The Andhra Pradesh High Court has affirmed that disputes between electricity distribution corporations and consumers over security deposit refunds fall squarely within the ambit of public utility services under the Legal Services Authorities Act, 1987. This ruling reinforces the role of Permanent Lok Adalats as accessible, pre-litigation forums for resolving such grievances, particularly for consumers seeking redress without protracted litigation.
Background & Facts
The Dispute
The dispute arose between the Andhra Pradesh Southern Power Distribution Corporation Limited (APSPDCL) and Sri G. Suryanarayana Setty, Managing Partner of Sree Lakshmi Venkateswara Modern Rice Mills in Yemmiganur, Kurnool District. The respondent secured an electricity connection for his rice mill in 2011 and deposited a security amount of Rs. 1,16,050. After closing the business, he requested disconnection of the service and refund of the security deposit. Despite repeated requests, APSPDCL failed to refund the amount.
Key Facts
- Electricity connection established in 2011
- Security deposit paid: Rs. 1,16,050 on or before connection
- Business closed after operational period
- Disconnection requested and granted; No Due Certificate issued
- Multiple written requests for refund made between 2018 and 2022
- No refund processed by APSPDCL despite acknowledgments
- Legal notice issued under Section 22C of the Legal Services Authorities Act, 1987
Procedural History
- 2022: Respondent filed application before Permanent Lok Adalat for Public Utility Services, Kurnool (PLAC No. 3 of 2023)
- 14.02.2023: Lok Adalat issued notice to APSPDCL
- 05.03.2023: APSPDCL filed written statement contesting liability
- 10.07.2023: Evidence recorded, including deposit receipts and correspondence
- 14.02.2024: Lok Adalat passed award directing refund with interest and compensation
- 28.02.2024: APSPDCL filed Writ Petition No. 8228/2024 before the High Court seeking stay and quashing of the award
- 17.03.2026: High Court heard arguments and delivered judgment
Relief Sought
The petitioners sought:
- Stay of all proceedings under the Lok Adalat award dated 14.02.2024
- Declaration that the Lok Adalat lacked jurisdiction to adjudicate the dispute
- Quashing of the award dated 14.02.2024
- Costs of litigation
The Parties' Positions
Petitioners (APSPDCL): Argued that the dispute is governed by the Electricity Act, 2003 and Andhra Pradesh State Regulatory Commission Regulations, 2004, and that the Lok Adalat has no jurisdiction over such matters.
Respondent (Suryanarayana Setty): Contended that electricity supply to consumers is explicitly included under Section 22A(b)(iii) as a public utility service, and that the Lok Adalat followed statutory procedure.
The Legal Issue
The central question was whether a dispute over refund of a security deposit for electricity supply qualifies as a dispute relating to a "public utility service" under Section 22A(b)(iii) of the Legal Services Authorities Act, 1987, thereby conferring jurisdiction upon the Permanent Lok Adalat.
Arguments Presented
For the Petitioner
The petitioners contended that:
- The definition of "public utility service" under Section 22A(b) does not encompass disputes between distribution companies and consumers over security deposits.
- The Andhra Pradesh State Electricity Regulatory Commission, constituted under Regulation No. 6 of 2004, is the exclusive forum for resolving such disputes.
- The Lok Adalat’s adjudication bypasses the statutory regulatory framework and violates the principle of exclusive jurisdiction.
- The award was passed without strict compliance with the mandatory conciliation process under Section 22C, as held in Canara Bank v. G.S. Jayarama.
For the Respondent
The respondent argued that:
- Supply of power to the public by any establishment is explicitly included in Section 22A(b)(iii) as a public utility service.
- The purpose of Chapter VIA of the Act is to provide accessible, cost-free dispute resolution for consumers.
- The Lok Adalat followed the statutory procedure: pleadings were filed, evidence recorded, conciliation was attempted, and only after failure to settle was the matter decided on merits.
- The existence of another forum does not oust the Lok Adalat’s jurisdiction under the Act.
The Court's Analysis
The Court undertook a detailed statutory interpretation of Section 22A(b) and Section 22C of the Legal Services Authorities Act, 1987. It emphasized that the definition of "public utility service" under Section 22A(b)(iii) explicitly includes "supply of power, light or water to the public by any establishment." The Court held that this language is unambiguous and encompasses the relationship between a power distribution corporation and its consumer.
"Section 22A(b)(iii) clearly includes supply of power to the public by any establishment. The fact that a regulatory commission exists does not negate the jurisdiction of the Permanent Lok Adalat under a statute designed for pre-litigation settlement."
The Court further examined the procedural compliance of the Lok Adalat under Section 22C. It relied on the Supreme Court’s analysis in Canara Bank v. G.S. Jayarama (2022) 7 SCC 776, which outlined a five-step process: (1) application filing, (2) submission of pleadings, (3) conciliation attempt, (4) formulation of settlement terms, and (5) adjudication only if settlement fails.
The Court found that the Lok Adalat had fully complied with this sequence. It noted that the award explicitly recorded that conciliation was attempted, the parties were unable to reach an agreement, and only then was the matter decided on merits. The Court rejected the petitioners’ claim that conciliation was skipped, stating:
"It is clear from the impugned order that conciliation proceedings were conducted under Section 22C(4), and the Lok Adalat rightly proceeded to adjudication under Section 22C(8) after finding no possibility of settlement."
The Court also dismissed the argument that the Electricity Regulatory Commission’s jurisdiction ousted the Lok Adalat’s, holding that statutory forums can coexist unless expressly excluded. The Act’s primary objective - to ensure access to justice for weaker sections - supported the Lok Adalat’s role.
The Verdict
The writ petition was dismissed. The High Court upheld the award dated 14.02.2024 passed by the Permanent Lok Adalat for Public Utility Services, Kurnool. The Court directed that the award remains enforceable: APSPDCL shall pay Rs. 1,14,310 as refund of security deposit, with interest at 6% per annum from 06.11.2021 to 14.03.2024 and thereafter at 12% per annum until realization; Rs. 60,000 as compensation for mental agony; and Rs. 5,000 as costs. No costs were awarded to either party in the writ petition.
What This Means For Similar Cases
Public Utility Services Include Power Supply Disputes
- Practitioners must now treat disputes over security deposits, billing errors, or disconnection delays by electricity distributors as squarely within the jurisdiction of Permanent Lok Adalats.
- Regulatory commissions do not have exclusive jurisdiction; consumers may opt for Lok Adalat even if other forums exist.
- Any entity supplying power, water, or telecommunication services to the public is subject to Lok Adalat adjudication under Section 22A(b).
Mandatory Conciliation Must Be Documented
- Lok Adalats must clearly record in their awards that conciliation was attempted and failed.
- Failure to document conciliation steps may invite judicial review.
- Petitioners cannot challenge awards on procedural grounds if the record shows compliance with Section 22C(4)-(8).
Consumer Access to Justice Is Prioritized
- Courts will favor interpretations that expand access to alternative dispute resolution for consumers.
- Legal aid and Lok Adalat mechanisms are not to be undermined by technical objections from public utilities.
- Practitioners representing consumers should routinely invoke Section 22C for disputes under Rs. 10 lakh, even where regulatory bodies exist.
