Permanent Lok Adalat's Mere Observation That 'Conciliation Was Attempted But Failed' Not Legally Sufficient: Allahabad High Court

The Allahabad High Court has held that Permanent Lok Adalat's mention of 'conciliation attempted but failed' is a general reference which is not legally sufficient as per the judgment of the High Court in Manager Life Insurance Corporation of India, Basti vs. Permanent Lok Adalat, Basti and others.

In Manager Life Insurance Corporation of India, Basti vs. Permanent Lok Adalat, Basti and others, the Court had held that the function of the Permanent Lok Adalat is to first try conciliation and settlement between the parties. If the same fails, it must record (briefly) the proceedings in the award so that its decision on the dispute is clear. It held that absence of conciliation attempts would render the award legally invalid as it would be against the provisions of the Act.

It had further held that merely recording that "conciliation was attempted but failed" is not sufficient. The record or award must reflect: when the conciliation was undertaken; what efforts were made; what terms of settlement, if any, were proposed; why the parties could not reach a settlement.

In the present case, the Permanent Lok Adalat made an observation that the matter was referred for conciliation, however, attempts at conciliation failed.

This order was challenged before the High Court, contending that it is against the procedure for conciliation laid down under Section 22-C of Legal Services Authority Act, 1987.

Holding that the consideration of the Permanent Lok Adalat was not sufficient, Justice Saurabh Shyam Shamshery remanded the matter to the concerned authority to decide in terms of the aforesaid judgment.

Case Title: The Oriental Insurance Company Limited v. Lalta Prasad Sharma And 5 Others

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