University of Petroleum and Energy Studies

College of legal studies

Academic year – 2018-2019

Under supervision of Mr. Gautam Gupta

Topic: ADR

Submitted by:
Name: Dibyanshu Singh
SAP ID: 500055203
ROLL NO.:R450216031

INTRODUCTION
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“I realized that the fiction of a lawyer was to unite partices..A large part of my time during the
20 years of my practice as a lawyer was occupied in bringing out private compromise of
hundreds of cases. I lost nothing thereby- not even money, certainly not my soul.”
- Mahatma Gandhi
Basically, ADR is not immune from criticism. Some have seen in it a waste of time; others
recognize the risk that it be only initiated to check what is the minimum offer that it be only
initiated to check what is the minimum offer that the other party would accept. The delay in
disposal of cases in Law Courts, for whatever reason it may be, has really defeated the purpose
for which the people approach the Courts for their redressal. In many parts of India, rapid
development has meant increased caseloads for already overburdened courts, further leading to
notoriously slow adjudication. As a result, alternative dispute resolution mechanisms have
become more crucial for businesses operating in India as well as those doing businesses
operating in India as well as those doing businesses with Indian firms. So Alternate Dispute
Resolution (herein after as ADR) is necessary as a substitute to existing methods of dispute
resolution such as litigation, conflict, violence and physical fights or rough handling of
situations. It is a movement with a drive from evolving positive approach and attitude towards
resolving a dispute.
Additional dispute resolution is an attempt to devise machinery which should be capable of
providing an alternative to the conventional methods of resolving disputed. ADR offers to
resolve matters of litigants, whether in business causes or otherwise, who are not able to start any
process of negotiation and reach any settlement. It has started gaining ground as against litigation
and arbitration.
ADR first stated as a quest to find solutions to the perplexing problem of the ever increasing
burden on the courts. It was an attempt made by the legislators and judiciary alike to achieve the
“Constitutional Goal” of achieving complete justice.
Alternative Dispute Resolution in India was founded on the Constitutional basis of Articles 14
and 21 which deal with Equality before Law and Right to life and personal liberty respectively.
ADR also tries to achieve the Directive Principle of State Policy relating to Equal justice and
Free Legal Aid as laid down under Article 39-A.
Advantage of Alternate Dispute Resolution:
 it is less expensive
 it is less time consuming
 it is free from technicalities as in the case of conducting cases in law Courts.
 The parties are free to discuss their difference of opinion without any fear of disclosure of
this fact before any law courts
 If the parties having feeling that there is no losing or winning feeling among the parties
by at the same time they are having the feeling that their grievance is redressed and the
relationship between the parties is restored.
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The Legal Services Authorities Act, 1987 brought about the establishment of Lok Adalat System
for settlement of disputes cheaply and expeditiously and also in the spirit of compromise by give
and take formula.
Section 30 of the Arbitration and Conciliation Act, 1996 encourages arbitrators, with the
agreement of the parties, to use mediation, conciliation or other procedures at any time during
the arbitration proceedings to encourage settlement.
The Civil Procedure Code (Amendment) Act, 1999 carries Section 89 which is designed to
enable the courts to bring about settlement of dispute outside the Court. As and when the
Amendment comes to be enforced, the four methods listed in the section and known as court-
ordered or court-annexed ADRs would become statutory alternatives to litigation for settlement
of disputes and would be legally enforceable. It is now made obligatory for the Court to refer the
dispute after issues are framed for settlement with the concurrence of the parties either by way
of:
 Arbitration,
 Conciliation,
 Judicial settlement including settlement through Lok Adalat, or
 Mediation
Where the parties fail to get their disputes settled through any of the Alternative Dispute
Resolution methods, the suit would come back to proceed further in the Court it was filed.
The Malimath Committee undertook a comprehensive review of the working of the court system,
particularly all aspects of arrears and Law’s delay and made various useful recommendations for
reducing litigation and making justice readily accessible to the people at the minimum cost to
time and money. It underlined the need for alternative dispute resolution mechanism such as
mediation, conciliation, arbitration, Lok Adalats etc. as a viable alternative to the conventional
court litigation.
Various Kinds of ADR Mechanism –
 Arbitation-
Arbitration is the process of hearing and determining of a dispute between parties by persons
chosen or agreed to by them. The object of arbitration is to obtain the fair resolution of
disputes by an impartial tribunal without unnecessary delay and expense.
 Conciliation-
Conciliation is the process of facilitating an amicable settlement between the parties. Unlike
the Arbitation there is no determination of a dispute. There need not be a prior agreement and
it cannot be forced on a party not intending for conciliation. The proceedings relating to
Conciliation are dealt under sections 61 and 81 of Arbitration and Conociliation Act, 1996.
 Mediation-

