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Binding nature of Mediation: A discussion by Rakesh Kumar Singh
1.
Concept of mediation has though been very effective since its introduction, instances are also available where it has been used only as tactics to defeat the purpose of speedy disposal. The reason appears to be the fact that mediation settlements are not treated as binding unless the court records statement of parties and passes a decree thereon. The present paper will try to project a proposition that mediation mediation settlement is final, binding and a deemed decree without any further approval of court.
2. For convenience, we can formulate following points of determination for a proper discussion: i.
The manner in which Mediation Rules 200 were framed in !elhi"
ii.
!oes Affcons #udgment affect the abo$e %osition&
iii.
'an Rule(2) be #ustified under general rule making %ower&
iv.
*hen will an +nstitution or %erson become ,ok Adalat&
v.
*hat are the rele$ant %ro$isions of ,SA Act a%%licable to mediation&
vi.
'an it be said that %ro$isions of ,SA Act will not a%%ly to mediation&
vii.
Section(-./2/c is an illustration of legislation by reference"
viii.
*hether contrary obser$ation of Affcons is a binding %recedent"
i.
1bser$ations of second Salem Bar case regarding $isible record of mediation"
.
Affcons $s second Sale Bar case: a legal dichotomy"
i.
Rules $s statutory enactment: which one will %re$ail&
ii.
alidity of Rule(2) of Mediation Rules 200"
iii.
'an mediation rules talking about %rocedure of %re referral court related matter be #ustified&
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iv.
'an mediation rules related to actual mediation be #ustified to some e3tent&
v.
'an criminal com%oundable cases be sent for mediation&
vi.
The furture""""""""""""""
The manner in which Mediation Rules 200 were framed in !elhi:
!. "e have to first understand as to how the #ediation $ules were framed by the %on&ble %igh Court of 'elhi. (reamble ( reamble of the $ules reads as: )*n eercise of the rule ma+ing power under (art of the Code of Civil (rocedure, 1-/ 0 of 1-/ and clause 0d of sub3section 02 of 4ection /- of the said Code and all other powers enabling it in this behalf, the %igh Court of 'elhi hereby ma+es the following rules5 !.1. The above clearly shows that the %on&ble %igh Court has primarily primarily used its power available under (art3 of C(C and 4ection3/-020d C(C. "e can therefore first scan the anatomy of (art3. This part of C(C deals with the rule ma+ing power of %on&ble %igh Courts and ta+es in its fold 4ection3121 to 1!1. 4ection3122 and 12/ are relevant for the present purpose. 4ection3122 re ads as under: )(ower of certain %igh Courts to ma+e rules6%igh Courts 0not being the Court of a 7udicial Commissioner may, from time to time after previous publication, ma+e rules regulating their own procedure and the %rocedure of the 'i$il 'ourts subject to their superintendence, and may be such rules annual, alter or add to all or any of the rules in the First 4chedule.5 !.2. 4ection312/ has two sub3sections. 4ub3section302 tal+s about specific instances of rule ma+ing but does not include mediation and therefore the same is not relevant for the present purpose. 4ub3section301 is general in nature and reads as under: )4uch rules shall be not inconsistent with the provisions in the body of this Code, but, subject thereto, may provide for any matters relating to the procedure of Civil Courts.5 !.!. "hat immediately immediately becomes very clear is that the above indicated provisions empower the %on&ble %igh Court to frame rules to regulate the ) %rocedure of ci$il courts5 and the rules so made must not be inconsistent with the provisions of body
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of the Code, obviously means the part containing the sections. 'o these provisions say that %on&ble %igh Court can frame a rule for a procedure which is to be followed by another institution8 9nswer is simply ;. $eason is obvious.
>>>>>>>>>>0d for mediation, the court shall effect a compromise between the parties and shall follow such procedure as may be prescribed.5 !.. *t simply simply shows that whenever the parties parties choose mediation as an an option under 4ection3/-01, the court shall effect a compromise. #eaning thereby that it is the court which has to do the activity for compromise. ow, the C(C does not provide as to how the court will act or proceed to effect a compromise. Therefore, the 4ection itself gives the answer also in the wordings )and shall follow such procedure as may be prescribed5. 4o, the court has to follow such procedure as may be prescribed. !.?. "ho will will prescribe prescribe the procedure is the net @uestion. The The epression epression )%rescribed5 has a definite indication in modern legislative enactments. 4ection3 201? C(C reads as under: )201? )prescribed5 means prescribed by rules.5 !.A. Clearly, the procedure to be followed under 4ection3/-020d has to be prescribed by rules. The epression ) Rules5 is also a defined term under 4ection3 201/ of C(C which reads as under: )201/ )rules5 means rules and forms contained in the First 4chedule or made under section 122 or section 12.5 !./. 4o, $ules can either be as contained in first schedule or as framed by the %on&ble %igh Court. First schedule does not contain any rule of procedure to be followed for mediation. 4ection312 does not apply to %on&ble 'elhi %igh Court. 9s indicated above, 4ection3122 tal+s about rules to regulate procedure of civil courts. 4ection3/-020d obliges the court to effect compromise in case of mediation and procedure to be followed by court is to be prescribed by rules made under 4ection3 122. 4o, with all certainty %on&ble 'elhi %igh Court could have made rules to regulate the procedure of civil court even for effecting compromise through mediation. 9s such, #ediation $ules 2= could have been framed.
