IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C).No. 30059 of 2008(C)
1. M/S NEW INDIA ASSURANCE COMPANY LTD.,
... Petitioner
Vs
1. SABHARATHNAM @ SABHA RATHINAM,
... Respondent
2. P.S. THAHA, SALIM MANZIL, MUTTADA P.O.,
3. BASHEER S.M., S/O SAYED MOHAMMED,
4. THE PERMENANT LOK ADALATH FOR PUBLIC
For Petitioner :SRI.KKM.SHERIF
For Respondent :SRI.G.SUDHEER
The Hon'ble MR. Justice V.GIRI
Dated :11/11/2008
O R D E R
C.R.
V. GIRI, J.
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WP(C).NO. 30059 & 30067 of 2008
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Dated this the 11th day of November, 2008.
JUDGMENT
The New India Assurance Company challenges the awards
passed by the Permanent Lok Adalath for Public Utility Services
essentially on the ground that the said body had acted without
jurisdiction in proceeding to decide a claim petition filed by the
injured in a motor accident case, for compensation. Since the
contentions raised in these two writ petitions are common, they
have been heard together and are being disposed of by this
common judgment. I will refer to WPC.No.30059/2008, taken as
the leading case.
2. The first respondent met with an accident on
26.11.2005 when he was walking along the road and a car
owned by the second respondent and driven by the third
respondent hit him. He sustained serious injuries and he claimed
compensation to the tune of Rs.6 lakhs. He filed
OP.No.465/2007 before the 4th respondent which is the
WPC. 30059 and 30067 of /2008 2
Permanent Lok Adalath for Public Utility Services. On receipt of
summons from the Permanent Lok Adalath the petitioner
entered appearance and disputed the maintainability of the
petition. It was contended that the Permanent Lok Adalath
has no jurisdiction to adjudicate the matter under section 22C
(8) read with section 22D of the Legal Services Authorities Act
1987, (hereinafter referred to as the Act). The claimant and
the respondents were not able to come to a settlement.
Thereupon the Permanent Lok Adalath proceeded to adjudicate
the dispute and by Ext.P3 the claimant was permitted to realise
an amount of Rs.52,000/- from the petitioner, the third
respondent before the Permanent Lok Adalath with 9%
interest from the date of petition till realisation. This has been
challenged in this writ petition.
3. I heard learned counsel for the petitioner and the
learned counsel for the first respondent. The petitioner
contends that the Permanent Lok Adalath is established under
section 22B of the Act and exercises jurisdiction in respect of
one or more Public Utility Services. It does not exercise a
general jurisdiction and therefore it does have the powers to
WPC. 30059 and 30067 of /2008 3
adjudicate any dispute unless the dispute is in respect of one or
more public utility services. ‘Public utility service’ is defined
under section 22 A(b) of the Act and the claim made by the
injured or legal representatives of the deceased person, in a
petition claiming compensation for injuries suffered in a motor
accident, will not be a dispute touching upon the Insurance
service as defined under section 22 A(b) of the Act.
Consequently, the Permanent Lok Adalath was bereft of
jurisdiction to consider Ext.P1 or to pass an award in the
nature of Ext.P3, apparently on the premise that it is entitled to
adjudicate a claim petition for compensation, like a Motor
Accidents Claims Tribunal. In other words, the challenge
against the award Ext.P3 is on the ground that it is bereft of
jurisdiction.
4. Learned counsel for the respondents submits that the
Motor Vehicles Act inter alia provides for compulsory insurance
for any motor vehicle and consequently the claim by an injured
in a motor accident against the owner or driver of the vehicle
would also be a claim against the insurer and the dispute raised
in that behalf would charactorise itself as a dispute touching
WPC. 30059 and 30067 of /2008 4
upon the insurance service. He therefore contends that
Permanent Lok Adalath would have jurisdiction to decide a
claim petition filed by the injured in a motor accident case.
Alternatively, he submits, that such jurisdiction must be
vouchsafed in favour of the Permanent Lok Adalath atleast in
cases where the insurance company does not deny the
existence of a valid insurance coverage of the vehicle in
question, which was involved in the accident. I find that the
question raised in this regard is not traversed by any judgment
of the Supreme Court or this court. Therefore, I have
anxiously considered the issue.
5. Chapter VI-A of the Act was substituted by
amendment of the Legal Services Authorities Act brought about
in the year 2002. Section 22A (a) defines Permanent Lok
Adalath as one established under sub section (1) of section
22B. Section 22A (b) defines the Public Utility Services as
follows:-
“Public Utility Services” means any (i)
transport service for the carriage of
passengers or goods by air, road or water;
WPC. 30059 and 30067 of /2008 5
or (ii) postal, telegraph or telephone
service or (iii) supply of power, light or
water to the public by any establishment
or (iv) system of public conservancy or
sanitation (v) service in hospital or
dispensary (vi) insurance service.”
6. Section 22B provides for the establishment of a
Permanent Lok Adalath. Section 22B (1) reads as follows:
“22B(1) Notwithstanding anything
contained in section 19, the Central
Authority or as the case may be, every
State Authority shall, by notification,
establish Permanent Lok Adalats at such
places and for exercising such jurisdiction
in respect of one or more public utility
services and for such areas as may be
specified in the notification.”
