CPC and Alternative Dispute Resolution
Under CPC there are few provisions which provide for peaceful settlement of disputes by way of adopting ADR mechanisms. These are section 8 of CPC! "rder #! Rules $A! $% and $C. 89. Settlement of disputes outside the Court
&$' (here it appears to the court that there e)ist 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 observation of the parties! the court may reformulate the terms of a possible settlement and refer the same for* &a' arbitration+ &b' conciliation &c' ,udicial settlement including settlement through -oAdalat+ or &d' mediation. &/' (here a dispute had been referred* &a' for arbitration or conciliation! the provisions of the Arbitration and Conciliation Act! $0 shall apply as if the proceedings for arbitration or conciliation were referred for settlement under the provisions of that Act. &b' to -oAdalat! the court shall refer the same to the -oAdalat in accordance with the provisions of sub*section &$' of section sect ion /1 of the -egal 2ervices Authority Act! $83 and all other provisions of that Act shall apply in respect of the dispute so referred to the -oAdalat+ &c' for ,udicial settlement! the court shall refer the same to a suitable institution or person and such institution or person shall be deemed to be a -oAdalat and all the provisions of the -egal 2ervices Authority Act! $83 shall apply as if the dispute were referred to a -oAdalat under the provisions of that Act+ &d' for mediation! the court shall effect a compromise between the parties and shall follow such procedure as may be prescribed.
Order 10 Rule 1A. Direction of the Court to opt for any one mode of alternative dispute resolution After recording the admissions and denials! the Court shall direct the parties to the suit to opt either mode of the settlement outside the Court as specified in sub* section &$' of section 8. "n the option of the parties! the Court shall fi) the date of appearance before such forum or authority as may be opted by the parties. Order 10 Rule 1. Appearance !efore the conciliatory forum or authority (here a suit is referred under rule $A! the parties shall appear before such forum or authority for conciliation of the suit. Order 10 Rule 1C . Appearance !efore the Court conse"uent to the failure of efforts of conciliation . (here a suit is referred under rule $A and the presiding officer of conciliation forum or authority is satisfied that it would not be proper in the interest of ,ustice to proceed with the matter further! then! it shall refer the matter again to the Court and direct the parties to appear before the Court on the date fi)ed by it.4
At the time of framing of CPC! section 8 was their providing for settlement of disputes by way of arbitration. The supporting procedural provisions were laid down in second schedule of CPC. -ater on a comprehensive legislation dealing with domestic arbitration was passed i.e. * The Arbitration Act $51. 6n pursuant to the same section 8 and second schedule of CPC were deleted. 7urther in order to give effect to the recommendations given by various law commission reports and ustice 9alimath Committee report! again 2ection 8 is incorporated in CPC in its modified form by way of CPC Amendment Act! $. A simple reading of the section suggests that the Court is not bound to decide each case itself! but can refer the dispute to Arbitration! Conciliation! 9ediation! -o Adalats or udicial settlement mechanism! the failure of which would revert the case bac to the Court for normal ad,udication proceedings. This could reduce the burden of the Court. %ut there have been several doubts! even cases challenging the validity and the completeness of 2.8! saying that it does not provide much operational value in real time.
#hat is $ron% $ith section 89 of the Code 6n the latest case on the applicability of 2.8 and Court anne)ed ADR! decided in /1$1! Afcons 6nfrastructure v. Cherian :arey Construction $! the Court says that if this section is literally read and implemented! then it would be ;put! with an ;impractical> procedure in sub*section &$' and mi)ed up definitions in sub*section &/'. The Court refers to the anomalies addressed in the 2alem %ar Association cases 6 / and 66 ?! whereupon the validity of 2. 8 was upheld and the Court held that it could be implemented 1Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (P) Ltd., Civil Appeal No.!!! "f #!1!
