Permanent Lok Adalats for Public Utility Services in India

An Analytical Study of Permanent Lok Adalats for Public Utility Services under Indian Law

Introduction

The Indian legal system, burdened with a considerable backlog of cases, has embraced Alternative Dispute Resolution (ADR) mechanisms to ensure speedier justice. A significant innovation in this domain is the establishment of Permanent Lok Adalats (PLAs) for Public Utility Services (PUS) through the Legal Services Authorities (Amendment) Act, 2002, which inserted Chapter VI-A into the Legal Services Authorities Act, 1987 (hereinafter "LSA Act").[1] These PLAs are designed to provide a pre-litigation mechanism for conciliation and settlement of disputes concerning essential public utilities, thereby offering an accessible and efficient grievance redressal forum for citizens. This article critically examines the legal framework, jurisdiction, procedure, and judicial interpretation surrounding PLAs for PUS in India, drawing extensively from statutory provisions and landmark case law.

Establishment, Objectives, and Constitutional Mandate

Chapter VI-A of the LSA Act, titled "Pre-litigation Conciliation and Settlement," was introduced with the objective of settling disputes related to public utility services urgently, even at the pre-litigation stage, thereby reducing the workload of regular courts.[2] Section 22-B of the LSA Act empowers the Central Authority or State Authorities to establish PLAs for exercising jurisdiction over one or more public utility services.[3]

The constitutional validity of Chapter VI-A (Sections 22-A to 22-E) was challenged in Bar Council Of India v. Union Of India[4] on grounds of arbitrariness and violation of Article 14 of the Constitution. The Supreme Court upheld the provisions, emphasizing that PLAs are statutory bodies designed to complement existing judicial forums and are rooted in Article 39-A of the Constitution, which mandates the state to provide free legal aid and ensure accessible justice. The Court affirmed that the mechanism of PLAs for pre-litigation conciliation and settlement in disputes concerning PUS is a constitutionally sound measure.[4] The Rajasthan High Court in Municipal Council, Tonk v. Serve Seva Sansthan Tonk & Ors.[5] also highlighted the societal importance of this amendment in addressing consumer helplessness against public bodies providing utility services.

Definition and Scope of "Public Utility Services"

Section 22-A(b) of the LSA Act defines "public utility service" (PUS) to include:

  • Transport service for the carriage of passengers or goods by air, road or water;
  • Postal, telegraph or telephone service;
  • Supply of power, light or water to the public by any establishment;
  • System of public conservancy or sanitation;
  • Service in hospital or dispensary; or
  • Insurance service.
Furthermore, this definition allows the Central or State Government to declare, by notification in the public interest, any other service as a PUS for the purposes of Chapter VI-A.[1, 6] This inclusive definition ensures a wide ambit for PLAs to address grievances across various essential services. The inclusion of "insurance service" has been noted in several judicial pronouncements.[3, 6, 7] Some High Court materials also indicate potential state-level inclusions like "Housing and Estates" and "Banking and Financial" services.[8]

Jurisdiction of Permanent Lok Adalats for Public Utility Services

Pre-litigation Nature

A crucial aspect of PLA jurisdiction is its pre-litigation character. Section 22-C(1) of the LSA Act stipulates that any party to a dispute may make an application to the PLA for settlement before the dispute is brought before any court.[1] The Supreme Court in Bar Council of India v. Union Of India clarified that the "sine qua non of taking cognizance of a dispute concerning public utility service by the Permanent Lok Adalat is that neither party to a dispute has approached the civil court."[9] This addresses concerns that service providers might preempt consumers from accessing other judicial fora.[9]

Pecuniary and Subject-Matter Jurisdiction

PLAs have jurisdiction to entertain disputes concerning PUS up to a specified pecuniary limit, which is currently Rupees One Crore as per government notifications. They cannot, however, take cognizance of any matter relating to an offence not compoundable under any law (Proviso to Section 22-C(1) LSA Act). The subject matter must pertain to a "public utility service" as defined under Section 22-A(b).

