{"id":246149,"date":"2009-04-09T00:00:00","date_gmt":"2009-04-08T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/state-bank-of-india-vs-state-of-jharkhand-anr-on-9-april-2009-4"},"modified":"2015-07-22T16:00:30","modified_gmt":"2015-07-22T10:30:30","slug":"state-bank-of-india-vs-state-of-jharkhand-anr-on-9-april-2009-4","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/state-bank-of-india-vs-state-of-jharkhand-anr-on-9-april-2009-4","title":{"rendered":"State Bank Of India vs State Of Jharkhand &amp; Anr. on 9 April, 2009"},"content":{"rendered":"<div class=\"docsource_main\">Jharkhand High Court<\/div>\n<div class=\"doc_title\">State Bank Of India vs State Of Jharkhand &amp; Anr. on 9 April, 2009<\/div>\n<pre>IN THE HIGH COURT OF JHARKHAND AT RANCHI\n             W.P.(C) No. 1449 of 2008\nState Bank of India, Dhanbad                ...   Petitioner\n                         Versus\nState of Jharkhand &amp; anr.                   ...   Respondents\n                         ---------\n<\/pre>\n<pre>CORAM:       HON'BLE MR. JUSTICE D.N.PATEL\n                         ---------\nFor the petitioner:      M\/s Rajesh Kumar,\n                               Deepak Kumar Bharti,\n                               Manindra Kumar Sinha, Advocates\n<\/pre>\n<p>For Respondent No. 1: M\/s Rahul Gupta (JC to AG)<br \/>\nFor Respondent No. 2 R.S. Majumdar, Advocate<br \/>\n                         P.A.S. Pati, Advocate\n<\/p>\n<p>                         &#8212;&#8212;&#8212;\n<\/p>\n<p>04.    Dated 9th April, 2009<\/p>\n<p>1.   The present writ petition has been preferred mainly against a<br \/>\n     decision rendered by Permanent Lok Adalat at Dhanbad, on<br \/>\n     merits, in Permanent Lok Adalat Case No. 91 of 2007 dated<br \/>\n     8th February, 2008 (Annexure 2 to the memo of present<br \/>\n     petition)\n<\/p>\n<p>2.   Counsel appearing for the petitioner-bank submitted that<br \/>\n     Permanent Lok Adalat ought not to have decided, on merits,<br \/>\n     the   claim   between   the   parties   by   exercising   power,<br \/>\n     jurisdiction and authority under the Legal Services Authority<br \/>\n     Act, 1987 (hereinafter referred to as &#8220;the Act, 1987&#8221;). In fact,<br \/>\n     there is no willingness, on the part of the petitioner-bank to<br \/>\n     pursue the matter before the Permanent Lok Adalat in the<br \/>\n     Permanent Lok Adalat Case No. 91 of 2007. It is contended<br \/>\n     by the counsel for the petitioner that a loan amount of Rs.<br \/>\n     2,25,000\/- (Two lacs twenty five thousand) was received by<br \/>\n     the respondent from the State Bank of India towards<br \/>\n     housing loan in the year, 1995 with an interest @ 11% per<br \/>\n     annum, having equal monthly installment of Rs. 3079\/- per<br \/>\n     month, on the assessable amount. Instead of making<br \/>\n     payment of the outstanding amount, an application was<br \/>\n     preferred by the respondent before Permanent Lok Adalat at<br \/>\n     Dhanbad, State of Jharkhand and Permanent Lok Adalat<br \/>\n     Case No. 91 of 2007 was thus instituted. Upon receipt of the<br \/>\n     notice, reply was given by petitioner-bank that the borrower<br \/>\n     must produce documents and receipts for the amount<br \/>\n     deposited, as alleged by him in his application. It is stated<br \/>\n     that the bank is not liable to credit the amount for which no<br \/>\n     deposit receipt is produced nor it is a case of deficiency of<br \/>\n     services and ultimately it was stated before Permanent Lok<br \/>\n<span class=\"hidden_text\">                              2<\/span><\/p>\n<p>     Adalat that the application preferred by the respondent<br \/>\n     deserves to be dismissed with cost. It is also submitted by<br \/>\n     counsel for the petitioner that Permanent Lok Adalat has not<br \/>\n     followed the proper procedure which is envisaged under<br \/>\n     Section 22-C of the Act 1987. Firstly it is not the role of<br \/>\n     Permanent Lok Adalat that it should decide on merits the<br \/>\n     dispute between the parties. It is further stated that the<br \/>\n     Permanent Lok Adalat, as the conciliator, must put all efforts<br \/>\n     to settle the dispute, between the parties as per sub section<br \/>\n     7 of section 22-C of the Act 1987, which empowers that the<br \/>\n     settlement ought to have been presented before the parties<br \/>\n     by the Permanent Lok Adalat so that the petitioner-bank can<br \/>\n     think upon it and can give its suggestion for settlement. It is<br \/>\n     also submitted by the counsel for the petitioner that from the<br \/>\n     very beginning, approach of the Permanent Lok Adalat is not<br \/>\n     that of a conciliator, but, it was playing role of adjudicatory<br \/>\n     authority, which is against the provisions of Section 22-C of<br \/>\n     the Act 1987 and therefore the claim between the parties<br \/>\n     decided on merits like a judgment, by the Permanent Lok<br \/>\n     Adalat, dated 8th February, 2008 in Permanent Lok Adalat<br \/>\n     Case No. 91 of 2007 deserves to be quashed and set aside,<br \/>\n     with cost.\n<\/p>\n<p>3.   