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IN THE HIGH COURT OF CALCUTTA
Dipankar Datta, J.
Bajaj Allianz General Insurance Company Ltd. - Petitioner
Versus
State Legal Services Authority, West Bengal – Respondent
W.P. No. 9527(W) of 2014
Decided on : 22-04-2014
For the Petitioner:Mr. Shamim Ahmed and Mr. Rajesh Singh, Advocates.
For the Respondents:Mr. Biswaroop Bhattacharya, Mr. Anil Ranjan Roy, Advocate.
A lok adalat, upon a compromise being reached between the parties, is entitled to record its terms by passing an order, and that the order impugned in the present writ petition although uses the term "ORDERED" just above the operative portion, it must necessarily be distinguished from an order passed by an adjudicating authority, upon due consideration of the issue(s) of fact and/or law and necessarily deciding an issue in favour of one and against the other.
Headnote:
MOTOR VEHICLES ACT, 1988 - Section 166 - Lok Adalat - Order - Interest on Compensation - Jurisdiction - Compromise - Award - Execution - Delay in Payment.
Fact of the Case:
The insurer challenged an order passed by the Lok Adalat awarding compensation to the claimants in a motor accident claim case, along with interest for default in payment within a stipulated time. The insurer contended that the Lok Adalat lacked jurisdiction to award interest, that it never agreed to pay interest, and that its representative signed the order without being aware of the interest provision.
Finding of the Court:
The court held that the Lok Adalat had the authority to pass an order recording the terms of a compromise reached between the parties, and that the order impugned was a composite one recording the settlement. It further held that the insurer's representative had knowledge of the obligation to pay interest, as he had signed the order, and that the insurer's claim of unawareness was not believable.
Issues: 1. Whether the Lok Adalat had the jurisdiction to award interest on the compensation in the absence of a contentious issue being adjudicated. 2. Whether the insurer's representative had knowledge of the obligation to pay interest.
Ratio Decidendi: 1. A lok adalat, upon a compromise being reached between the parties, is entitled to record its terms by passing an order, and that is exactly what the impugned order recorded. 2. The order impugned in the present writ petition although uses the term "ORDERED" just above the operative portion, it must necessarily be distinguished from an order passed by an adjudicating authority, upon due consideration of the issue(s) of fact and/or law and necessarily deciding an issue in favour of one and against the other. 3. The insurer's learned lawyer having put his signature on the first page of the impugned order, an inference can legitimately be drawn that he was aware of how the payments were to be effected, for, the second page was in fact the continuation of the first page ending with the word "Hence".
Final Decision: The court dismissed the writ petition, holding that the Lok Adalat had the jurisdiction to award interest, that the insurer's representative had knowledge of the obligation to pay interest, and that the insurer's claim of unawareness was not believable.
Dipankar Datta, J.
The petitioning insurance company (hereafter the insurer) by presenting this writ petition calls in question an order dated April 27, 2013 passed by the Lok Adalat, Nadia (hereafter the Lok Adalat). The said order allowed an application under Section 166 of the Motor Vehicles Act, 1988 (hereafter the said application), registered as Motor Accident Claims Case No. 333 of 2011, on compromise. The claimants were awarded a compensation of Rs.26,50,000/-, to be paid within a month from the date of the order and in such case the awarded compensation would not earn any interest; however, in default of such payment, the awarded compensation would carry interest @ 12% p.a. from the date of filing of the said application till full realization.
2. The claimants in the said application were the minor son, the husband, the mother and the father of the victim Nila Roy, a school teacher. She was on her way to school traveling in a bus. Owing to alleged rash and negligent driving of the bus, the same overturned resulting in the instant death of the victim. The claimants having filed the said application before the Motor Accident Claims Tribunal, Nadia at Krishnanagar (hereafter the tribunal), the same was transferred to the Lok Adalat. The order impugned came to be made thereafter.
3. The claimants, on the failure of the insurer to effect payment in terms of the order of the Lok Adalat, instituted proceedings for execution before the tribunal giving rise to Money Execution Case No. 3 of 2014. The insurer filed a written objection to the application for execution. It was the claim of the insurer that the order was received by it through its learned lawyer on May 14, 2013. Although the insurer was obliged to make payment within May 26, 2013, it had defaulted and ultimately the payment was effected on June 7, 2013, resulting in a delay of only 11 days in effecting payment in terms of the order of the Lok Adalat. According to the insurer, the order awarding interest was passed by the Lok Adalat without jurisdiction. An order dated February 20, 2014 was passed by the tribunal recording that the written objection filed by the insurer is misconceived, since it is beyond its jurisdiction to travel behind the award, and that the petition for attachment would be considered on the next date i.e. March 23, 2014, if payment were not effected in the meanwhile. The execution case is pending.
4. It is after such order of the tribunal that the insurer has approached this Court with the instant writ petition dated March 21, 2014.
5. Mr. Ahmed, learned advocate for the insurer, sought to assail the order of the Lok Adalat on three grounds, viz., i) a lok adalat in terms of provisions contained in Regulation 9 of the National Legal Services Authority (Lok Adalats) Regulations, 2009 (hereafter the Regulations) has no authority to pass any order in respect of the dispute between the parties, who intend to settle the same before it (the lok adalat) and, therefore, the portion regarding payment of interest under "ORDERED" in the impugned order of the Lok Adalat is without jurisdiction; ii) the insurer never agreed to payment of any interest in default of payment of the awarded compensation within the time stipulated in the impugned order and, therefore, question of bearing the interest component does not and cannot arise; and (iii) the insurer through its representative made endorsement without even knowing about the portion regarding payment of interest, which was held back from him.
6. In support of his submissions, Mr. Ahmed relied on the decisions of the Supreme Court reported in (2011) 7 SCC 491 : LIC v. Suresh Kumar; (SC; Suppl) 2006 (4) CHN 93 : Pushpa Devi Bhagat v. Rajinder Singh; and (2004) 7 SCC 555 : State of Punjab v. Phulan Rani.
7. Mr. Bhattacharya, learned advocate representing the State Legal Services Authority, respondent no. 1, urged that none of the contentions urged by his adversary has merit. According to him, a lok adalat
