Lok Adalat Cannot Adjudicate Disputes Relating To Offences If No Settlement Is Arrived At: Bombay High Court

The question came up in a case concerning the offence of theft of electricity under Section 135 of the Electricity Act, 2003. The Appellant-Electricity Board had registered a case under Section 135 against the Respondent, seized his existing meter and cut-off his electricity supply pending payment of Bill issued to him. In its impugned judgement, the Permanent Lok Adalat, Aurangabad had directed the petitioner to issue regular bills to the Respondent and to not disconnect his electricity supply. Significantly, the Permanent Lok Adalat had observed that it as not within its jurisdiction to pass an award to the effect that the electricity Bill issued to the Respondent was illegal. 

The Appellant-Electricity Board appealed against the impugned order and argued that the Permanent Lok Adalat had exceeded the powers vested in them. It was argued that in the wake of Section 22 (C) (8) of the 1987 Act, where the parties fail to reach an agreement under sub-section (7), the Permanent Lok Adalat, if the dispute does not relate to any offence, cannot decide the dispute. The Appellants also argued that the licensee can restore the supply of electricity after deposit of assessed amount. Per contra, the Respondent argued that Section 22 (c) (1) of the 1987 Act confers jurisdiction on the Permanent Lok Adalat to deal with a matter relating to an offence which is compoundable in law.

In answering the question whether the Permanent Lok Adalat possess jurisdiction to resolve a dispute of the present nature-where the applicant is accused of theft of electricity and is liable for prosecution under the provisions of the 2003 Act- the judgement authored by Justice Bharati Dangre peruses through Section 22 (c ) of the Legal Services Authority Act and observes that the Permanent Lok Adalat can exercise jurisdiction in respect of matters relating to compoundable offences. It notes: 

"Section 22(C) determine the jurisdiction of the Permanent Lok Adalat and it adumbrate that the Permanent Lok Adalat shall exercise jurisdiction in respect of any matter relating to an offence, which is compoundable under any law. To that extent, at first blush, the exercise of jurisdiction of the Permanent Lok Adalat in the impugned order appear to be justified since the offence under the Electricity Act are compoundable" (Para 11)

Equally importantly however, the Court explains, it is imperative for the Permanent Lok Adalat to first make an endeavour to initiative conciliation proceedings before it assumes the role of an adjudicating authority. It observes:

"However, when the procedure to be adopted by the Permanent Lok Adalat in determining the dispute before it is carefully perused, it is manifest that the exercise of powers by the Permanent Lok Adalat is in form of Pre-litigation, Conciliation and Settlement, and therefore, it is imperative for the Permanent Lok Adalat to make an endeavour to initiate conciliation proceedings before it assume the role of an adjudicating authority" (Para 11)

Further, the Court notes that when the parties fail to reach an agreement on attempting conciliation, the Permanent Lok Adalat shall proceed to decide the dispute, if the dispute does not relate to any offence. It notes:

"The first proviso to Section 22(C)(1) of the 1987 Act, provide that the Permanent Lok Adalat shall not have jurisdiction in respect of any matter relating to an offence not compoundable under any law……However, by further referring to the scheme contained in Section 22(C), it is apparent that where the conciliation failed between the parties and no settlement is arrived at, in that contingency, the Permanent Lok Adalat cannot proceed further to adjudicate dispute between the parties on merits, if the dispute relate to any offence. A distinction is made between the two clauses of Section 22 (C), being the first proviso appended to sub-section (1) of Section 22 (C), and between sub-section 8 of Section 22 (C), which imply the term "if the dispute does not relate to any offence". It is in this case, the Permanent Lok Adalat shall not adjudicate the dispute. Meaningfully read, it convey that, where a dispute brought before the Permanent Lok Adalat effecting a conciliation and settlement, but if the conciliation fail, then it is not within the power of the Permanent Lok Adalat to adjudicate the matter on merits, if it relate to an offence, despite the offence being compoundable. The irresistible conclusion, is that on a conciliation or settlement being not arrived at during the proceedings before the Permanent Lok Adalat, if the dispute relates to any offence, then the Permanent Lok Adalat can neither pass an award, in absence of a settlement being arrived at, nor it can adjudicate the said dispute and will have to stop there." ( Para 14)

Having explained the import of Section 22 (c), in the context of the present case, the Court notes that while offences under Section 135 of the Electricity Act are compoundable offences and thus the Lok Adalat will have jurisdiction to entertain an application in respect of an offence, which is compoundable. However, since no attempt was made to arrive at conciliation, the Permanent Lok Adalat had no authority to pass adjudicate the dispute since it related to "an offence." It notes: 

"The above direction in the award, is blemished on two counts; the Permanent Lok Adalat has failed to conduct conciliation proceedings, which was duty bound to conduct and it is only, if at the end of the conciliation, if an agreement is arrived at between the parties resulting into settlement of the dispute, it is within the powers of the Permanent Lok Adalat to pass an award. However, when the parties fail to reach at an agreement on attempting conciliation, the Permanent Lok Adalat shall proceed to decide the dispute, if the dispute does not relate to any offence. The impugned award lies in the teeth of sub-section (8) of Section 22(C), as the dispute raised by the applicant before the Permanent Lok Adalat, clearly relate to an offence punishable under the Electricity Act. (Para 13)

"In the light of the aforesaid statutory scheme, when the application preferred by the respondent before the Permanent Lok Adalat related to an incident, which resulted in registration of an offence in the Electricity Act, the Permanent Lok Adalat had entertained the dispute for the purpose of conciliation and settlement, but did not attempt any conciliation and in it's absence, proceeded to adjudicate the dispute, despite a bar being imposed under sub-section (8) of Section 22 (C). The Permanent Lok Adalat has, thus, clearly fallen into an error in adjudicating the dispute instituted by the applicant on it's merits, when it could not effect the conciliation/settlement between the parties. The said order, therefore, cannot be sustained." (Para 15)

The Court also places reliance on the decision of the Punjab and Haryana High Court in Dakshin Haryana Bijli Vitran Nigam Ltd. & anr. vs. Permanent Lok Adalat, Public Utility Services, Gurgaon and another, where it was held that the Lok Adalat had erroneously exercised its jurisdiction in deciding a matter under Section 154 of the Electricity Act. 

Accordingly, the Court set aside the impugned judgement of the Permanent Lok Adalat, Aurangabad. 

Case Title: Maharashtra State Electricity Distribution Company Ltd v Badrinath Pema Rathod

Coram: Justice Bharati Dangre

Citation: 2022 LiveLaw (Bom) 5

Read/Download the Judgement here