# L.I.C., Gorakhpur & Anr v. Permanent Lok Adalat, Azamgarh & Anr

- **Citation:** (2023) 5 ILRA 709
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2023-04-06
- **Case number:** Writ-C No. 20577 of 2016
- **Bench:** Kshitij Shailendra
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/l-i-c-gorakhpur-anr-v-permanent-lok-adalat-azamgarh-anr-50276
- **Pages:** 20

## Headnote

A. Civil Law - Insurance Act, 1938 -
Section 45 - Insurance Claim-Award ofValidity- Corporation repudiated the claim
of respondent on account of the wrong
declaration made in the proposal form-
contract of insurance being one of utmost
good faith, repudiation was rightly done
by the L.I.C. for breach of utmost good
faith and payment of premium by the
brother of respondent and revival of
policies by the L.I.C. has no relevance qua
the repudiation of policy- on account of
misstatement made by the deceased lifeassured in reply to the questions in the
proposal form with regard to his previous
ailment, the life-assured had suppressed
the facts, which were material for him to
disclose-When medical opinion furnished
by the Doctor of Corporation, clearly
establish
that
cause
of
death
had
absolutely no relation with fever suffered
by assured one year ago-therefore, nondisclosure of such a fever cannot be
treated as suppression of material fact
while
deciding
claim
made
by
the
respondent-Thus, the amount deposited
by the Life Insurance Corporation under
the said interim order shall positively be
released in favour of respondent within a
period of two months.(Para 1 to 67)

B. Section 45 of the Insurance Act
authorizes the L.I.C. to repudiate the
claim
on
the
ground
of
fraud,
misrepresentation, or concealment of factSince the contract of insurance is a
contract of utmost good faith, everything
starts from submission of proposal form
issued by the Insurance Company. The
proposal form issued by the L.I.C. contains
a declaration that the statements made in
the form are true and correct to the best
of
the
knowledge
of
the
insured.
Accordingly, the proposer/insured should
not hide any fact in the proposal form. If
the insured gives wrong information in the
proposal form, the contract of insurance is
vitiated.(Para 5)

The writ petition is dismissed. (E-6)

List of Cases cited:

## Text

_Characters 0–39,622 of 67,841. This is a partial read: ask again with offset=39622 for what follows._

5 All. L.I.C., Gorakhpur & Anr. Vs. Permanent Lok Adalat, Azamgarh & Anr.
709
(2023) 5 ILRA 709
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 06.04.2023

BEFORE

THE HON'BLE KSHITIJ SHAILENDRA, J.

Writ-C No. 20577 of 2016

L.I.C., Gorakhpur & Anr. ...Petitioners
Versus
Permanent Lok Adalat, Azamgarh & Anr.
 ...Respondents

Counsel for the Petitioners:
Sri Prateek J. Nagar, Sri J. Nagar (Sr.
Advocate)

Counsel for the Respondents:
Sri Sunil Kumar Singh, Sri J.P. Singh, S.C.

A. Civil Law - Insurance Act, 1938 -
Section 45 - Insurance Claim-Award ofValidity- Corporation repudiated the claim
of respondent on account of the wrong
declaration made in the proposal form-
contract of insurance being one of utmost
good faith, repudiation was rightly done
by the L.I.C. for breach of utmost good
faith and payment of premium by the
brother of respondent and revival of
policies by the L.I.C. has no relevance qua
the repudiation of policy- on account of
misstatement made by the deceased lifeassured in reply to the questions in the
proposal form with regard to his previous
ailment, the life-assured had suppressed
the facts, which were material for him to
disclose-When medical opinion furnished
by the Doctor of Corporation, clearly
establish
that
cause
of
death
had
absolutely no relation with fever suffered
by assured one year ago-therefore, nondisclosure of such a fever cannot be
treated as suppression of material fact
while
deciding
claim
made
by
the
respondent-Thus, the amount deposited
by the Life Insurance Corporation under
the said interim order shall positively be
released in favour of respondent within a
period of two months.(Para 1 to 67)

B. Section 45 of the Insurance Act
authorizes the L.I.C. to repudiate the
claim
on
the
ground
of
fraud,
misrepresentation, or concealment of factSince the contract of insurance is a
contract of utmost good faith, everything
starts from submission of proposal form
issued by the Insurance Company. The
proposal form issued by the L.I.C. contains
a declaration that the statements made in
the form are true and correct to the best
of
the
knowledge
of
the
insured.
Accordingly, the proposer/insured should
not hide any fact in the proposal form. If
the insured gives wrong information in the
proposal form, the contract of insurance is
vitiated.(Para 5)

The writ petition is dismissed. (E-6)

List of Cases cited:

1. Om Prakash Agarwal thru L.R. & ors. Vs
Vishan Dayal Rajpoot & anr. (2019) 14 SCC 526

2. Subhash Mahadevasa Habib Vs Nemasa
Ambasa Dharmadas (Dead) by LRs. & ors.
(2007) 13 SCC 650

3. R.S.D.V. Finance Co. Pvt. Ltd. Vs Shree
Vallabh Glass Works Ltd (1993) 2 SCC 130

4. Appat Krishna Poduval Vs Lakshmi Nathiar &
ors. (1950) AIR (37) Madras 751

5. Kumaran Nambiar Vs Ramunni (1998)AIR 25
Mad. 257

6. Kiran Singh & ors. Vs Chaman Paswan & ors.
(1954) AIR SC 340

7. Koopilan Uneen's daughter Pathumma & ors.
Vs Unee's son Kuntalan Kutty (dead) by LRs
&Ors (1981) AIR SC 1683

8. Harshad Chiman Lal Modi Vs D.L.F. Universal
Ltd. & anr. (2005) AIR SC 4446
710 INDIAN LAW REPORTS ALLAHABAD SERIES
9. Surendra Mahanti Vs Ghasiram Mahanti &
ors. (1996) AIR Ori.

