Professional Documents
Culture Documents
CHAPTER: V
The Lok Adalat and Motor Accident Claims
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CHAPTER: V
The Lok Adalat and Motor Accident Claims
A. Introduction
Camps of Lok Adalat were started initially in Gujarat in March 1982 and now it
has been extended throughout the Country. The evolution of this movement was
a part of the strategy to relieve heavy burden on the Courts with pending cases.
The reason to create such camps were only the pending cases and to give relief
to the litigants who were in a queue to get justice. Seekers of justice are in
millions and it is becoming rather difficult for the Courts to cope up with the
ever-increasing cases with the present infrastructure and manpower. Courts are
clogged with cases. There is serious problem of overcrowding of dockets.
Because of the ever-increasing number of cases the Court system is under great
pressure. Therefore, if there was at the threshold a permanent mechanism or
machinery to settle the matters at a pre-trial stage, many matters would not find
their way to the Courts. Similarly, if there are permanent forums to which Courts
may refer cases, the load of cases could be taken off the Courts. In order to
reduce the heavy demand on Court time, cases must be resolved by resorting to
'Alternative Dispute Resolution' Methods before they enter the portals of Court.
Here comes the significance of Lok Adalat which has showed its significance by
settling huge number of Third Party claims referred by Motor Accident Claim
Tribunal (MACT). Except matters relating to offences, which are not
compoundable, a Lok Adalat has jurisdiction to deal with all matters. Matters
pending or at pre-trial stage, provided a reference is made to it by a court or by
291
the concerned authority or committee, when the dispute is at a pre-trial stage and
not before a Court of Law it can be referred to Lok Adalat.
A large number of cases are settled expeditiously through Lok Adalats and with
lesser costs to the parties. Initially, there was no statutory backing for its
functioning and decisions and Lok Adalats were working as voluntary and
conciliatory agency. It was becoming popular day by day for providing a
speedier system of administration of justice. In view of its growing popularity
there has been a demand for providing a statutory backing to the institution of
and the awards given by the Lok Adalats. It was felt that such a statutory support
would not only reduce the burden of the arrears of work in regular courts, but
would also take justice to the doorsteps of the poor and the needy and make
justice quicker and less expensive1.
In order, therefore, to constitute Legal Services Authorities to provide free and
competent legal service to the weaker sections of the society, to ensure that
opportunities for securing justice are not denied to any citizen by reason of
economic and other disabilities, and to organize Lok Adalats to secure that the
operations of the legal system promotes justice on a basis of equal opportunity,
the Legal Services Authorities Act, 1987, was enacted which received the assent
of the President on 11th October, 1987 and came on the statue book. Sections 19
to 22 of Legal Services Authorities Act, 1987, deal with formation, organization
and functions of Lok Adalats.
292
Motor Vehicles Act, 1988, Subs. by Act 59 of 1994, sec. 15, for section 19 (w.e.f. 29.10.1994).
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(a) the parties thereof agree; or (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
(ii)
Ibid., Subs. by Act 59 of 1994, sec. 15, for section 20 (w.e.f. 29.10.1994).
294
Provided that no case shall be referred to the Lok Adalat under sub-clause
(b) of clause (i) or clause (ii) by such court except after giving a reasonable
opportunity of being heard to the parties.
(2) Notwithstanding anything contained in any other law for the time being
in force, the Authority or Committee organizing the Lok Adalat under
subsection (1) of section 19 may, on receipt of an application from any
one of the parties to any matter referred to in clause (ii) of sub-section
(5) of section 19 that such matter needs to be determined by a Lok
Adalat, refer such matter to the Lok Adalat, for determination:
Provided that no matter shall be referred to the Lok Adalat except after
giving a reasonable opportunity of being heard to the other party.
(3) Where any case is referred to a Lok Adalat under sub-section (1) or
where a reference has been made to it under sub-section (2), the Lok
Adalat shall proceed to dispose of the case or matter and arrive at a
compromise or settlement between the parties.
(4) Every Lok Adalat shall, while determining any reference before it under
this Act, act with utmost expedition to arrive at a compromise or
settlement between the parties and shall be guided by the principles of
justice, equity fair play and other legal principles.
(5) Where no award is made by the Lok Adalat on the ground that no
compromise or settlement could be arrived at between the parties, the
record of the case shall be returned by it to the court, from which the
reference has been received under sub-section (1) for disposal in
accordance with law.
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(6) Where no award is made by the Lok Adalat on the ground that no
compromise or settlement could be arrived at between the parties, in a
matter referred to in sub-section (2), that Lok Adalat shall advice the
parties to seek remedy in a court.
(7) Where the record of the case is returned under sub-section (5) to the
court, such court shall proceed to deal with such case from the stage
which was reached before such reference under sub-section (1).
4
5
Ibid., Subs. by Act 59 of 1994, sec. 16, for sub-section (1) (w.e.f. 29.10.1994).
