JUDGMENT: M. Y. Eqbal, J.-In this application, the petitioner- M/s Sharat San char Nigam Limited. has prayed for quashing the order and award dated 31.8.2005 passed by the Permanent Lok Adalat, Dumka in Pre-litigation Case No. 2 of 2005 whereby the Permanent Lok Adalat (in short referred to as 'Lok Adalat') allowed the petition filed by respondent No. 2 and directed the petitioner to pay a sum of Rs. 10000/- as compensation and Rs. 20001- as litigation cost 2. The facts of the case lie in a narrow compass:- Respondent No. 2 who is an employee of Civil Court, Dumka filed a Complaint Petition under Section 22(1) of the Legal Services Authority Act before the Permanent Lok Adalat, Dumka for compensation of Rs. 10000/- and a cost of Rs. 2000/- on the allegation that his Telephone No. 224605 was not functioning from 8.5.2005 to 2.6.2005. The said Complaint Petition was registered as Pre-litigation Case No.2 of 2005. In response to the notice, the petitioner filed show cause stating inter alia that Telephone No. 224605 of respondent NO.2 was lying out of order due to cable fault during the period 8.5.2005 to 2.6.2005. The said telephone connection was restored on 3.6.2005. The telephone remained out of order for the aforesaid period was due to technical ground of cable fault. The petitioner's further case was that as per the Departmental Rules, since the telephone being out of order, a rent rebate of Rs. 132/- for the period of interruption had already been sanctioned to respondent No. 2 vide letter as contained in Memo dated 9.8.2005. Hence, respondent No.2 was adequately compensated for the technical fault. The Lok Adalat, after hearing the parties, vide order dated 31.8.2005 allowed the complaint petition filed by respondent No. 2 and directed the petitioner to pay a sum of Rs. 10000/- as compensation and Rs. 2000/- as cost within a period of one month. 3. The impugned award was assailed by the petitioner mainly on the ground that the order and award passed by the Lok Adalat is wholly without jurisdiction and is bad in law. Learned counsel for the petitioner submitted that the Lok Adalat has committed error of law and has exceeded its jurisdiction in passing the order of compensation and cost as the Permanent Lok Adalat has no jurisdiction under the Legal Services Authority Act to pass order of compensation. Learned counsel for the petitioner submitted that the Lok Adalat has committed error of law and has exceeded its jurisdiction in passing the order of compensation and cost as the Permanent Lok Adalat has no jurisdiction under the Legal Services Authority Act to pass order of compensation. Learned counsel further submitted that the Lok Adalat has not correctly followed the provisions as envisaged under Section 22-C(5) of the Act, inasmuch as the basic purpose of the Act is to arrive at a. compromise or settlement between the parties to the dispute. Learned counsel submitted that as per the Telegraph Rule, a rebate of RS.132/- was allowed for the period 8.5.2005 to 2.6.2005 during which the telephone of respondent No. 2 was out of order due to cable fault and as such, he was adequately compensated by the petitioner. 4. On the other hand, learned counsel for the respondents supported the order on the ground that the Lok Adalat has all jurisdiction to decide the case on merits and to award compensation in case where there is deficiency of services. 5. The only question that falls for conSideration is as to whether a Permanent Lok Adalat established under Chapter VIA of the Legal Services Authority Act, 1987 (in short 'the Act') can adjudicate and decide and give an award in disputed cases. 6. Chapter VIA was inserted in the Act In 2002 (Act 37 of 2002) w.e.t. 11.6.2002. By the aforesaid amendment, Sections 22-A to 22-E were inserted. Clause (a) of Section 22-A defines "Permanent Lok Adalat" means a Permanent Lok Adalat established under sub-section (1) of Section 22-B. Section 22-B confers power upon the Central Authority and the State Authority to establish by notification Permanent Lok Adalat at such places for exercising such jurisdiction in respect of one or more public utility services. Section 22-C is relevant provision which deals with the cases where the Permanent Lok Adalat will take cognizance and also power to deal with the matter. Section 22-C is relevant provision which deals with the cases where the Permanent Lok Adalat will take cognizance and also power to deal with the matter. Section 22-C reads as under:- "22-C. Cognizance of cases by Permanent Lok Adalal.