10. Ajay Singh (deceased by Lrs.) & etc. Vs
Tikka Brijendra Singh & ors. etc. (2007) AIR
H.P. 52

11.
ARCE Polymers Pvt Ltd Vs Alphine
Pharmaceuticals Pvt Ltd & ors. (2022) 2 SCC
221

12. Krishna Bahadur Vs M/s Purna Threatre &
ors. (2004) AIR SC 4282

13. M/s Power Control Appliance & ors. Vs
Sumeet Machines Pvt. Ltd. (1994) 2 SCC 448

14. Rodgers Vs Nowill (1847) 2 De GM &G 614

15. Tufan Chatterjee vs Rangan Dhar (2016)
AIR Calcutta 213

16. ARCELOR Mittal Nippon Steel India Ltd Vs
Essar Bulk Terminal Ltd (2022) 1 SCC 712 para
38

17. Bar Council of India Vs U.O.I. (2012) 8 SCC
243

18. M.P. St. Legal Services Authority Vs Prateek
Jain & anr. (2014) 10 SCC 690

19. Inter Globe Aviation Ltd. Vs N.Satchidanand
(2011) 7 SCC 463

20. SBI, Dhanbad Vs St. of Jharkhand & anr.
(2009) 2 AIR Jhar R 970

21. Mithoolal Nayak Vs LIC, India (1962) AIR
SC 814

22. Smt. Krishna Wanti Puri Vs LIC, India,
Div. Officer, New Delhi & anr. (1975) AIR
Delhi 19

23. Canara Bank Vs G.S. Jayarama, Aironline
(2022) SC 835

24. LIC Vs Syed Zaigham Ali& anr. (Writ-C No.
39879 of 2015)

25. LIC, India & anr. Vs PLA & anr. (2018)
ADJ Online 0484
26. Nitin Kumar Vs Oriental Ins. Co. Ltd. & ors.
(Writ C No. 28999 of 2013 )

27. Mithoolal Nayak Vs LIC India (1962) AIR SC
814

28. Smt. Krishna Wanti Puri Vs LIC, India, Div.
Officer, New Delhi & anr. (1975) AIR Delhi, 19

29. Sulbha Prakash Motegaonkar & ors. Vs LIC,
India Civil Appeal No. 8245 of 2015 (SLP(C )No.
13589 of 2015)

(Delivered by Hon'ble Kshitij Shailendra, J.)

1. The instant writ petition has been
filed by the Life Insurance of India (hereinafter referred to as "L.I.C."), challenging
the impugned judgement and award dated
15.02.2016, whereby the Permanent Lok
Adalat (herein-after referred to as "P.L.A.")
has allowed the claim made by respondent
No. 2 directing the L.I.C. to pay to the
claimant-respondent
a
sum
of
Rs.
14,00,000/- (rupees fourteen lacs only)
along with interest @ 9% per anum as
covered by the Insurance Policy held by the
insured, who was real brother of the
claimant-respondent.

2. In short compass, the facts of the
case, as pleaded in the writ petition, are that
Thakur Prasad Singh, the brother of
respondent No. 2, aged 47 years, was
insured with the L.I.C. under Policy No.
297170129 dated 28-11-2011. Proposal of
the said insured was accepted by the L.I.C.
and Policy No. 297170129 dated 28-112011 was issued to him towards insurance
of his life. Unfortunately, Thakur Prasad
Singh died on 10-09-2012.

3. On receipt of information about the
death of Thakur Prasad Singh, along with
the claim papers, the L.I.C. made enquiries
in the matter, whereupon, it stood revealed
that prior to submitting the proposal for
5 All. L.I.C., Gorakhpur & Anr. Vs. Permanent Lok Adalat, Azamgarh & Anr.
711
Policy No. 297170129 dated 28-11-2011,
the assured was suffering from Enteric
Fever and Urinary Tract Infection and was
being treated for the same in Chitransh
Hospital
and
Surgical
Care
Centre,
Shivpur, Varanasi. Accordingly, the L.I.C.,
by its letter dated 28-11-2013, repudiated
the claim of the respondent No.2.

4. After the claim was repudiated,
respondent No.2 filed a Case No. 406 of
2014, (Kali Prasad Singh versus Life
Insurance Corporation of India and others)
before the Permanent Lok Adalat at
Azamgarh for recovery of a sum of
Rs.14,00,000/- (rupeees fourteen lac only)
towards death claim of Late Thakur Prasad
Singh.

