Tarun Agarwala, J.@mdashThe petitioner is a distribution franchise of Dakshinanchal Vidyut Vitran Nigam Ltd. and is authorized to operate and maintain the distribution system for supplying electricity to the consumers in the urban areas of Agra. Respondent No. 3 is a consumer of electricity having obtained a sanctioned load of 7.5 KVA for domestic purposes. It transpires that an inspection was carried out on 19th September, 2011 at the premises of respondent No. 3 and it was found that respondent No. 3 was using the domestic connection for commercial purposes, namely, for office purposes. Since the consumption of energy was being used unauthorizedly for a purpose other than for what it was given, a report was submitted by the inspection team for unauthorized use of electricity. Based on this inspection report, a provisional assessment was made by the petitioner u/s 126 of the Electricity Act, 2003 (hereinafter referred to as the Act of 2003) demanding a sum of Rs. 42,266.30. The respondents, instead of filing an appeal u/s 127 of the Act of 2003, filed an application before the Permanent Lok Adalat for the quashing of the assessment bill as well as the inspection report. The petitioner appeared and contended that the Permanent Lok Adalat had no jurisdiction to entertain such claim as it related to the unauthorized use of electricity, which was an offence and, consequently, the Permanent Lok Adalat had no jurisdiction to entertain the claim or decide the dispute on merits. The petitioner further contended that an assessment was made u/s 126 of the Act of 2003, against which an appeal lies u/s 127 of the Act of 2003 and, therefore, the respondent had a remedy under the Electricity Act, 2003. The Permanent Lok Adalat without deciding the issue of jurisdiction and without conciliating in the matter proceeded to decide the matter on merit and issued an award dated 21st June, 2012 allowing the claim by setting aside the inspection report and the assessment bill.
2. Heard Sri Ashutosh Srivastava, the learned Counsel for the petitioner and Sri M.L. Jain, the learned Counsel for respondent No. 3.
3. The learned Counsel for the petitioner submitted that a complaint relating to theft of energy was not maintainable as it was an offence and, consequently, the Permanent Lok Adalat did not have the jurisdiction to entertain or decide the dispute on merits. The learned Counsel further submitted that the primary object of the Permanent Lok Adalat was to conciliate and settle the matter at the pre-litigation stage and only upon failure of the conciliation, that it was open to the Permanent Lok Adalat to proceed and decide the matter on merits. The learned Counsel submitted that in the instant case, no effort whatsoever was made for conciliation and the Permanent Lok Adalat proceeded from the very inception as if it only had an adjudicatory role to play.
4. On the other hand, the learned Counsel for the respondent No. 3 submitted that it was a case of wrong billing, which could be raised and decided by the Permanent Lok Adalat.
5. In order to appreciate the submissions of the learned Counsel for the parties, it would be essential to refer to some of the provisions of the Legal Services Authorities Act, 1987 and The Electricity Act, 2003. Chapter VI-A of the Legal Services Authorities Act, 1987 was inserted by Act No. 37 of 2002. The title of this chapter states pre-litigation, conciliation and settlement. Section 22A(a) defines Permanent Lok Adalat to mean a Permanent Lok Adalat under sub-section (1) of section 22B. Public utility service has been defined u/s 22A(b), to mean:
(i) transport service for the carriage of passengers or goods by air, road or water; or
(ii) postal, telegraph or telephone service; or
(iii) supply of power, light or water to the public by any establishment; or
(iv) system of public conservancy or sanitation; or
(v) service in hospital or dispensary; or
(vi) insurance service,
6. Section 22C provides the procedure for raising a dispute. For facility, the entire provision of section 22C is extracted hereunder:
22-C. Cognizance of cases by Permanent Lok Adalat.--(1) Any party to a dispute may, before the dispute is brought before any Court, make an application to the Permanent Lok Adalat for the settlement of dispute:
Provided that the Permanent Lok Adalat shall not have jurisdiction in respect of any matter relating to an offence not compoundable under any law:
Provided further that the Permanent Lok Adalat shall not have jurisdiction in the matter where the value of the property in dispute exceeds ten lakh rupees:
Provided also that the Central Government, may, by notification, increase the limit of ten lakh rupees specified in the second proviso in consultation with the Central Authority.
