The Permanent Lok Adalat

The Permanent Lok Adalat shares a name with the ordinary Lok Adalat and is a different institution. It was created by Chapter VI-A of the Legal Services Authorities Act, 1987, inserted by the amendment of 2002, for disputes relating to public utility services. It is a standing body rather than a sitting organised from time to time; it is approached before the dispute reaches a court and shuts the courts out once it is; and, uniquely among the settlement forums, it may decide the dispute on the merits if conciliation fails. Its award is final, is deemed a decree, and is not appealable.

1. Why It Was Created

An ordinary Lok Adalat can do nothing where one party declines to settle. In disputes between an individual consumer and a large supplier of a public utility service, that limitation is fatal: the claims are small, repetitive and numerous, and a supplier with no incentive to compromise can defeat the process simply by refusing. The Legal Services Authorities (Amendment) Act, 2002 answered this by creating a forum that attempts conciliation first and, failing agreement, decides. The price of that power is that its jurisdiction is confined by subject matter and by value, and that it cannot touch an offence.

2. Public Utility Services: Section 22A

Section 22A(b) defines public utility service as any of the following.

• 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.
• A system of public conservancy or sanitation.
• Service in a hospital or dispensary.
• Insurance service.
• Any other service which the Central Government or the State Government, as the case may be, may in the public interest declare by notification to be a public utility service for the purposes of this Chapter; services such as education and housing have been added in this way.

3. Establishment and Composition: Section 22B

The Central Authority or every State Authority may, by notification, establish Permanent Lok Adalats at such places and for exercising such jurisdiction in respect of one or more public utility services and for such areas as may be specified. A Permanent Lok Adalat consists of a Chairman who is or has been a district judge or an additional district judge, or has held a judicial office higher in rank than that of a district judge, and two other persons having adequate experience in public utility service, nominated by the Central or State Government on the recommendation of the Authority establishing it.

The composition reflects the dual function. The judicial Chairman is necessary because the body may decide; the two members with experience of the service supply the practical knowledge that makes conciliation possible in a technical field.

4. Jurisdiction: Section 22C

The course of an application, the two outcomes, and the effect of the award

1. Who may apply, and when. 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 that dispute. The application is pre-litigation by definition.
2. The bar on offences. The first proviso excludes any matter relating to an offence not compoundable under any law. Read with Section 22C(8), which permits a decision only where the dispute does not relate to an offence, the effect is that the adjudicatory power is confined to civil disputes.
3. The pecuniary limit. The second proviso excludes disputes where the value of the property in dispute exceeds the prescribed amount, originally ten lakh rupees, which the Central Government has power to increase by notification and has done.
4. The bar on approaching a court. Section 22C(2) provides that after an application is made, no party to that application shall invoke the jurisdiction of any court in the same dispute. This is what makes the forum effective and is also the provision most often challenged.

5. The Conciliation Stage

Sections 22C(3) to (7) set out the process. On receipt of the application the Permanent Lok Adalat directs each party to file a written statement with supporting documents, and supplies copies to the other side. It then assists the parties in an independent and impartial manner in their attempt to reach an amicable settlement. Where it appears that there exist elements of settlement which may be acceptable to the parties, it formulates the terms of a possible settlement and submits them to the parties for their observations, and after receiving those observations may reformulate the terms. If the parties reach an agreement, the Permanent Lok Adalat passes an award in terms of the settlement and furnishes a copy to each of them.

The language is drawn from Section 73 of the Arbitration and Conciliation Act, 1996, and the function at this stage is exactly that of a conciliator: the bench may propose terms, but it imposes nothing.

6. The Adjudicatory Power

This single sub-section is what distinguishes the institution from every other settlement forum in Indian law. A mediator, a conciliator and an ordinary Lok Adalat can do nothing against a party that will not agree. A Permanent Lok Adalat, having tried and failed, decides. Three limits contain the power: the dispute must relate to a public utility service, it must be below the prescribed value, and it must not relate to an offence.

7. Procedure: Section 22D

The Permanent Lok Adalat is, while conducting conciliation proceedings or deciding a dispute on the merits, guided by the principles of natural justice, objectivity, fair play, equity and other principles of justice, and is not bound by the Code of Civil Procedure, 1908 or the Indian Evidence Act, 1872, now the Bharatiya Sakshya Adhiniyam, 2023. The freedom from the procedural codes is the same as that of an arbitral tribunal under Section 19 of the Arbitration and Conciliation Act, 1996, and it is subject to the same limitation: the parties must be heard, and a decision reached without hearing a party is liable to be set aside in the exercise of the supervisory jurisdiction.

8. The Award: Section 22E

• Final and binding. Every award of a Permanent Lok Adalat under this Act, made either on merit or in terms of a settlement agreement, is final and binding on all the parties and on persons claiming under them.
• Majority. Every such award is deemed to be a decree of a civil court, and where it is made by a majority that is sufficient.
• No appeal. No appeal lies to any court against an award of a Permanent Lok Adalat.
• Execution. The award may be transmitted to a civil court having local jurisdiction, and that court executes it as if it were a decree made by it.

Because there is no appeal, the only recourse against an award is the supervisory jurisdiction of the High Court under Articles 226 and 227, exercised on the usual narrow grounds: want of jurisdiction, as where the dispute did not relate to a public utility service or exceeded the pecuniary limit or related to an offence; breach of natural justice; or an award founded on no material at all.

9. Permanent Lok Adalat and Lok Adalat

10. Related Topics and Provisions