5. Having coming to know about the
filing of complaint, the L.I.C. filed its reply
in the matter denying the averments made
by respondent No.2 in his application and
stating therein that the Corporation had
repudiated the claim of respondent No.2.
on account of the wrong declaration made
in the proposal form. It was further stated
that the contract of insurance being one of
utmost
good
faith
(uberima-fide),
repudiation was rightly done by the L.I.C.
for breach of utmost good faith and
payment of premium by the brother of
respondent No.2 and revival of policies by
the L.I.C. has no relevance qua the
repudiation of policy. It was further stated
that Section 45 of the Insurance Act
authorizes the L.I.C. to repudiate the claim
on the ground of fraud, misrepresentation
or concealment of fact. Since the contract
of insurance is a contract of utmost good
faith, everything starts from submission of
proposal form issued by the Insurance
Company. The proposal form issued by the
L.I.C. contains a declaration that the
statements made in the form are true and
correct to the best of the knowledge of the
insured. Accordingly, the proposer/insured
should not hide any fact in the proposal
form.
If
the
insured
gives
wrong
information in the proposal form, the
contract of insurance is vitiated. Further, on
account of misstatement made by the
deceased life-assured in reply to the
questions in the proposal form with regard
to his previous ailment, the life-assured had
suppressed the facts, which were material
for him to disclose. Accordingly, the
contract of insurance became void and
nothing was payable to the respondent
No.2. It was further stated that the L.I.C.
was not willing to settle the matter with the
claimant.

6. After the parties led evidences in
support of their respective claim and
defence,
the
P.L.A.,
Azamgarh,
by
impugned judgment and award dated
15.02.2016, has allowed the claim and
directed the L.I.C. to pay to the claimantrespondent a sum of Rs. 14,00,000/-
(rupees fourteen lac only) along with 9%
interest per anum as covered by Insurance
Policy.

7. A counter affidavit has been filed
by the claimant-respondent No. 2 stating
that his brother was insured with the L.I.C.
under Policy No. 297170129 dated 28-112011 and before the said policy was issued,
respondent's brother, Thakur Prasad Singh
was thoroughly examined by the Doctor of
the Corporation on 23rd of November,
2011. It is further stated that after the claim
papers were submitted before the L.I.C., it,
instead of allowing the claim, directed to
conduct an enquiry. The said enquiry is
shown to have been made on 10-12-2013
and, to make out a ground for repudiating
the claim, the Enquiry Officer mentioned
that prior to submitting the proposal for
712 INDIAN LAW REPORTS ALLAHABAD SERIES
Policy dated 28-11-2011, the deceased (life
assured) was suffering from Enteric Fever
and Urinary Tract Infection and he was
being treated for some time in Chitransh
Hospital
and
Surgical
Care
Centre,
Shivpur, Varanasi. The illness cited in the
report has nothing to do with the lawful
claim for the reason that the brother of
respondent No.2 was insured with the
L.I.C. after thorough medical examination/
check-ups conducted by the Doctors of
L.I.C.

8. It is further stated in the counter
affidavit that the basic object of the
contract of insurance is to insure the life of
the assured and the element of utmost good
faith
is
equally
applicable
to
the
Corporation. Here, the Corporation, on its
own, presumed that there was a breach of
good faith, while there was no breach of
good faith, and the fact of the matter is that
the brother of the respondent No.2 was
insured after thorough medical check-up
and the death was not on account of any
prolonged illness, therefore, the order
repudiating the claim of respondent No.2
was wholly illegal.

9. It is further stated in the counter
affidavit that the life assured did not give
any misstatement. So far as previous
ailments are concerned, the assured is not
required to give details of all previous
ailments, like Typhoid and Fever etc. The
purpose of disclosure is to inform the
serious disease, if any. Moreover, selfdeclaration of assured is not sufficient for
insurance. The Corporation before issuing
policy, conducts medical examination of
the person seeking insurance. Here, in the
given case, the brother of respondent No.2
was medically examined by the Doctors of
L.I.C. on 23-11-2011 and taking into
account the said medical report, policy was
issued. There was no suppression by the
life-assured.
It
is
usually
seen
that
Insurance Corporation, instead of allowing
the claim of the life-assured, takes a
number of objections. Here, in the given
case also the Corporation illegally and
arbitrarily
repudiated
the
claim
of
respondent No.2 on the basis of the report
of his officer, which was not at all accepted
by the respondent No.2.

10. The petitioner has filed a rejoinder
affidavit. Insofar as the pleadings contained
in paragraph 5 of the counter affidavit to
the effect that the insured was thoroughly
examined by the Doctor of the Corporation
on 23.11.2011, whose medical examination
report is annexed as annexure No. CA-1 to the
counter affidavit, are concerned, it has been
stated in paragraph No. 7 of the rejoinder
affidavit that the averments made in paragraph
No. 5 of the counter affidavit are not admitted
as they stand, and the respondent No. 2 is put
to strict proof of the averments made therein. It
is stated in paragraph No. 7 that the deceased
life-assured was examined by the Doctor of
the L.I.C., is of no help to respondent No. 2.
However, pleadings contained in rejoinder
affidavit are substantially reiteration of the
contention raised through the writ petition.