Interaction with Other Fora and Statutory Remedies

The jurisdiction of PLAs, while specialized, must be understood in conjunction with other available remedies. In Interglobe Aviation Limited v. N. Satchidanand, the Supreme Court clarified that PLAs are specialized tribunals and not "courts" in the traditional sense; thus, exclusive jurisdiction clauses in contracts referring to "courts" do not oust the jurisdiction of PLAs.[10] However, where specific statutes provide for a distinct mechanism of appeal or redressal, the jurisdiction of the PLA may be curtailed. For instance, in Punjab State Power Corporation Ltd. And Another Petitioners v. Chairman, Permanent Lok Adalat For Public Utility Services, Faridkot And Another S, the Punjab & Haryana High Court held that the PLA had no jurisdiction to decide a dispute concerning unauthorized use of electricity when the Electricity Act, 2003, provided a specific appellate remedy under Section 127 against an order passed under Section 126.[11] A similar view was expressed in Punjab State Power Corporation Limited And Others S v. Amandeep Singh And Another S regarding theft of electricity.[12]

Procedural Framework: The Dual Role of Conciliation and Adjudication

The procedure before the PLA is unique, combining conciliation and, if necessary, adjudication. This dual role distinguishes PLAs under Chapter VI-A from Lok Adalats constituted under Section 19 of the LSA Act, which primarily have a conciliatory role and cannot adjudicate on merits if parties fail to reach a settlement.[13, 14]

Mandatory Conciliation

Upon receiving an application, the PLA is mandated by Section 22-C(3) to direct each party to file written statements and thereafter initiate conciliation proceedings (Section 22-C(4)). The PLA assists the parties in reaching an amicable settlement (Section 22-C(5)) and may propose terms of settlement (Section 22-C(6)). The Supreme Court in Canara Bank v. G.S. Jayarama unequivocally held that conciliation proceedings under Section 22-C are mandatory and must precede any adjudicatory action.[15] Bypassing conciliation, even if one party does not participate, is contrary to the legislative framework.[15] The emphasis on settlement is the "main theme" of PLAs for PUS.[1] The Karnataka High Court in Bajaj Allianz Insurance Co. Ltd., v. Madhava Nair And Others cautioned that the PLA "must not give an impression to any of the disputants that it from the very beginning has an adjudicatory role to play."[16]

Adjudication upon Failure of Conciliation

If the PLA opines that there exist elements of a settlement which may be acceptable to the parties, it formulates the terms of a possible settlement and gives observations to the parties for their consideration. If the parties reach an agreement, the PLA passes an award in terms thereof. However, if the parties fail to reach an agreement (Section 22-C(7)), the PLA is empowered under Section 22-C(8) to decide the dispute on merits, provided the dispute does not relate to any offence.[1] This adjudicatory power is a significant feature of PLAs for PUS, as affirmed by the Supreme Court in Bar Council Of India v. Union Of India[4, 17] and reiterated in Canara Bank v. G.S. Jayarama.[15] The Supreme Court in Life Insurance Corporation Of India v. Suresh Kumar also noted that if conciliation fails, the PLA can adjudicate.[18]

Procedure and Powers

Section 22-D of the LSA Act states that the PLA, while conducting conciliation proceedings or deciding a dispute on merits, shall 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, and the Indian Evidence Act, 1872.[1] This flexible procedure is intended to facilitate quick resolution. However, certain limitations on PLA powers have been judicially identified. For example, the Punjab & Haryana High Court in AVTAR SINGH AND ORS v. THE MANAGING DIRECTOR UHBVNL AND ORS held that a PLA does not have the power or jurisdiction to pass interim restraint orders while dealing with an application under Section 22-C(3) to Section 22-C(7), i.e., during the conciliation stage.[19]

Award of the Permanent Lok Adalat

Finality and Binding Nature

Section 22-E(1) of the LSA Act accords finality and a binding nature to every award of the PLA, whether made on merits or in terms of a settlement agreement. It is binding on all parties to the dispute and persons claiming under them.[6]

Deemed Decree of a Civil Court

Under Section 22-E(2), every award of the PLA is deemed to be a decree of a civil court. This provision facilitates the execution of PLA awards.