The counsel appearing for the petitioner has submitted that<br \/>\n     looking to the decision given by the Hon&#8217;ble Supreme Court<br \/>\n     in the case of State of Punjab Vs. Jalour Singh, as reposted<br \/>\n     in (2008) 2 SCC 660, the Permanent Lok Adalat ought not<br \/>\n     have decided the dispute between the parties as an<br \/>\n     adjudicatory authority, but, ought to have acted like a<br \/>\n     conciliator. First of all, steps should have been taken to<br \/>\n     settle the matter between the parties and suggestions and<br \/>\n     conditions in the form of settlement ought to have been<br \/>\n     presented by the Permanent Lok Adalat before the parties, so<br \/>\n     that the parties to the disputes, especially the petitioner,<br \/>\n     could have pointed out its own suggestions, for better<br \/>\n     settlement. Such opportunity ought to have been given,<br \/>\n     which is envisaged in Sub Section 7 of Section 22-C of the<br \/>\n     Act 1987.\n<\/p>\n<p>4.   Counsel appearing for the petitioner relied upon the decision<br \/>\n     rendered by a division bench of this Court in the case of<br \/>\n     Bharat Sanchar Nigam Limited Vs. The State of Jharkhand,<br \/>\n     as reported in 2008 (3) JLJR 513, and pointed out that the<br \/>\n<span class=\"hidden_text\">                              3<\/span><\/p>\n<p>     Permanent Lok Adalat instead of deciding the disputes on<br \/>\n     merits, first of all should have asked for the terms of<br \/>\n     settlements to the parties, as required in sub- Section 7 of<br \/>\n     Section 22-C of the Act, 1987.      Predominantly the role of<br \/>\n     Permanent Lok Adalat is like a conciliator and not like an<br \/>\n     adjudicating authority. It is submitted by the counsel for the<br \/>\n     petitioner that the Bank is neither ready nor willing to go<br \/>\n     before the Permanent Lok Adalat for getting the dispute<br \/>\n     adjudicated, where the provisions of Code of Civil Procedure<br \/>\n     is not applicable nor the Indian Evidence Act is applicable<br \/>\n     nor the order is made appellable. Petitioner is neither willing<br \/>\n     for adjudication of the dispute on merits nor it is willing to<br \/>\n     settle the matter, unless reasonable figure of amount for<br \/>\n     settlement is offered by the original applicant or by the<br \/>\n     Permanent Lok Adalat.       The petitioner, is also not binding<br \/>\n     itself, in absence of any suggestions, either from Permanent<br \/>\n     Lok Adalat or from the private respondent.\n<\/p>\n<p>5.   I have heard counsel appearing on behalf of respondent no.\n<\/p>\n<p>     2. It is submitted that looking into the provisions of the Act<br \/>\n     1987, Permanent Lok Adalat has got power, jurisdiction and<br \/>\n     authority to decide the dispute under Section 22-C of the<br \/>\n     Act, 1987, which confers power upon the Permanent Lok<br \/>\n     Adalat to decide the dispute between the parties. It is<br \/>\n     submitted by counsel for the respondent no. 2 that there is<br \/>\n     vast difference between Lok Adalat and Permanent Lok<br \/>\n     Adalat. Chapter VI-A of the Act, 1987, is altogether a<br \/>\n     different procedure envisaged for the Permanent Lok Adalat.<br \/>\n     Section 22-C (8) of the Act, 1987, empowers the Permanent<br \/>\n     Lok Adalat to adjudicate the dispute, if the settlement is not<br \/>\n     possible. It is also submitted by the counsel for the<br \/>\n     respondent that no plea, has been raised, in the memo of<br \/>\n     present petition, that there is procedural lacuna, on the part<br \/>\n     of   the Permanent Lok Adalat and, therefore, the order<br \/>\n     passed by the Permanent Lok Adalat dated 8th February,<br \/>\n     2008, in Permanent Lok Adalat Case No. 91 of 2007 is<br \/>\n     absolutely, true, correct and in consonance with the<br \/>\n     provisions of the Act, 1987. Counsel appearing on behalf of<br \/>\n     respondent, has relied upon the decision rendered by the<br \/>\n     Supreme Court in the case of United India Insurance Co. Ltd.<br \/>\n     Vs. Ajay Sinha, as reported in (2008)7 SCC 454, and has<br \/>\n     submitted that to create another adjudicatory authority than<br \/>\n<span class=\"hidden_text\">                                   4<\/span><\/p>\n<p>     the Civil Court, is a privilege and prerogative power of the<br \/>\n     Parliament. Permanent Lok Adalat constituted under the<br \/>\n     Act, 1987, is an independent and separate forum. Permanent<br \/>\n     Lok Adalat is created in Chapter VI-A of the Act, 1987, and it<br \/>\n     is clothed with all power of adjudication under Sub-section<br \/>\n     (8) of Section 22-C of the Act, 1987. It can also play a role<br \/>\n     like a court and an adjudicatory power is vested in it. If<br \/>\n     settlement is not possible, by suggestions and counter-<br \/>\n     suggestions of the parties to dispute, the Permanent Lok<br \/>\n     Adalat itself should make all efforts to settle the dispute<br \/>\n     between the parties, but, if dispute is not settled, the case<br \/>\n     can be heard and decided on merits. Thus, the decision<br \/>\n     rendered by the Permanent Lok Adalat, is absolutely in<br \/>\n     consonance with the provisions of the Act, 1987, and in<br \/>\n     consonance with the decision, as cited hereinabove, and,<br \/>\n     therefore, this Court, may not interfere with, the impugned<br \/>\n     order, passed by the Permanent Lok Adalat.\n<\/p>\n<p>6.   Having heard the counsels for the both sides and looking to<br \/>\n     the facts and circumstances of the case and the order passed<br \/>\n     by the Permanent Lok Adalat, I hereby quash and set aside,<br \/>\n     the order passed by the Permanent Lok Adalat, dated 8th<br \/>\n     February, 2008, in Permanent Lok Adalat Case No. 91 of<br \/>\n     2007, for the following facts and reasons:\n<\/p>\n<p>            (i) Respondent no. 2, who had taken housing loan of<br \/>\n     Rs. 2,25000\/- @ 11% annual interest, was unable to make<br \/>\n     payment to the petitioner-bank and subsequently filed<br \/>\n     application before the Permanent Lok Adalat at Dhanbad,<br \/>\n     State Jharkhand as Permanent Lok Adalat Case No. 91 of<br \/>\n     2007     for    settlement       of   dispute   This   was   unilateral<br \/>\n     application or negatively, it was never a joint application.