Karnataka HC Sets Aside Lok Adalat Compensation Award Based On Claimants’ Unsigned Settlement Memo; Motor Accident Claim Withdrawn

The petitioners had filed a claim under Section 166 of the Motor Vehicles Act, 1988, before the Motor Accident Claims Tribunal, Vijayapur, in MVC No. 703/2014.

The matter was referred to the Lok Adalat, which passed an award dated 26 July 2016 on the basis of a joint memo.

The petitioners contended that they had neither consented to the compromise nor signed the memo; the Insurance Company argued that they had agreed to the compensation during pre-conciliation proceedings.

The petitioners also stated that they had received compensation in proceedings in Rajasthan and wished to withdraw the Vijayapur claim.

The petition was brought under Article 226 of the Constitution, seeking certiorari against the Lok Adalat award.

The claim itself had been filed under Section 166 of the Motor Vehicles Act, 1988.

The Court applied the principle that, on the record before it, an award based on a compromise memo not signed by the claimants could not be sustained.

No precedent or further statutory test was cited in the order.

The Court examined the joint memo and found that it bore the Insurance Company official’s signature but not the claimants’ signatures.

Since the impugned award had been passed mainly on the basis of that memo, the Court held that the award required interference, notwithstanding the Insurance Company’s submission that the claimants had agreed during pre-conciliation proceedings.

The Court then acted on the petitioners’ stated intention to withdraw the Vijayapur claim.

It disposed of that claim as withdrawn and directed that any amount deposited by the Insurance Company pursuant to the award be returned to it.