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                                                         REPORTABLE

                IN THE SUPREME COURT OF INDIA

                CIVIL APPELLATE JURISDICTION

               CIVIL APPEAL NO.______ OF 2008               (Arising out of SLP (C) No. 17758 of 2006)

United India Insurance Co. Ltd.                                       .... Appellant

           Versus

Ajay Sinha and another                                .... Respondents

                           JUDGMENT

S.B. SINHA, J.

     Leave granted.

1.    Legal Services Authorities Act, 1987 (the Act) was enacted to

constitute Legal Services Authorities to provide for free and competent

legal service to the weaker sections of the society, to ensure that

opportunities for securing justice are not denied to any citizen by reason

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of economic or other disabilities, and to organize Lok Adalats to secure

that the operation of the legal system promotes justice on a basis of equal

opportunity.

2.    The Act was enacted with a view to give effect to the provisions of

Article 39A of the Constitution of India which mandates that State shall

secure that the operation of the legal system promotes justice on a basis

of equal opportunity, and shall in particular, provide free legal aid, by

suitable legislation or schemes or in any other way, to ensure that

opportunities for securing justice are not denied to any citizen by reason

of economic or other disability.

3.    If we are to look at the history of grant of legal aid, it may be

noticed that the Law Commission of India in its 14th report on ’reform of

Judicial Administration’ published in 1958, strongly advocated the need

for rendering legal aid to poor litigants and categorically stated that’ the

rendering of legal aid to the poor litigants is not a minor problem of

procedural law but a question of fundamental character’.

4.    The committee under the Chairmanship of Hon’ble Mr Justice

V.R. Krishna Iyer, then a Member of the Law Commission, constituted

by the Government of India Order dated 27th October, 1972 to consider

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the question of making available to the weaker sections of the

community and persons of limited means in general and citizens

belonging to the socially and educationally backward class in particular,

facilities for

                (a) legal advice so as to make them aware of their

      constitutional and legal rights and obligations; and

                (b) legal aid in proceedings before Civil, Criminal and

      Revenue Courts so as to make justice more easily available to all

      sections of the community.

      With a view to implement the report of the Bhagwati Committee

and in fulfillment of its constitutional obligations under Article 39-A of

the Constitution, a committee known as the "Committee for

Implementing Legal Aid Schemes (CILAS) was being constituted by the

Government of India at the very beginning under the Chairmanship of

Hon’ble Mr. Justice P.N. Bhagwati. This Committee formulated a broad

pattern of the legal aid programme to be set up in the country. It gave

stress on preventive legal aid programme with a view to creating legal

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awareness amongst the people. It also suggested dynamic and activist

programmes to carry legal services to the doorsteps of the rural

population, to promote community mobilization and rights enforcement

through public interest litigations and other statutes. The Committee also

framed a model scheme for establishment of State Legal Aid and Advice

Boards, as also, Committees at the High Court, District and Tahasil

levels to cater legal services to the people at large.

5.    In the year 1987 the Legal Services Authorities Act was enacted

by the parliament with a view to provide free and competent legal

services and to ensure opportunity for securing justice to the

downtrodden class of the society.           The Statement of Objects and

Reasons for enacting the Amendment Act is as under :-

            "The Legal Services Authorities Act, 1987 was              enacted to constitute legal services authorities              for providing free and competent legal services              to the weaker sections of the society to ensure              that opportunities for securing justice were not              denied to any citizen by reason of economic or              other disabilities and to organize Lok Adalats              to ensure that the operation of the legal system              promoted justice on a basis of equal              opportunity. The system of Lok Adalat, which              is an innovative mechanism for alternate              dispute resolution, has proved effective for              resolving disputes in a spirit of conciliation              outside the courts."

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6.    We may have a look to the relevant statutory provisions for the

purpose of this case.

