Dismissed

Executive Engineer, Dakshinanchal Vidyut Vitaran Nigam Limited and Another v. State of U.P. and Another

Allahabad HC4 Jul 2022WRIC/15897/2022

Case brief

AI extract

What is this about?

The court dismissed a writ petition challenging the constitutional validity of Section 22-A of the Legal Services Authorities Act, 1987. It held that Section 185 of the subsequent Electricity Act, 2003 does not render Chapter VI-A of the LSA Act inoperative. The court reaffirmed that Permanent Lok Adalats have wider powers and mandatory conciliation procedures before adjudication, and ruled that t

What did the court decide?

The writ petition challenging the validity of Section 22-A of the Legal Services Authorities Act, 1987 is dismissed.

Executive Engineer, Dakshinanchal Vidyut… — Public Procurement and Tenders | Allahabad HC (2022)

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Court No. - 38

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Case :- WRIT - C No. - 15897 of 2022

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Petitioner :- Executive Engineer, Dakshinanchal Vidyut Vitaran Nigam Limited And Another Respondent :- State of U.P. and Another Counsel for Petitioner :- Alok Mishra Counsel for Respondent :- C.S.C.

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Hon'ble Saumitra Dayal Singh,J.

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Heard Sri Alok Mishra, learned counsel for the petitioners and learned Standing Counsel for the State.

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Present writ petition has been filed by the Distribution Corporation. It arises from the award of the Permanent Lok Adalat, Kasganj dated 17.01.2022 passed in Case No.46 of 2021 (Smt. Pinki Yadav Vs. Executive Engineer, Electricity Distribution Division, Urban, Prabhu Park, Kasganj & Another. The petitioners also seek to assail the constitutional validity of Section 22-A(b)(iii) of Legal Services Authorities Act, 1987 (hereinafter referred to as the 'impugned Act').

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During the course of hearing, submissions were advanced as to the validity issues. Merit issues giving rise to the award have not been questioned.

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Submission of learned counsel for the petitioners is, the Electricity Act, 2003 (hereinafter referred to as the 'Act') with the UP Electricity Supply Code, 2005 (hereinafter referred to as the 'Code') read together, constitute the special law to deal with all challenges that may arise to any assessment order or demand raised under those Acts. Thus, referring to Section 135 of the Act and Clause 6.5 of the Code, it has been submitted, the only remedy available to the respondent/consumer was to have filed objections to the demand raised or to institute appeal proceedings at the appropriate stage. In face of such specific remedy provided under the special law, no

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parallel remedy could have been provided under the impugned Act. He has further placed reliance on Section 185 of the Act to submit that the said Act is a later Act, and therefore, the provision of the impugned Act including Section 22A(b)(iii) read with Section 22-C of the impugned Act would stand overridden.

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To bolster his submission, learned counsel for the petitioners has further referred to Section 20(1)(i)(a) of the impugned Act. Referring to the proceedings conducted by the Permanent Lok Adalat, Kasganj in Case No.46 of 2021, dated 19.11.2021. It has been submitted, the terms of compromise proposed by the Permanent Lok Adalat had been rejected by the petitioners. Thus, there was no agreement reached between the parties as may have allowed the Permanent Lok Adalat to continue the proceedings or to adjudicate the dispute.

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He has further placed reliance on Section 22-D of the impugned Act to submit that adjudication could arise only if the petitioners had agreed to submit to the jurisdiction of the Permanent Lok Adalat. Since the petitioners refused the terms of settlement, the jurisdiction never arose.

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Before dealing with the submission thus advanced by learned counsel for the petitioners, it may be noted that the vires of the provisions of the impugned Act was upheld by the Supreme Court in Bar Council of India Vs. Union of India (2012) 8 SCC 243.

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As to the specific challenge raised in the present petition, it cannot be lost sight, the Permanent Lok Adalat has been constituted under the impugned Act, under Chapter VI-A thereto as inserted by Act No.37 of 2002, w.e.f. 11.06.2002. The constitution of the Permanent Lok

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Adalat, its jurisdiction and procedure are governed exclusively by the provisions contained in Chapter VI-A of the impugned Act. The provision of Section 20 of the impugned Act referred to by learned counsel for the petitioners are therefore wholly inapplicable. They apply to regular Lok Adalats only. The submission to the contrary is plainly misconceived.

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As to the main submission being advanced by learned counsel for the petitioners, the same is also found to be misconceived. In the first place, there is no inherent constitutional invalidity in two remedies being provided by the law. The only issue that may arise in a given case is - which of the two remedies may be availed first and if availment of one remedy would debar the other. However that issue does not exist in the present case. Yet, the answer lies in Section 22-C(1) of the impugned Act. Since no prior proceeding was instituted by the private respondent with respect to the matter brought by him before the Permanent Lok Adalat, either under the Act or the Code elsewhere, the claim filed before the Permanent Lok Adalat was competent and maintainable.

