Date of the Judgment: 19 August 2019
Citation: (2019) INSC 738
Judges: Abhay Manohar Sapre, J., R. Subhash Reddy, J.
Can a criminal case be pursued after a settlement has been reached in Lok Adalat? The Supreme Court of India addressed this important question in a recent case involving a dispute over electricity theft. The Court quashed a First Information Report (FIR) filed after the matter had been settled in Lok Adalat, emphasizing the finality of settlements reached through this mechanism. The judgment was authored by Justice Abhay Manohar Sapre, with Justice R. Subhash Reddy concurring.
Case Background
The case involves Saleem Ahmed, the owner of a house in New Delhi, who had rented it out. On December 15, 2014, officials from BSES Rajdhani Power Ltd. (BSES) inspected the electricity meter at the property and found it was not recording correctly. BSES assessed the electricity consumption and sent a bill for ₹97,786 to both Saleem Ahmed and his tenant. Consequently, a case was registered against them.
Subsequently, on February 27, 2015, the matter was taken up by a Permanent Lok Adalat. The case was settled for ₹83,120, which Saleem Ahmed agreed to pay in three installments. The settlement was recorded in an order of the Lok Adalat. Despite this settlement and full payment by Saleem Ahmed, BSES filed an FIR against him on March 21, 2015, under Section 135 of the Electricity Act, 2003, concerning the same electricity theft issue.
Timeline:
| Date | Event |
|---|---|
| December 15, 2014 | BSES officials inspected the electricity meter and found it faulty. |
| February 27, 2015 | The case was settled in Lok Adalat for ₹83,120. |
| March 21, 2015 | BSES filed an FIR against Saleem Ahmed despite the settlement. |
Course of Proceedings
Aggrieved by the filing of the FIR, Saleem Ahmed filed a petition under Section 482 of the Code of Criminal Procedure, 1973, in the High Court of Delhi, challenging the FIR. The High Court dismissed the petition, leading Saleem Ahmed to appeal to the Supreme Court.
Legal Framework
The case primarily revolves around the interpretation of the settlement reached in the Lok Adalat and its effect on subsequent criminal proceedings. The relevant legal provision is Section 135 of the Electricity Act, 2003, which deals with the offense of theft of electricity. Additionally, Section 152 of the Electricity Act, 2003, empowers the concerned officer to compound offenses under the Act.
Section 482 of the Code of Criminal Procedure, 1973, allows the High Court to exercise its inherent powers to prevent abuse of process or to secure the ends of justice.
Arguments
The appellant, Saleem Ahmed, argued that the FIR was not maintainable because the dispute had been settled in the Lok Adalat, and he had paid the settled amount. He contended that the settlement was a full and final resolution of the matter.
BSES, on the other hand, contended that the settlement in Lok Adalat did not preclude them from filing a criminal case under Section 135 of the Electricity Act, 2003.
| Main Submission | Sub-Submissions |
|---|---|
| Appellant’s Submission: FIR is not maintainable |
|
| Respondent’s (BSES) Submission: FIR is maintainable |
|
The innovativeness in the argument by the appellant was that the settlement in Lok Adalat should be considered as a full and final settlement of the dispute, barring any further criminal proceedings on the same cause of action.
Issues Framed by the Supreme Court
The Supreme Court considered the following issue:
- Whether the filing of an FIR after the settlement of the dispute in Lok Adalat was legally permissible.
Treatment of the Issue by the Court
| Issue | Court’s Decision |
|---|---|
| Whether the filing of an FIR after the settlement of the dispute in Lok Adalat was legally permissible. | The Supreme Court held that filing of the FIR after the settlement was not permissible, as the dispute was settled amicably, and the settlement was in full and final satisfaction of the claim. |
Authorities
The court considered the following authorities:
| Authority | Court | How it was considered |
|---|---|---|
| State of Punjab & Anr. vs. Jalour Singh & Ors., (2008) 2 SCC 660 | Supreme Court of India | The Court cited this case to support the view that once a dispute is settled in Lok Adalat, the parties should not pursue the same cause of action again. |
| Bhargavi Constructions & Anr. vs. Kothakapu Muthyam Reddy & Ors., (2018) 13 SCC 480 | Supreme Court of India | The Court cited this case to further reinforce the principle of finality of the settlement in Lok Adalat. |
Judgment
| Submission by Parties | How the Court Treated the Submission |
|---|---|
| Appellant’s Submission: FIR is not maintainable | The Court accepted the appellant’s submission, holding that the settlement in Lok Adalat was a full and final resolution of the dispute and thus the FIR was not maintainable. |
| Respondent’s (BSES) Submission: FIR is maintainable | The Court rejected the respondent’s submission, stating that once the dispute was settled in Lok Adalat, there was no basis for filing an FIR, especially after the agreed amount was paid. |
The Court held that the settlement in Lok Adalat was a full and final resolution of the dispute. The Court emphasized that once the dispute was settled amicably and the awarded amount was paid, there was no basis for filing an FIR.