-(1) 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 dispute: Provided that the Permanent Lok Adalat shall not have jurisdiction in respect of any matter relating to an offence not compoundable under any law: Provided further that the Permanent Lok Adalat shall also not have jurisdiction in the matter where the value of the property in dispute exceeds ten lakh rupees: Provided also that the Central Government, may, by notification, increase the limit of ten lakh rupees specified in the second proviso in consultation with the Central Authority. (2) After an application is made under sub-section (1) to the Permanent Lok Adalat, no party to that application shall invoke jurisdiction of any Court in the same dispute. (3) Where an application is made to a Permanent Lok Adalat under subsection (1), It- (a) shall direct each party to the application to file before it a written statement, stating therein the facts and nature of dispute under the application, points or Issues in such dispute and grounds relied in support of, or in opposition to, such points or issues, as the case may be, and such party may supplement such statement any document and other evidence which such party deems appropriate In proof of such facts and grounds and shall send a copy of such statement together with a copy of such document and other evidence, if any, to each of the parties to the application; (b) may require any party to the application to file additional statement before it at any stage of the conciliation proceedings; (c) shall communicate any document or statement received by it from' any party to the application to the other party. to enable such other party to present reply thereto. (4) When statement, additional statement and reply, if any, have been filed under sub-section (3), to the satisfaction of the Permanent Lok Adalat, it shall conduct conciliation proceedings between the parties to the application in such manner as it thinks appropriate taking into account the circumstances of the dispute. to enable such other party to present reply thereto. (4) When statement, additional statement and reply, if any, have been filed under sub-section (3), to the satisfaction of the Permanent Lok Adalat, it shall conduct conciliation proceedings between the parties to the application in such manner as it thinks appropriate taking into account the circumstances of the dispute. (5) The Permanent Lok Adalat shall, during conduct of conciliation proceedings under sub-section (4), assist the parties in their attempt to reach an amicable settlement of the dispute in an independent and impartial manner. (6) It shall be the duty of every party to the application to cooperate in good faith with the Permanent Lok Adalat In conciliation of the dispute relating to the application and to comply with the direction of the Permanent Lok Adalat to produce evidence and other related documents before it. (7) When a Permanent Lok Adalat, in the aforesaid conciliation proceedings, is of opinion that there exist elements of settlement in such proceedings which may be acceptable to the parties, it may formulate the terms of a possible settlement of the dispute and give to the parties concerned for their observations and in case the parties reach at an agreement on the settlement of the dispute, they shall sign the settlement agreement and the Permanent Lok Adalat shall pass an award in terms thereof and furnish a copy of the same to each of the parties concerned. (8) Where the parties fail to reach at an agreement under sub-section (7), the Permanent Lok Adalat shall. if the dispute does not relate to any offence, decide the dispute." 7. Section 22-D provides that the Permanent Lok Adalat shall while conducting conciliation proceeding or deciding a dispute on merit under this Act, be guided by the principles of natural justice, objectivity, fair play, equity and other principles of justice and shall not be bound by the Code of Civil Procedure. Section 22-E provides that every award of the Permanent Lok Adalat made either on merit or in terms of a settlement agreement, shall be final and binding on all the parties thereto and on persons claiming under them. The award given by the Permanent Lok Adalat shall be deemed to be a decree of Civil Court and shall not be called in question in any original suit. application or execution proceedings. 8. The award given by the Permanent Lok Adalat shall be deemed to be a decree of Civil Court and shall not be called in question in any original suit. application or execution proceedings. 