Tuesday 23 August 2022

Can the court enforce a settlement done in mediation if one party contends that he was compelled to sign a mediation agreement?

  For all these reasons, I hold that the Magistrate exercising jurisdiction under the DV Act has the power to refer thematter before it to mediation applying the principles of Section 89 of CPC, record the compromise and pass an order in terms of the settlement applying the principles of Order XXIII Rule 3 of CPC.

11. When the parties settle the dispute at mediation by

signing an agreement detailing the procedure to be followed to

work out the settlement, certainly that agreement is having all

the characteristics of Order XXIII Rule 3 of CPC. The scheme of

Order XXIII Rule 3 is to avoid multiplicity of litigation to enable the parties to settle their dispute once and for all. When the parties agreed to settle the dispute in terms of compromise under Order XXIII Rule 3 of CPC, one of the parties cannot unilaterally withdraw from the compromise. The Explanation to Order XXIII Rule 3 makes it clear that only an agreement or compromise which is void or voidable under the Indian Contract Act could be considered as not lawful agreement for the purpose of the Rule. Chapter II of the Indian Contract Act contains provisions relating to voidable contracts and void agreements. The petitioner has absolutely no case that the compromise is vitiated by any one of the grounds enumerated in Chapter II of the Indian Contract Act.

The only contention taken by the petitioner is that he was

compelled to sign the mediation settlement agreement without

understanding the consequences of its terms. So long as there is

no contention that the compromise is vitiated by one of the

grounds enumerated in Chapter II of the Indian Contract Act, the parties of the compromise are bound to honour the compromise and the court has the duty to enforce it.The Apex Court in Salkia Businessmens' Association and Others v. Howrah Municipal Corporation and Others [(2001) 6 SCC 688] has held that the terms of the compromise which become part of the order of the court should be strictly enforced. It was observed that if the courts are not to honour and implement their own orders, and encourage party litigants - be they public authorities, to invent methods of their own to short circuit and give a go-by to the obligations and liabilities incurred by them under orders of the court - the rule of law will certainly become a casualty in the process - a costly consequence to be zealously averted by all and at any rate by the highest Courts in the States in the country. {Para 10}


OP(CRL.) NO. 390 OF 2020




Dated: 16th day of August, 2022.

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