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=. The foundational basis of #ediation $ules 2= was the first 4alem
%owever, in second 4alem
=.2. *f this was the position, the the $ules framed under 4ection312/ read read with 4ection3 122 could only have provided for the procedure to be followed before the court and not before the mediator as both the 4ections empower to ma+e $ules only to regulate )%rocedure before ci$il court5 and not before any other institution. "hat could fall under such procedure can now be considered. There may be three stages. First, before referral i.e. as to how to choose for mediation and how to refer the dispute to mediation. 4econd, the actual mediation. Third, procedure after return of the settlement before the court i.e. how to dispose off the case. Clearly, first and third situations are related to court and therefore procedure can be prescribed by ma+ing rules under 4ection312/ read with 4ection3122. #ediation $ules 2= contain $ule3 2 which relate to the third stage indicated above and reads as: )$ule 2 : Court to fi a date for $ecording settlement and passing decree: 0a ;n receipt of any settlement, the Court shall fi a date of hearing normally within seven days but in any case not beyond a period of fourteen days. ;n such date of hearing, if the Court is
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satisfied that the parties have settled their dispute0s, it shall pass a decree in accordance with terms thereof. 0b *f the settlement dispose of only certain issues arising in the suit or proceeding, on the basis of which any decree is passed as stated in Clause 0a, the Court shall proceed further to decide remaining issues.5 =.!. The above rule clearly clearly shows that unless satisfaction is recorded recorded and decree is passed, the mediation settlement by itself has no legal sanctity. This is the provision which is primarily responsible for problem. 'espite settlement in mediation, one of the parties may choose not to give statement in the court and thereby defeat the very purpose.
!oes Affcons #udgment affect the abo$e %osition&
. %on&ble 4upreme Court through a judicial legislation has amended 4ection3 /-02 of the C(C. Garlier, 4ection3/-02 C(C was as under: )02 where a dispute has been referred 6 0a for arbitration or conciliation, the provisions of the 9rbitration and Conciliation 9ct, 1--? 02? of 1--? shall apply as if the proceedings for arbitration or conciliation were referred for settlement under the provisions of that 9ctH 0b to o+ 9dalat, the Court shall refer the same to the o+ 9dalat in accordance with the provisions of sub3section 01 of section 2 of the egal 4ervices 9uthority 9ct, 1-/A 0!- of 1-/A and all other provisions of that 9ct shall apply in respect of the dispute so referred to the o+ 9dalatH 0c 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 o+ 9dalat and all the provisions of the egal 4ervices 9uthority 9ct, 1-/A 0!- of 1-/A shall apply as if the dispute were referred to a o+ 9dalat under the provisions of that 9ctH 0d for mediation, the Court shall effect a compromise between the parties and shall follow such procedure as may be prescribed.5 .1.
*n 9ffcons, it was held as under:
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)the definitions of 4#udicial settlement5 and 4mediation5 in clauses /c and /d of section -./2 shall ha$e to be interchanged to correct the draftsman5s error" 5 .2. Clearly, after the above changes made by the %on&ble %on&ble 4upreme Court, 4ection3 /-02 C(C to the relevant etant will read as under: )0c for )mediation5, the court shall refer the same to a suitable institution or person and such institution or person shall be deemed to be a o+ 9dalat and all the provisions of the egal 4ervices 9uthority 9ct, 1-/A 0!- of 1-/A shall apply as if the dispute were referred to a o+ 9dalat under the provisions of that 9ctH 0d for )judicial settlement5, the court shall effect a compromise between the parties and shall follow such procedure as may be prescribed.5 .!. The 6on5ble Su%reme 'ourt then issued a clear direction as under: )The abo$e changes made by inter%retati$e %rocess shall remain in force till the legislature corrects the mistakes7 so that section -. is not rendered meaningless and infructuous" 5 .=. "e have already noted that the base of mediation mediation rules was first first Salem Bar case. The relevant etracts therefrom are: B4ection /-020d, therefore, contemplates appropriate rules being framed with regard to mediationB DDDDD The #odel rules, with or without modification, which are formulated may be adopted by the %igh Court concerned for giving effect to 4ection /-020dB .. *hy it was so&
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)/-020d for )judicial settlement5, the court shall effect a compromise between the parties and shall follow such procedure as may be prescribed.5 .A. There is thus no mention of mediation in in the aforesaid provision. provision. ow, the above section says that if the parties have chosen to go for judicial settlement, then the court will effect compromise and follow such procedure as may be prescribed. *f the rules are made to give effect to 4ection3/-020d, then it can only apply for a judicial settlement and not for mediation unli+e the situation before amendment. #eaning thereby that the $ule32 of #ediation $ules which were made to give effect to 4ection3/-020d cannot be treated as valid after the amendment as 4ection3/-020d itself is now not applicable to the mediation. 0* will tal+ about other rules in later part of this journey.
