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Alternative Dispute Resolution Through Section 89 Code Of Civil Procedure 1908

Alternative Dispute Resolution (ADR) is not just about Arbitration it engulfs in itself various modes which are different from litigation but solve the same purpose that is 'provide justice' but in a speedier and an efficient manner. Section 89 of the Code of Civil Procedure, 1908 which was introduced by the Act of 1999 and came into effect from 01/07/2002, embodies the legislative mandate to the court to refer civil disputes to various ADR mechanisms mentioned in the Section where it finds it appropriate to do so.

The general principle behind all the matters is to reach a settlement that is to get justice, then why not opt for ways which can be settled amicably and efficiently by means of compromise. Therefore this Article tries to analyse the Section 89 of Code of Civil Procedure ("CPC") and to provide an overview of the same.

Laws in India or to be general, laws all over the world in civilised societies are categorised into substantive and procedural laws. The former decides the rights and duties of the people who are subject to it and the latter lays down the procedure for the effective implementation of the substantive laws.

Code of Civil Procedure is a procedural law which encompasses the procedure for procuring remedies related to any Civil dispute in the court of law. It is a perfect collection of all the laws that relate to the procedure adopted by civil courts and parties appearing thereunder.

From 1859, when British India got its first uniform civil code till 1908 the Code Of Civil Procedure got replaced thrice. There could be many reasons for the same but the major reason that needs to be pointed out is the change in the circumstances and needs that the legislature kept realising from time to time.

Moving ahead to the independent India wherein the country still follows the Code Of Civil Procedure, 1908 which is considered to be one of the most important laws of the land but the same has had its turn of amendments over the period of time.

One such amendment that creeped up looking upon the delay in delivering justice and the cost of litigation combined with the lack of judges, was Section 89 of the code. This section allows the court to refer the parties to alternative dispute resolutions with a view to settle the matter effectively and in less time.

Alternative Dispute Resolution is a way out for the litigants to procure justice in a shorter period of time and is also cost effective. In return it reduces the court with the burden of cases that get piled up on a daily basis. It is provided for with the sole objective of blending judicial and non-judicial dispute resolution mechanisms and bringing alternate dispute mechanisms to the centre of the Indian Judicial System. In the modern day world where everything and anything can be substituted but cannot be delayed, justice is also being served in an alternative way in order to curb the delay.

The Article in a way makes an attempt to Analyse the section and give an overview of the alternative methods that section 89 resorts to for delivering justice in a non traditional way and thereby examines the law commission as well as the Malimath report and how it led to the amendment of the code.

Analysis Of Section 89 CPC

Alternative Dispute Resolution is a substitute to the conventional methods of resolving disputes which offer to resolve matters related to civil, commercial, industrial and family etc. This basically is done by the involvement of a third party that helps the parties in dispute to communicate and discuss the differences which have led to the dispute and resolve them effectively. It thereby maintains co-operation, social order and provides an opportunity to reduce hostility.

89. Settlement of disputes outside the Court:
  1. Where it appears to the Court that there exist elements of a settlement which may be acceptable to the parties, the Court shall formulate the terms of settlement and give them to the parties for their observations and after receiving the observations of the parties, the Court may re-formulate the terms of a possible settlement and refer the same for:
    1. arbitration;
    2. conciliation;
    3. judicial settlement including settlement through Lok Adalat; or
    4. mediation.
  2. Where a dispute has been referred:
    1. for arbitration or conciliation, the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply as if the proceedings for arbitration or conciliation were referred for settlement under the provisions of that Act;
    2. to Lok Adalat, the Court shall refer the same to the Lok Adalat in accordance with the provisions of sub-Section (1) of Section 20 of the Legal Services Authority Act, 1987 (39 of 1987) and all other provisions of that Act shall apply in respect of the dispute so referred to the Lok Adalat;
    3. for judicial settlement, the Court shall refer the same to a suitable institution or person and such institution or person shall be deemed to be a Lok Adalat and all the provisions of the Legal Services Authority Act, 1987 (39 of 1987) shall apply as if the dispute were referred to a Lok Adalat under the provisions of that Act;
    4. for mediation, the Court shall effect a compromise between the parties and shall follow such procedure as may be prescribed.

A bare reading of the section gives a clear view that there needs to exist particular elements only then the dispute can be referred to alternative resolutions which tells us that not all matters are subject to ADR as mentioned before. The code also does not depend upon any single method of ADR and lists down 4 different methods namely Arbitration, Conciliation, both of them are subject to Arbitration and Conciliation Act, 1996, judicial settlement including settlement through Lok Adalat which is subject to provisions of sub-Section (1) of Section 20 of the Legal Services Authority Act, 1987, Mediation which is subject to the procedure that may be prescribed.