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 Mediation aims to assist two (or more) disputants in reaching an agreement. The parties
themselves determine the conditions of any settlements reached- rather than accepting
something imposed by a third party. The disputes may involve (as parties) states,
organizations, communities, individuals or other representatives with a vested interest in
outcome. Mediators use appropriate techniques and/or skills to open and/or improve dialogue
between disputants, aiming to help the parties reach an agreement (with concrete effects) on
the disputed matter.

BRIEF HISTORY OF ADR

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ADR originated in USA in a drive to find alternatives to the traditional legal system, felt to be
adversarial, costly, unpredictable, rigid, over-professionalized, damaging to relationships, and
limited to narrow rights-based remedies as opposed to creative problem solving. The American
origins of the concept are not surprising, given certain features of litigation in that system, such
as: trials civil actions by a jury, lawyers’ contingency fees, lack of application in full of the rule
“the loser pays the costs”.
Beginning in the late 19th century, creative efforts to develop the use of arbitration and mediation
emerged in response to the disruptive conflicts between labor and management. In 1898,
Congress followed initiatives that began a few years earlier in Massachusetts and New York and
authorized mediation for collective bargaining disputes. In the ensuing years, special mediation
agencies, such as the Board of Mediation and Conciliation for railway labor, (1913) (renamed the
National Mediation Board in 1943), and the Federal Mediation and Conciliation Service (1947)
were formed and funded to carry out the mediation of collective bargaining disputes. Additional
state labor mediation services followed. The 1913 New lands Act and later legislation reflected
the belief that stable industrial peace could be achieved through conciliation, mediation and
voluntary arbitration.
At the same time, and for different reasons, varied forms of mediation for non-labor matters were
introduced in the courts. When a group of lawyers and jurists spoke on the topic to an American
Bar Association meeting in 923, they were able to assess court-related conciliation programs in
Cleveland, Minneapolis, North Dakota, New York City and Milwaukee.
Conciliation in a different form also appeared in domestic relations courts. An outgrowth of
concern about rising divorce rates in the postwar 1940’s and the 1950’s, the primary goal of
these programs was to reduce the number of divorces by requiring efforts at reconciliation rather
than to facilitate the achievement of divorces through less adversarial proceedings. Following
privately funded mediation efforts by the American Arbitration Association and others in the late
1960s, the community relations service (CRS) of the United States Department of Justice
initiated in 1972 a mediation program for civil rights disputes.
Although a small number of individual lawyers had been interested in and were practicing
mediation ADR in Britain for some years, it was only in 1989 when the first British based ADR
company- IDR Europe Ltd.- bought the idea across the Atlantic and opened its doors for
business. This was the start of ADR Group. Since then many other ADR organizations, including
CEDR (Centre for dispute resolution), followed suite and assisted in the development and
promotion of ADR in the UK.
ADR, or mediation (as it is now synonymously known as), is used world-wide by Governments,
corporations and individuals to resolve disputed big or small, of virtually any nature and in most
countries of the world.
In developing countries where most people opt for litigation to resolve disputes, there is
excessive over-burdening of courts and a large number of pending cases, which has ultimately
lead to dissatisfaction among people regarding the judicial system and its ability tto dispense
justice. This opinion is generated largely on the basis of the popular belief, “Justice delayed is

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justice denied”. However, the blame for the large number of pending cases in these countries.
These mechanisms, which have been working effectively in providing an amicable and speedy
solution for conflicts in developed countries in order to strengthen the judicial system. Many
countries such as India, Bangladesh and Sri Lanka have adopted the Alternative Dispute
Resolution Mechanism. However, it is for time to see how effective the implementation of these
mechanisms would be in these countries.

