievance against the award of Permanent Lok Adalat he can
always approach the High Court under its supervisory and extraordinary
jurisdiction under Articles 226 and 227 of the Constitution of India. There is
no merit in the submission of the Learned Counsel for the Petitioner that in
that situation the burden of litigation would be brought back on the High
Courts after the award is passed by the Permanent Lok Adalat on merits.”
12.
The purpose of Permanent Lok Adalat is to provide
speedy remedy and writ petition preferred before this Court appears to be only
with purpose to stall the proceedings.
13.
Accordingly, the writ petition is dismissed with
cost of Rs.25,000/- which is to be paid to the respondents.
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