Ibid., Subs. by Act 37 of 2002, sec. 3, for Lok Adalat (w.e.f. 11.6.2002).
296
(1) The Lok Adalat or Permanent Lok Adalat shall, for the purposes of
holding any determination under this Act, have the same powers as are
vested in a civil court under the Code of Civil Procedure, 1908, (5 of
1908) while trying a suit in respect of the following matters, namely:
a)
b)
c)
d)
e)
(2) Without prejudice to the generality of the powers contained in subsection (1), every Lok Adalat or Permanent Lok Adalat shall have the
requisite powers to specify its own procedure for the determination of
any dispute coming before it.
(3) All proceedings before a Lok Adalat or Permanent Lok Adalat shall
be deemed to be judicial proceedings within the meaning of sections
193, 219 and 228 of the Indian Penal Code (45 of 1860) and every Lok
Adalat or Permanent Lok Adalat shall be deemed to be a civil court for
the purpose of section 195 and Chapter XXVI of the Code of Criminal
Procedure, 1973 (2 of 1974).
297
298
Manju Gupta v. National Insurance Co. Ltd, 1994 ACJ 1036 (All)
Ibid.
10
299
From the above it follows that Claims Tribunals have the authority to enhance
the amount of compensation even when a compromise settlement has been
arrived between the parties at Lok Adalats.
11
12
United India Fire and General Insurance Co. Ltd. v. Pallapu Sridevi, 1994 (1) ACC 110 (AP).
Karnataka State Road Transport Corporation v. Kumudavalli, 2004 (1) ACC 80 (Kar).
300
13
14
301
15
Life Insurance Corporation of India v. State of Rajasthan, 2007 (1) ACC 899 (Raj.)
Gangi v. Second Additional District Judge, Hamirpur, 2001 (1) TAC 519
17
S.Kesar Singh v. Balbir Singh, 2004 (3) TAC 241 (J & K)
16
302
In New India Assurance Co. Ltd. v. Boda Hari Singh18 High Court of Andhra
Pradesh had mentioned in the award that the parties had compromised the matter
before the Lok Adalat. A mere reading of the award had revealed that the award
was passed not by the Lok Adalat but by the Claims Tribunal. There was no
material to show that any compromise memo signed by both the parties was ever
filed in the Tribunal. Moreover, section 20 of the Legal Services Authorities Act,
1987 prescribes the procedure of the Lok Adalat to take cognizance of cases.
There must be a reference by the court concerned in all pending cases. There was
nothing to show that any such reference was made. The award having not been
passed by the Lok Adalat, the bar under section 21(2) of that Act in respect of
Appeal was, hence, not attracted and the appeal was maintainable.
However, in the matter of Mst. Anachi v. Ram Chandra19 an appeal against the
award passed by the Lok Adalat on compromise between the parties was
preferred on the ground that interest was not awarded. Dismissing the appeal, it
was held by the Honble High Court that once principal amount was accepted by
way of compromise, question of interest cannot be reopened in appeal after a
delay of1 years and more so when interest on award of compensation is not a
separate cause of action.
In Deputy General Manager & Divisional Controller, Karnataka State Road
Transport Corporation v. Kamappa20 the State Transport Corporation had
filed this appeal against a compromise award passed by the Lok Adalat,
contending that the compromise petition presented before the Lok Adalat was
not signed by it or its law officer on its behalf on basis of which the compromise
award had been passed. However, the compromise petition was signed by the
18
New India Assurance Co. Ltd. v. Boda Hari Singh, 2000ACJ 1580 (AP)
Mst. Anachi v. Ram Chandra, 2002 (1) AJR 643 (Raj.)
20
Deputy General Manager & Divisional Controller, Karnataka State Road Transport Corporation
v. Kamappa, 1993 ACJ 539 (Kar.)
19
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Advocate for the corporation, whose Vakalatnama had been filed in the court
and clause in vakalatnama had authorized the Advocate to enter in to a
compromise on behalf of the executants of the vakalatnama. It was held by the
High Court that the award passed in terms of the compromise petition was valid
and the appeal had to be dismissed.
In United India Insurance Co. Ltd. v. Shabbir M Attarwala21 the Double
Bench of Mumbai High Court held that where the award of Lok Adalat could not
have been passed without consent or compromise between parties, the award
would be amenable to judicial review and liable to be set aside.
In National Insurance Co. Ltd. v. Mossamat Das Choudharys case22, the
Lok Adalat awarded Rs. 45,000/- less Rs. 15,000/- as already paid under no fault
liability, but in other two cases arising out of one and same accident, the tribunal
awarded Rs.50,000/- each. On appeal by the insurer, contending its liability to be
limited only up to Rs. 15,000/- the awards passed by Tribunal were restricted to
Rs. 45,000/- as in first case compromised before the Lok Adalat.
In State of Punjab & another v. Jalour Singh23 s case it was held by the
Supreme Court that functioning and procedure of Lok Adalat is based on
principles of nature justice, equity and fair play and they are the guiding
principles for Lok Adalat.
