(1) No suit shall be brought on behalf of the Panchayat except as a last resort, when other means of obtaining relief have failed.
Explanation:- “Suit” means a suit by or against or affecting Panchayat or an officer of Panchayat in his official capacity, or which is brought or defended by such officer at the expense of Panchayat and includes an appeal, an application for revision, review or execution of decree and any civil or judicial proceeding in which the Panchayat or an officer of the Panchayat in his official capacity is a party or has any interest.
(2) The proposed defendant shall be given ample opportunity of stating his view of the case and of coming to some agreement for the settlement of the claim of the Panchayats out of Court.
(3) No person having a just claim against the Panchayat should be compelled to report to litigation to enforce the same.
(4) Communications made to the opposite party on the subject matter in respect of which it is possible that a suit may ensue shall be handed “without prejudice” and if made orally, shall be stated to be made “without prejudice.”
(5) No suit on behalf of the Panchayat shall be instituted without the previous sanction of the District Panchayat Officer in case of Gram Panchayat or the Deputy Commissioner in case of Panchayat Samiti or the Director of Panchayati Raj in case of Zila Parishad. While according the sanction, the District Panchayat Officer or the Deputy Commissioner or the Director of Panchayati Raj, as the case may be, shall study the pros and cons of the suit in question and examine the following facts which shall be submitted by the concerned Panchayat, namely:-
(a) the circumstances which in his opinion render the institution of the suit necessary, and precisely when or where these occurred ;
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(b) the subject of the claim and relief sought ;
(c) the steps which have been taken to obtain satisfaction of the claim without bringing a suit ;
(d) the pleas or objections, if any, which have been taken or raised by the proposed defendant against the claim ;
(e) the evidence, both oral and documentary, which is believed to be obtainable and which is proposed to be adduced in support of the claim ;
(f) whether the documents, if any, referred to clause(e) are registered or not ;
(g) whether or not the circumstances of the person against whom the suit is proposed to be instituted are such as to render it likely that the execution of any decree that may be given against him, will be obtained ;
(h) the evidence, both oral and documentary, which, so far as is known, the defendant will be able and is likely to adduce in his defence ;
(i) whether the documents, if any, referred to in clause(h) are registered or not.
(j) any other facts which the reporting Panchayat considers material, for example, whether there are any special reasons for the institution of the suit, apart from the amount actually claimed; whether other similar claims will hinge upon its decision ; and
(k) the amount required for stamp and other expenses is available or not.
(6) Copies of all available documents referred to in the report or the documents in original shall accompany the case submitted by the respective Panchayats.