For the purpose of bringing  about  voluntary  settlement  of  disputes  Hon’ble  Shri  P.N.Bhagwati, the ex-Chief Justice of the Supreme Court,  conceived a unique concept of Lok Adalat or Lok Nyayalaya. 

Due to enormous increase in the number of accidents and the number of persons maimed or killed, the MACT Courts  are faced with a very large number of cases. The net result is that it takes years through the MACT for disposal of claims.

Arising from this problem, G.I.C supported the concept and adopted settlements in Lok Adalat. to dispose of such cases  speedily in an informal way but with judicial backing and in a  spirit of compromise. This movement, in the last five years resulted in expeditious disposal.

For bringing about amicable  and speedy settlement of  cases pending before the MACT, Lok Adalat sessions are held  from time to time in close liaison with the local Legal Aid  Committee of the Legal Aid Board of each State and the  MACT  or  the  District  and  Sessions  Judge.

Lok Adalat sessions are held at important centers in the country from time to time in close liaison with the local Legal Aid Committee of the Legal Aid Board of each State and the MACT or the District and Sessions Judge for bringing about amicable settlement of cases pending before the MACT.

These sessions held in different parts of the country have received an enthusiastic response. The market practice is to place claims up to Rs. 5,00,000 before the Lok Nyayalay, where liability is otherwise clear.

Following procedure is adopted:

• Consent application from parties concerned – Consent application well in advance is taken from the applicant, dealing advocates for the parties, and the insurer is obtained for placing the cases before the Lok Adalat.
• Notice to parties concerned – Notice  under registered  post  is  issued  to  the  applicant  and  his advocate and to the iii) Compromise – Efforts are made to bring the parties to a  fair compromise without coercion or forces and the agreement  arrived at is reduced in writing on the prescribed form.
• Submission of compromise memo to the concerned Claims Tribunal – The compromise memo is submitted to the Claims Tribunal for passing the final order and apportionment of the compensation in terms of the settlement.
• Payment – The insurers are required to deposit the cheque  for the amount agreed with MACT within specified time from  the date of the agreement to settle.  As per current guidelines of G.I.C., only those cases where claim made to MACT is upto Rs. 500000 are to be considered in the Lok Adalat sessions.

Advantages of Lok Adalat Settlements: – Settlement of T.P. Claims in the Lok Adalat is advantageous to insurance companies for the following reasons:

• The insurers get an opportunity to clear up a large backlog of motor claims cases;
• The claim is deemed have been settled once and for all and there is no further litigation by way of appeal to the higher  Courts;
• Speedy settlement gives satisfaction to third party as well as to the insured.
• Serves as a means of good publicity, good name and prestige to the insurance company.

Extracts from “Guide for Motor Insurance (IC-72)” by Dr. Rakesh Agarwal. Copyright of Sashi Publications, kolkata www.sashipublications.com and www.bimabazaar.com