'an Rule(2) be #ustified under general rule making %ower&
?. "e have seen that due to amendment made, 4ection3/-020d cannot justify $ule32 of #ediation $ules 2=. "e have also seen that the $ule falls within third category of situation which is related to a court procedure. ow, in terms of 4ection3 122 and 12/, the %on&ble %igh Court is empowered to frame any rule to regulate the )procedure of civil court5. 'oes this general power justify the ma+ing of $ule32 is now the prime @uestion. ?.1. "e have to again go through both the sections which which to the relevant etant read as under: )122. (ower of certain %igh Courts to ma+e rules3%igh Courts 0not being the Court of a 7udicial Commissioner may, from time to time after previous publication, ma+e rules regulating their own procedure and the %rocedure of the 'i$il 'ourts subject to their superintendence, and may be such rules annual, alter or add to all or any of the rules in the First 4chedule.5 )12/01. 4uch rules shall be not inconsistent with the provisions in the body of this Code, but, subject thereto, may provide for any matters relating to the procedure of Civil Courts.5 ?.2. o doubt, the general power of rule ma+ing ma+ing does contemplate that the the procedure before the court may be regulated by the rules but with certainty it bars ma+ing of any rule which is inconsistent with the body of the code. eedless to say that body of the code means part of C(C which contains the sections 0for obvious reasons, first schedule cannot be included as the rules can even alterEannul the first
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schedule. ;ne of the sections in body of the code is 4ection3/-020c which after the amendment through 9ffcons reads as under: )0c for )mediation5, the court shall refer the same to a suitable institution or person and such institution or person shall be deemed to be a o+ 9dalat and all the provisions of the egal 4ervices 9uthority 9ct, 1-/A 0!- of 1-/A shall apply as if the dispute were referred to a o+ 9dalat under the provisions of that 9ct5. ?.!. The above provision contemplates three stages. stages. First, First, referring the dispute dispute to a suitable institution or person. 4econd, creation of deeming fiction for such institution or person. 9nd third, applicability of law to such institution or person. ?.=. First stage is the activity covered before the civil court i.e. the court that is referring the matter and there is nothing in the C(C or any other law which provides any procedure to be followed by the court at this stage. Therefore, rules may be made under general rule ma+ing power of the %on&ble %igh Court. 4econd stage is clearly a creation of (arliament. *t creates a o+ 9dalat by a deeming fiction. There remains nothing for anyone to do anything at this stage. $eason is obvious. *n all circumstances, once the referral stage is over, the institution or person to whom matter has been referred will become a o+ 9dalat in itself without anything more. et is the third stage of applicability of law. 9gain by a deeming fiction created by the (arliament, the law governing the procedure has been provided i.e. the provisions of egal 4ervices 9uthority 9ct, 1-/A. #eaning thereby that procedure for mediation has been provided by a deeming fiction created under 4ection3/-020c. 4ection312/01 says that $ules shall not be inconsistent with the body of the code and further that subject to the provisions available in the body of the code, rules may be made to regulate the procedure of court. 4o, not only the rules should not be inconsistent to 4ection3/-020c but such rules shall also be subject to 4ection3 /-020c. ;nce, 4ection3/-020c provides that provisions of egal 4ervices 9uthority 9ct shall apply, there cannot be any @uestion of framing any other rule in this regard. The mediation has to be governed by the provisions of egal 4ervices 9uthority 9ct 0as if the matter has been referred under relevant provisions of 49 9ct once the matter is received by the institution or person to whom the same has been referred.
*hen an +nstitution or %erson will become ,ok Adalat:
A. ;ne thing is however very significant. Gven amended 4ection3/-020c does not ma+e the mediation institute or person a o+ 9dalat. "hat it says is simply this: whenever the dispute is referred for mediation to any suitable institution or person, such institution or person shall be deemed to be a o+ 9dalat. ;bviously, to deem
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)95 as )<5 the pre3eistence of )95 is a necessity. #eans, unless the )95 already eits, it cannot be deemed to be )<5 through a fiction. %ere, )95 is a suitable institution or person. Can we say that if an institution by the name of mediation centre or a person by the name of mediator eists in 'elhi, therefore the same shall be deemed to be o+ 9dalat8 9nswer is bound to be in the negative. The 4ection has used )institution or person5 at two places. *t has used an indefinite article ) a5 at the first place denoting that it may be any institution or person to whom matter may be referred for mediation.
*hat are the rele$ant %ro$isions of ,SA Act a%%licable to mediation:
/. "e should go through the provisions of 49 9ct to ascertain as to what are the provisions which can apply to the mediation. 4ection3! to 1/ tal+s about constitution of different authorities, provisions for legal aid and finances. Therefore, these sections are not material for mediation. Chapter3I*9 tal+s about permanent o+ 9dalat which does not contemplate court referred matters and therefore the same is also not material for mediation. Chapter3I** tal+s about rule ma+ing power of government and legal services authorities, removal of difficulties, eemption from prosecution etc. and therefore is not material for our purpose ecept section32 which gives overriding effect. Then remains 4ection31- to 22 which read as under: )1-. 01 Gvery 4tate 9uthority or 'istrict 9uthority or the 4upreme Court egal 4ervices Committee or every %igh Court egal 4ervices Committee or, as the case may be, Talu+ egal 4ervices Committee may organiJe o+ 9dalats at such intervals and places and for eercising such jurisdiction and for such areas as it thin+s fit.
