Lok Adalats to address pendency of public utility services cases should be constituted in accordance with LSA Act: Delhi HC

The Delhi High Court has held that the Lok Adalats established to address the pendency of cases relating to public utility services etc. are to be constituted in accordance with the provisions of Legal Services Authorities Act 1987 and not de-hors that statute (Tata Power Delhi Distribution Ltd vs Rampal)..The judgement was passed by a single Judge Bench of Justice Anup J Bhambhani. .The Petitioner, Tata Power Delhi Distribution Ltd, had disconnected the electricity connection of the Respondent, Rampal for the alleged non-payment of about Rs 8 lakhs towards the consumption of electricity..It was subsequently discovered by the Petitioner that the Respondent had unauthorisedly restored the electricity connection. The Petitioner thus initiated proceedings under Section 126 of the Electricity Act 2003 and raised a demand of about Rs 30 lakhs on account of the unauthorised use of electricity, including misuse charges and a late payment surcharge. .The Respondent then sought an amicable settlement of this demand and made an application to the Delhi State Legal Services Authority (DSLSA) for the settlement of the dispute. .The application was referred to, what was called, the "Permanent Lok Adalat-II". .The Petitioner pointed out that the prayer in the application was for settlement and not adjudication. However, at the time of closing the matter and on account of the failure of the parties to reach a common ground, the Presiding Officer granted interim relief to the Respondent by directing that the electricity connection is not disconnected for the non-payment of misuse penalty. The forum even recorded serious, adverse observations and remarks against the Petitioner. .Aggrieved by the order, the Petitioner moved the High Court. .Broadly, the Petitioner contended as follows:.The forum in the present case was not constituted under the Legal Services Authorities Act 1987 (LSA Act) but under the directions issued in Abul Hassan and National Legal Services Authority vs. Delhi Vidyut Board & Ors. Such fora were directed to be established only to facilitate settlement of disputes by mutual agreement between parties, without having any adjudicatory powers. .Even assuming that the forum was set-up under the LSA Act, since it had only one member, its constitution was not in accordance with Section 22B(2) which required setting-up of a three-member "Permanent Lok Adalat"..In view of Section 22C(1) of the LSA Act, a Lok Adalat was barred from entertaining a matter relating to an offence which is not compoundable under any law. .Lok Adalat could not have entertained the dispute in view of Section 22C of the LSA Act which sets the maximum pecuniary jurisdiction of Rs 10 lakh. .The jurisdiction of the Lok Adalat was barred in view of Section 145 of the Electricity Act which granted exclusive jurisdiction over such matters to the assessing officer or the appellate authority under the Electricity Act..The Respondent, on the other hand, argued as follows:.Presiding Officer did not decide anything on merits. .Since the award was rendered by a Permanent Lok Adalat, it was final and binding on the parties, irrespective of whether the award was the result of a settlement or an adjudication on merits as contemplated under Section 22E of the LSA Act. .The Permanent Lok Adalat is an adjudicatory body which can decide a dispute on merits if the parties fail to reach an agreement by conciliation. .What the Court held:.After analysing the relevant case laws and the LSA Act, the Court clarified that the directions for setting-up of Lok Adalats in Abul Hassan were required to be implemented in accordance with the provisions of the LSA Act and not de-hors that statute..It was noted that in Abul Hassan, a Single Judge of the Delhi High Court had expressed the "dire need for setting-up Lok Adalats to address the huge pendency of cases relating inter-alia to public utility services". .Justice Bhambhani went on to observe,.""A meaningful reading of the aforesaid judgement shows that the directions issued by the single Judge of this court in Abul Hassan (supra) for establishment of 'permanent and continuous Lok Adalat(s)' were in fact by way of implementation of the LSA Act which, as the single Judge observed, though enacted in October 1987 was not implemented at least till November 1995; and thereafter the Supreme Court was constrained to issue directions for enforcement and implementation of the LSA Act in Supreme Court Legal Services Committee vs. Union of India & Ors."."Accordingly the directions for setting-up of Lok Adalats in Abul Hassan (supra) were required to be implemented in accordance with the provisions of the LSA Act and not de-hors that statute."Delhi High Court.The Court further discussed the difference between a Lok Adalat under Section 19 and a Permanent Lok Adalat under Section 22B, observing that while the former has no adjudicatory or judicial function, a Permanent Lok Adalat could mutate into an adjudicatory body under Section 22C in case parties failed to reach an agreement by conciliation. .In the present case, since the impugned order was of a one-member body, it did not pass muster as a Permanent Lok Adalat under Section 22B(2) of the LSA Act, which conceived it as a 3-member forum.."It may be stated here that no material has been placed on record to show as to how, and in what manner the forum came to be set-up, either by way of a notification or direction of the State Government, and therefore it is not apparent from the record as to whether the forum was intended to be a Lok Adalat or a Permanent Lok Adalat."Delhi High Court.The Court further stated that in terms of Section 22C, a Permanent Lok Adalat did not have jurisdiction in respect of a matter which relating to a non-compoundable offence and/or pertaining to a dispute of over Rs 10 lakhs..In the present case, although the offence under the Electricity Act was compoundable in nature, the quantum of the dispute exceeded the pecuniary threshold, the Court observed. .Additionally, the Court remarked that since the dispute was amenable to determination by various authorities under Electricity Act, the Presiding Officer could not have adjudicated upon the dispute after the parties failed to reach a settlement and no injunction could have been granted..Insofar as the remarks and observations made by the Presiding Officer against the Petitioner were concerned, the Court observed that the Presiding Officer was out of line in having made such adverse comments, especially since they were based upon his stated experience in some other cases.."..those who man tribunals and hold other similar quasi-judicial positions, must always ensure that the comments and observations they make in their orders are objective, well-founded, restrained and are based on the record of the concerned case; and do not take the colour of a tirade against one litigant or another, since such observations can have serious repercussions and consequences."Delhi High Court. The order by the Presiding ofifcer was thus set-aside. .The Petitioner was represented by Advocates Manish Srivastava, Shivangi Krishna..The Respondent was represented by Advocates Dr L.S. Chaudhary, Viresh Chaudhary, Parambir Singh, Manoj Kumar Bhagat..Read the Judgement: