SC – FIR cannot be lodged in respect of a dispute settled in Lok Adalat

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The Supreme Court has passed a judgment which states that FIR cannot be lodged in respect of a dispute settled in Lok Adalat.

Saleem Ahmed vs. State and Anr.

Facts of the case: After noting that the electricity meter was not recording correct reading in the house of Saleem Ahmed (the appellant), BSES Rajdhani Power Ltd. (the respondent) made an assessment in relation to the consumption of the electricity and sent a bill for theft for Rs. 97,786 to him. Later the matter was referred to Lok Adalat to settle their recovery cases. Though the original demand was for Rs.97,786, the dispute was settled at Rs.83,120 in full and final payment of the bill and satisfaction of the claim made by the BSES. Despite the settlement of the case and receiving the payment, the BSES filed an FIR against Saleem under Section 135 of the Electricity Act in relation to the same demand. Saleem, aggrieved by the registration of the FIR, filed a petition under Section 482 of the Code of Criminal Procedure in the High Court challenging its registration as being bad in law. The High Court dismissed the petition filed by Saleem seeking to quash FIR.

Appeal to the Supreme Court: An appeal was then filed in the Supreme Court by way of special leave by the appellant. In the appeal, the Supreme Court bench, comprising of Justice Abhay Manohar Sapre and Justice R. Subhash Reddy, observed that, once the dispute in relation to recovery of outstanding amount was finally settled between the parties amicably in Lok Adalat resulting in passing of the award in full and final satisfaction of the entire claim, there was neither any occasion and nor any basis to file FIR by the BSES in respect of the cause which was subject matter of an award. 

The Supreme Court observed that: “The remedy of the parties in such a case was only to challenge the award in appropriate forum in case they felt aggrieved by the award. Such was not the case here… In our opinion, the effect of passing of an award was that dispute in relation to the demand raised by the BSES was settled amicably between the parties leaving no dispute surviving.”

The dispute between the parties, therefore, came to an end for all purposes consequent except to the extent of recovery of the awarded amount of Rs.83,120. The award given by the Lok Adalat was fully accepted by the BSES without any protest. Once the award was accepted and settled, the dispute had no ground left for a criminal case.

The court also noted that the conditions set out in the award, in clear terms, recorded that the dispute has been settled in full and final satisfaction of the demand in question.

“In our view, if the BSES was so keen to file FIR against the appellant under the Electricity Act then either they should not have settled the matter through Lok Adalat or while settling should have put a condition in the award reserving therein their right to file FIR notwithstanding settlement of the dispute in question. This was, however, not done.”

The decision of the Supreme Court: Accordingly, the Supreme Court quashed the FIR. The bench held that the filing of FIR after passing of the award by the Lok Adalat was wholly unjust and illegal and the same was not permissible being against the terms of the award and also for want of any subsisting cause of action arising out of demand. The appeal filed under Section 482 of the Code of Criminal Procedure was, therefore, allowed.

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