7.    Section 22-A of the Act defines "Permanent Lok Adalat" to mean

a Permanent Lok Adalat established under sub-section (1) of Section 22

B.   "Public utility service"" inter alia means insurance service, and

includes any service which the Central Government or the State

Government, as the case may be, may, in the public interest, by

notification, declare to be a public utility service for the purposes of this

Chapter. Section 22-B. provides for establishment of Permanent Lok

Adalats.    Section 22-C delineates the jurisdiction of Permanent Lok

Adalat to take cognizance of cases filed before it, the relevant provisions

whereof are as under :-

            "22-C.- Cognizance of cases by Permanent Lok              Adalat :-              1. Any party to a dispute may, before the                 dispute is brought before any court, make an                 application to the Permanent Lok Adalat for                 the settlement of dispute:

            Provided that the Permanent Lok Adalat shall              not have jurisdiction in respect of any matter

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           relating to an offence not compoundable under             any law:

           Provided further that the Permanent Lok Adalat             shall also not have jurisdiction in the matter             where the value of the property in dispute             exceeds ten lakh rupees:

           Provided also that the Central Government,             may, by notification, increase the limit of ten             lakh rupees specified in the second proviso in             consultation with the Central Authority.

           (2) After an application is made under sub-             section (1) to the Permanent Lok Adalat, no             party to that application shall invoke             jurisdiction of any court in the same dispute.

(3)   ...                ....                 ....

           (4)   ...                  ....                ....

           (5) The Permanent Lok Adalat shall, during             conduct of conciliation proceedings under sub-             section (4), assist the parties in their attempt to             reach an amicable settlement of the dispute in             an independent and impartial manner.

           (6) It shall be the duty of every party to the             application to cooperate in good faith with the             Permanent Lok Adalat in conciliation of the             dispute relating to the application and to             comply with the direction of the Permanent Lok

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            Adalat to produce evidence and other related              documents before it.

            (7) When a Permanent Lok Adalat, in the              aforesaid conciliation proceedings, is of              opinion that there exist elements of settlement              in such proceedings which may be acceptable              to the parties, it may formulate the terms of a              possible settlement of the dispute and give to              the parties concerned for their observations and              in case the parties reach at an agreement on the              settlement of the dispute, they shall sign the              settlement agreement and the Permanent Lok              Adalat shall pass an award in terms thereof and              furnish a copy of the same to each of the parties              concerned.

            (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.    The Permanent Lok Adalat, in terms of Section 22-D of the Act,

while conducting conciliation proceedings or deciding a dispute on merit

is not bound by the provisions of the Code of Civil Procedure, 1908 and

the Indian Evidence Act, 1872 but guided by the principles of natural

justice, objectivity, fair play, equity and other principles of justice.

9.    Section 22-E of the Act makes an Award of Permanent Lok Adalat

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to be final and binding on all the parties, which would be deemed to be a

decree of a civil court. Jurisdiction of the civil court to call in question

any Award made by the Permanent Lok Adalat is barred. It has the

jurisdiction to transfer any Award to a civil court and such civil court is

mandated to execute the order as if it were the decree by the court.

10.   Interpretation of the aforesaid provisions in the light of the

Statement of Objects and Reasons for which they have been enacted calls

for our consideration.

11.   Before, however, we embark thereupon we may briefly notice the

factual matrix involved herein.

12.   First respondent carries on business in electrical goods. He is an

authorized distributor of Sony products. He entered into a contract of

insurance with the appellant company; the period covered thereunder

being 29th August, 2001 to 31st August, 2002. Allegedly, a burglary took

place in his godown in the night of 18th /19th August, 2002. He lodged a

First Information Report with Doranda Police Station, Ranchi. He also

submitted a claim with the appellant alleging that in the said burglary,

goods worth Rs.11,14,597/- had been stolen away.