\n<\/p>\n<p>            (ii)    Upon receipt of a notice, from Permanent Lok<br \/>\n     Adalat, a reply was filed by the petitioner-bank, before<br \/>\n     Permanent Lok Adalat, wherein, the disputes have been<br \/>\n     raised on factual aspects about an amount paid, as claimed<br \/>\n     by respondent no. 2, and also on legal points that it is not<br \/>\n     the case of deficiency of services of the bank and therefore<br \/>\n     the case can not be decided by the Permanent Lok Adalat.<br \/>\n     Deficiency, if any, was on the part of defaulter and no<br \/>\n     assurance was given by the previous manager of the State<br \/>\n     Bank of the India and ultimately it was replied, that<br \/>\n     Permanent Lok Adalat should dismiss the application<br \/>\n<span class=\"hidden_text\">                             5<\/span><\/p>\n<p>preferred by respondent no. 2 with cost. Looking to the reply<br \/>\nof the petitioner bank, there was no joint application and<br \/>\nthere was absence of willingness, on the part of petitioner-<br \/>\nbank, to go before Permanent Lok Adalat. Secondly, there<br \/>\nwas dispute regarding the jurisdiction of the Permanent Lok<br \/>\nAdalat also.\n<\/p>\n<p>       (iii) It appears that the bank was demanding, balance<br \/>\noutstanding amount of Rs.1,35,514.41\/- and the private<br \/>\nrespondent was insisting upon some oral assurance, given<br \/>\nby the concerned Branch Manager, State Bank of India to<br \/>\nsettle a loan account. Giving such type of oral promise has<br \/>\nbeen denied, in black and white, by the petitioner in the<br \/>\nwritten statement\/reply of the notice given in the Permanent<br \/>\nLok Adalat Case No. 91 of 2007. No figure of settlement was<br \/>\never presented by respondent no. 2 in his memo of<br \/>\napplication before Permanent Lok Adalat, nor any terms of<br \/>\nsettlement were pointed out to the bank, by the Permanent<br \/>\nLok Adalat during the course of settlement proceeding.\n<\/p>\n<p>       (iv) It ought to be kept in mind by the Permanent Lok<br \/>\nAdalat that they must take all possible steps of settlement of<br \/>\nthe dispute. It should not wear a robe of the court from the<br \/>\nvery beginning. Predominant role to be played by Permanent<br \/>\nLok Adalat is of conciliator and not of an adjudicator.<br \/>\nMembers of Permanent Lok Adalat may be retired District<br \/>\nJudges or retired members of Judiciary, but, their ability to<br \/>\ndecide a dispute, on merits, is not at the touchstone or to be<br \/>\nchecked. What is expected under the Act, 1987, is full use of<br \/>\nwisdom and experience of members of Permanent Lok<br \/>\nAdalat, for arriving at settlement of dispute. It is a prime<br \/>\nduty vested in Permanent Lok Adalat to offer, terms of<br \/>\nsettlement, on its own, using all its common sense and<br \/>\nknowledge, clarity of law and facts, worldly wisdom and<br \/>\nenormous experience, as per Sub-section (7) of Section 22-C<br \/>\nof the Act, 1987. For ready reference provisions of law read<br \/>\nand read of the Act, 1987, are as under:\n<\/p>\n<p>       &#8220;22C. Cognizance of cases by Permanent Lok Adalat.- (1) Any<br \/>\nparty to a dispute may, before the dispute is brought before any court,<br \/>\nmake an application to the Permanent Lok Adalat for the settlement of<br \/>\ndispute:\n<\/p>\n<p>       Provided that the Permanent Lok Adalat shall not have jurisdiction<br \/>\nin respect of any matter relating to an offence not compoundable under<br \/>\nany law:\n<\/p>\n<p><span class=\"hidden_text\">                                6<\/span><\/p>\n<p>        Provided further that the Permanent Lok Adalat shall also not<br \/>\nhave jurisdiction in the matter where the value of the property in dispute<br \/>\nexceeds ten lakh rupees:\n<\/p>\n<p>        Provided also that the Central Government, may, by notification,<br \/>\nincrease the limit of ten lakh rupees specified in the second proviso in<br \/>\nconsultation with the Central Authority.\n<\/p>\n<p>        (2) After an application is made under sub-section (1) to the<br \/>\nPermanent Lok Adalat, no party to that application shall invoke<br \/>\njurisdiction of any court in the same dispute.\n<\/p>\n<p>        (3) Where an application is made to a Permanent Lok Adalat<br \/>\nunder sub-section (1), it-\n<\/p>\n<blockquote><p>                 (a) shall direct each party to the application to file before it<br \/>\n        a written statement, stating therein the facts and nature of dispute<br \/>\n        under the application, points or issues in such dispute and grounds<br \/>\n        relied in support of, or in opposition to, such points or issues, as<br \/>\n        the case may be, and such party may supplement such statement<br \/>\n        with any document and other evidence which such party deems<br \/>\n        appropriate in proof of such facts and grounds and shall send a<br \/>\n        copy of such statement together with a copy of such document and<br \/>\n        other evidence, if any, to each of the parties to the application;\n<\/p><\/blockquote>\n<blockquote><p>                 (b) may require any part to the application to file<br \/>\n        additional statement before it at any stage of the conciliation<br \/>\n        proceedings;\n<\/p><\/blockquote>\n<blockquote><p>                 (c) shall communicate any document or statement received<br \/>\n        by it from any party to the application to the other party, to enable<br \/>\n        such other party to present reply thereto.