(2) After an application is made under sub-section (1) to the Permanent Lok Adalat, no party to that application shall invoke jurisdiction of any Court in the same dispute.
(3) Where an application is made to a Permanent Lok Adalat under sub-section (1), it:
(a) shall direct each party to the application to file before it a written statement, stating therein the facts and nature of dispute under the application, points or issues in such dispute and grounds relied in support of, or in opposition to, such points or issues, as the case may be, and such party may supplement such statement with any document and other evidence which such party deems appropriate in proof of such facts and grounds and shall send a copy of such statement together with a copy of such document and other evidence, if any, to each of the parties to the application;
(b) may require any party to the application to file additional statement before it at any stage of the conciliation proceedings;
(c) shall communicate any document or statement received by it from any party to the application to the other party, to enable such other party to present reply thereto.
(4) When statement, additional statement and reply, if any, have been filed under sub-section (3), to the satisfaction of the Permanent Lok Adalat, it shall conduct conciliation proceedings between the parties to the application in such manner as it thinks appropriate taking into account the circumstances of the dispute.
(5) The Permanent Lok Adalat shall, during conduct of conciliation proceedings under sub-section (4), assist the parties in their attempt to reach an amicable settlement of the dispute in an independent and impartial manner.
(6) It shall be the duty of every party to the application to cooperate in good faith with the Permanent Lok Adalat in conciliation of the dispute relating to the application and to comply with the direction of the Permanent Lok Adalat to produce evidence and other related documents before it.
(7) When a Permanent Lok Adalat, in the aforesaid conciliation proceedings, is of opinion that there exist elements of settlement in such proceedings which may be acceptable to the parties, it may formulate the terms of a possible settlement of the dispute and give to the parties concerned for their observations and in case the parties reach at an agreement on the settlement of the dispute, they shall sign the settlement agreement and the Permanent Lok Adalat shall pass an award in terms thereof and furnish a copy of the same to each of the parties concerned.
(8) Where the parties fail to reach at an agreement under sub-section (7), the Permanent Lok Adalat shall, if the dispute does not relate to any offence, decide the dispute.
7. A perusal of the aforesaid provision provides that any party to a dispute may make an application to the Permanent Lok Adalat for the settlement of the dispute before such dispute is brought before any Court. The provision also limits the jurisdiction of the Permanent Lok Adalat, namely, that the Permanent Lok Adalat would not have any jurisdiction to deal with any matter relating to an offence not compoundable under any law. The second proviso puts a further cap on the pecuniary jurisdiction, which provides that the Permanent Lok Adalat will not have jurisdiction where the value of the property in dispute exceeds Rs. 10 lacs, which has now been enhanced to Rs. 25 lacs. Sub-section (2) of section 22C further puts an embargo on the parries to a dispute, namely, that after an application has been made before the Permanent Lok Adalat, the parties could not invoke the jurisdiction of any other Court with regard to the same dispute.
8. Section 22C(3) provides the procedure to be followed by the Permanent Lok Adalat, which relates to the filing of a written statement by each party stating therein the facts and nature of the dispute and highlighting the points or issues in such dispute and the documents and other evidence in support of their claim or objection. The Permanent Lok Adalat under sub-clause (4) of section 22C may require any party to the application to file an additional statement or document and upon completion of the aforesaid procedure, the Permanent Lok Adalat under sub-clause (5) of section 22C would proceed with the conciliation proceedings and assist the parties to reach an amicable settlement in relation to the dispute. During the conciliation proceedings, the Permanent Lok Adalat is obliged to assist the parties in an independent and impartial manner. In the event, there is likelihood of a settlement, the Permanent Lok Adalat under sub-clause (7) of section 22C is required to formulate the terms of a possible settlement of the dispute and where parties reach an agreement, such settlement shall be drawn and signed, which will become an award. Sub-clause (8) of section 22C provides that where parties fail to reach an agreement and if the dispute does not relate to an offence, in that case, the Permanent Lok Adalat will decide the dispute on merit.