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13.   Appellant denied and disputed the said claim which refuted the

claims by a letter dated 12th August, 2004 interlia stating :-

            a)     The surveyor has observed that the loss                     cannot be assessed since the quantity                     claimed by you is not verifiable                     especially as the authenticity of the                     documents provided by you creates                     doubt.

            b)     The surveyor has noticed that there is                     movement of stock from the godown                     without proper billing and proper entry                     which was found by the surveyor on their                     random inspection of the godown on                     27.7.2003.

            c)     .....                      .....                             ......

            d)     ....                       .....                             .....

            e)     The     Chartered     Accountant     who                     accompanied the surveyor had made an                     inspection of the financial statements as                     provided by you and found various                     discrepancies in your accounts. For these                     reasons the accounts provided by you                     cannot be relied upon. It was found by                     the said Chartered Accountant that there

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                  was difference in closing stock, Opening                    Balance of Sundry Debtors etc. and such                    the credibility of the accounts submitted                    by you is doubtful.

           f)     The Dy. Superintendent of Police in his                    supervision note has recorded that the                    alleged crime has been done by people                    who are closely associated with the                    Company under a high hatched                    conspiracy and also having the capacity                    to sell the alleged stolen products in the                    market.

           g)     It is also observed that neither the FIR                    nor during investigation by the police                    you ever disclosed that there was a                    common watchman in that area where the                    godown is located which creates doubt                    about the genuineness of the incident.                    Furthermore      not    providing    any                    security/watchman with respect to the                    said godown also amounts to violation of                    the terms of the Policy coupled with                    misrepresentation."

                                            (Emphasis supplied)

14.   The Investigating Officer in the criminal case filed a final report.

It was, however, opposed by the insurance company. We have not been

informed as to whether the cognizance of the alleged offence has been

taken by a competent court or not.

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15.   We may, however, notice that respondent being aggrieved by and

dissatisfied with the purported repudiation of his claim filed an

application before the District Consumer Forum claiming a sum of

Rs.18,45,697.50 from the appellant.      It was not entertained on the

premise that deficiency in service had occurred in connection with a

commercial contract.

16.   First respondent, thereafter, filed an application for the Permanent

Lok Adalat claiming a sum of Rs.9,80,000/-.           Appellant filed an

objection raising the question of jurisdiction of the Permanent Lok

Adalat. By reason of an order dated 4th January, 2005, the said objection

was overruled stating that it had the pecuniary jurisdiction over the

matter and only because a criminal case is pending in the Court of Chief

Judicial Magistrate, Ranchi, the same was not relevant stating :-

           "However, the finding of criminal court is not             binding on this court and this court has to             decide as to whether burglary had taken place             or not. After taking independent evidences of             the parties, so far finding of Surveyor is             concerned, it is regarding merit of the claim             which this P.L.A. has to decide after taking             evidence. If the claim cannot be refused on the             basis of surveyor report at this stage."

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17.   Appellant filed a writ application challenging the validity of the

said order before the Jharkhand High Court. A learned Single Judge of

the High Court allowed the said writ application opining that as Sections

479/461 of the Indian Penal Code being not compoundable, the

Permanent Lok Adalat had no jurisdiction to entertain the claim opining:-

           "9     In my considered opinion, the Permanent             Lok Adalat has committed great error of law in             holding that it has jurisdiction inspite of the             fact that the matter relates to an offence not             compoundable under any law. The Permanent             Lok Adalat has further committed serious error             in holding that the finding of the criminal Court             in non-compoundable offence is not binding on             it.

           10. No doubt Chapter VI-A has been inserted             in the Legal Services Authority Act, 1987 by             Amendment Act of 2002 for constitution of             Permanent Lok Adalat for the purpose of pre-             litigation, conciliation and settlement, but the             whole object of the Act is to provide free legal             and competent legal services to the weaker             section of the Society to ensure that             opportunities for securing justice are not denied             to any citizen by reason of economic or other             disability. The amended provision of the Act             does not confer power to the Permanent Lok             Adalat even to entertain the disputes which             related to a criminal offence non compoundable             in law."

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18.   An intra court appeal was preferred thereagainst. The Division

Bench of the High Court by reason of the impugned judgment and order

dated 29th March, 2006 allowed the appeal of the first respondent holding

that the pendency of a criminal case has nothing to do with the exercise

of jurisdiction by the Permanent Lok Adalat as it was not concerned as to

who had committed the burglary but was only concerned with the fact as

to whether burglary had taken place or not stating :-.