11. I have heard Shri J. Nagar, learned
Senior Advocate assisted by Shri Pratik J.
Nagar, learned counsel for the petitioners
and Shri J.P. Singh, learned counsel for
respondent No. 2.

12. Shri J. Nagar, learned Senior
Advocate has raised the following THREE
ISSUES/CONTENTIONS
for
consideration by this Court in the present
writ petition:

(1)
The
claim
made
by
respondent No. 2 had a valuation of Rs.
5 All. L.I.C., Gorakhpur & Anr. Vs. Permanent Lok Adalat, Azamgarh & Anr.
713
14,00,000/- (rupees fourteen lac only) and,
therefore, as per section 22C of the Legal
Services Authorities Act, 1987, the P.L.A.
had no jurisdiction to entertain and decide
the case, because as per the second proviso
to section 22 C (1) of the Act, the
pecuniary limits of jurisdiction of the
P.L.A. were confined to the matters, where
the value of property in dispute was only
Rs. 10,00,000/- (rupees ten lac only).

(2) The P.L.A. has failed to
perform statutory duty cast upon it as per
section 22 C (5) of the Legal Services
Authorities Act, 1987, whereunder it was
duty
bound
to
hold
conciliation
proceedings before deciding the matter on
merits.

(3) The claim of respondent No.2
was not entitled to be allowed as the
deceased (insured) had, at the time of
taking
Insurance
Policy,
deliberately
concealed his physical ailment, which
subsequently stood revealed during the
enquiry and, hence, the award of the P.L.A.
is unsustainable.

13. This Court proceeds to deal with
the aforesaid three contentions/issues as
raised by Shri Nagar, learned Senior
Advocate.

ISSUE/CONTENTION NO. 1 :-

14. Shri Nagar, learned Senior
Advocate has, with reference to second
proviso attached to section 22C (1) of the
Legal Services Authorities Act, 1987,
contended that the claim made before the
P.L.A. was valued at Rs. 14,00,000/-
(rupees fourteen lac only), whereas the
pecuniary limits of jurisdiction of P.L.A.
were restricted and confined upto claims of
Rs. 10,00,000/- (rupees ten lac only) and,
therefore,
the
impugned
order
is
unsustainable.

15. To this argument of Shri Nagar,
Shri J.P. Singh, learned counsel for
respondent No. 2, has vehemently argued
that the said contention cannot be allowed
to be raised by the petitioner for two main
reasons. First, as per section 21 of the Code
of Civil Procedure (herein-after referred to
as "C.P.C."), such objection to the
pecuniary limits of jurisdiction of P.L.A.
must have been taken before the court
below itself at the earliest available
opportunity, and once the same was not
raised, either through any plea in the
written statement or otherwise, the same
cannot be allowed to be agitated before the
writ court for the first time. Secondly, As
per the Notification No. S.O. 803(E), dated
20.03.2015, issued by the Ministry of Law
and Justice (Department of Justice), the
pecuniary limits of jurisdiction of P.L.A.
were enhanced from Rs. 10,00,000/- (ten
lacs only) to Rs. 1,00,00,000/- (one crore
only) with effect from the date of
publication of the said Notification in the
Official Gazette.

16. For a ready reference, section 21
of the Code of Civil Procedure and
Notification
No.
S.O.
803(E),
dated
20.03.2015 issued by the Ministry of Law
and Justice (Department of Justice) are
being respectively quoted herein-below:

"21. Objections to jurisdiction.-
(1) No objection as to the place of suing
shall be allowed by any Appellate or
Revisional Court unless such objection was
taken in the Court of first instance at the
earliest possible opportunity and in all
cases where issues are settled at or before
such settlement, and unless there has been
a consequent failure of justice.

(2) No objection as to the
competence of a Court with reference to
the pecuniary limits of its jurisdiction
714 INDIAN LAW REPORTS ALLAHABAD SERIES
shall be allowed by any Appellate or
Revisional Court unless such objection
was taken in the Court of first instance at
the earliest possible opportunity, and, in
all cases where issues are settled, at or
before such settlement, and unless there
has been a consequent failure of justice.

(3) No objection as to the
competence of the executing Court with
reference to the local limits of its
jurisdiction shall be allowed by any
Appellate or Revisional Court unless such
objection was taken in the executing Court
at the earliest possible opportunity, unless
there has been a consequent failure of
justice."
****************

Notification No. S.O. 803(E),
dated 20.03.2015

In
exercise
of
the
powers
conferred by the third proviso to subsection (1) of Section 22-C of the Legal
Services Authorities Act, 1987 (39 of 1987)
and in supersession of the Government of
India, Ministry of Law and Justice
(Department of Legal Affairs), Notification
Number S.O. 2083(E), dated the 15th
September, 2011, published in the Gazette
of India, Extraordinary, Part II, Section 3,
sub-section (i), dated the 15th September,
2011,
the
Central
Government,
in
consultation with the Central Authority,
hereby increases the limit of the value of
the property in dispute for the purpose of
determining the jurisdiction of Permanent
Lok Adalat to "one crore rupees" with
effect from the date of publication of this
notification in the Official Gazette."