Overview of ADR-
Alternative dispute resolution encompasses a range of means to resolve conflicts short of formal
litigation. The modern ADR movement originated in the United States in 1970s, spurred by a
desire to avoid the cost, delay and adversarial nature of litigation. For these and other reasons,
court reformers are seeking to foster its use in developing nations. The interest in ADR in some
countries also stems from a desire to revive and reform traditional mediation mechanisms.
ADR today falls into two broad categories: court annexed options and community-based dispute
resolution mechanisms. Court-annexed ADR includes mediation/conciliation- the classic method
where a neutral third party assists disputants in reaching a mutually acceptable solution- as well
as variations of early neutral evaluation, a summary jury trial, a mini-trial and other techniques.
Supporters argue that such methods decrease the cost and time of litigation, improving access to
justice and reducing court backlog, while at the same time preserving important social
relationships for disputants.
Community-based ADR is often designed to be independent of a formal court system that may
be biased, expensive, distant or otherwise inaccessible to a population. New initiatives
sometimes build on traditional models of popular justice that relied on elders, religious leaders,
or other community figures to help resolve conflict. India embraced lok adalat village-level
people’s courts in the 1980s, where trained mediators sought to resolve common problems that in
an earlier period may have gone to the panchayat, a council of village or caste elders. Elsewhere
in the religion, bilateral donors have recently supported village-based shalish mediation in
Bangladesh and nationally established mediation boards in Sri Lanka. In Latin America, there
has been a revival of interest in the juece de paz, a legal officer with the power to conciliate or
mediate small claims.
Some definitions of ADR also include commercial arbitration: private adversarial proceedings in
which a neutral third party issues a binding decision. Private arbitration services and centers have
an established role in the United States for commercial dispute resolution, and are spreading
internationally as business, and demand for harmonization, expands. In the last decade, more
countries have passes legislation based on the 1985 UNCITRAL Model Law on International
Commercial Arbitration, which makes an arbitral award legally binding and grants broad rights
to commercial parties choosing arbitration.
It is important to distinguish between binding and non-binding forms of ADR. Negotiation,
mediation and conciliation are non-binding forms, and depend on the willingness of parties to

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reach a voluntary agreement. Arbitration programs may be binding or non-binding. Binding
Arbitration produces a third party decision that the disputants must follow even if they disagree
with the result much like a judicial decision. Non-binding Arbitration produces a third party
decision that the parties may reject.
It is also important to distinguish between mandatory processes and voluntary processes. Some
judicial systems require the parties to negotiate, conciliate, mediate or arbitrate, prior to court
action. ADR processes may also be required as part of prior contractual agreement between
parties. In voluntary processes, submission of a dispute to an ADR process depends entirely on
the will of the parties.
It can be observed that the term “Alternative dispute resolution” can refer to everything from
facilitated settlement negotiations in which disputants are encouraged to negotiate directly with
each other, prior to some other legal process. Processes designed to manage community tension
or facilitate community development issues can also be included into rubric of ADR.