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02 Gvery o+ 9dalat organiJed for an area shall consist of such number of3 0a serving or retired judicial officersH and 0b other persons, of the area as may be specified by the 4tate 9uthority or the 'istrict 9uthority or the 4upreme Court egal 4ervices Committee or the %igh Court egal 4ervices Committee or, as the case may be, the Talu+ egal 4ervices Committee, organiJing such o+ 9dalat. 0! The eperience and @ualifications of other persons referred to in clause 0b of sub3section 02 for o+ 9dalats organiJed by the 4upreme Court egal 4ervices Committee shall be such as may be prescribed by the Central Kovernment in consultation with the Chief 7ustice of *ndia. 0= The eperience and @ualifications of other persons referred to in clause 0b of sub3section 02 for o+ 9dalats other than referred to in sub3section 0! shall be such as may be prescribed by the 4tate Kovernment in consultation with the Chief 7ustice of the %igh Court. 0 9 o+ 9dalat shall have jurisdiction to determine and to arrive at a compromise or settlement between the parties to a dispute in respect of33 0i any case pending beforeH or 0ii any matter which is falling within the jurisdiction of and is not brought before, any court for which the o+ 9dalat is organiJed: (rovided that the o+ 9dalat shall have no jurisdiction in respect of any case or matter relating to an offence not compoundable under any law. 2. 01 "here in case referred to in clause 0i of sub3section 0 of section 1-. 0i 0a the parties thereof agreeH or 0b one of the parties thereof ma+es an application to the court, for referring the case to the o+ 9dalat for settlement and if such court is prima facie satisfied that there are chances of such settlementH or 0ii the court is satisfied that the matter is an appropriate one to be ta+en cogniJance of by the o+ 9dalat, the court shall refer the case to the o+ 9dalat : (rovided that no case shall be referred to the o+ 9dalat under sub3 clause 0b of clause 0i or clause 0ii by such court ecept after giving a reasonable opportunity of being heard to the parties. 02 otwithstanding anything contained in any other law for the time being in force, the 9uthority or Committee organiJing the o+ 9dalat under sub3section 01 of section 1- may, on receipt of an application from any one of the parties to any matter referred to in clause 0ii of sub3section 0 of section 1- that such matter needs to be determined by a o+ 9dalat, refer such matter to the o+ 9dalat, for determination: (rovided that no matter shall be referred to the o+
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9dalat ecept after giving a reasonable opportunity of being heard to the other party. 0! "here any case is referred to a o+ 9dalat under sub3section 01 or where a reference has been made to it under sub3section 02, the o+ 9dalat shall proceed to dispose of the case or matter and arrive at a compromise or settlement between the parties. 0= Gvery o+ 9dalat shall, while determining any reference before it under this 9ct, act with utmost epedition to arrive at a compromise or settlement between the parties and shall be guided by the principles of justice, e@uity fair play and other legal principles. 0 "here no award is made by the o+ 9dalat on the ground that no compromise or settlement could be arrived at between the parties, the record of the case shall be returned by it to the court, from which the reference has been received under sub3section 01 for disposal in accordance with law. 0? "here no award is made by the o+ 9dalat on the ground that no compromise or settlement could be arrived at between the parties, in a matter referred to in sub3section 02, that o+ 9dalat shall advice the parties to see+ remedy in a court. 0A "here the record of the case is returned under sub3section 0 to the court, such court shall proceed to deal with such case from the stage which was reached before such reference unde r sub3section 01. 21. 01 Gvery award of the o+ 9dalat shall be deemed to be a decree of a civil court or, as the case may be, an order of any other court and where a compromise or settlement has been arrived at by a o+ 9dalat in a case referred to it under sub3section 01 of section 2, the court3fee paid in such case shall be refunded in the manner provided under the Court3fees 9ct, 1/A. 02 Gvery award made by a o+ 9dalat shall be final and binding on all the parties to the dispute, and no appeal shall lie to any court against the award. 22. 01 The o+ 9dalat )or (ermanent o+ 9dalat5 shall, for the purposes of holding any determination under this 9ct, have the same powers as are vested in a civil court under the Code of Civil (rocedure, 1-/, while trying a suit in respect of the following matters, namely:3 0a the summoning and enforcing e nforcing the attendance of
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any witness and eamining him on oathH 0b the discovery and production of any documentH 0c the reception of evidence on affidavitsH 0d the re@uisitioning of any public record or document or copy of such record or document from any court or officeH and 0e such other matters as may be prescribed. 02 "ithout prejudice to the generality of the powers contained in sub3section 01, every o+ 9dalat )or (ermanent o+ 9dalat5 shall have the re@uisite powers to specify its own procedure for the determination of any dispute coming before it. 0! 9ll proceedings before a o+ 9dalat )or (ermanent o+ 9dalat5 shall be deemed to be judicial proceedings within the meaning of sections 1-!, 21- and 22/ of the *ndian (enal Code and every o+ 9dalat shall be deemed to be a civil court for the purpose of section 1- and Chapter I* of the Code of Criminal (rocedure, 1-A!.5 /.1. 4ection31- empowers empowers the legal services authorities to constitute constitute a o+ 9dalat, 9dalat, to provide for number of members thereof or their @ualification. *t is only 4ection3 1-0 which tal+s about the matters which can be dealt with by the o+ 9dalat. %owever, even this sub3section has no relevance relevance for the present purpose as the deemed o+ 9dalat under 4ection3/-020c can deal with only the matter which has the basis of its creation through the deeming fiction i.e. the matter specifically referred to it there3under. /.2. 4ection3201 and and 202 tal+ about who can refer a matter and and how.