17. Shri Nagar, learned Senior
Advocate has argued on behalf of the
petitioner that since by virtue of section 22D of the Legal Services Authorities Act,
1987, the Code of Civil Procedure, 1908
shall not be applicable to the proceedings
under the said Act, the contention of Shri
J.P. Singh to the effect that objection to the
pecuniary limits of jurisdiction, if not
raised at the initial stage, shall be treated to
have been waived, is not acceptable.

18. Before dealing with the said
argument of Shri Nagar, it would be
appropriate to refer to section 22-D of the
Legal Services Authorities Act, 1987
which, for a ready reference, is reproduced
as follows:

"22-D. Procedure of Permanent
Lok Adalat.- The Permanent Lok Adalat
shall,
while
conducting
conciliation
proceedings or deciding a dispute on merit
under this Act, be guided by the principles
of natural justice, objectivity, fair play,
equity and other principles of justice, and
shall not be bound by the Code of Civil
Procedure, 1908 (5 of 1908) and the Indian
Evidence Act, 1872 (1 of 1872)."

19. The heading of the section 22-D
speaks of "Procedure of Permanent Lok
Adalat". The necessary implication of the
words used in section 22 D of the Act, is
that Permanent Lok Adalat will adopt its
own procedure while dealing with the case
and the procedure prescribed for trial of
suits, as contained in the Code of Civil
Procedure, would not be applicable.

20. However, it would be appropriate
to mention that Code of Civil Procedure,
though named as procedure, is divided
into two parts, i.e. substantive part and
the procedural part. The substantive part
of the Code of Civil Procedure contains
sections 1 to 158, whereas the procedural
part is spread from Order I to Order LI.
Section 21 of Code of Civil Procedure, as
referred
to
herein
above,
regarding
bar/stage of taking objections with regard
5 All. L.I.C., Gorakhpur & Anr. Vs. Permanent Lok Adalat, Azamgarh & Anr.
715
to pecuniary limits of jurisdiction, finds
place in the "substantive part" of the
Code of Civil Procedure and not in the
"procedural part". That is to say that
section 22-D of the Legal Services
Authorities Act, 1987 does not exclude
applicability
or
significance
of
the
substantive provisions of Code of Civil
Procedure or their soul while considering
any case, which is tried by Permanent Lok
Adalat.

21. Even otherwise, section 22-D of
the Act itself speaks that Permanent Lok
Adalat shall be guided by the principles of
Natural Justice, objectivity, fair play,
equity and other principles of justice. In the
opinion of this Court, words "natural
justice, objectivity, fair play and equity"
used in section 22-D of the Act, would
mean that whatever objections are taken by
any party to the litigation before the
Permanent Lok Adalat, the rival parties
must be aware of the same and must get an
opportunity to rebut the same at appropriate
stage. Meaning thereby, that a party cannot
be taken by surprise and the objections,
factual or legal, must be met during the
course of the trial before the first court.

22. There is no dispute about the fact
that the plea of alleged lack of pecuniary
limits of jurisdiction of the P.L.A. was
neither taken in the written statement nor
was it otherwise raised on behalf of the
petitioner, who was defendant in the
proceedings before the P.L.A. Therefore,
the effect of such omission would be fatal
to the case of the petitioner, even if we
ignore subsequent Notification dated 20th
March, 2015, which was published in the
Official Gazette on the same date as the
argument of the learned Senior Advocate is
to the effect that the case in reference was
instituted prior to issuance of the said
Notification, and therefore, on the date of
institution of proceedings, the P.L.A. was
not competent to even register the case.

23. The Supreme Court, in the case of
Om Prakash Agarwal (since deceased)
through L.R. and others vs Vishan Dayal
Rajpoot and another, reported in 2019 (14)
SCC 526, has elaborately dealt with the
effect of section 21 of C.P.C. upon
proceedings with reference to the stage of
objection to be raised in this regard.
Paragraph Nos. 57, 58 and 59 of the said
report are worth reproduction and, hence,
are being reproduced as follows:

"57.
The
policy
underlying
Section 21 of Code of Civil Procedure is
that when the case has been tried by a
court on merits and the judgment rendered,
it should not be liable to be reversed purely
on technical grounds, unless it has resulted
in failure of justice. The provisions akin to
Section 21 are also contained in Section 11
of the Suit Valuation Act, 1887 and Section
99 of the Code of Civil Procedure. This
Court had the occasion to consider the
principle behind Section 21, Code of Civil
Procedure and Section 11 of the Suit
Valuation Act, 1887 in Kiran Singh v.
Chaman Paswan AIR 1954 SC 340. In para
7 of the judgment following was laid down:
(AIR p. 342)

"7....
The
policy
underlying
Sections 21 and 99 of the Civil Procedure
Code and Section 11 of the Suits Valuation
Act is the same, namely, that when a case
had been tried by a court on the merits and
judgment rendered, it should not be liable
to be reversed purely on technical grounds,
unless it had resulted in failure of justice,
and the policy of the legislature has been to
treat
objections
to
jurisdiction
both
territorial and pecuniary as technical and
not open to consideration by an appellate
716 INDIAN LAW REPORTS ALLAHABAD SERIES
court, unless there has been a prejudice on
the
merits.
The
contention
of
the
appellants, therefore, that the decree and
judgment of the District Court, Monghyr,
should be treated as a nullity cannot be
sustained under Section 11 of the Suits
Valuation Act."

