Electricity Theft Case and Lok Adalat Settlement: Supreme Court’s Judgment on Criminal Proceedings

The Supreme Court of India recently addressed a crucial case concerning the compounding of offenses related to electricity theft under the Electricity Act, 2003. The case, Mukesh Chand vs. The State (NCT) of Delhi & Anr., revolved around the prosecution of an individual accused of electricity theft and the subsequent settlement of the dispute in a Lok Adalat.

This case highlights the legal provisions governing the compounding of offenses under Section 152 of the Electricity Act, the role of the Lok Adalat in dispute resolution, and whether criminal proceedings can be quashed based on such settlements.

Background of the Case

The appellant, Mukesh Chand, was a consumer of electricity and had obtained an electricity connection from BSES Rajdhani Power Limited (BSES). On 22 September 2014, BSES issued a bill of Rs. 3,54,598.21 to Mukesh Chand, alleging that he had committed theft of electricity. Following non-payment of the bill, an FIR was registered against him under Section 135 of the Electricity Act, 2003, leading to criminal proceedings.

During the proceedings, both parties settled the matter through a Special Lok Adalat on 11 February 2018, where Mukesh Chand agreed to pay a reduced amount of Rs. 1,60,000 in two installments. Following this settlement, he approached the Delhi High Court under Section 482 of the Code of Criminal Procedure (CrPC), seeking the quashing of the FIR and criminal case against him.

Petitioner’s Arguments

The appellant, Mukesh Chand, argued:

• Since BSES had agreed to withdraw all cases against him as per the Lok Adalat settlement, the criminal case and FIR should also be quashed.
• The settlement in the Lok Adalat was binding, and he had fully complied with its terms by paying the agreed amount.
• Continuation of the criminal proceedings would be unnecessary and contrary to the purpose of the settlement.

Respondent’s Arguments

BSES, supported by the State, countered:

• The legality of quashing an FIR in an electricity theft case must be considered in light of Section 152 of the Electricity Act, 2003.
• Compounding of offenses under the Electricity Act follows specific statutory provisions and must be analyzed accordingly.
• The High Court’s decision to dismiss the petition was based on the legal framework governing such offenses.

Supreme Court’s Observations

The Supreme Court reviewed the case and noted that the High Court had not examined the matter in light of Section 152 of the Electricity Act, which specifically deals with compounding offenses. The bench, comprising Abhay Manohar Sapre and Dinesh Maheshwari, stated:

“Since we find that the High Court did not examine the issue in the light of Section 152 of the Act, we consider it proper to remand the case to the High Court to examine the issue afresh keeping in view the provisions of Section 152 of the Act and then pass appropriate orders as the case may require on the facts involved therein in accordance with law.”

The Court emphasized that the compounding of offenses under the Electricity Act must align with statutory provisions, and a Lok Adalat settlement does not automatically lead to the quashing of criminal proceedings unless the law permits such action.

Final Judgment

The Supreme Court issued the following directives:

• The impugned order of the Delhi High Court was set aside.
• The case was remanded to the High Court for reconsideration in light of Section 152 of the Electricity Act.
• The High Court was instructed to decide the matter strictly in accordance with the law, uninfluenced by any observations made in the Supreme Court’s ruling.

The Court clarified:

“We make it clear that having formed an opinion to remand the case, we have not applied our mind to the merits of the case. The High Court will, therefore, decide the matter strictly in accordance with law uninfluenced by any observations made by us in this order.”

Implications of the Verdict

The Supreme Court’s decision has several key implications:

• Legal Scrutiny of Electricity Theft Cases: The ruling reinforces that criminal cases related to electricity theft must be analyzed within the statutory framework of the Electricity Act.
• Compounding of Offenses: Section 152 of the Electricity Act provides the legal basis for compounding offenses, and its application must be considered before quashing criminal proceedings.
• Binding Nature of Lok Adalat Settlements: While Lok Adalat settlements are encouraged for dispute resolution, they do not automatically override statutory provisions regarding criminal offenses.

This ruling ensures that courts follow the correct legal procedures when dealing with compounding offenses under the Electricity Act, balancing the interests of justice with procedural integrity.

Petitioner Name: Mukesh Chand.
Respondent Name: The State (NCT) of Delhi & Anr..
Judgment By: Justice Abhay Manohar Sapre, Justice Dinesh Maheshwari.
Place Of Incident: Delhi, India.
Judgment Date: 12-03-2019.

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