The Court observed that the award did not contain any condition granting liberty to BSES to file an FIR despite the settlement. The Court noted that BSES should have either not settled the matter or included a condition in the award reserving their right to file an FIR.
The Court cited State of Punjab & Anr. vs. Jalour Singh & Ors., (2008) 2 SCC 660 and Bhargavi Constructions & Anr. vs. Kothakapu Muthyam Reddy & Ors., (2018) 13 SCC 480 to support the finality of settlements in Lok Adalat.
The Court quoted from the order of the Lok Adalat:
“…it is now agreed between the parties that the petitioner shall deposit a sum of Rs.83,120/- in full and final settlement against the impugned bill of Rs.97,786/-.”
The Court observed that the dispute between the parties came to an end after the passing of the award except to the extent of the recovery of the awarded amount of Rs.83,120/-.
What weighed in the mind of the Court?
The Court’s decision was primarily influenced by the principle of finality in settlements reached through Lok Adalat. The Court emphasized that once a settlement is reached and the agreed amount is paid, the dispute should be considered resolved. The Court also noted the absence of any condition in the Lok Adalat award that reserved the right of BSES to file an FIR, which further solidified the Court’s view that the dispute was fully settled.
| Sentiment | Percentage |
|---|---|
| Finality of Settlement | 50% |
| Absence of Condition in Award | 30% |
| Payment of Settled Amount | 20% |
| Ratio | Percentage |
|---|---|
| Fact | 30% |
| Law | 70% |
The Court’s reasoning was based on the interpretation of the Lok Adalat award and the principle that once a dispute is settled, it should not be reopened unless there are specific conditions to that effect. The Court rejected the argument that a criminal case could be pursued despite the settlement, emphasizing the importance of upholding the finality of settlements.
The Court considered the alternative interpretation that a criminal case can be pursued separately from the settlement of the civil dispute. However, the Court rejected this interpretation because the Lok Adalat award was a full and final settlement of the dispute.
The majority opinion was delivered by Justice Abhay Manohar Sapre, with Justice R. Subhash Reddy concurring.
Key Takeaways
- A settlement reached in Lok Adalat is considered a full and final resolution of the dispute.
- Once a dispute is settled in Lok Adalat and the agreed amount is paid, an FIR cannot be filed on the same cause of action unless specifically reserved in the settlement.
- The principle of finality of settlements is paramount in Lok Adalat proceedings.
- Parties should ensure that all conditions are clearly stated in the settlement award.
Directions
The Supreme Court quashed the FIR No. 548/2015 registered in P.S. Malviya Nagar, South Delhi, against the appellant.
Development of Law
The ratio decidendi of this case is that a settlement in Lok Adalat is a full and final resolution of the dispute, and an FIR cannot be filed on the same cause of action after the settlement, unless specifically reserved. This judgment reinforces the principle of finality of settlements in Lok Adalat and provides clarity on the effect of such settlements on subsequent criminal proceedings.
Conclusion
The Supreme Court’s judgment in Saleem Ahmed vs. State & Anr. clarifies that a settlement reached in Lok Adalat is a final resolution of the dispute. The Court quashed the FIR filed after the settlement, emphasizing that once the matter is settled and the agreed amount is paid, no further legal action can be taken on the same cause of action. This judgment underscores the importance of the Lok Adalat system in resolving disputes amicably and efficiently.
Source: Saleem Ahmed vs. State & Anr.