LEGISLATIONS OF ADR IN INDIA

Code of Civil Procedure

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The code of Civil Procedure, 1859 in its sections 312 to 325 dealt with arbitration in suits while
sections 326 and 327 provided for arbitration without court intervention. The code of Civil
Procedure (Act 5 of 1908) repealed the Act of 1882. The Code of Civil Procedure, 1908 has laid
down that cases must be encouraged to go in for ADR under section 89(1). 1Under the First
Schedule, Order XXXII A, Rule 3 a duty is cast upon the courts that it shall make an endeavor to
assist the parties in the first instance, in arriving at a settlement in respect of the subject matter of
the suit.2 The second schedule related to arbitration in suits while briefly providing arbitration
without intervention of a court. Order 1 Rule 1 of the schedule says that where in any suit, all the
parties agree that may at any matter in difference between them shall be referred to arbitration,
they may, at any time before judgement is pronounced; apply to the court for an order of
reference. This schedule, in a way supplemented the provisions of the Arbitration Act, 1899.
Indian Arbitration Act, 1899:
This Act was substantially based on the British Arbitration Act, 1899. It expanded the area or
arbitration by defining the expression ‘sunmission’ to mean “a written agreement to submit
present and future differenced to arbitration whether an arbitrator is named therein or not”’
Arbitration (Protocol and Convention) Act, 1937:
The Geneva Protocol of Arbitration Clauses 1923 and the Geneva Convention on the Execution
of Foreign Arbitral Awards 1927 were implemented in India by the Arbitration (protocol and
convention) Act, 1937. This Act was enacted with the object of giving effect to the Protocol and
enabling the Convention to become operative in India.
The Arbitration Act, 1940:

The Arbitration Act, 1940, dealt with only domestic arbitration. Under the 1940 Act, intervention
of the court was required in all the three stages of arbitration in the tribunal, i.e. prior to the
reference of the dispute, in the duration of the proceedings, and after the award was passed.

This Act made provision for- a) arbitration without court intervention; b) arbitration in suits i.e.
arbitration with court intervention in pending suits and c) arbitration with court intervention, in
cases where no suit was pending before the court.

Before an arbitral tribunal took cognizance of a dispute, court intervention was required to set the
arbitration proceedings in motion. The existence of an agreement and of a dispute was required
to be proved. During the course of the proceedings, the intervention of the court was necessary
for the extension of time for making an award. Finally, before the award could be enforced, it
was required to be made the rule of the court3. This Act did not fulfill the essential functions of
ADR. The extent of Judicial Interference under the Act defeated its very purpose 4. It did not

1
Civil Procedure Code, 1908 as amended and implemented in 2002.
2
Civil Procedure Code 1908, Order XXXII A Rule 3
3
Hon’ble Thiru Justice S.B.Sinha, Judge Supreme Court of India, ‘ADR and Access to Justice: Issues and
Perspectives’.
4
Justice R S Bachawat’s, LexisNexis, “Law of Arbitration and Conciliation”, preface commentary, (3 rd ed., 1999).

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provide a speedy, effective and transparent mechanism to address disputes arising out of foreign
trade and investment transactions. 5

Arbitration and Conciliation Act, 1996:

The government enacted the Arbitration and Conciliation Act, 1996 in an effort to modernize the
1940 Act. In 1978, the UNCITRAL Secretariat, the Asian African Legal Consultative Committee
(AALCC), the International Council for Commercial Arbitration (ICCA) and the International
Chamber of Commerce (ICC) met for a consultative meeting, where the participants were of the
unanimous view that it would be in the interest of International Commercial Arbitration if
UNCITRAL would initiate steps leading to the establishment of uniform standards of arbitral
procedure. The preparation of a Model Law on arbitration was considered the most appropriate
way to achieve the desired uniformity. The full text of this Model Law was adopted on 21stJune
1985 by UNCITRAL. This is a remarkable legacy given by the United Nations to International
Commercial Arbitration, which has influenced Indian Law. In India, the Model Law has been
adopted almost in its entirety in the 1996 Act. This Act repealed all the three previous statutes.
Its primary purpose was to encourage arbitration as a cost-effective and quick mechanism for the
settlement of commercial disputes. It covers both domestic arbitration and international
commercial arbitration. It marked an epoch in the struggle to find an alternative to the traditional
adversarial system of litigation in India.
The changes brought about by the 1996 Act were so drastic that the entire case law built up over
the previous fifty-six years on arbitration was rendered superfluous. Unfortunately, there was no
widespread debate and understanding of the changes before such an important legislative change
was enacted. The Government of India enacted the 1996 Act by an ordinance, and then extended
its life by another ordinance, before Parliament eventually passed it without reference to
Parliamentary Committee.
Arbitration, as practiced in India, instead of shortening the lifespan of the dispute resolution,
became one more “inning” in the game. Not only that, the arbitrator and the parties’ lawyers
treated arbitration as “extra time” or overtime work to be done after attending to court matters.
The result was that the normal session of an arbitration hearing was always for a short duration.
Absence of a full-fledged Arbitration Bar effectively prevented arbitrations being heard
continuously on day-to-day basis over the normal working hours, viz. 4-5 hours every day. This
resulted in elongation of the period for disposal.
Veerappa Moily also said in the ADR congress held in the year 2010 that the 1996 Act, although
modeled along international standards, has so far proved to be insufficient in meeting the needs
of the business community, for the speedy and impartial resolution of disputes in India.6