58.One more submission which
was raised in the said appeal was
considered by this Court. One of the
submission of the appellant who had
instituted the suit in the subordinate court
was that as per the revised valuation, the
appeal
against
the
decree
of
the
subordinate Judge did not lie before the
District Court but to the High Court, hence,
the judgment of the District Judge in
appeal should be ignored. The appeal in
the High Court be treated as first appeal. It
was contended that appellant has been
prejudiced in the above manner. Rejecting
the above submissions, this Court laid
down following in paras 11 and 12: (Kiran
Singh case, AIR p. 343)

"11. ... This argument proceeds
on a misconception. The right of appeal is
no doubt a substantive right, and its
deprivation is a serious prejudice; but the
appellants have not been deprived of the
right of appeal against the judgment of the
Subordinate Court. The law does provide
an appeal against that judgment to the
District Court, and the plaintiffs have
exercised
that
right.
Indeed,
the
undervaluation
has
enlarged
the
appellants' right of appeal, because while
they would have had only a right of one
appeal and that to the High Court if the suit
had been correctly valued, by reason of the
undervaluation they obtained right to two
appeals, one to the District Court and
another to the High Court. The complaint
of the appellants really is not that they had
been deprived of a right of appeal against
the judgment of the subordinate court,
which they have not been, but that an
appeal on the facts against that judgment
was heard by the District Court and not by
the High Court. This objection therefore
amounts to this that a change in the forum
of appeal is by itself a matter of prejudice
for the purpose of Section 11 of the Suits
Valuation Act.

12. The question, therefore, is,
can a decree passed on appeal by a court
which had jurisdiction to entertain it only
by reason of undervaluation, be set aside
on the ground that on a true valuation that
court was not competent to entertain the
appeal?
Three
High
Courts
have
considered the matter in Full Benches, and
have come to the conclusion that mere
change of forum is not a prejudice within
the meaning of Section 11 of the Suits
Valuation Act. Vide Kelu Achan v. Cheriya
Parvathi Nethiar 1923 SCC Online Mad
356, Moolchand Motilal v. Ram Kishen
1933 SCC Online All 2, and Ramdeo v. Raj
Narain 1948 SCC Online Pat 91. In our
judgment, the opinion expressed in these
decisions is correct."

59. The above principle has been
reiterated by this Court in Hira Lal Patni v.
Kali Nath AIR 1962 SC 199 and Bahrein
Petroleum Co. Ltd. v. P.J. Pappu AIR 1966
SC 634."

24. Similar view has been taken by
the Supreme Court in the case of Subhash
Mahadevasa Habib vs Nemasa Ambasa
Dharmadas (Dead) by LRs. and others,
reported in 2007 (13) SCC 650, reference
to paragraph No. 34 whereof can be made,
which reads as follows:

"34. It may be noted that Section
21 provided that no objection as to place
the suing can be allowed by even an
appellate or revisional court unless such
objection was taken in the court of first
5 All. L.I.C., Gorakhpur & Anr. Vs. Permanent Lok Adalat, Azamgarh & Anr.
717
instance at the earliest possible opportunity
and unless there has been a consequent
failure of justice. In 1976, the existing
Section was numbered as sub- Section (1)
and sub-Section (2) was added relating to
pecuniary jurisdiction by providing that no
objection as to competence of a court with
reference to the pecuniary limits of its
jurisdiction shall be allowed by any
appellate or revisional court unless such
objection had been taken in the first
instance at the earliest possible opportunity
and unless there had been a consequent
failure of justice. Section 21A also was
introduced in 1976 with effect from
1.2.1977 creating a bar to the institution of
any suit challenging the validity of a decree
passed in a former suit between the same
parties on any ground based on an
objection as to the place of suing. The
amendment by Act 104 of 1976 came into
force only on 1.2.1977 when O.S. No. 4 of
1972 was pending. By virtue of Section
97(1)(c) of the Amendment Act, 1976, the
said suit had to be tried and disposed of as
if Section 21 of the Code had not been
amended by adding sub-Section (2) thereof.
Of course, by virtue of Section 97(3) if
Section 21A had to be applied, if it has
application. But then, Section 21A on its
wording covers only what it calls a defect
as to place of suing."

25. Reference to another decision of
the Supreme Court in the case of R.S.D.V.
Finance Co. Pvt. Ltd. Vs Shree Vallabh
Glass Works Ltd, reported in 1993 (2) SCC
130 , can also be made with reference to
concept of consequent failure of justice.

