This writ petition raises an important question as to the authority of the Permanent Lok Adalath in deciding a dispute as contemplated under Section 22C(8) of the Legal Service Authorities Act, 1987 (for short, 'the Act').

2. The insurer challenges an Award of the Permanent Lok Adalath on the ground that it has no authority to adjudicate and decide a dispute which primarily revolved around the validity of a contract.

3. The insurer-New India Assurance Company Ltd. rejected the benefit under a medi claim insurance policy on the ground of suppression of material facts. The insured had taken the policy on 10.10.2005. The insured claimed reimbursement for renal treatment and liver disease. The insurer repudiated the claim pointing out pre-existing disease which was suppressed while taking the policy.

4. Based on the application before the Permanent Lok Adalath, conciliation proceedings were initiated as referrable under Section 22C(7) of the Act. The conciliation failed. Thereafter the Permanent Lok Adalath decided the dispute. The insurer objected to the authority of the Permanent Lok Adalath in deciding the dispute by pointing out that it cannot decide a dispute in regard to validity of a contract. Permanent Lok Adalath overruled the objection. The Permanent Lok Adalath observed that there was no suppression to hold that the contract was vitiated by misrepresentaiton. After entering into such findings, the Permanent Lok Adalath ordered the insurer to reimburse the expenses incurred by the insured.

5. Learned counsel for the insurer argued by referring to the various provisions of the Act. According to the learned counsel, though the Permanent Lok Adalath has jurisdiction, being insurance service one of the service coming under the 'public utility service' referrable under Section 22A of the Act, it has no authority to decide the question regarding the validity of a contract. In other words, the arguments were that the Permanent Lok Adalath is having only the authority to decide the question emanating from the contractual obligation and not upon the validity of a contract. It is further submitted that the Permanent Lok Adalath has no authority to interpret the contract and adjudicate such disputes as a Civil Court. Learned counsel points out that the word 'power to decide' as referred in Section 22C(8) of the Act has to be distinguished from the word 'power to adjudicate'. His submission was that the 'power to decide' would arise only when there are elements of settlement exist between the parties and if there are no elements of settlement, the Adalath has no power to adjudicate.

6. Per contra, learned counsel for the insured submits that the Permanent Lok Adalath is specifically constituted with certain broad objects to cater larger public interest. According to him, the very purpose of conferring the limited jurisdiction to 'decide the dispute' in relation to public utility service is to subserve the public interest and to provide quality justice at minimum cost to the public. Learned counsel pointed out that the Permanent Lok Adalath is headed by a retired District Judge.

7. It is appropriate to refer to the various provisions of the Legal Services Authorities Act, 1987. The Legal Services Authorities Act was enacted to provide free and competent legal service to the weaker sections of the society and to organise Lok Adalath to promote justice on the basis of equal opportunity. In the original enactment, the statutory provisions had not conceived the Permanent Lok Adalath. Before the inclusion of Chapter VIA covering the provisions relating to Permanent Lok Adalath, statutory provisions had only envisaged the constitution of a 'Lok Adalath' for settling disputes amicably between the parties to the dispute. It was intended to reduce the burden on the Civil Court. However, drastic amendments were made in, in the year 2002 to establish a 'Permanent Lok Adalath' to exercise jurisdiction in respect of certain public utility ser