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/.. 4ection320= and 4ection322 are are re@uired re@uired to be considered together. 4ection3 20= indicates that o+ 9dalat shall be guided by natural principles. 4ection32201 gives the o+ 9dalat some of the powers of civil court. *t is however 4ection32202 which provides for some additional avenue to lay down procedure which may, by way of some farfetched interpretation, be utiliJed for procedure before mediator 0* will deal with this concept in later part of this opinion.
4ection320! and 4ection321 are significant. 4ection321 reads as under: )21. 01 Gvery award of the o+ 9dalat shall be deemed to be a decree of a civil court or, as the case may be, an order of any other court and where a compromise or settlement has been arrived at by a o+ 9dalat in a case referred to it under sub3section 01 of section 2, the court3fee paid in such case shall be refunded in the manner provided under the Court3fees 9ct, 1/A. 02 Gvery award made by a o+ 9dalat shall be final and binding on all the parties to the dispute, and no appeal shall lie to any court against the award.5
/.A.
Following situations immediately become clear: 9ward shall be deemed to be a decreeH 9ward shall be finalH 9ward shall be binding on partiesH o appeal shall lie against award to any court.
/./.
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/.-. *t clearly says that upon settlement the case has to be disposed of. The term )case5 has been defined in 4ection320a 4e ction320a of 49 9ct which reads as under: )20a )case5 includes a suit or any proceeding before a court5. /.1. 9 suit pending before a civil civil court is clearly a )case5 )case5 for the purpose of 4ection320! of 49 9ct and therefore it has to be disposed of by the o+ 9dalat and the same procedure has to be applied by the mediator in terms of 4ection3/-020c. ;nce the matter is settled, the case 0i.e. the suit has to be disposed of by the o+ 9dalat 0even by deemed o+ 9dalat and therefore there remains nothing for the court to do with the suit. Gven the 49 9ct tal+s about return of matter in cases of no3settlement but does not provide for return in case of settlement. Therefore, there cannot be any @uestion of returning the case to the civil court after settlement. Conse@uently, the aforesaid proposition cannot be adopted. /.11. *nterestingly, 4ection320 and 20? tal+ about dispute referred to by a court and a dispute which has not been referred to by a court and provide for different conse@uences in case of non3settlement. "hereas 4ection321 does not differentiate between an award made upon reference of court and an award made in the matter not referred by court. Gpression used in both the sub3sections of 4ection321 is )e$ery award5 and therefore it will ta+e widest possible meaning and include in its fold all the awards made by a o+ 9dalat irrespective of the referral refe rral position i.e. who referred the dispute or how it has been referred. 4imilarly, 4ection320! has used )disposed of5 in respect of caseEmatter if settlement is arrived at and there is no distinction between dispute referred by a court and a dispute not referred by a court. The only distinction made by the 49 9ct is between conse@uence of settlement and no3settlement. *f settlement happens, one particular line of action will ensue whereas if dispute is not settled, the other line of action will ensue. othing more. Clearly, when the (arliament wanted to differentiate between conse@uences of two modes of referral, it has done so specifically but for award L disposal, it has not made any differentiation. "e cannot adopt any proposition which goes contrary to plain language of the statutory provisions.
'an it be said that %ro$isions of ,SA Act will not a%%ly to mediation&:
-. 4ection3/-020c says ) all the %ro$isions of the ,egal Ser$ices Authority Act7 8.-9 /. of 8.-9 shall a%%ly as if the dis%ute were referred to a ,ok Adalat under the %ro$isions of that Act5. The only provision of 49 9ct which provides for reference by a court is 4ection3201. Therefore, once the court sends the dispute for mediation, the mediator shall be deemed to be a o+ 9dalat and the dispute shall be treated as if it has been referred to under 4ection3201. ;nce it is treated as referred under 4ection3201, all the provisions conse@uent thereto shall
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automatically become applicable. 4ection320!, 20, 20A clearly tal+ about dispute referred under 4ection3201. 4o these provisions will apply to the matters referred to mediation 0deemed o+ 9dalat and conse@uently, case has to be disposed of if settlement is arrived at and in the situation of no3settlement, the case has to be returned to concerned court which shall continue with the trial. 4ection3 20=, 21, 22 tal+ about any reference, every award, any determination. 4o, these provisions will apply without any discrimination. Conse@uently, the same shall also apply to the matters referred to mediation in terms of deeming fiction created under 4ection3/-020c C(C.
Section(-./2/c is an illustration of legislation by reference:
1. 9 constitution bench of %on&ble 4upreme Court in ;irnar Traders $s State of Maharashtra < 1rs" dated 11.1.211 has commented upon the doctrine of legislation by reference in following manner: )"hen there is general reference in the 9ct in @uestion to some earlier 9ct but there is no specific mention of the provisions of the former 9ct, then it is clearly considered as legislation by reference. *n the case of legislation by reference, the amending laws of the former 9ct would normally become applicable to the later 9ctH but, when the provisions of an 9ct are specifically referred and incorporated in the later statute, then those provisions alone are applicable and the amending provisions of the former 9ct would not become part of the later 9ct. This principle is generally gene rally called legislation by incorporation. Keneral reference, ordinarily, will imply eclusion of specific reference and this is precisely the fine line of distinction between these two doctrines.