In this case it was also held by the Supreme Court that duties of Lok Adalat are
to explain and persuade the parties for compromise24.
In this case it was further held by the Supreme Court that modification of award
by Lok Adalat in absence of parties - not valid and liable to be set aside25.
21
United India Insurance Co. Ltd. v. Shabbir M Attarwala, 2007 ACJ 2860 (Bom)
National Insurance Co. Ltd. v. Mossamat Das Choudhary, 1998 (2) ACC 111 (Pat)
23
State of Punjab & another v. Jalour Singh, ILC 2008 SC MAC JAN-6
24
Ibid.
22
304
25
Ibid.
General Manager, Karnataka State Road Transport Corporation v.Pandu ,1998 ACJ 1389(Karn).
27
New India Assurance Co. Ltd. v. Ponnamma Thomas, 2009 ACJ 1331(Ker.)
28
Chandrakanti Das v. State of Orissa, 2010 (1) TAC 339 (Orissa)
26
305
Tamil Nadu State Transport Corporation Ltd. v. A.T.Narendiran, 2010 ACJ 77 (Mad)
United India Insurance Co. Ltd. v. Patramana, 1996 ACJ 427 (Kar)
31
United India Insurance Co. Ltd. v. Mohammed, 2000 ACJ 158
30
306
32
33
Ibid.
Inserted by C.P.C. (Amendment) Act, No. 46 of 1999
307
b. To Lok Adalat, the Court shall refer the same to the Lok Adalat in
accordance with the provisions of sub-section (1) of Section 20 of
the Legal Services Authorities Act, 1987 (39 of 1987) and all other
provisions of that Act shall apply in respect of the dispute referred to
the Lok Adalat;
c. For judicial settlement, the Court shall refer the same to a suitable
institution or person and such institution or person shall be deemed
to be a Lok Adalat and all the provisions of the Legal Services
Authorities Act,1987 (39 of 1987) shall apply as if the dispute were
referred to a Lok Adalat under the provisions of that Act;
d. For mediation, the Court shall effect a compromise between the
parties and shall follow such procedure as may be prescribed.
II. Direction of the Court to Opt for Any One Mode of Alternative
Dispute Resolution.
After recording the admissions and denials, the court shall direct the parties
to the suit to opt either mode of the settlement outside the court as specified
in sub-section (1) of Section 89 of Civil Procedure Code, 1908. On the option
of the parties, the court shall fix the date of appearance before such forum or
authority as may be opted by the parties34.
Civil Procedure Code, 1908, Order X, Rule 1A, (inserted by CPC (Amendment) Act, 1999)
Ibid., Order X, Rule 1B,( inserted by CPC (Amendment) Act, 1999)
308
P. Review.
A large number of cases are settled expeditiously through Lok Adalats and with
lesser costs to the parties. Initially, there was no statutory backing for its
functioning and decisions and Lok Adalats were working as voluntary and
conciliatory agency. It is becoming popular day by day for providing a speedier
system of administration of justice. In view of its growing popularity there was
a demand for providing a statutory backing to the institution of and the awards
given by the Lok Adalats. It was felt that such a statutory support would not only
reduce the burden of the arrears of work in regular courts, but would also take
justice to the doorsteps of the poor and the needy and make justice quicker and
less expensive.
Sections 19 to 22 of Legal Services Authorities Act, 1987, deals with
organization and functions of Lok Adalats.
Every State Authority or District Authority or the Supreme Court Legal Services
Committee or every High Court Legal Services Committee or, as the case may
be, Taluk Legal Services Committee may organize Lok Adalats at such intervals
36
309
and places and for exercising such jurisdiction and for such areas as it thinks fit
and every Lok Adalat organized for an area shall consist of such number of- (a)
serving or retired judicial officers; and (b) other persons, of the area as may be
specified.
The parties to a matter pending before a court may agree or 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 the court is satisfied that the matter is an appropriate one to be
taken cognizance of by the Lok Adalat, the court shall refer the case to the Lok
Adalat.
Every Lok Adalat shall, while determining any reference before it under this
Act, act with utmost expedition to arrive at a compromise or settlement between
the parties and shall be guided by the principles of justice, equity fair play and
other legal principles. Where no award is made by the Lok Adalat on the ground
that no compromise or settlement could be arrived at between the parties, the
record of the case shall be returned by it to the court, from which the reference
has been received for disposal in accordance with law.
Award of the Lok Adalat shall be deemed to be a decree of a civil court or, as the
case may be and award made by a Lok Adalat shall be final and binding on all
the parties to the dispute, and no appeal shall lie to any court against the award.
In the matter of Life Insurance Corporation of India v. State of Rajasthan37,
Double Bench of Rajasthan High Court held that in a dispute arising from a
public utility service, Permanent Lok Adalat can pass an award even without a
compromise having been arrived at between parties.
37
Life Insurance Corporation of India v. State of Rajasthan, 2007 (1) ACC 899 (Raj.)