            "So far as the case before the Permanent Lok              Adalat is concerned, the Adalat is to determine              whether burglary had taken place or not, after              taking into consideration the independent              evidence of the parties. It is not required to              determine as to who has committed burglary              nor it is required to determine whether an              accused is guilty for the charges or not.              Therefore, for the purpose of determination of              the issue and claim in question, the Permanent              Lok Adalat is not required to determine              whether offence committed by an accused is              ’compoundable’ or not. Thus, as in this case              such issue is not required to be determined by              the Permanent Lok Adalat, we hold that the              Permanent Lok Adalat has jurisdiction to              decide the claim as made by the appellant, on              merit, after hearing the parties and on              appreciation of evidence on record. Learned              Single Judge has failed to notice the aforesaid              facts while determining the issue in question."

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19.   Mr. Raju Ramachandran, learned Senior counsel appearing on

behalf of the appellant would submit :-

     (i)          Chapter VI-A of the Act will have no application in a

                  case of this nature which involves complicated

                  questions of fact and law.

     (ii)         The question as to whether the burglary has been

                  committed or not being pending before the criminal

                  court, Permanent Lok Adalat had no jurisdiction in

                  relation thereto.

     (iii)        As the contract of insurance had been repudiated, it

                  was not a case which was fit for settlement within the

                  meaning of Section 22-B of the Act.

     (iv)         Claim of first respondent is mala fide as he had

                  artificially reduced the claim to bring the same within

                  the jurisdiction of the Permanent Lok Adalat,

                  although initially he claimed a sum higher than Rs. 10

                  lakhs.

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20.   Mr. Amit Kumar, learned counsel appearing on behalf of the

respondent, on the other hand, would urge :-

     (i)     That the value of the property being less than Rs.10 lakhs,

             the Permanent Lok Adalat had jurisdiction in regard to the

             dispute in question.

     (ii)    The restrictions imposed in regard to the offences cannot be

             applied to civil dispute between the parties arising out of

             any offence as the same relates to the claim of the

             respondent against the appellant.

     (iii)   Jurisdiction of the Permanent Lok Adalat being confined to

             determination of the amount of loss caused to the first

             respondent on account of burglary, Permanent Lok Adalat is

             not required to decide the case between the accused of

             burglary and the State.

     (iv)    For invoking the jurisdiction of Permanent Lok Adalat, the

             question as to whether the offence is compoundable or not is

             not relevant.

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     (v)    Proviso appended to sub-section (5) of Section 22 of the Act

            should be construed in a manner which would widen the

            scope and ambit of the Act, rather accentuate the same.

     (vi)   The object of the legislation is to promote resolution of the

            dispute by conciliation and, therefore, it is for the welfare of

            the general public that construction which would achieve

            the object of the beneficial legislation should be preferred.

21.   The term "conciliation" is not defined under the Act. It should,

therefore, be considered from the perspective of Arbitration and

Conciliation Act, 1996.    In order to understand what Parliament meant

by ‘Conciliation’, we have necessarily to refer to the functions of a

‘Conciliator’ as visualized by Part III of the 1996 Act.         Section 67

describes the role of a conciliator. Sub-section (1) states that he shall

assist parties in an independent and impartial manner. Subsection (2)

states that he shall be guided by principles of objectivity, fairness and

justice, giving consideration, among other things, to the rights and

obligations of the parties, the usages of the trade concerned and the

circumstances surrounding the dispute, including any previous business

practices between the parties. Sub-section (3) states that he shall take

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into account "the circumstances of the case, the wishes the parties may

express, including a request for oral statements". Sub-section (4) is

important and permits the ‘conciliator’ to make proposals for a

settlement. This section is based on Article 7 of UNICTRAL

Conciliation Rules.