DDDD
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"hen the later law depends on the former law for proceduralEsubstantive provisions or is to draw its strength from the provisions of the former 9ct, the later 9ct is termed as the supplemental to the former law.5 1.1. #eaning thereby that 4ection3/-020c 4ection3/-020c has made the provisions provisions of 49 9ct as part of C(C by fiction whenever a dispute is referred for mediation. *f this is the position, no rule can be made which is inconsistent or if a rule is to be made the same will be subject to sections of C(C as laid down in 4ection312/. 09nd of course, provisions of 49 9ct will fictionally be treated as being made part of 4ection3 /-020c in view of doctrine of legislation by reference. 1.2. Further, if provisions of 49 9ct 0including 4ection32 and and 21 are fictionally treated as being made in 4ection3/-020c of C(C, how one will be able to say that those provisions cannot apply to matter settled in mediation.
*hether contrary obser$ation of Affcons is a binding bi nding %recedent:
11. %on&ble 4upreme Court in 9ffcons has made some interesting observations in following manner: )Though the settlement agreement in a conciliation or a settlement award of a o+ 9dalat may not re@uire the seal of approval of the court for its enforcement when they are made in a direct reference by parties without the intervention of court, the position will be different if they are made on a reference by a court in a pending suitEproceedings. DD 9s the court continues to retain control and jurisdiction over the cases which it refers to conciliations, or o+ 9dalats, the settlement agreement in conciliation or the o+ 9dalat award will have to be placed before the court for recording it and disposal in its terms. "here the reference is to a neutral third party 0Mmediation& as defined above on a court reference, though it will be deemed to be reference to o+ 9dalat, as court retains its control and jurisdiction over the matter, the mediation settlement will have to be placed before the court for recording the settlement and disposal. DDD
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"henever such settlements reached before non3adjudicatory 9'$ Fora are placed before the court, the court should apply the principles of ;rder 2! $ule ! of the Code and ma+e a decreeEorder in terms of the settlement, in regard to the subject matter of the suitEproceeding. *n regard to mattersEdisputes which are not the subject matter of the suitEproceedings, the court will have to direct that the settlement shall be governed by 4ection A= of 9C 9ct 0in respect of conciliation settlements or 4ection 21 of the egal 4ervices 9uthorities 9ct, 1-/A 0in respect of settlements by a o+ 9dalat or a #ediator. ;nly then such settlements will be effective.5 11.1. The above @uoted portions show that three proposition were contemplated. contemplated. First, there is a difference between settlement on court reference and settlement of matter without being referred by a court. 4econd, since court retains the control, the settlement has to be vetted by it. Third, court related subject matter shall be governed by ;rder 2! $ule ! whereas subject matter not forming part of case before court shall be directed to be governed by relevant statutory provisions even if the same is incorporated in a single award. 11.2. 9ll the three propositions, propositions, in my humble view, cannot be said to be the binding ratio of the judgment. ;rder 2! $ule ! covers the matters beyond the subject matter of a suit. either the 9rbitration and Conciliation 9ct nor 49 9ct differentiates between any settlement arrived at in a matter referred by the court and a settlement of a matter which is not referred by court. "e have seen in detail the 4ection321 of 49 9ct. Conciliation 9ct is not different. Through 4ection3A= it contemplates the applicability of 4ection3! thereof which in turn says that award on settlement shall have same status L effect as is available with any other arbitral award. Conse@uently, finality L binding clause and deeming decree provisions of 4ection3! L !? will become applicable to to the settlement in conciliation. conciliation. *f due to 4ection3! L !?, an arbitral award is treated as final, binding and deemed to be a decree and not re@uiring any approval even if the same is arrived at in a matter referred by a court, there is no reason as to why conciliation award, mediation settlement, lo+ adalat award having the same provisions will not have the same value only because it has been arrived at in a matter referred by a court. one of the statutory provisions re@uire any approval of the court for treating such settlement as final, binding and a deemed decree. 9ffcons also appears to premise it on an assumption that being an adjudicatory procedure, arbitration goes out of the stream of court system whereas other four 9'$ being non3adjudicatory, remain in the court system. %owever, this remains an assumption as neither Conciliation 9ct nor 49 9ct and nor even C(C, differentiates between 9'$s on adjudicatory or non3 adjudicatory basis. 4o far as first proposition is concerned, none of the statutory provisions of 49 9ct or 9rbitration L Conciliation 9ct ma+es a distinction between
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settlement on court reference and settlement of matter without being referred by a court. 11.!. 'oes the observations in 9ffcons bind the courts and refrain deviation8 9nswer is simply o. $eason is obvious. 9 judgment which goes contrary to statutory provisions cannot be treated as a binding precedent. Fortunately, * am not obliged to say so as a 'onstitution bench of %on&ble 4upreme Court has already commented upon this issue in 'B+ $s Keshub Mahindra dated 88"0)"2088 in following manner: )o decision by any court, this Court not ecluded, can be read in a manner as to nullify the epress provisions of an 9ct or the Code>>.5 11.=. 9uthorities may be multiplied as the same are in abundance so so far as concept of precedent is concerned but will only be a formality. The observations in 9ffcons cannot be read as binding. 4tatutory provision of 49 9ct and 9rbitration L Conciliation 9ct will have to be followed.