26. Learned counsel for respondent
No. 2 has also relied upon the judgment of
Madras High Court in the case of Appat
Krishna Poduval vs Lakshmi Nathiar and
others, reported in AIR (37) 1950 Madras
751, in which it was held as under:-

"8. ...........................The learned
District Munsif has dealt with this aspect of
the case elaborately and I do not think it
necessary to reiterate the reasons which he
has given for rejecting the contention
relying on the following observations in
Kumaran Nambiar v. Ramunni, 1988-1
M. D. J. 193: (A. I. R. (25) 1998 Mad.
257):

"To treat want of territorial or
pecuniary jurisdiction as amounting to
incompetency, seems incompatible with the
idea underlying the two statutory pro-
visions mentioned above (S. 11, Suita
Valuation Act and S. 21, Civil P C.). These
sections
provide
that
even had
the
objection not been waived, that is to say,
had been taken in the Court of first
instance, the presence of a further element
is essential, viz. that there has been
consequent failure of justice. The principle
that they appear to embody is that these
defects of jurisdiction are not fundamental
in character and are no more than
irregularities in the exercise of jurisdiction."

9. In this case I do not see any
justification for holding that there has been a
failure of justice by reason of the claim not
having been in respect of the entire amount
due for all the three thavzahis but only in
respect of two thavazhis represented by the
plaintiffs and I do not see much substance in
this point and especially when the petitioner
who raised this point at the time of the trial
but did not take it up in appeal."

27. Learned counsel for respondent No.
2 has also placed reliance upon the judgment
of Supreme Court in the case of Kiran Singh
and others vs. Chaman Paswan and others,
reported in AIR 1954 SC 340 holding that-
718 INDIAN LAW REPORTS ALLAHABAD SERIES

...........

"With reference to objections
relating to territorial jurisdiction, section
21 of the Civil Procedure Code enacts that
no objection to the place of suing should be
allowed by an appellate or revisional
Court, unless there was a consequent
failure of justice.

It is the same principle that has
been adopted in section 11 of the Suits
Valuation Act with reference to pecuniary
jurisdiction. The policy underlying sections
21 and 99 of the Civil Procedure Code and
section 11 of the Suits Valuation Act is the
same, namely, that when a case had been
tried by a Court on the merits and
judgment rendered, it should not be liable
to be reversed purely on technical grounds,
unless it had resulted in failure of justice,
and the policy of the Legislature has been
to treat objections to jurisdiction both
territorial and pecuniary as technical and
not open to consideration by an appellate
Court, unless there has been a prejudice
on the merits. The contention of the
appellants, therefore, that the decree and
judgment of the District Court, Monghyr,
should be treated as a nullity cannot be
sustained under section 11 of the Suits
Valuation Act."

28. Further reliance has been placed
reliance upon the judgment of the Supreme
Court in the case of Koopilan Uneen's
daughter Pathumma and others vs Unee's
son Kuntalan Kutty (dead) by LRs and
others, reported in AIR 1981 SC 1683 as
well as the judgment of Supreme Court in
the case of Harshad Chiman Lal Modi vs
D.L.F.
Universal
Ltd.
and
another
reported in AIR 2005 SC 4446 wherein
same view has been taken. He has also
placed reliance upon the judgment of
Orissa High Court in the case of Surendra
Mahanti vs Ghasiram Mahanti and
others, reported in AIR 1996 Orissa 172
reiterating the same view in the light of
miscarriage of justice and also upon the
judgment of High Court of Himachal
Pradesh in the case of Ajay Singh
(deceased by Lrs.) and etc. vs Tikka
Brijendra Singh and others etc. reported in
AIR 2007 Himachal Pradesh 52, where the
same
proposition
of
law
has
been
reiterated.

29. In this regard, concept of
"Waiver" should also be reiterated which is
an intentional relinquishment of a
known legal right. In the present case, the
petitioner had a legal right to raise
objections regarding pecuniary limits of
jurisdiction immediately after registration
of the case, or even thereafter. However,
for the reasons best known to it, the said
objection was admittedly not raised, and
therefore, the same shall be deemed to have
been waived.

30. Reference to judgement of
Supreme Court in the case of ARCE
Polymers Private Limited vs Alphine
Pharmaceuticals Private Limited and
others reported in 2022 (2) SCC 221, can
be made, paragraph Nos. 16 and 17 of
which read as follows:

"16. Waiver is an intentional
relinquishment of a known right. Waiver
applies when a party knows the material
facts and is cognizant of the legal rights in
that matter, and yet for some consideration
consciously abandons the existing legal
right,
advantage,
benefit,
claim
or
privilege. Waiver can be contractual or by
express conduct in consideration of some
compromise. However, a statutory right
may also be waived by implied conduct,
like, by wanting to take a chance of a
favourable decision. The fact that the other
5 All. L.I.C., Gorakhpur & Anr. Vs. Permanent Lok Adalat, Azamgarh & Anr.
719
side
has
acted
on
it,
is
sufficient
consideration.

