TaxTMI 
TaxTMI 
2008 (5) TMI 745
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.... suitable legislation or schemes or in any other way, to ensure that opportunities for securing justice are not denied to any citizen by reason of economic or other disability. 3. If we are to look at the history of grant of legal aid, it may be noticed that the Law Commission of India in its 14th report on 'reform of Judicial Administration' published in 1958, strongly advocated the need for rendering legal aid to poor litigants and categorically stated that' the rendering of legal aid to the poor litigants is not a minor problem of procedural law but a question of fundamental character'. 4. The committee under the Chairmanship of Hon'ble Mr Justice V.R. Krishna Iyer, then a Member of the Law Commission, constituted by the Government of India Order dated 27th October, 1972 to consider the question of making available to the weaker sections of the community and persons of limited means in general and citizens belonging to the socially and educationally backward class in particular, facilities for (a) legal advice so as to make them aware of their constitutional and legal rights and obligations; and (b) legal aid in proceedings before Civi....
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....h the Central Government or the State Government, as the case may be, may, in the public interest, by notification, declare to be a public utility service for the purposes of this Chapter. Section 22-B. provides for establishment of Permanent Lok Adalats. Section 22-C delineates the jurisdiction of Permanent Lok Adalat to take cognizance of cases filed before it, the relevant provisions whereof are 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 ten lakh rupees: 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 mad....
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....t is mandated to execute the order as if it were the decree by the court. 10. Interpretation of the aforesaid provisions in the light of the Statement of Objects and Reasons for which they have been enacted calls for our consideration. 11. Before, however, we embark thereupon we may briefly notice the factual matrix involved herein. 12. First respondent carries on business in electrical goods. He is an authorized distributor of Sony products. He entered into a contract of insurance with the appellant company; the period covered thereunder being 29th August, 2001 to 31st August, 2002. Allegedly, a burglary took place in his godown in the night of 18th /19th August, 2002. He lodged a First Information Report with Doranda Police Station, Ranchi. He also submitted a claim with the appellant alleging that in the said burglary, goods worth Rs.11,14,597/- had been stolen away. 13. Appellant denied and disputed the said claim which refuted the claims by a letter dated 12th August, 2004 interlia stating :- a) The surveyor has observed that the loss cannot be assessed since the quantity claimed by you is not verifiable especially as the authenticity of the documents prov....
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....ary jurisdiction over the matter and only because a criminal case is pending in the Court of Chief Judicial Magistrate, Ranchi, the same was not relevant stating :- "However, the finding of criminal court is not binding on this court and this court has to decide as to whether burglary had taken place or not. After taking independent evidences of the parties, so far finding of Surveyor is concerned, it is regarding merit of the claim which this P.L.A. has to decide after taking evidence. If the claim cannot be refused on the basis of surveyor report at this stage." 17. Appellant filed a writ application challenging the validity of the said order before the Jharkhand High Court. A learned Single Judge of the High Court allowed the said writ application opining that as Sections 479/461 of the Indian Penal Code being not compoundable, the Permanent Lok Adalat had no jurisdiction to entertain the claim opining:- "9 In my considered opinion, the Permanent Lok Adalat has committed great error of law in holding that it has jurisdiction inspite of the fact that the matter relates to an offence not compoundable under any law. The Permanent Lok Adalat has further committe....
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.... involves complicated questions of fact and law. (ii) The question as to whether the burglary has been committed or not being pending before the criminal court, Permanent Lok Adalat had no jurisdiction in relation thereto. (iii) As the contract of insurance had been repudiated, it was not a case which was fit for settlement within the meaning of Section 22-B of the Act. (iv) Claim of first respondent is mala fide as he had artificially reduced the claim to bring the same within the jurisdiction of the Permanent Lok Adalat, although initially he claimed a sum higher than Rs. 10 lakhs. 20. Mr. Amit Kumar, learned counsel appearing on behalf of the respondent, on the other hand, would urge :- (i) That the value of the property being less than Rs.10 lakhs, the Permanent Lok Adalat had jurisdiction in regard to the dispute in question. (ii) The restrictions imposed in regard to the offences cannot be applied to civil dispute between the parties arising out of any offence as the same relates to the claim of the respondent against the appellant. (iii) Jurisdiction of the Permanent Lok Adalat being confined to determination of the am....
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....erms of a possible settlement" or "reformulate the terms". This is indeed the UNCITRAL concept. 22. Section 89 of the Code of Civil Procedure inter alia was enacted to promote resolution of disputes through mutual settlement. Chapter VI-A of the Act seeks to achieve a different purpose. It not only speaks of conciliation qua conciliation but conciliation qua determination. Jurisdiction of Permanent Lok Adalat, although is limited but they are of wide amplitude. The two provisos appended to Section 22-C (1) of the Act curtail the jurisdiction of the Permanent Lok Adalat which are as under :- 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 ten lakh rupees: 23. 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 wou....
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....ute by negotiation, conciliation or mediation. The proceedings adopted are not bending 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 conciliation only at the final stage of the proceedings would adopt the role of an arbitrator. ....
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....ude those cases where the provisions of the particular Act have not been complied with or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure. (2) Where there is an express bar of the jurisdiction of the court, an examination of the scheme of the particular Act to find the adequacy or the sufficiency of the remedies provided may be relevant but is not decisive to sustain the jurisdiction of the civil court. Where there is no express exclusion the examination of the remedies and the scheme of the particular Act to find out the intendment becomes necessary and the result of the inquiry may be decisive. In the latter case it is necessary to see if the statute creates a special right or a liability and provides for the determination of the right or liability and further lays down that all questions about the said right and liability shall be determined by the tribunals so constituted, and whether remedies normally associated with actions in Civil Courts are prescribed by the said statue or not..." 32. In Dwarka Prasad Agarwal (D) by Lrs. and Anr. vs. Ramesh Chander Agarwal and Ors. : (2003) 6 SCC 220 , this Court held:....
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....e, by a reasoned order which is adjudicatory in nature. It arrogated to itself the appellate powers of the High Court and 'allowed' the appeal and 'directed' the respondents in the appeal to pay the enhanced compensation within a period fixed by it. It was held that such an order is not an Award. 36. Section 22-C(1) read with Section 22-C(2), Section 22-C(8) and Section 22-E of the Act, exclude the jurisdiction of the civil courts by providing that when an application is made by either party to the Permanent Lok Adalat to settle a dispute at the pre-litigation stage, the PLA shall do so, and the other party is precluded from approaching the civil court in such a case. 37. Section 22-C(1) contains certain Provisos which limit the jurisdiction of the PLA. Given the principle of statutory interpretation stated earlier, these Provisos, as a corollary, must be interpreted in an expansive manner. 38. What is important to note is that with respect of public utility services, the main purpose behind Section 22-C(8) seems to be that "most of the petty cases which ought not to go in the regular Courts would be settled in the pre-litigation stage itself." 39. There....