<\/p><\/blockquote>\n<p>        (4) When statement, additional statement and reply, if any, have<br \/>\nbeen filed under sub-section (3), to the satisfaction of the Permanent Lok<br \/>\nAdalat, it shall conduct conciliation proceedings between the parties to<br \/>\nthe application in such manner as it thinks appropriate taking into<br \/>\naccount the circumstances of the dispute.\n<\/p>\n<p>        (5) The Permanent Lok Adalat shall, during conduct of<br \/>\nconciliation proceedings under sub-section (4), assist the parties in their<br \/>\nattempt to reach an amicable settlement of the dispute in an independent<br \/>\nand impartial manner.\n<\/p>\n<p>        (6) It shall be the duty of every party to the application to<br \/>\ncooperate in good faith with the Permanent Lok Adalat in conciliation of<br \/>\nthe dispute relating to the application and to comply with the direction of<br \/>\nthe Permanent Lok Adalat to produce evidence and other related<br \/>\ndocuments before it.\n<\/p>\n<p>        (7) When a Permanent Lok Adalat, in the aforesaid conciliation<br \/>\nproceedings, is of opinion that there exist elements of settlement in such<br \/>\nproceedings which may be acceptable to the parties, it may formulate the<br \/>\nterms of a possible settlement of the dispute and give to the parties<br \/>\nconcerned for their observations and in case the parties reach at an<br \/>\nagreement on the settlement of the dispute, they shall sign the settlement<br \/>\nagreement and the Permanent Lok Adalat shall pass an award in terms<br \/>\nthereof and furnish a copy of the same to each of the parties concerned.\n<\/p>\n<p>        (8) Where the parties fail to reach at an agreement under sub-<br \/>\nsection (7), the Permanent Lok Adalat shall, if the dispute does not relate<br \/>\nto any offence, decide the dispute.\n<\/p>\n<p>        22D. Procedure of Permanent Lok Adalat.- The Permanent Lok<br \/>\nAdalat shall, while conducting conciliation proceedings or deciding a<br \/>\ndispute on merit under this Act, be guided by the principles of natural<br \/>\njustice, objectivity, fair play, equity and other principles of justice, and<br \/>\nshall not be bound by the Code of Civil Procedure, 1908 (5 of 1908) and<br \/>\nthe Indian Evidence Act, 1872 (1 of 1872).\n<\/p>\n<p>        22E. Award of Permanent Lok Adalat to be final.- (1) Every<br \/>\naward of the Permanent Lok Adalat under this Act made either on merit or<br \/>\nin terms of a settlement agreement shall be final and binding on all the<br \/>\nparties thereto and on persons claiming under them.\n<\/p>\n<p><span class=\"hidden_text\">                               7<\/span><\/p>\n<p>        (2) Every award of the Permanent Lok Adalat under this Act shall<br \/>\nbe deemed to be a decree of a civil court.\n<\/p>\n<p>        (3) The award made by the Permanent Lok Adalat under this Act<br \/>\nshall be by a majority of the persons constituting the Permanent Lok<br \/>\nAdalat.\n<\/p>\n<p>        (4) Every award made by the Permanent Lok Adalat under this Act<br \/>\nshall be final and shall not be called in question in any original suit,<br \/>\napplication or execution proceeding.\n<\/p>\n<p>        (5) The Permanent Lok Adalat may transmit any award made by it<br \/>\nto a civil court having local jurisdiction and such civil court shall execute<br \/>\nthe order as if it were a decree made by that court.&#8221;\n<\/p>\n<p>                                              (Emphasis supplied)<\/p>\n<p>       Thus, as per the aforesaid provisions, Permanent Lok<br \/>\nAdalat, must offer terms of settlement, on its own, as stated<br \/>\nhereinabove. Thereafter, some time to think upon it, should<br \/>\nbe given to the parties. Without following this procedure, in<br \/>\nfacts of the present case, Permanent Lok Adalat has<br \/>\nswitched over to an adjudicatory role, as envisaged under<br \/>\nSub-section (8) of Section 22-C of the Act, 1987, which is<br \/>\nimpermissible and illegal. The goal to be achieved by the Act,<br \/>\n1987, is, settlement of dispute, at pre-litigation stage, so that<br \/>\nspeedy justice can be rendered. Time and money of litigants,<br \/>\ncan be saved and adjudicatory institutions (courts or<br \/>\ntribunals) can invest the time for other complex matters,<br \/>\nwhere adjudication on merits is required.\n<\/p>\n<p>       (v) It has been held by Hon&#8217;ble Supreme Court in the<br \/>\ncase of State of Punjab Vs. Jalour Singh (supra), as reported<br \/>\nin (2008)2 SCC 660, in paragraph nos. 8 and 10, as under:\n<\/p>\n<blockquote><p>          &#8220;8. It is evident form the said provisions that the Lok Adalats<br \/>\n       have no adjudicatory or judicial functions. Their functions relate<br \/>\n       purely to conciliation. A Lok Adalat determines a reference on the<br \/>\n       basis of a compromise or settlement between the parties at its<br \/>\n       instance, and puts its seal of confirmation by making an award in<br \/>\n       terms of the compromise or settlement. When the Lok Adalat is not<br \/>\n       able to arrive at a settlement or compromise, no award is made<br \/>\n       and the case record is returned to the court from which the<br \/>\n       reference was received, for disposal in accordance with law. No<br \/>\n       Lok Adalat has the power to &#8220;hear&#8221; parties