     Section 73, which is important, states that the conciliator can

formulate terms of a possible settlement if he feels that there exists

elements of settlement. He is also entitled to ‘reformulate the terms’ after

receiving the observations of the parties. The above provisions in the

1996 Act make it clear that the ‘Conciliator’ under the said Act, apart

from assisting the parties to arrive at a settlement, is also permitted to

make "proposals for a settlement" and "formulate the terms of a possible

settlement" or "reformulate the terms". This is indeed the UNCITRAL

concept.

22.   Section 89 of the Code of Civil Procedure inter alia was enacted to

promote resolution of disputes through mutual settlement. Chapter VI-A

of the Act seeks to achieve a different purpose. It not only speaks of

conciliation qua conciliation but conciliation qua determination.

Jurisdiction of Permanent Lok Adalat, although is limited but they are of

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wide amplitude. The two provisos appended to Section 22-C (1) of the

Act curtail the jurisdiction of the Permanent Lok Adalat which are as

under :-

            Provided that the Permanent Lok Adalat shall              not have jurisdiction in respect of any matter              relating to an offence not compoundable under              any law:

            Provided further that the Permanent Lok Adalat              shall also not have jurisdiction in the matter              where the value of the property in dispute              exceeds ten lakh rupees:

23.   Chapter VI-A stands independently. Whereas, the heading of the

Chapter talks of pre-litigation, conciliation and settlement, Section 22-C

(8) of the Act speaks of determination. It creates another adjudicatory

authority, the 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.           (See

Advanced Law Lexicon 3rd Edition 2005 at 1253). Any award made by

the Permanent Lok Adalat is executable as a decree.             No appeal

thereagainst shall lie. The decision of the Permanent Lok Adalat is final

and binding on parties. Whereas on the one hand, keeping in view the

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Parliamentary intent, settlement of all disputes through negotiation,

conciliation, medication, Lok Adalat and Judicial Settlement are required

to be encouraged, it is equally well settled that where the jurisdiction of a

court is sought to be taken away, the statutory provisions deserve strict

construction. A balance is thus required to be struck. A court of law can

be created under a statute.      It must have the requisite infrastructure

therefor.   Independence and impartiality of Tribunal being a part of

human right is required to be taken into consideration for construction of

such a provision. When a court is created, the incumbents must be

eligible to determine the lis.

24.   An option is given to any party to a dispute. It may be a public

utility service provider or a public utility service recipient. The service

must have some relation with public utility. Ordinarily insurance service

would not come within the public utility service. But having regard to

the statutory scheme, it must be held to be included thereunder. It is one

thing to say that an authority is created under a statute to bring about a

settlement through Alternate Dispute Resolution mechanism but it is

other thing to say that an adjudicatory power is conferred on it. Chapter

VI-A, therefore, in our opinion, deserves a closure scrutiny. It a case of

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this nature, the level of scrutiny must also be high. {See Anuj Garg &

ors. vs. Hotel Association of India & Ors. [(2008) 3 SCC 1]}

25.   Sub-section (1) of Section 22-C speaks of settlement of disputes.

The authority has to take recourse to conciliation mechanism. One of the

essential ingredients of the conciliation proceeding is that nobody shall

be forced to take part therein. It has to be voluntary in nature. The

proceedings are akin to one of the recognized ADR mechanism which is

made of Medola. It may be treated at par with Conciliation and

Arbitration. In such a case the parties agree for settlement of dispute by

negotiation, conciliation or mediation. The proceedings adopted are not

bending ones, whereas the arbitration is a binding procedure. Even in

relation to arbitration, an award can be the subject matter of challenge.

The provisions of the Arbitration and Conciliation Act, 1996 shall apply

thereto. The jurisdiction in terms of Section 34 of the Arbitration and

Conciliation Act, 1996 is wide.         The court in exercise of the said

jurisdiction may not enter into the merit of the case but would be entitled

to consider as to whether the arbitrator was guilty of misconduct. If he is

found to be biased, his award would be set aside. The scope of voluntary

settlement through the mechanism of conciliation is also limited. If the

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parties in such a case can agree to come to settlement in relation to the

principal issues, no exception can be taken thereto as the parties have a

right of self determination of the forum, which shall help them to resolve

the conflict, but when it comes to some formal differences between the

parties, they may leave the matter to the jurisdiction of the conciliator.