1bser$ations of second Salem Bar case regarding %ublic record of mediation:
12. Then there are some observations regarding visible records for mediation in the second 4alem
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no such procedure for visible record was suggested or made in the said judgment for other modes of 9'$. $eason was obvious. They were to be governed by relevant statutory provisions of 1--? 9ct and 1-/A 9ct. 0see the observation ) Section -. makes a%%licable 8..= Act and 8.-9 Act from the stage after e3ercise of o%tions and making of reference 5 in the aforesaid judgment. This also strengthen the view that the observation of 9ffcons about vetting by court for Conciliation and o+ 9dalat would be contrary to the second 4alem
Affcons $s second Sale Bar case: a legal dichotomy:
1!. This is somewhat interesting. interesting. 4ome fertile mind may say that that at one point of time * am accepting some observation of second 4alem nion of +ndia and another 2/ 0 4CC 2/A where by deleting some offending portions, 4ection31=010e of 'elhi $ent Control 9ct 1-/ was made applicable to all type of tenancies. The concept of amendment made by the 9ffcons was never the subject matter of consideration in the second 4alem
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Constitution. eedless to say therefore that both the judgments have to be followed for what is not contrary to the statutory provisions or any earlier precedents.
Rules $s statutory enactment: which one will %re$ail&:
1=.
There cannot cannot be be any problem. $ule $ule has to give way to the statutory statutory provisions.
1=.1. *n State 1f Karnataka And Anr $s 6" ;anesh Kamath ?tc 9*$ 1-/! 4C , it has been observed as under: )Though the substituted clause 0aa inserted in sub3section 02 of section 21 confers power upon a 4tate Kovernment to ma+e rules providing for the minimum @ualifications of persons to whom licences to drive a transport vehicle are issued, such power cannot include within its scope the power to ma+e a rule contrary to the provisions of the 9ct conferring the rule3ma+ing power. *t is a well settled principle of interpretation of statutes that the conferment of rule3 ma+ing power by an 9ct does not enable the rule3ma+ing authority to ma+e a rule which travels beyond the scope of the enabling 9ct or which is inconsistent there with or repugnant thereto.5 1=.2. *n ;eneral 1fficer $s Subhash 'handra @ada$ 9*$ 1-// 4C /A?, it has been observed as under: )This contention is unsound. *t is well settled that rules framed under the provisions of a statute form part of the statute. *n other words, rules have statutory force.
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DDDDDD *ts power, therefore, was to ma+e rules only for the purpose of carrying out the purposes of the 9ct and not dehors the same. *n other words, rules cannot be framed in matters that are not contemplated under the 9ct.5 1=.=. *n Ashok ,anka and Another $s Rishi !i3it and ;thers 02 4CC -/, it was held: )"e are not oblivious of the fact that framing of rules is not an eecutive act but a legislative actH but there cannot be any doubt whatsoever that such subordinate legislation must be framed strictly in consonance with the legislative intent as reflected in the rule3 ma+ing power contained in 4ection ?2 of the 9ct.5 1=.. 9uthorities are therefore clear to the the effect that rules being a subordinate subordinate legislation have not only to give way to the substantive provisions of the statute under which they have been made but also of the other statutes as $ules are eample of subordinate legislation. 9nd if the rules are violative, they would be void.
alidity of Rule(2) of Mediation Rules 200:
1. $ule32 tal+s about satisfaction of court after settlement in mediation, passing of decree by court etc. $ule32= shows that mediator will not do anything after recording of settlement and only forward the settlement to the court and then $ule3 2 shows that the court will record its satisfaction about settlement, and then the court will pass a decree. 9ll these procedures are clearly contrary to 4ection32 and 21 of 49 9ct and therefore is also contrary to 4ection3/-020c which ma+es the 49 9ct as part of itself by fiction 0see also the doctrine of legislation by reference. $ules made by a %on&ble %igh Court have to be subject to provisions of the section part of C(C and also should not be inconsistent therewith in terms of 4ection312/. 9s such, $ule32 cannot continue to eist after the amendment made by 9ffcons.
'an mediation rules talking about %rocedure of %re referral court related matter be #ustified&:
1?. 4ection3122 and 12/ 12/ C(C, we have seen, provide for the rules which may be made to regulate the procedure before the court. Therefore, how a pre3referral
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procedure will be governed can certainly be provided by the rules made under aforesaid provisions. 1?.1. This also finds support support from the second 4alem 4alem
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1?.=.
