UNITED INDIA INSURANCE CO. LTD. versus AJAY SINHA AND ANOTHER

Citation: [2008] 8 S.C.R. 509 · Decided: 13-05-2008 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Appeal(s) allowed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

[2008] 8 S.C.R. 509 
'. 
UNITED INDIA INSURANCE CO. LTD. 
A 
V. 
AJAY SINHA AND ANOTHER 
(Civil Appeal No. 3537 Of 2008) 
MAY 13, 2008 
B 
t-
[S.B. SINHA AND V.S.SIRPURKAR, JJ.] 
Legal Services Authorities Act, 1987 - s. 22-C proviso 
'· 
and s. 22-C(B) - Cognizance of cases by Permanent Lok 
Ada/at (PLA) - Power of - Case of burglary - Goods of com- c 
plainant insured with Insurance Company - Claim of, before 
PLA- Criminal case u!s 4791461 pending before criminal court 
- Jurisdiction of PLA - Held: Terms 'relating to an offence' in 
proviso 1 to s. 22 C is to be broadly interpreted - Since PLA is 
~ 
to determine whether non-compoundable offence has been D 
, 
committed or not, PLA has no jurisdiction to entertain such 
claim - Construction of statute conferring wide power in PLA 
must be guarded - PLA must at the outset formulate ques-
tions - It must exercise its power with due care and caution - It 
cannot be said that it has adjudicatory role to play in relation 
E 
to its jurisdiction without going into the statutory provisions and 
restrictions imposed thereunder - Thus, order of Division 
Bench of High Court that PLA had jurisdiction to decide the 
claim not sustainable and set aside. 
f-
• 
The goods of the first respondent were insured with 
F 
the appellant company for the period 29.08.2001 -
31.08.2002. It is alleged that on the night of 18/19.08.2002 
burglary took place in his godown. FIR was lodged. Re-
spondent raised a claim with the appellant-insurance com-
pany that in the burglary, goods worth Rs 11,14,597/-were G 
stolen and the same was rejected. A criminal case was 
filed. The Investigating Officer filed a report. However, the 
insurance company denied the same. Aggrieved, respon-
dents filed application before the District Consumer Fo-
509 
H 
510 
SUPREME COURT REPORTS 
[2008] 8 S.C.R. 
A rum claiming a sum of Rs 18,45,697.50 from the appel-
lant. Application was not entertained. The First respon-
dent then filed application before the Permanent Lok 
Adalat (PLA) claiming a sum of Rs 9,80,000/-. The PLA held 
that it had the pecuniary jurisdiction over the matter and 
B pendency of a criminal case was not relevant. Appellant 
challenged the order. The Single Judge of the High Court 
allowed the same holding that offence u/ss. 469/461 IPC 
not being compoundable, the PLA did not have jurisdic-
tion to entertain the 1.laim. In appeal, the Division Bench 
c of the High Court held that the PLA had jurisdiction to 
decide the claim made by the parties. The pendency of a 
criminal case had nothing to do with the exercise of juris-
diction by PLA as it was not concerned as to who had 
committed the burglary but whether the burglary had 
0 taken place or not. It was not required to determine 
whether offence committed by accused was compound-
able or not. Hence the present appeal. 
Allowing the appeal, the Court 
-+ 
HELD: 1.1. Section 89 of CPC inter alia was enacted 
E to promote resolution of disputes through mutual settle-
ment. Chapter VI-A of the Act seeks to achieve a different 
purpose. It not only speaks of conciliation qua concilia-
tion but conciliation qua determination. Jurisdiction of 
Permanent Lok Adalat, although is limited but they are of -\ 
F wide amplitude. The two provisos appended to Section 
• 
22-C (1) of the Act curtail the jurisdiction of the Perma-
nent Lok Adalat. It states that PLA will not have jurisdic-
tion in respect of any matter relating to an offence not 
compoundable under any law and in the matter where the 
G value of the property in dispute exceeds Rupees ten 
lakhs. [Para 22] [525-E-G] 
1 
1.2 Chapter VI-A stands independently. Whereas, the 
heading of the Chapter talks of pre-litigation, conciliation 
H and settlement, Section 22-C(8) of the Act speaks of de-
1-
UNITED INDIA INSURANCE CO. LTD. v. AJAY 
511 
SINHA AND ANOTHER 
termination. It creates another adjudicatory authority, the A 
decision of which by a legal fiction would be a decision 
of a civil court. It has the right to decide a case. The term· 
'decide' means to determine; to form a definite opinion; 
to render judgment. [Para 23] [525-H; 526-A-B] 
Advanced Law Lexicon 3rd Edition 2005 p 1253 - re-
B 
t 
ferred to. 
1.3 Any award made by the Permanent Lok Adalat is 
executable as a decree. No appeal thereagainst shall lie. 
The decision of the Permanent LokAdalat is final and bind- c 
ing on parties. Whereas on the one hand, keeping in view 
the Parliamentary intent, settlement of all dispute

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