to adjudicate cases as<br \/>\n       a court does. It discusses the subject-matter with the parties and<br \/>\n       persuades them to arrive at a just settlement. In their conciliatory<br \/>\n       role, the Lok Adalats are guided by the principles of justice, equity<br \/>\n       and fair play. When the LSA Act refers to &#8220;determination&#8221; by the<br \/>\n       Lok Adalat and &#8220;award&#8221; by the Lok Adalat, the said Act does not<br \/>\n       contemplate nor require an adjudicatory judicial determination,<br \/>\n       but a non-adjudicatory determination based on a compromise or<br \/>\n       settlement, arrived at by the parties, with guidance and assistance<br \/>\n       from the Lok Adalat. The &#8220;award&#8221; of the Lok Adalat does not<br \/>\n       mean any independent verdict or opinion arrived at by any<br \/>\n       decision-making process. The making of the award is merely an<br \/>\n       administrative act of incorporating the terms of settlement or<br \/>\n       compromise agreed by parties in the presence of the Lok Adalat, in<br \/>\n       the form of an executable order under the signature and seal of the<br \/>\n       Lok Adalat.\n<\/p><\/blockquote>\n<p><span class=\"hidden_text\">                            8<\/span><\/p>\n<blockquote><p>          10. The order of the Lok Adalat in this case (extracted above),<br \/>\n     shows that it assumed a judicial role, heard parties, ignored the<br \/>\n     absence of consensus, and increased the compensation to an extent<br \/>\n     it considered just and reasonable, by a reasoned order which is<br \/>\n     adjudicatory in nature. It arrogated to itself the appellate powers<br \/>\n     of the High Court and &#8220;allowed&#8221; the appeal and &#8220;directed&#8221; the<br \/>\n     respondents in the appeal to pay the enhanced compensation of<br \/>\n     Rs.62,200 within two months. The order of the Lok Adalat was not<br \/>\n     passed by consent of parties or in pursuance of any compromise or<br \/>\n     settlement between the parties, is evident from its observation that<br \/>\n     &#8220;if the parties object to the proposed order they may move the<br \/>\n     High Court within two months for disposal of the appeal on merits<br \/>\n     according to law&#8221;. Such an order is not an award of the Lok<br \/>\n     Adalat. Being contrary to law and beyond the power and<br \/>\n     jurisdiction of the Lok Adalat, it is void in the eye of the law. Such<br \/>\n     orders which &#8220;impose&#8221; the views of the Lok Adalats on the parties,<br \/>\n     whatever be the good intention behind them, bring a bad name to<br \/>\n     the Lok Adalats and legal services.&#8221;<\/p><\/blockquote>\n<p>     (vi) It has been held by the Division Bench of this<br \/>\nCourt in the case of Bharat Sanchar Nigam Limited Vs. The<br \/>\nState of Jharkhand (supra), as reported in 2008(3) J.L.J.R.<br \/>\n513, in paragraph no.18, as under:\n<\/p>\n<blockquote><p>     &#8220;18. In the instant case, the respondents claim compensation of<br \/>\n     Rs.10,000\/- (ten thousand) and cost of Rs.2000\/- (two thousand) on<br \/>\n     the allegation that his telephone connection remain out of order<br \/>\n     for about one month i.e. from 8.5.2005 to 2.6.2005. The appellant<br \/>\n     refuted the said allegation and stated that because of cable fault,<br \/>\n     the telephone remains out of order and as per the departmental<br \/>\n     rule, a rebate was sanctioned for the interruption and thereby<br \/>\n     respondent was adequately compensation. Inspite of the aforesaid<br \/>\n     fact, Permanent Lok Adalat exercised the adjudicatory role and<br \/>\n     ignoring the Telegraph Act and the Rules, awarded compensation<br \/>\n     of Rs.10,000\/- and cost of Rs.2000\/- without any basis. In our<br \/>\n     opinion, instead of exercising adjudicatory role, the Permanent<br \/>\n     Lok Adalat ought to have acted in such a manner to bring the<br \/>\n     parties into a settlement. The duty of the Permanent Lok Adalat is<br \/>\n     to bring the parties to a settlement and to pass award instead of<br \/>\n     adjudicating a dispute and pass an award without taking notice of<br \/>\n     the Act and the Rules under which claim was entertainable. In our<br \/>\n     considered opinion, Permanent Lok Adalat has no jurisdiction to<br \/>\n     directly invoke the provision of Sub-section (8) of Section 22-C and<br \/>\n     decide the dispute on merit against the will of the party. As the<br \/>\n     basic object and power of enacting Chapter VIA is to get the<br \/>\n     disputes settled at the pre-litigation stage the provision of sub-<br \/>\n     section (8) become redundant where the Permanent Lok Adalat<br \/>\n     failed to apply the provisions of sub-section (4) to (7) of Section<br \/>\n     22-C of the Act.