The conciliation only at the final stage of the proceedings would adopt

the role of an arbitrator.

26.   Here, however, the Permanent Lok Adalat does not simply adopt

the role of an Arbitrator whose award could be the subject matter of

challenge but the role of an adjudicator. The Parliament has given the

authority to the Permanent Lok Adalat to decide the matter. It has an

adjudicating role to play.

27.   The validity of the said provision is not in question. But then

construction of such a provision must be given in such a manner so as

make it prima facie reasonable. With that end in view let us consider the

meaning of the word "relating to an offence". We will assume that in a

given case the dispute between the service provider and the service

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recipient may not have anything to do with the ultimate result of the

criminal case but there are cases and cases.

28.   In this case, as noticed above, the genuineness of the claim itself is

in dispute. Where the parties have taken extreme positions, the same

prima facie may not be the subject matter of conciliation which provides

for a non binding settlement.

29.   For the said purpose, the dispute under the criminal procedure

and/or the nature thereof would also play an important role. Whereas

Respondent states that the burglary has taken place, the appellant denies

and disputes the same. In a criminal case, the accused shall be entitled to

raise a contention that no offence has taken place. If the criminal court

form an opinion that an offence had taken place, which otherwise is a

non-compoundable one, the term "relating to an offence" should be given

wider meaning. The first proviso appended to section 22-B of the Act

may not be of much relevance.

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30.   This aspect of the matter had not been argued before the Division

Bench of the High Court. The counsel appearing were remiss in bringing

the same to the notice of the Court the binding precedents, as regards the

jurisdictional aspect of the Civil Court in the light of Section 9 of the

Code of Civil Procedure.

31.   In Dhulabhai and Ors. vs. The State of Madhya Pradesh and Anr. :

AIR 1969 SC 78, the Court discussed the ambit of S.9 of the CPC and

laid down the following principles:

           "...(1) Where the statute gives a finality to the             orders of the special tribunals the Civil Court’s             jurisdiction must be held to be excluded if there             is adequate remedy to do what the Civil Courts             would normally do in a suit. Such provision,             however, does not exclude those cases where             the provisions of the particular Act have not             been complied with or the statutory tribunal has             not acted in conformity with the fundamental             principles of judicial procedure.

           (2) Where there is an express bar of the             jurisdiction of the court, an examination of the             scheme of the particular Act to find the             adequacy or the sufficiency of the remedies             provided may be relevant but is not decisive to             sustain the jurisdiction of the civil court.

           Where there is no express exclusion the             examination of the remedies and the scheme of             the particular Act to find out the intendment             becomes necessary and the result of the inquiry

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           may be decisive. In the latter case it is             necessary to see if the statute creates a special             right or a liability and provides for the             determination of the right or liability and             further lays down that all questions about the             said right and liability shall be determined by             the tribunals so constituted, and whether             remedies normally associated with actions in             Civil Courts are prescribed by the said statue or             not..."

32.   In Dwarka Prasad Agarwal (D) by Lrs. and Anr. vs. Ramesh

Chander Agarwal and Ors. : (2003) 6 SCC 220 , this Court held:

                  "...The dispute between the parties was             eminently a civil dispute and not a dispute             under the provisions of the Companies Act.             Section 9 of the Code of Civil Procedure             confers jurisdiction upon the civil courts to             determine all disputes of civil nature unless the             same is barred under a statute either expressly             or by necessary implication. Bar of jurisdiction             of a civil court is not to be readily inferred. A             provision seeking to bar jurisdiction of a civil             court requires strict interpretation. The court, it             is well settled, would normally lean in favour             of construction, which would uphold retention             of jurisdiction of the civil court..."

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           This case was cited with approval in Bhagubhai Dhanabhai

Khalasi and Anr. vs. The State of Gujarat and Ors., 2007 (5) SCALE

357.