8. From perusal of the provisions of sub-section (3) of Section 22-C, it is manifestly clear that if an application is filed before a Permanent Lok Adalat, it shall first call upon the parties to file written statement disclosing the nature of the dispute, points or issues in such dispute and produce documents and evidence in order to prove their case. Sub-section (4) of Section 22-C cast a mandate upon the Lok Adalat to conduct conciliation proceeding between the parties and make all endeavour for amicable settlement of the dispute. Sub-section 7 of Section 22-C further cast a mandate upon the Permanent Lok Adalat to first form an opinion as to whether there exists element of set" t1ement in such proceeding, which may be acceptable to the parties. It may formulate the terms of possible settlement of dispute and give to the parties concerned for their observation. In case parties reach to an agreement on the settlement of the dispute they shall sign the settlement agreement and then Permanent Lok Adalat pass an award in terms thereof. It is only when mandatory requirement as contemplated under sub-section (3) to sub-section (7) of Section 22-C is complied with and when parties failed to reach at an agreement the Permanent Lok Adalat can decide the dispute as provided under subsection 8 of section 22-C of the Act. 9. As noticed above, Chapter VIA has been inserted in the Legal Service Authority Act, 19lF for dealing with the pre-litigation, conciliation and settlement. Although Permanent Lok Adalat vested with the power under sub-section 8 of Section 22-C for deciding the dispute on merit but from reading of the provisions of subsection (4) to sub-section (7) of Section 22-C, it is abundantly clear that the establishment of the Permanent Lok Adalat is mainly and basically for the purpose of deciding the dispute through conciliation and for arriving at an agreement on settlement. 10. In the light of the aforesaid provisions, I would first like to discuss the manner in which the Permanent Lok Adalat conducted the instant case. 11. The case before the Lok Adalat was initiated on the basis of application filed by the claimant/respondent claiming compensation of Rs. 10. In the light of the aforesaid provisions, I would first like to discuss the manner in which the Permanent Lok Adalat conducted the instant case. 11. The case before the Lok Adalat was initiated on the basis of application filed by the claimant/respondent claiming compensation of Rs. 10,000/- for the mental tension, agony, harassment because of the fact that telephone of the respondent was out of order from 5.5.2005. On being notice by the Permanent Lok Adalat, petitioner through the District Telephone Manager appeared and filed show cause stating inter alla that due to cable fault, the telephone of the petitioner along with others remain out of order, however, the defect was repaired and telephone connection was restored on 3.6.2005. It was further stated as per the Telegraph Rule, necessary rent rebate was allowed to the respondent for the period telephone connection remained out of order. On the date fixed i.e. 16.8.2005 show cause was filed and the Lok Adalat fixed the date on 29.8.2005 for conciliation and for framing of issues. Similar order was repeated on 27.8.2005 and the next date was fixed on 29.8.2005 for conciliation and settlement. On 29.8.2005 order-sheet shows that case was fixed on 31.8.2005 for final order as no compromise arrived at between the parties. The order dated 29.8.2005 IS worth to be quoted herein below:- "Ubhay paksh upasthit. Dono pakshon ko sulahnamana hone ki isthiti me case ke merit par suna gaya. Bipakashi ke adhiwakta dwara kaha gaya ki unhe apne kathan ke samarthan me case law dakhil kama haL Atah aaj aadesh parit nahin har aadesh hetu 31.8.05 ko nirdharit kiya jay taki ish bich me case law dakhil kiya ja sake. Chukin ubhay pakshon ko purn rup se suna ja chukka haL Atah uprokt paristhiti me abhilekh aadesh hetu dinank 31.8.05 ko prastut karen." 12. On 31.8.2005, the impugned order has been passed by the Permanent Lok Adalat. In the final order also there is no mention at all about the compliance of the provisions of sub-section (4) to subsection (7) of Section 22-C of the Act by the Permanent Lok Adalat. There is nothing mention in the order-sheet that the Lok Adalat applied their mind to find out as to whether there exist any element of settlement. The Lok Agalat even not formulated the terms of settlement and held any sitting for conciliation. There is nothing mention in the order-sheet that the Lok Adalat applied their mind to find out as to whether there exist any element of settlement. The Lok Agalat even not formulated the terms of settlement and held any sitting for conciliation. The order has been passed like that of a Civil Court. Even in the Code of Civil Procedure also it has become mandatory for the Civil Court to comply the requirement of Section 89 and other provisions of Code of Civil Procedure. It is really surprising that Permament Lo"\< Adalat exercising power under sub-section (8) of Section 22-C directly decided the claim of the respondent on merit and without assigning any reason and without proof of any loss or dame-lee or mental pain and agony suffered by 'he claimant/respondent awarded a compensation of Rs. 10,000/- and a cost of Rs. 2,000/-. Not only that Permanent Lok Adalat directed payment of Rs. 12,000/- to the claimant/respondent and directed recovery of the said amount from the salary of the petitioner/District Telecom Manager. Prima facie therefore, it is clear that Permanent Lok Adalat exceeded its jurisdiction and erroneously passed the impugned order. The jurisdiction and power of the Lok Adalat came for consideration before the Supreme Court in series of decisions where the Supreme Court discussed the issues in detail. 