Conciliation proceedings mandated by law must occur before any judgment in disputes regarding insurance claims; bypassing this duty invalidates the award.

1. This petition has been filed by the Oriental Insurance Company Limited questioning the legality and propriety of award dated 28.08.2012 (Annexure P - 1) passed by the Permanent Lok Adalat (Public Utility), Bastar, Place Jagdalpur in Case No.37/2012, whereby the claim made by the respondent No.3 - J. C. Construction Company under S.22(C) of the Legal Services Authorities Act, 1987 (hereinafter referred to as "the Act, 1987") has been allowed while directing the Insurance Company to pay a sum of Rs.24 Lakhs (Twenty four Lakh only) with interest @ 7.5 % per annum from the date of filing of the claim form dated 25.06.2007.

2. Briefly stated the facts of the case are that the claim enumerated under S.22(C) of the Act, 1987 has been made by the respondent No.3 before the Permanent Lok Adalat claiming compensation to the tune of Rs.24 Lakhs by submitting, inter alia, that the Poklane Machine bearing No. Tata Hitachi EX - 110 - Number - 1101-0120 (hereinafter referred to as "the machine in question") owned by him was destroyed by unknown naxalites near the village Katekalyan of District Dantewada on 08.06.2007 while burning it, owing to which, a report was lodged before the Police Station Katekalyan, District Dantewada. Since it was insured with the Insurance Company for Rs.24 Lakhs, therefore, an intimation to this effect was reported to the Insurance Company on 09.06.2007. It is pleaded further that a Surveyor of the Insurance Company has inspected the spot on 12.06.2007 and thereafter, the claim was made before the Insurance Company, but, has not been considered even after the issuance of notices, issued on 30.11.2011 and 20.01.2012, which compelled him for institution of the claim, instituted on 07.04.2012.

3. In reply to the aforesaid claim, it was stated by the Insurance Company that since the machine in. question was not insured, as claimed, therefore, no liability could be fastened upon it.

4. In support, the respondent No.3 has examined its Power of Attorney holder namely Satish Kumar Vyas, who has exhibited as many as 9 documents, including the insurance policy, marked as Ex.P - 2, and deposed that the surveyor of the Insurance Company has certified that the machine in question was belonging to the respondent - Company, i.e. J.C. Construction Company and, Abhay Kumar Sinha, the Branch Manager of the Insurance Company (NAW - 1) has also stated in his evidence at para - 7 that the model No.EX - 110 and the machine in question bearing Registration No.1101-0120 are the same. It was deposed further by him that a recommendation was made by his Divisional Office Jagdalpur to the Regional Office at Indore for releasing the claim as made by the said respondent, but the competent officer of the Head Office has rejected the same.

5. The Permanent Lok Adalat, after considering the evidence led by the parties and that by considering the report (Ex.D - 2) submitted by the Investigator - P. K. Bhattacharya, held that the machine in question, destroyed on the fateful day, insured with the Insurance Company vide its Policy (Ex.P - 2), is the same. It held further that since the machine in question was destroyed completely, therefore, the said respondent is entitled to get the entire insured amount of Rs.24 Lakhs from the Insurance Company and, in consequence, the said respondent has been held to be entitled for the alleged insured amount of Rs.24 Lakhs along with its interest @7.5% per annum from 25.06.2007, the date when the claim form was submitted before the Insurance Company.

6. According to the learned counsel appearing for the petitioner, the finding of the Court below holding that the machine in question was insured with the Oriental Insurance Company Limited