5
Krishna Sarma, Momota Oinam & Angshuman Kaushik, “Development and Practice of Arbitration in India –Has it
Evolved as an Effective Legal Institution”
6
ADR Congress India 2010,

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The Law Commission of India prepared a report on the experience of the 1996 Act and
suggested a number of amendments. Based on the recommendations of the Commission, the
Government of India introduced the Arbitration and Conciliation (Amendment) Bill, 2003, in the
Parliament. The standing committee of law ministry felt that provisions of the Bill gave room for
excessive intervention by the courts in arbitration proceedings.7

MATTER REFERS TO ADR PROCESSES

7
Government proposes major changes in Arbitration Act, The Times of India, April 9, 2010.

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  Appropriate Stage for Reference to ADR Process
The appropriate stage for considering reference to ADR processes is after the pleadings are
complete and before framing the issues. But nothing prevents the court from resorting to S.
89 even after framing issues. But once evidence is commenced, the court will be reluctant to
refer the matter to the ADR processes because if the reference is made at the stage when the
evidence has started, it may become a tool for protracting the trial. Page13 In family disputes
or matrimonial matters, the ideal stage for mediation will be immediately after service of
notice on respondent and before the respondent files objections/written statement because in
such cases the relationship becomes hostile on account of various allegations in the petition
and the hostility will be further aggravated by the counter allegations made in the
objections/written statement.
 Consent of Parties for Referring the matter to ADR Processes
The consent of all the parties to the suit is necessary for referring the case for arbitration
under section 89, CPC. The court exercising power under section 89, CPC cannot refer a suit
to arbitration unless all the parties to the suit agree to such reference. The Supreme Court has
observed that where there is no pre-existing arbitration agreement, the parties to the suit can
agree for arbitration by means of a joint application or joint affidavit before the court or by
record of the agreement by the court in the order sheet signed by the parties9. Similarly, the
consent of all the parties to the suit is necessary for referring the case for conciliation under
section 89, CPC (if the parties are not agreeable for arbitration). If the parties are not
agreeable for either arbitration or conciliation, the court has to consider which of the three
other ADR Processes (Lok Adalat, Mediation and Judicial Settlement) is suitable for
reference. In Afcon‟s case (supra) the Supreme Court has observed that three ADR Processes
– Lok Adalat, Mediation and Judicial Settlement do not require the consent of parties for
reference but the court has to use its discretion in choosing the ADR Process judiciously,
keeping in view the nature of disputes, interests of parties and expedition in dispute
resolution. However absence of consent for reference does not affect the voluntary nature of
the mechanism of mediation as the parties still retain the freedom to agree or not to agree for
the mediation settlement.
 Appropriate ADR Process, How to select?
Sec. 89, CPC refers to five types of ADR Mechanisms:-
(1) Arbitration
(2) Conciliation
(3) Mediation
(4) Judicial Settlement, and
(5) Lok Adalat