9. The validity of Chapter-VI-A of the Legal Services Authorities Act was upheld by the Supreme Court in the case of S.N. Pandey v. Union of India and another 2012 (8) SCC 261 and
10. In Bar Council of India''s case (supra) the Supreme Court held that it should be kept in mind that the dispute relating to public utility services have been entrusted to a Permanent Lok Adalat only if the process of conciliation and settlement fails. The emphasis is on settlement in respect of disputes concerning public utility services through the medium of Permanent Lok Adalat and that settlement of dispute between the parties in matters of public utility services is the main theme. The Supreme Court further held that where despite the endeavour and efforts of the Permanent Lok Adalat fails and the settlement between the parties does not come through, the said dispute is required to be determined and adjudicated by the Permanent Lok Adalat to avoid delay in the adjudication of disputes relating to public utility services.
11. Similarly, in
12. In the instant case, the Court finds that from a perusal of the award that no effort whatsoever was made by the Permanent Lok Adalat to settle the dispute through conciliation. It is clear that the Permanent Lok Adalat has proceeded from the very inception as it had only an adjudicatory role to play. The procedure adopted by the Permanent Lok Adalat was in total violation of the mandate given under Chapter VI-A of the State Legal Services Authorities Act and the decisions of the Supreme Court in the case of Bar Council of India (supra) and United India Insurance Company Ltd. (supra). On this short ground the award cannot be sustained.
13. However, the matter does not end here. The question is, whether such an application questioning the assessment order, which relates to an offence could be entertained and decided on merits by the Permanent Lok Adalat. In this regard, the provisions of the Act of 2003, is required to be considered.
14. Section 126 of the Act of 2003 relates to making a provisional assessment where it is found that a consumer indulging in unauthorized use of electricity. For facility, the said provision is extracted hereunder:
126. Assessment.--(1) If on an inspection of any place or premises or after inspection of the equipments, gadgets, machines, devices found connected or used, or after inspection of records maintained by any person, the assessing officer comes to the conclusion that such person is indulging in unauthorised use of electricity, he shall provisionally assess to the best of his judgment the electricity charges payable by such person or by any other person benefited by such use.
(2) The order of provisional assessment shall be served upon the person in occupation or possession or in charge of the place or premises in such manner as may be prescribed.
(3) The person, on whom an order has been served under sub-section (2), shall be entitled to file objections, if any, against the provisional assessment before the assessing officer, who shall, after affording a reasonable opportunity of hearing to such person, pass a final order of assessment within thirty days from the date of service of such order of provisional assessment, of the electricity charges payable by such person.
(4) Any person served with the order of provisional assessment may, accept such assessment and deposit the assessed amount with the licensee within seven days of service of such provisional assessment order upon him:
(5) If the assessing officer reaches to the conclusion that unauthorised use of electricity has taken place, the assessment shall be made for the entire period during which such unauthorised use of electricity has taken place and if, however, the period during which such unauthorised use of electricity has taken place cannot be ascertained, such period shall be limited to a period of twelve months immediately preceding the date of inspection.;
(6) The assessment under this section shall be made at a rate equal to twice the tariff applicable for the relevant category of services specified in sub-section (5).
Explanation.--For the purposes of this section:
(a) "assessing officer" means an officer of a State Government or Board or licensee, as the case may be, designated as such by the State Government;
(b) "unauthorised use of electricity" means the usage of electricity:
(i) by any artificial means; or
(ii) by a means not authorised by the concerned person or authority or licensee; or
(iii) through a tampered meter; or
(iv) for the purpose other than for which the usage of electricity was authorized; or
(v) for the premises or areas other than those for which the supply of electricity was authorised.
15. Explanation (b)(iv) provides that the usage of electricity for the purpose other than for which the usage of electricity was authorized would amount to unauthorized use of electricity.
16. In the instant case, an inspection was made and it was found that the consumer, who was granted a load for domestic purposes was using it for commercial purposes and, therefore, the usage of electricity was being used for a purpose other than for which the usage was authorized. On this basis, an assessment bill was issued u/s 126 of the Act of 2003.