&#8221;\n<\/p><\/blockquote>\n<blockquote><p>                                           (Emphasis supplied)\n<\/p><\/blockquote>\n<blockquote><p>     (vii) Now the question arises how a Permanent Lok<br \/>\nAdalat can switch over to Sub-section (8) of Section 22-C of<br \/>\nthe Act, 1987 for playing its adjudicatory role. It appears<br \/>\nfrom Sub-section (8) of Section 22-C of the Act, 1987, that<br \/>\nPermanent Lok Adalat can decide the dispute if the dispute<br \/>\nis not relating to any offence and if no settlement has been<br \/>\narrived at, after following the procedure under Sub-section<br \/>\n<span class=\"hidden_text\">                          9<\/span><\/p>\n<p>(7) of Section 22-C of the Act, 1987. As per Section 22-D of<br \/>\nthe Act, 1987, neither the provisions of the Code of Civil<br \/>\nProcedure, 1908 are applicable, nor the provisions of Indian<br \/>\nEvidence Act, 1872 are applicable. Likewise, the order<br \/>\npassed by the Permanent Lok Adalat, as per Section 22-E of<br \/>\nthe Act, 1987, is not an appellable order and, therefore, the<br \/>\nPermanent Lok Adalat must make the parties aware of the<br \/>\naforesaid aspect and, even if, they are giving consent for<br \/>\nplaying an adjudicatory role by the Permanent Lok Adalat,<br \/>\nthen only the Permanent Lok Adalat can decide the dispute<br \/>\non merits. Thus, under Sub-section (7) of Section 22-C of the<br \/>\nAct, 1987, Permanent Lok Adalat must offer the terms of<br \/>\nsettlement on its own. If the settlement is not arrived at,<br \/>\nthen the Permanent Lok Adalat should inform the parties<br \/>\nthat whether they wish that dispute may be decided on<br \/>\nmerits by Permanent Lok Adalat. This option ought to have<br \/>\nbeen given and there must be a positive answer from both<br \/>\nthe parties. If one of the parties to the dispute is denying the<br \/>\nadjudication of the dispute, Permanent Lok Adalat shall not<br \/>\ndecide the dispute on merits. Permanent Lok Adalat shall<br \/>\nalso make the parties aware that it is not bound by the<br \/>\nprovisions of the Code of Civil Procedure and likewise, it is<br \/>\nalso not bound by the provisions of Indian Evidence Act.\n<\/p><\/blockquote>\n<p>Permanent Lok Adalat will also make the parties aware<br \/>\nbefore exercising powers under Sub-section (8) of Section 22-<br \/>\nC of the Act, 1987, that the award, passed by the Permanent<br \/>\nLok Adalat, will be a final one and no appeal shall lie and<br \/>\ndespite this awareness, if both the parties to the dispute are<br \/>\ngiving consent that Permanent Lok Adalat can decide the<br \/>\ndispute on merits, then only Permanent Lok Adalat shall<br \/>\ndecide the dispute on merits, otherwise the matter will again<br \/>\ngo to the normal course or the parties will be free to take<br \/>\nrecourse under the law. This Safeguard is necessary to make<br \/>\nthe parties aware, because several parties to the dispute may<br \/>\nnot be agreeable for their matters to be decided by the<br \/>\nPermanent Lok Adalat, where neither the provisions of Code<br \/>\nof Civil Procedure nor the provisions of Indian Evidence Act<br \/>\nis applicable. Even, no appeal is provided under the Act,<br \/>\n1987 against the award of Permanent Lok Adalat under<br \/>\nSection 22-E of the Act, 1987.\n<\/p>\n<p><span class=\"hidden_text\">                         10<\/span><\/p>\n<p>      (viii) Looking to the scheme of the Act, it appears that<br \/>\nany of the parties to a dispute can make an application to a<br \/>\nPermanent Lok Adalat for settlement of the dispute, as per<br \/>\nSub-section (1) of Section 22-C of the Act. Thus, any<br \/>\ncomplex matter may come to the Permanent Lok Adalat<br \/>\nunilaterally, upon an application by a single party, or<br \/>\nwithout a joint application by the parties to the dispute also,<br \/>\nany party can prefer an application before the Permanent<br \/>\nLok Adalat for settlement of the dispute and, therefore,<br \/>\nPermanent     Lok   Adalat   ought    to   follow,   as   stated<br \/>\nhereinabove, the procedure and the requirement of Sub-<br \/>\nsection (7) of Section 22-C of the Act, 1987, and if no<br \/>\nsettlement is arrived at, then again, option should be given<br \/>\nto the parties to the dispute, after making them aware of the<br \/>\nnon-applicability of the provisions of the Code of Civil<br \/>\nProcedure and the provisions of Indian Evidence Act and<br \/>\nalso that there shall be no appeal against the award, passed<br \/>\nby the Permanent Lok Adalat, and even after this awareness,<br \/>\nif both the parties give consent that Permanent Lok Adalat<br \/>\nmay decide the dispute on merits, then only Permanent Lok<br \/>\nAdalat shall exercise powers under Sub-section (8) of Section<br \/>\n22-C of the Act, 1987, but if one of the parties is refusing for<br \/>\nadjudication, on merits, of the dispute by Permanent Lok<br \/>\nAdalat, it shall not decide the dispute on merits. The primary<br \/>\nrole of the permanent Lok Adalat is settlement and it can<br \/>\nwear a robe of the court for playing adjudicatory role, only<br \/>\nupon consent of all the parties to the dispute and not<br \/>\notherwise.\n<\/p>\n<p>      (ix) In the facts of the present case, neither the<br \/>\nprocedure, as stated hereinabove, under Sub-section (7) of<br \/>\nSection 22-C of the Act, 1987, has been followed i.e. giving<br \/>\nthe terms of settlement, by Permanent Lok Adalat to the<br \/>\nparties to the dispute, nor their consent has been taken prior<br \/>\nto playing an adjudicatory role under Sub-section (8) of<br \/>\nSection 22-C of the Act. Consent or sanction of all the<br \/>\nparties to the dispute before adjudication on merits under<br \/>\nSub-section (8) of Section 22-C of the Act, 1987, is a<br \/>\ncondition precedent. Willingness of the parties to the dispute<br \/>\nfor adjudication, on merits, of a dispute, is at a pivotal<br \/>\nposition. Permanent Lok Adalat is basically not a court at all.