The powers conferred to the court is evidently vast as it allows it to surpass the decision of the parties but the words 'there exist elements of a settlement which may be acceptable to the parties' caste a responsibility on the court where it requires it to be lenient towards exercising of the power and should refer the parties to ADR only when the parties are on the same page and are ready for a settlement that is out of court.

The Court must guide the litigants towards which course or means to resolve a dispute, taking into consideration the legal acumen and knowledge of the judges and the appropriate forum for the dispute, only after the above stated element are taken into consideration. Sensible use of discretion may work wonders for the parties but the use of the power in a mechanical manner will in turn add up to the miseries of the parties. The court may however take it as a statutory duty to refer certain kinds of matters to ADR.

It is pertinent to note that the Arbitration cases are moved out of the court that is out of the court jurisdiction but in the case of conciliation or judicial settlement through Lok adalat or even mediation the courts have the jurisdiction over it and the result of the proceeding will have to be placed before the court recording it and the disposal will be through courts like a decree.

Procedure To Be Followed Under Section 89 CPC

The court is not conferred with the power to read the section in isolation and needs to be read with Rule 1A, 1B and 1C of Order X of Code Of Civil Procedure so the procedure that needs to be followed is:
  • The court will first record the admissions and denials made by the parties to the dispute.
  • As mentioned in the section ('Where it appears to the Court that there exist elements of a settlement which may be acceptable to the parties') it enables the court to take the next step for formulating such terms for the settlement which may be passed on to the parties for confirmation.
  • The parties may then return the court their observations and if the court is satisfied that a change in the term is required, it may make such changes by exercising its discretion.
  • The option to choose the forum for resolving the dispute is generally given to the parties and the court just affirms the option chosen by the parties.

Law Commission Report And The Malimath Report.

Law commission came up with a view for the introduction of a conciliation court system a system different from the traditional court system which has its own defects and is unknown to none.

The Law Commission referred to the Order XXVII Rule 5B of the Code which has the heading Duty of court in suits against the Government or a public officer in arriving at a settlement and observed:
"Though rule 5B is limited in its application to a suit to which the Government or the public officer acting in his official capacity is a party,it is time to expand the coverage of the method of resolution of disputes therein provided to all suits in civil courts, including the claim for compensation before the Motor Accidents Claims Tribunal. Rule 5B provides that in a suit to which it applies, it should be the duty of the court to make, in the first instance, every endeavor where it is possible to do so consistently with the nature and circumstances of the case to assist the parties in arriving at a settlement in respect of the subject matter of the dispute.

Where the court is of the opinion that there is a reasonable possibility of a settlement between the parties to the suit, the proceedings may be adjourned for such a period as it thinks fit to enable attempts to be made to effect such settlement. Rule 5B expects the court before which the suit is pending to itself attempt to conciliate the dispute".

Malimath committee on the other hand suggested for a "legal sanction to a machinery for resolution of disputes and resort thereto is compulsory" with the objective of reducing the number of cases getting piled up in civil courts on a daily basis.

The Law Commission considered it necessary to introduce the following provision in Order X of the Code.

The following may be added as sub-clause (c) immediately after sub-clause (b), clause (i) rule 2 of Order X of the Code of Civil Procedure: "may require the attendance of any party to the suit or proceedings, to appear in person with a view to arriving at an amicable settlement of the dispute between the parties and make an attempt to settle the dispute between the parties amicably".

The following may be added as clause(3) immediately below clause(2) of rule 4 of Order X Code of Civil Procedure:8 "Where a party ordered to appear before the court in person with a view to arriving at an amicable settlement of the dispute between the parties, fails to appear in person before the court without lawful excuse on the date so appointed, the court may pronounce judgment against him or make such order in relation to the suit as it thinks fit".

Section 89 is a vital part of the Code of Civil Procedure which acts as an effective method to resolve disputes between parties through various ways of resolving the same. The Section thrives to reduce the burden of the court by ensuring that a compromise is arrived at between parties. Alternate Dispute Resolution is a means of increasing access to justice without decreasing the quality of justice.

  1. Dr. Justice Dhananjaya Y. Chandrachud, Mediation � Realizing The Potential And Designing Implementation Strategies, L. COMMISSION INDIA,
  2. Arbitration And Conciliation Act, 1996, Bare Act.
  3. A.R. Lakshmanan, Settlement of Disputes Outside the Court under Section 89(1) read with Order X Rules 1A, 1B and 1C of the Code of Civil Procedure, 1908, 5 M. L. J. 22 (2007).
  5. Dr. Anupam Kurlwal, Implementation and interpretation of section 89 CPC
  6. Law Commission of India, 129th Report, Urban Litigation: Mediation as Alternative to Litigation (1988).
  7. The Malimath Committee Report (Aug., 1990).
  8. It has now become imperative that resort to ADR mechanisms with a view to bring an end to litigation between the parties at an early date. Law Commission of India, 238th Report, Amendment of Section 89 of the Code of Civil Procedure, 1908

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