The National Legal Services Authority (NALSA) is organising a nation-wide ‘mega lok adalat’ on that day (November 23) with the help of the Centre and state government authorities, finance ministry sources told FE.
The event assumes significance as there are over 7 lakh pending motor insurance claims involving more than R12,000 crore, besides around 20 lakh cheque bounce cases (where the total amount involved is not yet available). There were also nearly 43,000 cases, involving a whopping R1.43 lakh crore, pending with debt recovery tribunals as on March 31, 2013. NALSA is in the process of compiling the pendency in labour and land acquisition disputes as well as in tax and revenue cases.
Confirming the development, NALSA member secretary Asha Menon told FE that NALSA has already held discussions with the department of financial services on issues related to motor insurance claims, debt recovery cases (by banks and financial institutions) and cheque bounce cases. It will soon be holding meetings with the Central Board of Direct Taxes and Central Board of Excise and Customs so that for the first time, pending tax/revenue cases can be brought to the Lok Adalat platform and settled, she added.
Lok Adalats can be conducted only by the Legal Services Authorities (at the national, state, district and taluk levels) under the Legal Services Authority Act, which gives statutory backing to the settlement.
Referring cases to Lok Adalats by the respective parties is done on a voluntary basis. The Lok Adalat route not only results in expeditious settlement, but also cuts down the huge litigation costs. Once the cases are settled, there is no provision to go on an appeal. However, if no settlement can be reached, cases are returned to the courts concerned with no unfavourable noting.
The settlement award of Lok Adalat is equivalent to a court decree and in cases of non-adherence, the aggrieved party can file a petition to ensure that the award is complied with. However, the current adherence rate is close to 100%.
In 2012, a total of 1.03 lakh lok adalats were held across the country where 62.37 lakh cases were settled. This included 1.25 lakh cheque bounce cases, 3.6 lakh recovery cases involving banks, 71,342 motor accident cases (involving a compensation amount of R1,104 crore), 15,574 labour cases and 11,511 land acquisition cases. The remaining cases were criminal compoundable and matrimonial cases.
The finance ministry is engaging in discussions with all seriousness as finance minister P Chidambaram in his Budget speech this year said that public sector general insurance companies will take part in lok adalats to settle the third-party motor claims and give relief to the affected.
The huge pendency in motor insurance claims is due to the insurers (both private and public) not taking a realisitic view while negotiating a settlement, including on the treatment costs incurred by the insured following an accident and also the loss of potential earnings, official sources said.