17. It is correct that waiver being
an intentional relinquishment is not to be
inferred by mere failure to take action, but
the present case is of repeated positive acts
post the notices under Sections 13(2) and
(4) of the SARFAESI Act. Not only did the
Borrower not question or object to the
action of the Bank, but it by express and
deliberate conduct had asked the Bank to
compromise its position and alter the
contractual terms. The Borrower wrote
repeated request letters for restructuring of
loans, which prayers were considered by
the Bank by giving indulgence, time and
opportunities. The Borrower, aware and
conscious of its rights, chose to abandon
the statutory claim and took its chance and
even procured favourable decisions. Even
if we are to assume that the Borrower did
not waive the remedy, its conduct had put
the Bank in a position where they have lost
time, and suffered on account of delay and
laches, which aspects are material. Action
on the Subject Property was delayed by
more than a year as at the behest of the
Borrower, the Bank gave them a long rope
to regularise the account. To ignore the
conduct of the Borrower would not be
reasonable to the Bank once third party
rights
have
been
created.
In
this
background, the principle of equitable
estoppel as a rule of evidence bars the
Borrower from complaining of violation."

31. Shri J.P. Singh has further relied
upon the judgment of Supreme Court in the
case of Krishna Bahadur vs M/s Purna
Threatre and others, reported in AIR 2004
SC 4282, paragraph Nos. 8 and 9 whereof
are reproduced as under:

"8. The principle of waiver
although is akin to the principle of
estoppel; the difference between the two,
however, is that whereas estoppel is not a
cause of action; it is a rule of evidence;
waiver is contractual and may constitute a
cause of action; it is an agreement between
the parties and a party fully knowing of its
rights has agreed not to assert a right for a
consideration.

9. A right can be waived by the
party
for
whose
benefit
certain
requirements or conditions had been
provided for by a statute subject to the
condition that no public interest is involved
therein. Whenever waiver is pleaded it is
for the party pleading the same to show
that an agreement waiving the right in
consideration of some compromise came
into being. Statutory right, however, may
also be waived by his conduct."

32.

Learned
counsel
for
the
respondent No.2 has also placed reliance
upon the judgment of Supreme Court in the
case of M/s Power Control Appliance and
others vs Sumeet Machines Pvt. Ltd.
reported in 1994 (2) SCC 448. Paragraph
No. 26 of the said judgement is reproduced
as follows:

"26. Acquiescence is sitting by,
when another is invading the rights and
spending money on it. It is a course of
conduct inconsistent with the claim for
exclusive rights in a trade mark, trade
name etc. It implies positive acts; not
merely silence or inaction such as is
involved in laches. In Harcourt v. White
(1860)28 Beav 303, Sr. John Romilly said:
"It is important to distinguish mere
negligence and acquiescence." Therefore,
acquiescence is one facet of delay. If the
plaintiff stood by knowingly and let the
defendants build up an important trade
until it had become necessary to crush it,
then the plaintiffs would be stopped by their
720 INDIAN LAW REPORTS ALLAHABAD SERIES
acquiescence. If the acquiescence in the
infringement amounts to consent, it will be
a complete defence as was laid down in
Mouson (J. G.) & Co. v. Boehm (1884) 26
Ch D 406. The acquiescence must be such
as to lead to the inference of a licence
sufficient to create a new right in the
defendant as was laid down in Rodgers v.
Nowill, (1847) 2 De GM &G 614."

33. Shri J.P. Singh has, apart from
arguing that the objection to pecuniary
limits of jurisdiction was not raised by the
petitioner before the court below, submitted
that even if, at the time of institution of
proceedings, the P.L.A., financial limits
were confined to Rs. 10,00,000/- only
(rupees ten lac only), there would not be
any consequent failure of justice, if the
claim of Rs. 14,00,000/- (rupees fourteen
lac) has been finally allowed by the P.L.A.
particularly, when the financial limits had
already been enhanced to Rs. 1,00,00,000/-
(rupees one crore), vide Notification dated
20th March, 2015.

34. I deal with this aspect of the matter
and find that insofar as the effect of Notification
dated 20th March, 2015 is concerned,
admittedly, the case in reference was decided
by the P.L.A. in the year 2016. That is to say
that it was entertained and judicial mind was
applied on the facts and circumstances
involved in the case at the time when the
pecuniary limits of jurisdiction were already
enhanced from Rs.10,00,000/- (rupees ten
lac) to Rs.1,00,00,000/- (rupees one crore).
Therefore, on the date of its decision, the P.L.A.
had financial competence to adjudicate upon
the claim of respondent No. 2, which has been
accepted and allowed under the order
impugned.

35. As per Black's Law Dictionary
(7th Edition) by Bryan A. Garner, Editor in
Chief, the word "Entertain" has been
defined as "to bear in mind or consider,
to give judicial consideration to". The
New Lexicon Webster's Dictionary of the
English
Language
defines
the
word
"Entertain" as "to give thought or
consideration to" and "to have in one's
mind". The Chambers Dictionary (10th
Edition) explains the word "Entertain" as
"to keep or hold in the mind" and "to
receive and take into consideration".

36. Expression "Institute" is not
synonymous
with
the
expression
"Entertain", the Supreme Court in the
case of Martin and Harris Limited vs
Sixth Additional District Judge and
others, reported in 1998 (1) SCC 732
interpreted the expression "Entertain" in
section 21 (1) (a) of the U.P. Urban
Buildings (Regulation of Letting, Rent and
Eviction) Act, 1972, to mean entertaining
the ground for consideration for the
purpose of adjudication on merits and not
on any stage prior throughout.

37.