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Then, it must be understood, Section 22-C of the impugned Act is not a provision providing for remedy of adjudication in addition to or in conflict to (as learned counsel for the petitioners would submit) the remedies provided under the Act and the Code. In fact, primarily, Section 22-C of the impugned Act seeks to provide a remedy for settlement of dispute through conciliation. By very nature of that term and scope of settlement of a dispute, it can never be equated with adjudication of a dispute. The fact, that upon failure of conciliation, adjudicatory function arises, does not suffer from any

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invalidity.

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The Parliament, in its wisdom enacted Act No.37 of 2002 (hereinafter referred to as the 'Amending Act') and thereby introduced the Chapter VI-A of the impugned Act to provide for a mechanism for settlement of dispute as that was considered to be an advisable course to be adopted with respect to disputes specified under Section 22(a)(b) (as introduced by Act No.37 of 2002). For that short reason, the premise of the argument of unconstitutional is found to be non-existent.

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The submission advanced on the strength of Section 185 of the Act is equally misconceived. That provision only seeks to repeal the Indian Electricity Act, 1910, the Electricity (Supply) Act 1948, and the Electricity Regulatory Commissions Act, 1988. Insofar as subSection (2) of that provision is concerned, it only contains a limited saving clause applicable in certain circumstances. Since, no action had been taken under any of the repealed Acts, (noted above), the argument based on reading of Section 185 of the Act is also devoid of merit.

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The submission based on reading Section 20(1)(i)(a) of the impugned Act is wholly misconceived. As noted above, the provisions of Chapter VI-A of the impugned Act provide for constitution, jurisdiction, procedure and powers of the Permanent Lok Adalat. In a way those are stand alone provisions not coloured or influenced by the provisions applicable to the Lok Adalat. While, the Lok Adalat may never proceed to adjudicate the dispute and its jurisdiction may remain confined to seek settlement howsoever unreasonable the conduct of one or the other party before it, may be, yet, the Permanent Lok Adalat

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draws adjudicatory functions after the terms of settlement offered by (it to the parties), are rejected. Undisputedly, that was done, in the present case.

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That law has recently been settled by the Supreme Court in Canara Bank Vs. G.S. Jayarama 2022 SCC Online SC 656. Steps of proceedings have been clearly identified and mandated to be undertaken sequentially. Relevant to our discussion, the Supreme Court has observed as below :

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" 29. While the jurisdiction of the Permanent Lok Adalat is limited to disputes regarding public utility services, crucially, its powers are wider than the Lok Adalat in many respects:

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(i) Parties can approach Permanent Lok Adalats directly under Section 22-C(1), while Lok Adalats are sent their cases by courts where the dispute is pending (under Section 20(1)) or by the Authority or Committee organising the Lok Adalat under Section 19(1) after they receive it from the parties (under Section 20(2)). Indeed, an application made to the Permanent Lok Adalat ousts the jurisdiction of a civil court (under Section 22-C(2));

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(ii) Permanent Lok Adalats can direct the parties to submit written submissions, replies, evidence and documents (Section 22-C(3));

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(iii) Other then attempting conciliation with parties, the Permanent Lok Adalats can also decide a dispute on its merits if the settlement fails (Section-C(7)); and

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(iv) Permanent Lok Adalats can transmit an award made to a civil court having local jurisdiction, and such civil court shall execute the order as if it were a decree made by that court (Section 22-E(5)).

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30. The entrustment of wider powers to the Permanent Lok Adalat is supported by its membership, comprising of a District Judge or Additional District Judge or someone who has held judicial office higher in rank than that of a District Judge (as compared to only judicial officers in Lok Adalats).

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C.2 Mandatory nature of conciliation proceedings

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31. We must now address the first issue, i.e., whether the conciliation proceedings before the Permanent Lok Adalats are mandatory before it can decide a dispute on its merits.

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32. This issue is clearly resolved from a bare reading of Section 22-C. Section 22-C provides a step-by-step scheme on how a matter is to proceed before the Permanent Lok Adalat. The first step is the filing of the application which ousts the jurisdiction of other civil courts, in accordance with sub-Sections (1) and (2). The second step is the parties filing requisite submissions and documents before the Permanent Lok Adalat, in accordance with subSection (3). On the completion of the third step to its satisfaction, the Permanent Lok Adalat can move to the fourth step of attempting conciliation between the parties, in accordance with sub-Sections (4), (5) and (6).

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Subsequently, in the fifth step in accordance with subSection (7), the Permanent Lok Adalat has to draw up terms of settlement on the basis of the conciliation proceedings, and propose them to the parties. If the parties agree, the Permanent Lok Adalat has to pass an award on the basis of the agreed upon terms of settlement. Only if the parties fail to reach an agreement on the fifth step, can the Permanent Lok Adalat proceed to the final step and decide the dispute on its merits.