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  Arbitration:
Arbitration is an adjudicatory process and remaining four ADR processes are negotiable in
nature (non-adjudicatory processes). Arbitration is governed by the provisions of the Arbitration
and Conciliation Act. For a reference to arbitration under sec. 89, CPC, there must be the consent
of all the parties to the suit. The parties to the suit can agree for arbitration by means of a joint
memo, joint application or joint affidavits before court or the court may record such agreement in
the order sheet signed by the parties. On a reference to the arbitration the case will go outside the
stream of the court permanently and will not come back to the court. 8
Parties to the suit may agree for one arbitrator or each side may select its arbitrator and then two
arbitrators select the third one. The award of the arbitrators is binding on the parties and is
enforceable as a decree of the court in view of section 36 of the Arbitration and Conciliation Act,
1996. If any settlement is arrived at in the arbitration proceedings then the award passed on the
basis of such settlement will have the same status and effect as any other arbitral award as per
section 30 of the Arbitration and Conciliation Act.
 Conciliation:
For a reference to conciliation also the consent of the parties to the dispute is a must. If both the
parties do not agree for conciliation, there can be no conciliation. As a consequence the court
cannot refer the parties to the conciliation u/s. 89, CPC in the absence of consent by all the
parties. When a matter is referred to conciliation, it does not go outside the stream of the court
and if the conciliation fails, the matter is returned to court for hearing of the case. The ADR
Process of Conciliation is also governed by the Arbitration and Conciliation Act. 9
If a matter is settled through conciliation, then according to S. 74 of the Arbitration and
Conciliation Act, such settlement will have the same status and effect as an arbitral award. Thus,
such settlement is enforceable as a decree of the court as per section 36 of the Arbitration and
Conciliation Act.
 Mediation:
Mediation is a voluntary party centered and structured negotiation process which is conducted by
neutral third party with his specialized communication skills and negotiation techniques.
Per Christopher W. Moore, “Mediation is essentially a negotiation that includes a third party who
is knowledgeable in effective negotiation procedures and can help people in conflict to
coordinate their activities and to be more effective in their bargaining. Mediation is an extension
of the negotiation process in that it involves extending the bargaining into a new format and
using a mediator who contributes new variables and dynamics to the interaction of the
disputant.”

8
P.C. Rao & William Sheffield, Universal Law Publishing Co. Pvt. Ltd., Alternative Dispute Resolution: What is it and
how it works, at 26(1997 ed., 2006).
9
Garner, Black’s Law Dictionary (9th ed.,2009)

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Why do we say that mediation is voluntary? The process of mediation is voluntary because the
parties have the final say regarding the option as to whether to get their dispute settled through
mediation. They also retain the right to decide the terms of settlement of dispute. Even if the
dispute is required to be settled through mediation under the contract or statute or if the court has
referred a case for mediation, the parties have the right to decide as to whether to settle the
dispute and the term of settlement. Thus the settlement through mediation process results in a
settlement created by the parties themselves and it is therefore acceptable to them. Any party is
at Page19 liberty to withdraw from the mediation proceedings, at any stage and without
assigning any reason, before its termination.
Parties have direct and active participation in the process of mediation for resolution of their
dispute. They play the key role and are actively encouraged to explain the background of the
dispute, identify issues and underlying interests, provide options for agreement and make a final
decision regarding the settlement. Thus the mediation is a party centered negotiation process.
The mediation process is itself an structured and formalised process which has clearly
identifiable stages with, of course the degree of flexibility. The mediation process is informal in
nature which signifies that this mechanism of dispute resolution is not governed by the rules of
evidence and procedure. But at the same time it is not a casual process either, because as
mentioned above, it has identifiable stages. 10
Mediation is broadly focused on the point of facts, law and underlying causes of the dispute
which includes underlying interests of the parties. Such interests of parties may be personal,
commercial or social and may be related to family or community.
In the process of meditation the mediator assists the parties to bring about a resolution to their
dispute. He does not adjudicate a dispute by imposing a decision upon the parties rather he works
together with parties to facilitate the dispute resolution. The job of mediator is of a facilitator
because he manages the interaction between the parties, encourages and promotes
communication between them and manages interruption and outbursts by them so as to facilitate
and motivate them to arrive at a settlement which is acceptable to the parties.
Mediation is a negotiatory and voluntary process where a neutral third party assists the parties in
bringing about an amicable settlement of their dispute. Parties are the focal point of the
mediation process, their active and direct participation is encouraged in resolution of their
dispute. The goal of mediation is to find a solution which is acceptable to all the parties and
which adequately and legitimately satisfies the needs, desires and interests of the parties. The
mediator remaining impartial, works together with the parties to facilitate the dispute resolution
and for this purpose, the mediator uses specialized communication skills and negotiation
techniques.
Mediation is a private process which is confidential in nature. The settlement reached out in a
case referred for mediation, is required to be reduced in writing and after getting it signed by the