7. Section 22C provides for cognizance of cases by
Permanent Lok Adalath. Section 22C provides that Permanent
Lok Adalath should permanently settle the points in dispute
between the parties and try to effect conciliation between
them. But a distinguishing feature in so far as the powers of
WPC. 30059 and 30067 of /2008 6
the Permanent Lok Adalath is concerned is what flows out of
section 22C(8) and the same reads as follows:-
“22D(8) Where the parties fail to reach
at an agreement under sub section (7),
the Permanent Lok Adalat shall, if the
dispute does not relate to any offence,
decide the dispute.”
8. In effect therefore where the parties fail to arrive at a
settlement, Permanent Lok Adalath is not rendered helpless
but is given the power to proceed to adjudicate the dispute as
such, subject to the condition that the dispute is not related to
any offence. A Lok Adalath constituted under Chapter VI
derives its jurisdiction to proceed to settle certain disputes only
when the parties agree for such settlement. In other words,
power of adjudication, dehors any submission made in this
behalf by the parties to the jurisdiction of the Lok Adalath, is
not contemplated in so far as the Lok Adalaths constituted
under Chapter VI of the Act are concerned. But a permanent
Lok Adalath is competent to decide contentious issues as well.
I also refer to the fact that section 22E of the Act provides that
an award passed by the Permanent Lok Adalath either on
WPC. 30059 and 30067 of /2008 7
merit or in terms of a settlement agreement shall be final and
binding on all the parties thereto and on persons claiming
under them. The award is deemed to be a decree of a civil
court and therefore can be executed in that behalf. (see
section 22E (3) and 5). I have referred to the above features
to understand the powers of adjudication therefore available to
a Permanent Lok Adalath. Obviously this cannot be inferred.
But a Lok Adalath and a permanent Lok Adalath would only be
vouchsafed with powers strictly in consonance with the
statutory powers providing for their establishment and laid
down in that behalf. It cannot be gainsaid that Permanent
Lok Adalaths are entitled to only deal with such disputes which
touch upon “public utility services”. The term is defined under
section 22A (b) of the Act. What is really considered in the
present case is the scope of the provision “public utility
services” in so far as it mentions the term “insurance service”.
It would have been ideal if the legislature had defined
insurance service for the purpose of ascertaining the limits of
jurisdiction of the Permanent Lok Adalath in that regard. But
it has not been done and therefore it would be necessary to
WPC. 30059 and 30067 of /2008 8
refer to similar terms as they are defined in statutes covering
the same field. The Insurance Act 1938 does not define an
insurance service but significantly it defines Life Insurance
business, Marine Insurance business, General insurance
business and Fire insurance business. Life Insurance business
is defined under section 2(11) of the Insurance Act. The same
reads as follows:-
“2(11). Life Insurance business means
the business of effecting contracts of
insurance upon human life, including
any contract whereby the payment of
money is assured on death (except
death by accident only) or the
happening of any contingency
dependent on human life, and any
contract which is subject to payment of
premiums for a term dependent on
human life and shall be deemed to
include –
(a) the granting of disability and double
or triple indemnity accident benefits, if
so provided in the contract of insurance.
(b) the granting of annuities upon
human life and
WPC. 30059 and 30067 of /2008 9
) the granting of superannuation
allowances and annuities payable out of
any fund applicable solely to the relief
and maintenance of persons engaged or
who have been engaged in any
particular profession, trade or
employment or of the dependents of
such persons. “
9. What is therefore indicated by Life Insurance Business
as defined is the business of effecting contracts of insurance
upon human life. It can also include any contract which
assures the payment of money on death or other contingencies
as well. The Insurance would therefore depend upon a
bilateral agreement between the insurer and the insured.
Once there is a contract of insurance, the insurance company
may be called upon to render insurance service. A service
rendered by an insurer, as part of it’s activities would be called
as insurance service. The term insurance service as defined
under section 22 A(b) (vi) of the Legal Services Authorities Act
could be judged in the said context. Insurance Service is
WPC. 30059 and 30067 of /2008 10
treated as a part of the public utility service and therefore
what is contemplated by section 22 A(b)(vi) read with section
22 B in so far as the public utility service touching upon the
insurance business is concerned, is a dispute arising out of the
insurance business carried on by the insurance company.
There are several disputes which arise between the insured and
the insurer, for example dispute arising on account of
deficiency in service rendered by the insurance company.
Obviously such dispute would fall within the purview of section
22 A (b)(vi) read with section 22B and would therefore be
comprehended by the powers of the Permanent Lok Adalath.