13. In the case of State of Punjab and Others vs. Phulan Rani and Another [ (2004)7 SCC 555 ]. the facts of the case were that one Phulan Rani, a widow of the deceased employee, filed a writ petition in the year 1994 claiming pension payable to her. The services of deceased husband was terminated sometime in the year 1983 on the ground' that Punjab Tubewells Irrigation Department was transferred to Punjab State Tubewell Corporation. The High Court of Punjab and Haryana directed reappointment of late Mohinder Singh Walia and consequently, he was absorbed in Punjab State Tubewell Corporation. After the death of employee, the Widow filed the aforementioned writ petition which was disposed of on 18.1.2000. The State of Punjab filed a review application taking the stand that it was not properly represented in the proceedings. It was contended that there being dispute about entitlement to the pension, the writ petition could not have been disposed of by the High Court. The review petition was rejected. The State of Punjab filed a review application taking the stand that it was not properly represented in the proceedings. It was contended that there being dispute about entitlement to the pension, the writ petition could not have been disposed of by the High Court. The review petition was rejected. Thereafter, a writ petition was filed by the State of Punjab before the Punjab and Haryana High Court questioning the legality of the order passed by the Lok Adalat. The High Court held that even if it is accepted that the disposal by the Lok Adalat was not the proper course, yet on merits, respondent No. 1 was entitled to relief. Then the matter came to the Supreme Court and it was argued that the matter could not have been disposed of by the Lok Adalat in view of the specific provision contained in Section 20 of the Act. The Supreme Court, considering the provision of the Act observed that the Lok Adalat could not have decided the dispute on merit. Their Lordships observed:- "7. The specific language used in sub-section (3) of Section 20 makes it clear that the Lok Adalat can dispose of a matter by way of a compromise or settlement between the parties. Two crucial terms in sub-sections (3) and (5) of Section 20 are "compromise" and "settlement". The former expression means settlement of differences by mutual concessions. It is an agreement reached by adjustment of conflicting or opposing claims by reciprocal modification of demands. As per Termes de la Ley, "compromise is a mutual promise of two or more parties that are at controversy". As per Bouvier it is "an agreement between two or more persons, who, to avoid a law suit. amicably settle their differences. on such terms as they can agree upon". The word "compromise" implies some element of accommodation on each side. It is not apt to describe total surrender. (See N.F.U. Development Trust Ltd .. Re 1). A compromise is always bilateral and means mutual adjustment. "Settlement" is termination of legal proceedings by mutual consent. The case at hand did not involve compromise or settlement and could not have been disposed of by the Lok Adalat. If no compromise or settlement is or could be arrived at, no order can be passed by the Lok Adalat. A compromise is always bilateral and means mutual adjustment. "Settlement" is termination of legal proceedings by mutual consent. The case at hand did not involve compromise or settlement and could not have been disposed of by the Lok Adalat. If no compromise or settlement is or could be arrived at, no order can be passed by the Lok Adalat. Therefore, the disposal of Writ Petition No. 13555 of 1994 filed by Respondent 1 is clearly impermissible." 