10
Sriram Panchu, LexisNexis, Mediation: Practice and Law, at 9, (2011).

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parties, it is filed in the court for appropriate order. In case the mediation fails, the report of the
mediator does not mention the reason for the failure but it would only say “not settled”.
Keeping in view the scope and significance of mediation and recognizing the immense
possibility of the mediation process in the dispute resolution, Hon‟ble Allahabad High Court
took initiative to inaugurate on October 06, 2006, the Allahabad High Court Mediation &
Conciliation Centre (AHCMCC). This centre became functional on October 16, 2006. As a
significant step towards mediation movement at District Level, as many as 11 Mediation Centers
in the largest Districts of Uttar Pradesh became operational on February 01, 2009 and now
Mediation Centers have been established and made functional in all the Sessions Divisions
across the State.
 Judicial Settlement:
The process of judicial settlement is much in vogue in the U.S. It refers to a settlement of a civil
case with the help of a judge who is not assigned the adjudication of such a case.
In Afcon‟s case (supra), the Supreme Court in order to correct the draftsman‟s error, has held
that the definitions of “judicial settlement” and “mediation” in clauses (c) & (d) of Section 89(2),
CPC shall have to be interchanged as follows :-
(c) for “mediation”, 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 Authorities Act, 1987 shall apply as if the dispute were referred to a Lok Adalat under
the provisions of that Act;
(d) for “judicial settlement”, the court shall effect a compromise between the parties and shall
follow such procedure as may be prescribed.
 Lok Adalat:
The first Lok Adalat was organized on an experimental basis on March 14, 1982 at Junagarh in
the State of Gujarat. The Legal Services Authorities Act, 1987 has provided a statutory status to
the Lok Adalat for the purpose of facilitating the smooth functioning of the scheme of organizing
the Lok Adalat and also for providing legal services and free legal aid to the eligible persons,
different legal services institutions have been created and made functional across the country,
right from the Taluka to the National level. 11
Under the provisions of the Legal Services Authorities Act, 1987 and the amendments carried
out in the year 2002, the Lok Adalats have been established at three levels, viz. Regular Lok
Adalats, Permanent Lok Adalats under Section 19 of the Act and Permanent Lok Adalats for 6
Specific Public Utility Services created under section 22B of the Act of 1987.
Where a case is referred for settlement through Lok Adalat, there are two options available to it
:-

11
P.C. Rao & William Sheffield, Universal Law Publishing Co. Pvt. Ltd., Alternative Dispute Resolution: What is it
and how it works, at 26(1997 ed., 2006).

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 (i) if the compromise/settlement is arrived at, then to make an award in terms of such
compromise/settlement; or
(ii) if there is no compromise/settlement, then to return the record to the court with
failure report.
There can be no third hybrid order by the Lok Adalat containing directions to the parties. There
cannot be an award when there is no settlement. Nor can there be any directions by the Lok
Adalat determining the rights, obligations or title of parties, when there is no settlement. The
settlement should precede the award and not vice versa12.

 Whether the reference to ADR Process is Mantory?