32.         Therefore, it is a fundamental presumption in statutory

interpretation that ordinary civil courts have jurisdiction to decide all

matters of a civil nature. As a corollary,

     (i)        provisions excluding jurisdiction of civil courts should

                receive strict construction. (See Bhagwat Singh vs. State of

                Rajasthan :    AIR 1964 SC 444; Raichand vs. Union of

                India : AIR 1964 SC 1268), and

     (ii)       provisions conferring jurisdiction on authorities and

                tribunals other than civil courts (See Kasturi and Sons vs.

                Salivateswaran : AIR 1958 SC 507; Upper Doab Sugar

                Mills vs. Shahdara (Delhi) Saharanpur Light Railway : AIR

                1963 SC 217)

have to be strictly construed.

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34.     This principle, taken from Principles of Statutory Interpretation by

G.P. Singh, Ninth Edition, page 630, was cited with approval in Swamy

Atmananda and Ors. vs. Sri Ramakrishna Tapovanam and Ors. : AIR

2005 SC 2392.

35.     We must also take notice of a recent decision of this Court in State

of Punjab and another vs. Jalour Singh and others : JT 2008 (2) SC 83

where this Court expressed its dismay with the manner in which the Lok-

Adalat matters are dealt with. Chief Justice of India speaking for the

Bench, upon noticing the provisions of the Legal Services Authority Act,

1987, observed that whereas Lok Adalat had to arrive at a just settlement

in their conciliatory role guided by the principles of justice, equity, fair

play and other legal principles, but in that case it assumed a judicial role,

heard     parties, ignored the absence of consensus, and increased the

compensation to an extent it considered just and reasonable, by a

reasoned order which is adjudicatory in nature. It arrogated to itself the

appellate powers of the High Court and ’allowed’ the appeal and ’directed’

the respondents in the appeal to pay the enhanced compensation within a

period fixed by it. It was held that such an order is not an Award.

36.     Section 22-C(1) read with Section 22-C(2), Section 22-C(8) and

Section 22-E of the Act, exclude the jurisdiction of the civil courts by

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providing that when an application is made by either party to the

Permanent Lok Adalat to settle a dispute at the pre-litigation stage, the

PLA shall do so, and the other party is precluded from approaching the

civil court in such a case.

37.   Section 22-C(1) contains certain Provisos which limit the

jurisdiction of the PLA. Given the principle of statutory interpretation

stated earlier, these Provisos, as a corollary, must be interpreted in an

expansive manner.

38.   What is important to note is that with respect of public utility

services, the main purpose behind Section 22-C(8) seems to be that

"most of the petty cases which ought not to go in the regular Courts

would be settled in the pre-litigation stage itself."

39.   Therefore, in the instant case, the terms "relating to" an "offence"

appearing in Proviso 1 must be interpreted broadly, and as the

determination before the Permanent Lok Adalat will involve the question

as to whether or not an offence, which is non-compoundable in nature,

has indeed been committed, this case falls outside the jurisdiction of the

Permanent Lok Adalat.

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40.      We must guard against construction of a statute which would

confer such a wide power in the Permanent Lok Adalat having regard to

sub-section (8) of Section 22-Cof the Act. The Permanent Lok Adalat

must at the outset formulate the questions. We however, do not intend to

lay down a law, as at present advised, that Permanent Lok Adalat would

refuse to exercise its jurisdiction to entertain such cases but emphasise

that it must exercise its power with due care and caution. It must not

give an impression to any of the disputants that it from the very

beginning has an adjudicatory role to play in relation to its jurisdiction

without going into the statutory provisions and restrictions imposed

thereunder.

41.      For the reasons abovementioned the order of the High Court

cannot be sustained and is set aside accordingly. The appeal is allowed.

In the facts and circumstances of the case, there shall be no order as to

costs.

                                           ............................J.                                                  ( S.B. SINHA )

                                           .............................J.                                              ( V.S. SIRPURKAR )

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New Delhi May 13, 2008