14. In the case of State of Punjab and Others vs. Ganpat Raj [ (2006)8 SCC 364 ]. the Supreme Court again discussed the provisions of Sections 20(3) and (5) of the Act and observed as under:-. "7. The specific language used in sub-section (3) of Section 20 makes It clear that the Lok Adalat can dispose of a matter by way of a compromise or settlement between the parties Two crucial terms in sub-sections (3) and (5) of Section 20 are "compromise" and "settlement". The former expression means settlement of differences by mutual concessions. It is an agreement reached by adjustment of conflicting or opposing claims by reciprocal modification of demands. As per Termes de la Ley, "compromise is a mutual promise of two or more parties that are at controversy". As per Bouvier it is "an agreement between two or more persons, who. to avoid a law suit, amicably settle their differences, on such terms as they can agree upon". The word "compromise" implies some element of accommodation on each side. It is not apt to describe total surrender. (See NFU Development Trust Ltd., Re. 2). A compromise is always bilateral and means mutual adjustment. "Settlement" IS termination of legal proceedings by mutual consent. The case at hand did not involve compromise or settlement and could not have been disposed of by the Lok Adalat. If no compromise or settlement is or could be arrived at, no order can be passed by the Lok Adalat. Therefore, the disposal of Civil Writ Petition No. 243 of 2000 filed by the respondent is clearly impermissible. 15. Similar view has been taken by the Supreme Court in another case of Union of India VS. Ananto & Anr. [ AIR 2007 SC 1561 ], where their Lordships observed:- "7. Therefore, the disposal of Civil Writ Petition No. 243 of 2000 filed by the respondent is clearly impermissible. 15. Similar view has been taken by the Supreme Court in another case of Union of India VS. Ananto & Anr. [ AIR 2007 SC 1561 ], where their Lordships observed:- "7. The specific language used in sub-section (3) of Section 20 makes it clear that the Lok Adalat can dispose of a matter by way of a compromise or settlement between the parties. Two crucial terms in sub-sections (3) and (5) of Section 20 are "compromise" and "settlement". The former expression means settlement of differences by mutual concessions. It is an agreement reached by adjustment of conflicting or 0pposll1g claims by reciprocal modification of demands. As per Termes de la Ley. "compromise is a mutual promise of two or more parties that are at controversy". As per Bouvier it is "an agreement between two or more persons, who to avoid a law suit, amicably settle their differences. on such terms as they can agree upon". The word "compromise" implies some element of accommodation on each side. It is not apt to describe total surrender. (Sec NFU Development Trust Ltd .. Re. 2). A compromise is always bilateral and means mutual adjustment. "Settlement" is termination of legal proceedings by mutual consent. The case at hand did not involve compromise or settlement and could not have been disposed of by the Lok Adalat. If no compromise or settlement is or could be arrived at, no order can be passed by the Lok Adala\ Therefore. question of merger of Lok Adalat's order does not arise." 16. Recently 111 the case of State of Punjab and Anr. VS. Jalour Singh & Ors. [Civil Appeal No. 522 at 2008]. a Bench of the Supreme Court presided over by K.G. Balakrishnan. CJI, discussed the power of the Lok Adalat and held as under:- "8. It is evident from the said provisions that Lok Adalats have no adjudicatory or Judicial functions. Their functions relate purely to conciliation A Lok Adalat determines a reference on the basis of a compromise or settlement between the parties at Its instance. and put its seal of confirmati0l1 by making an award in terms of the compromise or settlement. It is evident from the said provisions that Lok Adalats have no adjudicatory or Judicial functions. Their functions relate purely to conciliation A Lok Adalat determines a reference on the basis of a compromise or settlement between the parties at Its instance. and put its seal of confirmati0l1 by making an award in terms of the compromise or settlement. When the Lok Adalat is not able to arrive at a settlement or compromise, no award IS made and the case record is returned to the court from which the reference was received, for disposal in accordance with law. No Lok Adalat has the power to "hear" parties to adjudicate cases as a court does. It discusses the subject matter with the parties and persuades them to arrive at a just settlement. In their conciliatory role, the Lok Adalats are guided by principles of justice. equity, fair play. When the LSA Act refers to 'determination' by the Lok Adalat and 'award' by the Lok Adalat, the said Act does not contemplate nor require an adjudicatory judicial determination, but a non-adjudicatory determination based on a compromise or settlement, arrived at by the parties, with guidance and assistance from the Lok Adalat. The 'award' of the Lok Adalat does not mean any independent verdict or opinion arrived at by any decision making process. The making of the award is merely an administrative act of incorporating the terms of settlement or compromise agreed by parties in the presence of the Lok Adalat, in the form of an executable order under the signature and seal of the Lok Adalat." 