The plain reading of the words in S. 89, CPC “where it appears to the court that there exist
elements of a settlement”, clearly shows that the cases which are not suitable for ADR Process
should not be referred under section 89. In Afcons’s Case the Apex Court has specified an
excluded category of cases which are considered not to be suitable for ADR Processes.
Therefore, having a hearing (after completion of pleadings) to consider recourse to ADR
Processes under section 89 CPC, is mandatory. But actual reference to an ADR Process in all
cases is not mandatory. The court has to consider as to whether the case falls under an excluded
category, if yes, then it is not to be referred to ADR Process. In such cases of excluded category,
the court should record a brief order referring to the nature of the case and why it is not fit for
reference to ADR Processes. It will then proceed with the framing of issue and trial. In all other
cases (except excluded category), reference to ADR Process is a must.

CONCLUSION

12
B.P. Moideen Sevamandir v. A.M. Kutty Hassan, AIR 2008 SC (Supp) 1123; State of Punjab v. Jalour Singh, (2008)
2 SCC 660

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Because justice is not executed speedily men persuade themselves that there is no such thing as
justice. Sharing the same sentiments, Chief Hustice Bhagwati said in his speech on Law Day, “I
am pained to observe that the judicial system in the country is on the verge of collapse. These are
strong words I am using but it is with considerable anguish that I say so. Our judicial system is
creeking under the weight of errors.”
Arrears cause delay and delay means negating the accessibility of justice in true terms to the
common man. Countless rounds to the Courts and the lawyers’ chambers can turn any person
insane. Even then loitering and wasting time in the corridors of Courts has become a way of life
for a majority of Indians who day by day are becoming litigous. Some of the main reasons for
delay in the disposal of cases are abnormal increase in the number of cases going to Courts and
Tribunals, mainly due to faulty legislation enacted hurriedly, arbitrary administrative orders,
increased consciousness of one’s rights and gambler’s instinct in a litigant due to multiplicity of
appeals and revisions provided in law.”
The disputants want a decision, and that too as quickly as possible. As the problem of
overburdened Courts has been faced all over the world, new solutions were searched. Various
Tribunals were the answer to the search. In India, we have a number of Tribunals. However, the
fact of the matter is that even after the formation of so many Tribunals, the administration of
justice has not become speedy. Thus, it can be safely said that the solution lies somewhere else.
All over the globe the recent trend is to shift from litigation towards Alternative Dispute
Resolution. It is a very practical suggestion, which if implemented, can reduce the workload of
Civil Courts by half. Thus, it becomes the bounden duty of the Bar to take this onerous task of
implementing ADR on itself so as to get matters settled without going into the labyrinth of
judicial procedures and technicalities. The Bar should be supported by the Bench in this
herculean task so that no one is denied justice because of delay.
It is important here to mention the statement made by John F. Kennedy in this respect: “Let us
never negotiate out of fear but let us never fear to negotiate.”

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 REFERENCES-
1. Sriram Panchu, Mediation Practice & Law: The Path to Successful Dispute Resolution, Nexis
Nexis-Butterworths-Wadhwa, Nagpur, 2011
2. T.K. Tope‟s, Constitution Law of India, Revised by Justice Sujata V. Manohar, Easten Book
Company, Lucknow
3. Justice R.S. Bachawat‟s Law of Arbitration & Conciliation, Edited by Anirudh Wadhwa &
Anirudh Krishna, Lexi-Nexis-Butterworths, Wadhwa, Nagpur, Vol. 2, 5th Edition, 2010
4. M.P. Jain, Indian Constitutional Law, 6th Edition Lexis Nexis- Butterworths, Wadhwa, Vol. 1
&2, 2010
5. Ghanshyam Das v. Domination of India; AIR 1984 SC 1004
6. Raghunath Das v. Union of India; AIR 1969 SC 674
7. State of Punjab v. Geeta Iron and Brass Works Ltd.; AIR 1978 SC 1608
8. Salem Advocate Bar Association, Tamil Nadu v. Union of India; AIR 2005 SC 3353
9. Afcons Infrastructure and others v. Cherian Verkay Construction Company Pvt. Ltd. and
others; (2010) 8 SCC 24

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