Non-Challengeability

Section 22-E(4) explicitly states that every award made by the PLA shall be final and shall not be called in question in any original suit, application, or execution proceeding.[6] This provision underscores the legislative intent to provide a conclusive dispute resolution mechanism.

Judicial Review

Despite the finality clause, the awards of PLAs are subject to the supervisory jurisdiction of the High Courts under Articles 226 and 227 of the Constitution of India. The Supreme Court in Bar Council Of India v. Union Of India acknowledged that this overarching supervisory authority provides a remedy against potential overreach or injustice by PLAs.[4] This ensures that PLAs remain accountable and their decisions are subject to higher judicial scrutiny if they act without jurisdiction, in violation of principles of natural justice, or if the award is patently erroneous. Several High Court decisions demonstrate the exercise of this writ jurisdiction to set aside PLA awards on grounds such as lack of jurisdiction[11, 12] or procedural impropriety.

Judicial Interpretation and Key Precedents

The judiciary has played a vital role in shaping the understanding and functioning of PLAs for PUS. The Supreme Court's decision in Bar Council Of India v. Union Of India[4] is foundational, upholding their constitutional validity and clarifying their role. Canara Bank v. G.S. Jayarama[15] is critical for its emphasis on the mandatory nature of conciliation proceedings before adjudication. Interglobe Aviation Limited v. N. Satchidanand[10] clarified the PLA's jurisdiction vis-à-vis contractual clauses and its distinct nature from "courts." It also underscored that even low-cost carriers have non-negotiable obligations towards passenger welfare. Cases like State Of Punjab And Another v. Jalour Singh And Others[13] are important for distinguishing PLAs (which can adjudicate post-conciliation failure under Chapter VI-A) from Lok Adalats under Section 19 (which are purely conciliatory). High Court judgments, such as those from Punjab & Haryana,[11, 12, 19] Rajasthan,[5] and Kerala,[2] have provided nuanced interpretations on jurisdictional limits, procedural requirements, and the objectives of PLAs. For instance, the distinction between different types of Lok Adalats was also highlighted in Sunil Gandhi And Others Petitioners v. Sidh Pith Sri Hanuman Mandir, where an award by a "Permanent and Continuous Lok Adalat" was distinguished from one by a PLA for PUS.[20]

Challenges and Efficacy

While PLAs for PUS represent a significant step towards accessible justice, certain challenges remain.

Balancing Speed with Justice

The emphasis on speedy resolution must be balanced with the principles of natural justice and fair hearing, especially when PLAs move from conciliation to adjudication. The non-applicability of CPC and Evidence Act, while promoting flexibility, requires careful handling by the PLA members to ensure fairness.

Awareness and Accessibility

Ensuring widespread awareness among the public about the existence and functioning of PLAs is crucial for their optimal utilization. Physical and procedural accessibility for ordinary citizens, particularly in remote areas, needs continuous attention.

Ensuring True Conciliation

The success of the PLA mechanism heavily relies on genuine efforts towards conciliation. There is a need to ensure that the conciliation stage is not treated as a mere formality before proceeding to adjudication, a point underscored by the Supreme Court in Canara Bank.[15] The composition of PLAs, including a judicial officer and persons with experience in public utility services (Section 22-B(2)), is intended to foster informed and fair decision-making.[3, 5]

Conclusion

Permanent Lok Adalats for Public Utility Services, established under Chapter VI-A of the Legal Services Authorities Act, 1987, are a vital component of India's ADR landscape. They offer a specialized, pre-litigation forum for resolving disputes related to essential services, blending mandatory conciliation with adjudicatory powers upon failure of settlement. Judicial pronouncements, particularly from the Supreme Court, have robustly affirmed their constitutional validity and delineated their procedural contours. While challenges related to awareness, accessibility, and the delicate balance between speed and substantive justice persist, PLAs hold significant promise in empowering consumers and ensuring accountability from public utility service providers. Their continued efficacy will depend on strict adherence to statutory mandates, vigilant judicial oversight, and a commitment to the core principles of conciliation and fair adjudication.

References