<br \/>\nOnly as an exceptional case, with consent of the parties, the<br \/>\n<span class=\"hidden_text\">                              11<\/span><\/p>\n<p>Permanent Lok Adalat can play an adjudicatory role. It is a<br \/>\nprime duty, vested in the Permanent Lok Adalat, before<br \/>\nexercising powers under Sub-section (8) of Section 22-C of<br \/>\nthe Act, 1987, to make the parties aware about non-<br \/>\napplicability of the provisions of Code of Civil Procedure and<br \/>\nthe provisions of the Indian Evidence Act and also that the<br \/>\naward, passed by the Permanent Lok Adalat, is a non-<br \/>\nappellable order and, thereafter, the Permanent Lok Adalat<br \/>\nmust ask for the consent of the parties to the dispute. Such<br \/>\nconsent must be reduced in writing by the parties, so as to<br \/>\navoid     future     complications       and     upon      taking     such<br \/>\npursis\/joint application, signed by both the parties to the<br \/>\ndispute that they are ready and willing for getting decision<br \/>\non merits, by the Permanent Lok Adalat, of their dispute,<br \/>\nand they are aware that the provisions of the Code of Civil<br \/>\nProcedure and the provisions of Indian Evidence Act are not<br \/>\napplicable and the award, passed by the Permanent Lok<br \/>\nAdalat, is also not appellable, this type of written joint<br \/>\npursis\/joint application, signed by both the parties, must be<br \/>\ntaken on record, henceforth, by the Permanent Lok Adalat,<br \/>\nand thereafter only, it shall exercise the powers of deciding,<br \/>\non merits, the dispute or disputes between the parties under<br \/>\nSub-section (8) of Section 22-C of the Act, 1987. If there is<br \/>\nno consent by any of the parties to the dispute, Permanent<br \/>\nLok Adalat shall refrain itself, from exercising powers under<br \/>\nSub-section (8) of Section 22-C of the Act, 1987. It has also<br \/>\nbeen held by the Hon&#8217;ble Supreme Court in the case of State<br \/>\nof Punjab Vs. Jalour Singh (supra), as reported in (2008)2<br \/>\nSCC 660, in paragraph no.9, as under:\n<\/p>\n<blockquote><p>           &#8220;9. But we find that many sitting or retired Judges, while<br \/>\n        participating in the Lok Adalats as members, tend to conduct the<br \/>\n        Lok Adalats like courts, by hearing parties, and imposing their<br \/>\n        views as to what is just and equitable, on the parties. Sometimes<br \/>\n        they get carried away and proceed to pass orders on merits, as in<br \/>\n        this case, even though there is no consensus or settlement. Such<br \/>\n        acts, instead of fostering alternative dispute resolution through the<br \/>\n        Lok Adalats, will drive the litigants away from the Lok Adalats.<br \/>\n        The Lok Adalats should resist their temptation to play the part of<br \/>\n        judges and constantly strive to function as conciliators. The<br \/>\n        endeavour and effort of the Lok Adalats should be to guide and<br \/>\n        persuade the parties, with reference to principles of justice, equity<br \/>\n        and fair play to compromise and settle the dispute by explaining<br \/>\n        the pros and cons, strengths and weaknesses, advantages and<br \/>\n        disadvantages of their respective claims.&#8221;\n<\/p><\/blockquote>\n<blockquote><p>                                                    (Emphasis supplied)<br \/>\n<span class=\"hidden_text\">                                12<\/span><\/p>\n<\/blockquote>\n<blockquote><p>         (x) If against the desire of the parties, a dispute is<br \/>\ndecided on merits under Sub-section (8) of Section 22-C of<br \/>\nthe Act, 1987, where neither the provisions of the Code of<br \/>\nCivil Procedure are applicable, nor the provisions of Indian<br \/>\nEvidence Act are applicable, nor the order is appellable (as<br \/>\nper Section 22-D and 22-E of the Act, 1987), then no party<br \/>\nwill come for settlement of the dispute at a pre-litigation<br \/>\nstage.<\/p><\/blockquote>\n<p>         (xi) It appears that in the present case, the primary<br \/>\nrole has been forgotten by the Permanent Lok Adalat.<br \/>\nAdjudicatory role under Section 22-C (8) of the Act, 1987,<br \/>\nalways depends upon the consent of all the parties to the<br \/>\ndispute. If there is a consent by all the parties, then only<br \/>\nPermanent Lok Adalat can decide the dispute on merits and<br \/>\nthat too, after making the parties to the dispute fully aware<br \/>\nof non-applicability of the provisions of Code of Civil<br \/>\nProcedure and the provisions of Indian Evidence Act and<br \/>\nafter making aware the parties to the dispute that there shall<br \/>\nbe no appeal against the award, passed by the Permanent<br \/>\nLok Adalat.\n<\/p>\n<p>         (xii) It has been held by the Hon&#8217;ble Supreme Court in<br \/>\nthe case of United India Insurance Co. Ltd. Vs. Ajay Sinha, as<br \/>\nreported in (2008)7 SCC 454, in paragraph nos. 25, 26 and<br \/>\n41, as under:\n<\/p>\n<blockquote><p>              &#8220;25. Chapter VI-A, stands independently. Whereas, the<br \/>\n         heading of the Chapter talks of pre-litigation, conciliation and<br \/>\n         settlement. Section 22-C (8) of the Act speaks of determination. It<br \/>\n         creates another adjudicatory authority, the decision of which by a<br \/>\n         legal fiction would be a decision of a civil court. It has the right to<br \/>\n         decide a case. The term &#8216;decide&#8217; means to determine; to from a<br \/>\n         definite opinion; to render judgment. (see Advanced Law Lexicon<br \/>\n         3rd Adition 2005 at 1253). Any award made by the Permanent Lok<br \/>\n         Adalat is executable as a decree. No appeal there against shall lie.