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34. The appellant's argument, however, is that if the opposite party does not appear before the Permanent Lok Adalat, it can dispense with the conciliation proceedings and straightaway adjudicate the dispute under Section 22C(8). We are unable to accept this submission. Even if the opposite party does not appear, the Permanent Lok Adalat is still bound to follow the step-by-step procedure laid down by Section 22-C. Under Section 22-C(3), it would require the party before it to file their submissions and documents, and make the best efforts to communicate them to the opposite party for their response. If it is satisfied that no response is forthcoming from the absent opposite party, the Permanent Lok Adalat shall still attempt to settle the dispute through settlement under Section 22C(4). It is important to remember that Section 22-C(5) imposes a duty upon the Permanent Lok Adalat to be independent and impartial in attempting to amicably settle the dispute, while Section 22-C(6) imposes a duty upon the party present before the Permanent Lok Adalat to cooperate in good faith and assist the Permanent Lok Adalat. Thereafter, the Permanent Lok Adalat, based on the materials before it, shall propose terms of settlement and communicate them to both parties, regardless of whether they participated in the proceedings. If the party present before the Permanent Lok Adalat does not agree or if the absent party does not respond in a sufficient period of time, only then can the Permanent Lok Adalat adjudicate the dispute on its merits under Section 22-C(8). Keeping in mind the principles enshrined in Section 22-D, the Permanent Lok Adalat shall once again notify the absent party of its decision to adjudicate the dispute on its merits, in case it wishes to join the proceedings at that stage.

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35. Section 22-C(8) is amply clear that it only comes into effect once an agreement under Section 22-C(7) has failed. The corollary of this is that the proposed terms of settlement under Section 22-C(7), and the conciliation proceedings preceding it, are mandatory. If Permanent Lok Adalats are allowed to bypass this step just because a party is absent, it would be tantamount to deciding disputes on their merit ex parte and issuing awards which will be final, binding and will be deemed to be decrees of civil courts. This was simply not the intention of the Parliament when it introduced the LSA Amendment Act. Its main goal was still the conciliation and settlement of disputes in relation to public utilities, with a decision on merits always being the last resort. Therefore, we hold that conciliation proceedings under Section 22-C of the LSA Act are mandatory in nature.

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C.3 Whether Permanent Lok Adalat has adjudicatory functions

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36. The second issue which is in contention before this Court is whether the Permanent Lok Adalat has any adjudicatory function. As highlighted in the Objects and Reasons accompanying the LSA Amendment Act, its introduction led to the creation of two different types of Lok Adalats. The first is a Lok Adalat constituted under Section 19 of the LSA Act, having no adjudicatory power, which can only conduct conciliatory proceedings. The second

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is a Permanent Lok Adalat, established under Section 22B(1) of the LSA Act in respect of public utility services, which can carry out both conciliatory and adjudicatory functions, subject to the procedure to be followed under Section 22-C of the LSA Act. The scheme of the LSA Act makes clear the distinction between the two types of Lok Adalats. Section 20 of the LSA Act provides that the Lok Adalat shall aim to arrive at a compromise or settlement between the parties. If no such compromise or settlement is arrived at, then the record of the case is returned to the court from which the Lok Adalat had received the reference. The court would then proceed to adjudicate the dispute. On the other hand, Section 22-C of the LSA Act provides that a party to a dispute, prior to bringing a dispute before the court, i.e., at the pre-litigation stage, can make an application to a Permanent Lok Adalat for the settlement of a dispute. The Permanent Lok Adalat would first conduct conciliation proceedings and attempt to reach an amicable settlement of the dispute. However, if the parties fail to reach an agreement, it shall decide the dispute, as long as the dispute does not relate to an offence. Section 22-D further indicates that the Permanent Lok Adalat is empowered to decide the dispute between the parties on merits.

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40. We reiterate that the powers of the Lok Adalat constituted under Section 19 of the LSA Act are to be distinguished from the nature of powers granted to a Permanent Lok Adalat established under Section 22-B of the LSA Act. It is in the context of interpreting the jurisdiction of Lok Adalats constituted under Section 19 of the LSA Act, that this Court has held that the Lok Adalat cannot perform any adjudicatory function in terms of Section 20 of the LSA Act."

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Therefore only in the event of settlement being not reached i.e. upon rejection of the written terms of settlement offered by the Permanent Lok Adalat, by one or the other party, the Permanent Lok Adalat may assume adjudicatory function and enter adjudication. In view of the law thus pronounced by the Supreme Court, there is no merit in the legal challenge raised.

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As a fact, in the present case as has been noted above, the Permanent Lok Adalat did offer written terms of compromise to the parties. While the petitioners rejected those terms, the respondent-consumer accepted the same.

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Upon such proceedings as are evidenced from the document annexed to the writ petition itself, adjudication had arisen before the Permanent Lok Adalat. Keeping in mind the principles laid down by the Supreme Court in

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Canara Bank Vs. G.S. Jayarama (supra) , there is no procedural defect found in the adjudicatory function performed by the Permanent Lok Adalat. This observation has been made only to complete the discussion, though no specific objection has been pressed in that regard.

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In view of the above, the challenge fails and the writ petition is accordingly dismissed .

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No order as to costs.

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Order Date :- 4.7.2022

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S.Chaurasia

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Digitally signed by SHUBHAM CHAURASIA Date: 2022.07.08 18:36:43 IST Reason: Location: High Court of Judicature at Allahabad

Executive Engineer, Dakshinanchal Vidyut Vitaran Nigam Limited and Another v. State of U.P. and Another

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Executive Engineer, Dakshinanchal Vidyut Vitaran Nigam Limited and Another v. State of U.P. and Another

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