17. Recently in the case of II United India Insurance Co. Ltd. vs. Ajay Sinha and Another" (2008)2 Arb.LR 425 (C), the Supreme Court has considered the scope and jurisdiction of Permanent Lok Adalat and observed as under:- "24. Chapter VI-A stands independently. Whereas, the heading of the Chapter talks of pre-litigation, conciliation and settlement, Section 22C (8) of the Act speaks of determination. It creates another adjudicatory authority, the decision of which by a legal fiction would be a decision of a Civil Court. It has the right to decide a case. The term 'decide' means to determine; to form a definite opinion; to render judgment [See Advanced Law Lexicon, 3rd Edition 2005 at p. 1253]. Any award made by the Permanent Lok Adalat is executable as a decree. No appeal there against shall lie. It has the right to decide a case. The term 'decide' means to determine; to form a definite opinion; to render judgment [See Advanced Law Lexicon, 3rd Edition 2005 at p. 1253]. Any award made by the Permanent Lok Adalat is executable as a decree. No appeal there against shall lie. The decision of the Permanent Lok Adalat is final and binding on parties. Whereas on the one hand, keeping in view the Parliamentary intent, settlement of all disputes through negotiation, conciliation, mediation, Lok Adalat and judicial settlement are required to be encouraged, it is equally well settled that where the jurisdiction of a Court is sought to be taken away, the statutory provisions deserve strict construction. A balance is thus required to be 'struck. A Court of law can be created under a statute. It must have the requisite infrastructure there for. Independence and impartiality of Tribunal being a part of human right is required to be taken into consideration for construction of such a provision. When a Court is created, the incumbents must be eligible to determine the lis. 25. An option is given to any party to a dispute. It may be a public utility service provider or a public utility service recipient. The service must have some relation with public utility. Ordinarily insurance service would not come within the public utility service. But having regard to the statutory scheme. it must be held to be included there under. It is one thing to say that an authority is created under a statute to bring about a settlement through alternate dispute resolution mechanism but it is other thing to say that an adjudicatory power is conferred on it. Chapter VI-A, therefore, in our opinion, deserves a closure scrutiny. In a case of this nature, the level of scrutiny must also be high [See Anuj Garg and Others. vs. Hotel Association of India and Others, (2008)3 SCC1]." 18. In the instant case, the respondents claim compensation of Rs. 10,000/- (ten thousand) and cost of Rs. 2000/- (two thousand) on the allegation that his telephone connection remain out of order for about one month i.e. from 8.5.2005 to 2.6.2005. The appellant refuted the said allegation and stated that because of cable fault, the telephone remains out of order and as per the departmental rule, a rebate was sanctioned for the interruption and thereby respondent was adequately compensated. The appellant refuted the said allegation and stated that because of cable fault, the telephone remains out of order and as per the departmental rule, a rebate was sanctioned for the interruption and thereby respondent was adequately compensated. Inspite of the aforesaid fact, Permanent Lok Adalat exercised the adjudicatory role and ignoring the Telegraph Act and the Rules, awarded compensation of Rs. 10,000/- and cost of Rs. 2000/without. any basis. In our opinion, instead of exercising adjudicatory role the Permanent Lok Adalat ought to have acted in such a manner to bring the parties into a settlement. The duty of the Permanent Lok Adalat is to bring the parties to a settlement and to pass award instead of adjudicating a dispute and pass an award without taking notice of the Act and the Rules under which claim was entertainble. In our considered opinion. Permanent Lok Adalat has no jurisdiction to directly invoke the provision of Sub-section (8) of Section 22-C and decide the dispute on merit against the will of the party. As the basic object and power of enacting Chapter VIA is to get the disputes settled at the pre-litigation stage the provision of sub-section (8) become redundant where the Permanent Lok Adalat failed to apply the provisions of sub-section (4) to (7) of Section 22-C of the Act. 19. We have, therefore, no hesitation in holding that the impugned award passed by the Permanent Lok Adalat is wholly without jurisdiction. 20. This writ application is, therefore, allowed and the impugned award passed by the Permanent Lok Adalat is set aside. D.K Sinha, J.-1 agree.