<br \/>\n         The decision of the Permanent Lok Adalat is final and inding on<br \/>\n         parties. Whereas on the one hand, keeping in view the<br \/>\n         Parliamentary intent, settlement of all disputes through<br \/>\n         negotiation, conciliation, mediation, Lok Adalat and Judicial<br \/>\n         Settlement are required to be encouraged. It is equally well settled<br \/>\n         that where the jurisdiction of a court is sought to be taken away,<br \/>\n         the statutory provisions deserve strict construction. A balance is<br \/>\n         thus required to be struck. A court of law can be created under a<br \/>\n         statute. It must have the requisite infrastructure therefor.<br \/>\n         Independence and impartiality of Tribunal being a part of human<br \/>\n         right is required to be taken into consideration for construction of<br \/>\n         such a provision. When a court is created, the incumbents must be<br \/>\n         eligible to determine the lis.\n<\/p><\/blockquote>\n<blockquote><p>               26. An option is given to any party to a dispute. It may be a<br \/>\n         public utility service provider or a public utility service recipient.<br \/>\n         The service must have some relation with public utility. Ordinarily,<br \/>\n<span class=\"hidden_text\">                                        13<\/span><\/p>\n<p>                  insurance service would not come within the public utility service.<br \/>\n                  But having regard to the statutory scheme, it must be held to be<br \/>\n                  included thereunder. It is one thing to say that an authority is<br \/>\n                  created under a statute to bring about a settlement through<br \/>\n                  alternate dispute resolution mechanism but it is another thing to<br \/>\n                  say that an adjudicatory power is conferred on it. Chapter VI-A,<br \/>\n                  therefore, in our opinion, deserves a closer scrutiny. In a case of<br \/>\n                  this nature, the level of scrutiny must also be high. <a href=\"\/doc\/845216\/\">(See Anuj Garg<br \/>\n                  v. Hotel Assn. of India).<\/a>\n<\/p><\/blockquote>\n<blockquote><p>                      41. We must guard against construction of a statute which<br \/>\n                  would confer such a wide power in the Permanent Lok Adalat<br \/>\n                  having regard to sub-section (8) of Section 22-C of the Act. The<br \/>\n                  Permanent Lok Adalat must at the outset formulate the questions.<br \/>\n                  We, however, do not intend to lay down a law, as at present<br \/>\n                  advised, that Permanent Lok Adalat would refuse to exercise its<br \/>\n                  jurisdiction to entertain such cases but emphasise that it must<br \/>\n                  exercise its power with due care and caution. It must not give an<br \/>\n                  impression to any of the disputants that it, from the very beginning<br \/>\n                  has an adjudicatory role to play in relation to its jurisdiction<br \/>\n                  without going into the statutory provisions and restrictions<br \/>\n                  imposed thereunder.&#8221;\n<\/p><\/blockquote>\n<blockquote><p>                                                         (Emphasis supplied)<\/p>\n<\/blockquote>\n<blockquote><p>   7.       Thus, in view of the aforesaid decision also, adjudicatory role<br \/>\n            should not be played, so hurriedly, unless the independence<br \/>\n            and impartiality of the Tribunal is properly established,<br \/>\n            unless the incumbents are found eligible to determine the<br \/>\n            lis. Thus, a precaution and warning has been given in the<br \/>\n            aforesaid paragraphs, of an inbuilt danger for playing an<br \/>\n            adjudicatory role, under Section 22-C (8) of the Act, 1987<br \/>\n            and, therefore, written joint consent by all the parties is a<br \/>\n            minimum requirement, over and above, impartiality and<br \/>\n            capability of the members of the Permanent Lok Adalat.<br \/>\n            None of the aforesaid aspects has been properly appreciated<br \/>\n            by the Permanent Lok Adalat in the facts and circumstances<br \/>\n            of the present case and, therefore, I hereby quash and set<br \/>\n            aside the order passed by the Permanent Lok Adalat,<br \/>\n            Dhanbad, dated February 8, 2008, in Permanent Lok Adalat<br \/>\n            Case No. 91 of 2007, which is Annexure 2 to the memo of<br \/>\n            present writ petition.<\/p><\/blockquote>\n<p>                                                       (D.N.Patel, J.)<\/p>\n<p>A.K.Verma\/Anit\n <\/p>\n","protected":false},"excerpt":{"rendered":"<p>Jharkhand High Court State Bank Of India vs State Of Jharkhand &amp; Anr. on 9 April, 2009 IN THE HIGH COURT OF JHARKHAND AT RANCHI W.P.(C) No. 1449 of 2008 State Bank of India, Dhanbad &#8230; Petitioner Versus State of Jharkhand &amp; anr. &#8230; Respondents &#8212;&#8212;&#8212; CORAM: HON&#8217;BLE MR. JUSTICE D.N.PATEL &#8212;&#8212;&#8212; For the petitioner: [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,18],"tags":[],"class_list":["post-246149","post","type-post","status-publish","format-standard","hentry","category-high-court","category-jharkhand-high-court"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>State Bank Of India vs State Of Jharkhand &amp; Anr. on 9 April, 2009 - Free Judgements of Supreme Court &amp; High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/state-bank-of-india-vs-state-of-jharkhand-anr-on-9-april-2009-4\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"State Bank Of India vs State Of Jharkhand &amp; 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