10. The crucial question is whether the claim petition filed
by the first respondent would also be a claim within the ambit
of “insurance service”. The term is not defined under the Legal
Services Authorities Act. A dispute raised by an injured or for
that matter a legal heir of deceased person claiming
compensation arising out of a motor accident cannot be
construed as one essentially touching upon the insurance
service rendered by the insurance company. One has to
understand the legislative background relating to establishment
WPC. 30059 and 30067 of /2008 11
of Motor Accidents Claims Tribunals as specialised Tribunals to
deal with claims arising out of motor accidents. Therefore,
prior to the establishment of Motor Accident Claims Tribunals,
the claim for compensation was dealt with by courts of general
jurisdiction. On establishment of MACTs, the jurisdiction
exercised by the civil courts came to be exercised by the
specialised Tribunal. The MACTs are therefore established as
specialised Tribunals under the provisions of the Motor
Vehicles Act. That claims similar to those filed by the first
respondent herein are obviously cognizable by the MACT
established under the Motor Vehicles Act is not disputed by any
party concerned. A claim by the injured in a motor accident is
only a claim for compensation filed by the injured who has
suffered from a tortious act of another person. A tortious act
gives rise to claim for damages, by a person who has suffered
from the act. Inspite of the fact that the claim is adjudicated
by Tribunals, the essence of a claim petition filed under section
166 or 163-A of the Motor Vehicles Act is nothing but a claim
for compensation filed by a person who has suffered at the
hands of a tortfeasor. Therefore what is to be first
WPC. 30059 and 30067 of /2008 12
adjudicated in such a claim petition under section 166 of the
Motor Vehicles Act is whether the vehicle in question was
driven by the driver in a rash and negligent manner. Whether
the claimant was a joint tortfeasor and whether there was
composite negligence are also matters which will come up for
consideration. If the court finds that the accident occurred on
account of the negligence of the driver of the vehicle, then the
claimant is entitled to compensation. But this is a matter for
adjudication by a court on an aspect which essentially involves
a claim by an injured person against a tortfeasor and that, in
my view is not comprehended by the term “insurance service”
as occurring in section 22 A(b)(vi) of the Legal Services
Authorities Act. In other words, a dispute which comes into
existence from a claim petition filed by the injured in a motor
accident is not a dispute touching upon “insurance service” for
the purpose of chapter VI-B of the Legal Services Authorities
Act.
11. What would therefore be a dispute touching upon
insurance service for the purpose of the Act. In my view, they
would essentially comprehend disputes arising between the
WPC. 30059 and 30067 of /2008 13
insurer and the insured. That would include cases of
repudiation by the insurer and claims of inadequacy of service
rendered by the insurer. Learned counsel for the first
respondent submits that it may not be safe to restrict cases of
disputes relating to insurance service as coming under the
Legal Services Authorities Act to cases where disputes arise
under the contract of insurance. He refers to the Public
Liability Insurance Act 1991 which provides for public liability
insurance for the purpose of providing immediate relief to the
persons affected by accidents occurring while handling any
hazardous substance and for matters connected therewith or
incidental thereto. It provides for an obligation on the part of
the industrial undertaking to give such reliefs as is specified in
the schedule to the Act whenever there occurs death or injury
to any person or damage to any property resulting from an
accident. Section 4 of the said Act obliges the owner to take
out a policy. Section 6 of the Act provides for an application
for claim for relief to be made to the Collector and an award of
relief by the Collector in terms of section 7. The Collector is
vouchsafed the powers of the civil court in terms of section 5
WPC. 30059 and 30067 of /2008 14
of the Act. But a claimant for compensation arising from a
motor vehicle accident under the Motor Vehicles Act does not
enjoy a similar privilege. Even the facility for a fixed amount
relating to “No fault liability” is only by way of an interim relief
in a regularly instituted petition for compensation, which if
contested, would obviously require proof of negligence by the
tortfeasor as the basis for an award. Thus the situation in
relation to claim for compensation under the Motor Vehicles
Act stands on a different footing and the crucial distinction is
evident from section 3(2) of the Public Liability Insurance Act
1991 which reads as follows:-
“3(2) In any claim for relief under sub
section (1) hereinafter referred to in
this Act as claim for relief), the
claimant shall not be required to plead
and establish that the death, injury or
damage in respect of which the claim
has been made was due to any
wrongful act, neglect or default of any
person. “
12. The discussion made above leads me to the
WPC. 30059 and 30067 of /2008 15
conclusion that a Permanent Lok Adalath would be bereft of
jurisdiction to decide a claim petition filed by a claimant arising
out of a motor accident. As the statutory position currently
obtains only the Tribunals constituted under the Motor Vehicles
Act have jurisdiction to decide such cases. The Permanent Lok
Adalath was devoid of jurisdiction to entertain Ext.P1
complaint or pass Ext.P3 order.
13. For all these reasons, I find the petitioner is entitled
to succeed. The writ petition is allowed. Ext.P3 order passed
by the Permanent Lok Adalath is set aside. On a query made
by me, the learned counsel for the petitioner the insurance
company submits that they have approached this court
essentially for a decision on the question of jurisdiction of the
Permanent Lok Adalath and that in the circumstances the
company has decided to pay the compensation as awarded by
the Permanent Lok Adalath as per Ext.P3. This, he undertakes
to do so within a period of two months from today.
V. GIRI, JUDGE.
Pmn/ WPC. 30059 and 30067 of /2008 16