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Report No. 163

2.7. Clause 7 of the Amendment Bill proposing to insert section 89, enabling and/or obliging the Court to explore the possibility of alternative methods of dispute resolution viz., conciliation, mediation, arbitration, judicial settlement or settlement through Lok Adalat.-

Coming to the proposal, it may be mentioned that there was good amount of debate on the same. Almost a uniform opinion was expressed by both the members of the Bench and the Bar that the Court should not be asked to undertake the exercise contemplated by proposed section 89.

Doing so would invite comments and suspicion upon the neutrality of the court as an impartial arbiter, it was submitted. While formulating the terms of settlement or while reformulating the terms of a possible settlement after receiving the observations of the parties, it may happen that the court may be obliged to express some opinion on a particular aspect of the dispute which may not be liked by one of the parties. Some procedural difficulties (e.g. absence of provision for a reference to arbitration in a pending suit in the Present Arbitration Act) were also pointed out.

Accordingly, several alternatives were suggested by the participants. One of the alternatives suggested was that instead of inserting proposed section 89, the existing Order XXXIIA may be suitably amended to cover all suits. Another suggestion which appeared to have gathered large amount of support was that after the issues were settled, every suit should be necessarily sent to a committee or board of conciliators comprised of senior lawyers and retired judicial officers enjoying high reputation for integrity and competence.

Such a committee or board will decide, after hearing the parties, whether the suit should be referred to any of the alternative modes of dispute resolution mentioned in sub-section (1) of section 89. It was explained that generally speaking, there was good amount of interval between the framing of the issues and the commencement of the trial and as such a mandatory reference to the committee or the board would not, really result in delaying the trial or the disposal of the suit.

Some others, however, expressed an apprehension that while this suggestion may be possible to implement in cities and big towns where a number of senior lawyers and retired judicial officers were available, there may be difficulties in implementing the same in smaller towns where there was only one court and there were not enough senior lawyers or retired judicial officers of high integrity.

2.7.1. The Law Commission is of the opinion that proposed section 89 may be suitably modified to provide as under:

(a) After the settlement of issues in every suit (when both the parties would have also filed their basic documents as required by the proposed provisions relating to filing of documents along with the pleadings), the suit shall be referred to a board of conciliators to explore whether there existed elements of settlement which were acceptable to the parties and if it appeared to the board that such elements of settlement did exist, they shall refer the suit for arbitration, judicial settlement or settlement through Lok Adalat. Method of conciliation could be tried by the Board itself if found feasible. Such reference could be made either after reformulating the terms of possible settlement if the board found the same feasible and advisable or without such reformulation, as the case may be.

(b) The presiding Officer of the principal civil court in every city and town shall constitute, in consultation with his senior colleagues, a Board of conciliators consisting of retired judicial officers and senior lawyers of known integrity and competence.

(c) A time limit should be prescribed within which the board of conciliators shall complete its work, i.e., either refer the suit to arbitration/judicial settlement or settlement through Lok Adalat or bring about a settlement through conciliation if it finds that such a course was advisable or report to the court that it could not find any elements of settlement which might be acceptable to the parties and that, therefore, any reference of the suit to arbitration/conciliation/judicial settlement or settlement through Lok Adalat was not warranted or advisable. This period could range between 4 months to one year, as may be specified by each court.

(d) To delete the alternative mode of "mediation" mentioned under clause (2) of sub-section (1) of the proposed section 39. Mediation by a court could be resorted to at any stage of the proceedings and it should not be stipulated as a matter of law either at the stage of the issues or at any subsequent stage. Such a course is always open to the court and there is no reason to define or codify it. Accordingly, clause (d) in sub-section (2) of section 39 might be deleted.

Section 89 may be redrafted in the light of the aforesaid recommendations.

The Code of Civil Procedure (Amendment) Bill, 1997 Back

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