17. Part-XIV of the Electricity Act relates to offences and penalties. Section 135 of the Act of 2003 which comes under Part-XIV provides that whoever dishonestly uses electricity for the purposes for which the usage of electricity was authorized so as to abstract or consume electricity shall be punished with an imprisonment for a term. For facility, section 135(i)(e) is extracted hereunder:
135(1) Theft of electricity.- Whoever, dishonestly:
.... (e) uses electricity for the purpose other than for which the usage of electricity was authorized,
So as to abstract or consume or use electricity shall be punishable with imprisonment for a term which may extend to three years or with fine or with both.
18. In the light of the provision of section 126 read with section 135 of the Electricity Act, it is apparently clear, that usage of electricity for the purposes other than for which the usage of electricity was authorized amounts to a theft of electricity and, is an offence punishable with an imprisonment for a specified term.
19. The first proviso to section 22-C(1) of the Legal Services Authorities Act provides that the Permanent Lok Adalat shall not have jurisdiction in respect of any matter relating to an offence not compoundable under any law. In the instant case, admittedly the matter is an offence but the proviso to section 22C directs that if the matter relates to an offence which is not compoundable by law, in that event, the Permanent Lok Adalat will not have any jurisdiction.
20. Section 152 of the Electricity Act provides for compounding of certain offences. For facility, section 152 is extracted hereunder:
152. Compounding of offences.--(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), the Appropriate Government or any officer authorised by it in this behalf may accept from any consumer or person who committed or who is reasonably suspected of having committed an offence of theft of electricity punishable under this Act, a sum of money by way of compounding of the offence as specified in the Table below:
Provided that the Appropriate Government may, by notification in the Official Gazette, amend the rates specified in the Table above.
(2) On payment of the sum of money in accordance with sub-section (1), any person in custody in connection with that offence shall be set at liberty and no proceedings shall be instituted or continued against such consumer or person in any Criminal Court.
(3) The acceptance of the sum of money for compounding an offence in accordance with sub-section (1) by the Appropriate Government or an officer empowered in this behalf shall be deemed to amount to an acquittal within the meaning of section 300 of the Code of Criminal Procedure, 1973 (2 of 1974).
(4) The compounding of an offence under sub-section (1) shall be allowed only once for any person or consumer.
21. A perusal of the aforesaid provision will clearly indicate that an offence relating to theft of electricity is compoundable.
22. In the light of the aforesaid provision, an application by a consumer in a matter relating to theft of energy can be filed before the Permanent Lok Adalat. The Permanent Lok Adalat will have jurisdiction to entertain such an application for conciliation and for settlement of the said dispute, in view of first proviso to section 22C of the Act.
23. Further, the Court is of the opinion that where the conciliation fails between the parties and no settlement is arrived at, the Permanent Lok Adalat cannot proceed any further nor can it decide the matter on merits u/s 22C(viii) of the Act. The reason is not far to see. The adjudicatory role, which the Permanent Lok Adalat is required to follow is only with regard to a dispute, which does not relate to an offence under sub-clause (viii). The words used are "does relate to an offence" which is totally different and distinct from the words used under the 1st proviso to section 22C(1), namely, "matter relating to an offence not compoundable in law".
24. Thus, where a dispute which is an offence, but is compoundable can be entertained by the Permanent Lok Adalat for the purpose of conciliation and settlement but, upon failure, the Permanent Lok Adalat cannot proceed to decide such matters on merit, if it relates to an offence irrespective of the fact as to whether it is compoundable or not. If the dispute relates to an offence, the Permanent Lok Adalat will have no jurisdiction to decide the matter on merits.
25. In the light of the aforesaid, the matter relating to theft of energy is an offence under the Electricity Act, 2003 and even though such offence is compoundable, the Permanent Lok Adalat has the jurisdiction to entertain the dispute for the purpose of conciliation and settlement but upon its failure, the Permanent Lok Adalat could not proceed to decide the matter on merits. In the present case, the Permanent Lok Adalat has decided the matter-on merits, which is without jurisdiction. In the light of the aforesaid, the impugned award of the Permanent Lok Adalat cannot be sustained and is quashed. The writ petition is allowed.
Let a certified copy of this order be circulated by the Registrar General to all the Permanent Lok Adalats within four weeks for information and necessary action.