'an mediation rules related to actual mediation be #ustified to some e3tent &
1A. #ediation centre and mediators are basically basically creation of %on&ble %igh Court. The courts in 'elhi practically are not choosing a suitable person under 4ection3 /-020c but they are choosing a suitable institution i.e. mediation centre and such institution is deciding as to who shall be the mediator. aturally, such institution would be deemed to be a o+ 9dalat for the purpose of specific matter referred to it. "e have seen that to such deemed o+ 9dalat, the provisions of 49 9ct will apply. 1A.1. Section(20/ %ro$ides that ,ok Adalat shall follow the natural %rinci%les. 4ection32201 gives some powers of civil court. *t is 4ection32202 which is very significant and empowers the o+ 9dalat to lay down its own procedure. *t is this provision which can be utiliJed. The mediation centre on becoming deemed o+ 9dalat can certainly lay down its own procedure for determining the dispute which is before it i.e. the specific referred matter. The procedure can be in writing. There can be no bar if the mediation centre says each time when it becomes deemed o+ 9dalat that it will follow the same procedure. 9s such a written procedure may eist which the mediation centre after becoming deemed o+ 9dalat can say that it will follow. 4uch written procedure may be prepared by anyone but the only rider is that the mediation centre has to say in every case when it becomes deemed o+ 9dalt that it is going to follow that procedure as its own. 1A.2. Gven the #ediation $ules, $ules, 2= may be treated as such written procedure procedure so far as actual mediation is concerned and the mediation centre on becoming a deemed o+ 9dalat for every matter can say that it will follow the said procedure.
'an criminal com%oundable cases be sent for mediation&:
1/. Though the present present case case is of civil nature, some observation regarding criminal compoundable cases being sent for mediation is also re@uired to be made. *t is a common +nowledge that criminal compoundable cases are being sent for mediation and #ediation $ules, 2= 0including $ule32 are used and normally even for those cases mediators are proposing vide the settlement communications that statement of parties be recorded. This appears to be presumably done as per $ule32. 0Though
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obviously, in such cases, Courts are not passing any decree. *n such circumstances, before see+ing the invalidity of $ule32, it is found appropriate to ma+e some observations on this count. 9 very innovative proposition is normally made i.e. since mediation is a deemed o+ 9dalat and as per 49 9ct criminal compoundable cases can be referred, such cases can be referred to mediation. The proposition though loo+s to be innovative is clearly fallacious. *t assumes that mediation is o+ 9dalat or the mediator is a o+ 9dalat or the mediation centre is a o+ 9dalat. This assumption is wrong. They are not the o+ 9dalat. They will become a o+ 9dalat by virtue of a deeming fiction created by (arliament when a matter is referred to them under 4ection3/-020c of C(C. Nnless this happens, they do not become o+ 9dalat. o+ 9dalat is a creature of 4ection31- of 49 9ct or a deeming creature of 4ection3/- of C(C. either the mediation centre nor a mediator is a creature of 49 9ct. 4o far as 4ection3/- C(C is concerned, the deeming fiction will come into play only when a matter is referred and not before that. 0for detail, see paragraph3A of the present discussion. ow, under C(C, a criminal case cannot be referred and this position cannot be disputed as C(C is a governing law of civil disputes.
The future""""""""""
1-. For the the civil matter, *t would would be appropriate if the mediation mediation rules rules are are re3 framed in consonance with the provisions of 49 9ct and till then, the courts should follow the statutory dictate. 1-.1. *f the system wants disposal of criminal criminal compoundable cases through through mediation, the appropriate way is to frame rules under some specific provisions if available. 4ection3=AA Cr(C governs the framing of rules and gives power to the %on&ble %igh Court. *t reads as under: )01 Gvery %igh Court may, with the previous approval of the 4tate Kovernment, ma+e rulesO
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0a as to the persons who may be permitted to act as petition3writers in the Criminal Courts subordinate to itH 0b regulating the issue of licences to such persons, the conduct of business by them, and the scale of fees to be charged by them. 0c providing a penalty for a contravention of any of the rules so made and determining the authority by which such contravention may be investigated and the penalties imposedH 0d any other matter which is reuired to be7 may be7 %rescribed" 02 9ll rules made under this section shall be published in the ;fficial KaJette.5 1-.2. Though on a superficial reading reading one may say that the above section does not not provide any power to ma+e rules for mediation in a criminal matter, a purposive reading will show otherwise. Clause30d supra is a residuary clause and includes everything which is re@uired. Cr(C otherwise does not prescribe any mode or manner in which a settlement between parties can be arrived at for the purposes of compounding. 4ince legislation is silent, the rules may be made to supplement it. The mode and manner of settlement for compounding may be re@uired and therefore the same may be prescribed also. 4ection320t of Cr(C provides the meaning of prescribed as )means %rescribed by rules made under this 'ode 5. Therefore, rules may be made to prescribe the mode and manner of settlement which is re@uired. This mode and manner can certainly include a system which may facilitate the parties in arriving at a settlement and such system may be anything including mediation. 1-.!. eedless to say that unless there are some contrary statutory statutory provisions for compounding under statutes other than *(C, the provisions of Cr(C have to be followed in terms of 4ection3= thereof. *t is hard to find compoundable offences for which any statutory provisions eist for the mode L manner of settlement in court system. 9s such, the above proposed rules may also apply to all compoundable offences.
or con$enient reading:
2. *n the present discussion, some epressions have been used used in short to maintain the flow. Therefore, the same are clarified as under:
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Cr(C: Code of Criminal (rocdeure, 1-A! C(C: Code of Civil (rocedure, 1-/ *(C: *ndian (enal Code, 1/? 9ffcons: #E4. 9fcons *nfra. td. L 9nr vs #E4 Cherian Iar+ey 021 / 4CC 2= First 4alem
DDDDDDDDDDDDDDDD
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