by ;ironing out the creases> and by applying purposive interpretation! respectively. The anomalies addressed were@ $. The definitions of mediationB and ,udicial settlementB under 2. 8&/'&c' and &d' have been mi)ed up! with mediation being effected by court*resolved compromise and the latter as reference made by the court to a suitable institution for settlement. 6t maes no sense to call a compromise effected by a court! as 4mediation4! as is done in clause &d'. or does it mae any sense to describe a reference made by a court to a suitable institution or person for arriving at a settlement as 4,udicial settlement4! as is done in clause &c'. 4udicial settlement4 is a term in vogue in U2A referring to a settlement of a civil case with the help of a ,udge who is not assigned to ad,udicate upon the dispute. 49ediation4 is also a well*nown term and it refers to a method of non*binding dispute resolution with the assistance of a neutral third party who tries to help the disputing parties to arrive at a negotiated settlement. 6t is also synonym of the term conciliationE. &2ee@ lac&'s (a$ Dictionary) *th +dition) Pa%es 1,** and 99-'. (hen words are universally understood in a particular sense! and assigned a particular meaning in common parlance! the definitions of those words in section 8 with interchanged meanings has led to confusion! complications and difficulties in implementation. The mi)*up of definitions of the terms 4,udicial settlement4 and 4mediation4 in 2ection 8 is apparently due to a clerical or typographical error in drafting! resulting in the two words being interchanged in clauses &c' and &d' of 2ection 8&/'. 6f the word 4mediation4 in clause &d' and the words 4,udicial settlement4 in clause &c' are interchanged! we find that the said clauses mae perfect sense. /. 6n sub*section &$'! the final stage of conciliation! as stated in 2. 3?&$' of the Arbitration and Conciliation Act! is brought into the pre*ADR stage under 2.8. 6f the Court is directed to list out the terms of settlement and refer the parties to anyone of the ADR mechanisms! then what will be the wor of the ADR forumF 2. 8&$' reGuires the formulation the terms of settlement and reformulatation of the terms after the parties send their observations! regarding those terms! all at the pre*ADR stage. 6t is not possible for the courts to perform all these actions at the preliminary hearing stage only to decide whether the case should be referred to ADR! and if so! then which ADR mechanism. 6f the trial court is to ;ascertain whether there e)ists any elements of settlement>! then why will it again refer it to ADR rather than solving the dispute itselfF 9oreover! if the dispute is referred to Arbitration! then all the terms listed out by the Court will be useless! as the Arbitrator will hear the dispute and not to the already enlisted terms! and his award will be based on his own ad,udication over the matter. 6n case of reference to -oAdalat! Conciliation! 9ediation! the drawing up of terms is the wor of the -oAdalat! Conciliator or the 9ediator as the case may be. Then! if at all useless! what end will be achieved by the court formulating the terms of settlement that too at a pre*ADR stageF
#$ale% Advocate &ar Association v. 'nion of India, #!! (1) $CC * $ale% Advocate &ar Association v. 'nion of India, #!!+ () $CC
These Anomalies were addressed in 2alem %ar 66 by eGuating the phrase ;terms of settlement> in 2. 8&$' to ;a summary of disputes>. Therefore the courts would only be reGuired to summariHe the disputes which have arisen. The Afcons case has reference to the Tirath 2ingh case5 and 2hamrao v Thane District 9agistrate caseI! where the Court states that if a statute has words which! if interpreted literally would give rise to anomalies! then! the ,udge may! instead of adopting the te)tual construction! add! omit! or substitute certain words in the statute to redress the situation and get rid of the anomalies. Afcons suggest that 2.8 has to be read along with Rule $A of "rder $1 to give it an appropriate structure. The parties! thus have an option to opt for any of the I dispute resolution mechanisms and refer the matter to their choice of ADR process. Rule $A does not reGuire the Court to formulate terms of settlement or reformulate the terms after receiving the observations of either party. Therefore! if Rule $A of "rder $1 is read along with 2. 8! it would be practically feasible! since the court would be enabled to inform the parties of the I ADR mechanisms and then refer them to opt the process of their choice. The court would have to refer to 2.8 before the framing of the issues! right after the pleadings of both the parties have been heard. 7or proper interpretation of 2. 8! CPC! the court is reGuired to remove itself from a plain and literal construction and mae two clear changes. $. The court is not mandatorily reGuired to formulate the ;terms of settlement> before referring the dispute to an ADR process! but can briefl y describe the dispute and refer it to the same. /. The clauses &c' and &d' of 2. 8&/'! with the terms mediationB and ,udicial settlementB will have to be interchanged! otherwise the sub*section maes no sense. 2ince the opening words of the section are 4where it appears to the court that there e)ist elements of a settlement4! this section need not be invoed if the Court forms an opinion that the case is not suited for an ADR process. The anomalies of 2.8 have been addressed by the ,udiciary in various case laws! but the section still remains unchanged by the legislature. 6t is a viable section which has the potential to reduce the burden of the 6ndian ,udiciary and accomplish what every ,ustice system aims for! fair and speedy ,ustice for all! since ,ustice delayed is ,ustice denied. This section addresses the need of the hour that is the reGuirement to reduce the load of our adversarial ,udicial system. ADR processes can be finally made an active part of the ustice system through this section. %ut this section needs to be properly formed through a thorough responsible debate by the law academicians and ,udicial authorities. This section needs to be looed into again by the parliament to iron out the creases and mae it an effective solution to provide speedy! satisfactory ,ustice! at an affordable cost. irath $in-h v. &achittar $in-h, AI 1*++ $C /!, as read in Afcons Case +$ha%raoV.Parulekar v. 0istrict a-istrate, hana, &o%2ay,3AI 1*+# $C #, read in Afcons Case
