Bombay HC: Mediation Act 2023 Does Not Confer Power On Courts To Mandate Mediation Without Mutual Consent Of Parties

Conclusion :-

15. The Mediation Act, 2023 does not provide for any mandatory

mediation nor does it confer any power on the court to order

mediation without consent of all parties. The procedure prescribed

under the Act is for a mediation agreement to be executed in writing to submit to mediation. Thus, the mediation contemplated by the Mediation Act is not compulsory but a consensual mediation.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

ORDINARY ORIGINAL CIVIL JURISDICTION

INTERIM APPLICATION NO. 5241 OF 2025

IN

SUIT NO. 250 OF 2023

Babasaheb Neelkanth Kalyani  Vs  Sugandha Hiremath 

CORAM : RAJESH S. PATIL, J.

PRONOUNCED ON : 04 May, 2026

Citation: 2026:BHC-OS:11441

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Supreme Court: Plaintiff in Maharashtra will get refund of entire court fees if case is settled in any one of the modes of settlement of dispute referred to in Section 89 of CPC after court fees amendment Act 2018

 As extracted supra, the High Court in the impugned judgment had made a suggestion to the State legislature that the differences in the court fees in Lok Adalat, vis-à-vis, the forms of ADR should be done away with the view to promote the adaptation of such methods of dispute resolution among the public. It has been brought to our attention that the State legislature has indeed carried out such an amendment to the MCFA, 1959 and Section 16A has been introduced therein by way of Maharashtra Act No. X of 2018, the relevant extract of which reads under:

MAHARASHTRA ACT No. X OF 2018.

(First published, after having received the assent of the Governor in the "Maharashtra Government Gazette", on the 16th January 2018.)

An Act further to amend the Maharashtra Court-fees Act.

WHEREAS it is expedient further to amend the Maharashtra Court-fees Act, for the purposes hereinafter appearing; it is hereby enacted in the Sixty-eighth Year of the Republic of India as follows:

2. After Section 16 of the Maharashtra Court-fees Act (hereinafter referred to as "principal Act"), the following Section shall be inserted, namely:

16A. Where the court refers the parties to the suit to any one of the modes of settlement of dispute referred to in Section 89 of the Code of Civil Procedure, 1908 and suit is disposed of by the court by adaptation of any of the modes prescribed under the said section, the Plaintiff shall be entitled to a certificate from the court authorising him to receive back from the collector, the full amount of the fee paid in respect of such plaint.''. {Para 22}

23. The effect of the above being that for the time when the amendment to the MCFA, 1959 granting partial or complete refund, as the case may be, in accordance with Section 43 as amended, the persons whose matters were settled by way of ADR would not be entitled to 100% refund. Any matter settled under the processes mentioned in Section 89 Code of Civil Procedure after the coming into force of the above-extracted amendment, such parties shall receive refund of court fees in its entirety.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 14742 of 2024.

Decided On: 19.12.2024

Sanjeevkumar Harakchand Kankariya Vs. Union of India (UOI) and Ors.

Hon'ble Judges/Coram:

C.T. Ravikumar and Sanjay Karol, JJ.

Author: Sanjay Karol, J.

Citation: MANU/SC/1377/2024.

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What is role of counseling and mediation in matrimonial conflict resolution in the context of S 89 C.PC?

 Counseling and mediation play important roles in matrimonial conflict resolution, especially in the context of Section 89 of the Code of Civil Procedure (C.P.C) in India. Section 89 encourages parties involved in disputes, including matrimonial conflicts, to explore alternative dispute resolution methods before resorting to litigation. Here's how counseling and mediation are involved in matrimonial conflict resolution under Section 89 C.P.C:

• Initiation and Referral:

• Section 89 of the C.P.C empowers courts to refer parties to mediation or counseling to resolve their disputes. In matrimonial cases, the court may suggest or order mediation or counseling before proceeding with the trial.

• Counseling:

• Counseling is a process where a trained counselor helps individuals or couples explore their issues, emotions, and communication problems. In matrimonial conflicts, counseling can provide a safe space for spouses to discuss their concerns, work on their relationship, and explore possible solutions. Counselors can assist with improving communication and understanding between the parties.

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Whether Litigant is Entitled To Refund Of Court Fees If Matter is Settled Outside Court Without Invocation Of S.89 CPC?

 In view of the aforesaid, I am of the considered opinion that even if the matter is settled by the parties outside the Court without invoking the provisions of section 89 CPC, the appellant while withdrawing his first appeal, is entitled to the refund of full Court fees as provided under section 16 of the Court Fees. {Para 7} Act, 1870. 

IN THE HIGH COURT OF MADHYA PRADESH

AT JABALPUR

FIRST APPEAL No. 222 of 2015

DAYARAM  BALARAM PATEL,  Vs SMT. LAXMI AGRAWAL 

BEFORE

HON'BLE SHRI JUSTICE DWARKA DHISH BANSAL

ON THE 20th OF SEPTEMBER, 2022.

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Whether the court should refund court fees to parties, who have settled their case out of court?

 We find ourselves in agreement with the approach taken by

the High Courts in the decisions stated supra. The purpose of

Section 69A

is to reward parties who have chosen to withdraw

their litigations in favour of more conciliatory dispute settlement

mechanisms, thus saving the time and resources of the Court, by

enabling them to claim refund of the court fees deposited by

them. Such refund of court fee, though it may not be connected

to the substance of the dispute between the parties, is certainly

an ancillary economic incentive for pushing them towards

exploring alternative methods of dispute settlement. As the

Karnataka High Court has rightly observed in Kamalamma

(supra), parties who have agreed to settle their disputes without

requiring judicial intervention under Section 89, CPC are even

more deserving of this benefit. This is because by choosing to

resolve their claims themselves, they have saved the State of the

logistical hassle of arranging for a thirdparty

institution to settle

the dispute. Though arbitration and mediation are certainly

salutary dispute resolution mechanisms, we also find that the

importance of private amicable negotiation between the parties

cannot be understated. In our view, there is no justifiable reason

why Section 69A

should only incentivize the methods of out of

court settlement stated in Section 89, CPC and afford stepbrotherly

treatment to other methods availed of by the parties.

Admittedly, there may be situations wherein the parties

have after the course of a longdrawn

trial, or multiple frivolous

litigations, approached the Court seeking refund of court fees in

the guise of having settled their disputes. In such cases, the

Court may, having regard to the previous conduct of the parties

and the principles of equity, refuse to grant relief under the

relevant rules pertaining to court fees. However, we do not find

the present case as being of such nature.

20. Thus, even though a strict construction of the terms of

Section 89, CPC and 69A

of the 1955 Act may not encompass

such private negotiations and settlements between the parties,

we emphasize that the participants in such settlements will be

entitled to the same benefits as those who have been referred to

explore alternate dispute settlement methods under Section 89,

CPC.

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

SPECIAL LEAVE PETITION (CIVIL) NOS. 30633064

OF 2021

(DIARY NO. 38692021)

The High Court of Judicature at Madras Vs M.C. Subramaniam & ors. 

Author: MOHAN M. SHANTANAGOUDAR, J.

Dated: FEBRUARY 17, 2021

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Whether court can return plaint on ground of availability of alternative dispute redressal mechanism?

The learned Judge wrongly read the provisions of Order 7 Rule 10
of the Code of Civil Procedure (CPC), which is reproduced as under:
“Order 7 Rule 10- Return of plaint- (1) Subject to the provisions of
rule 10A, the plaint shall at any stage of the suit be returned to be
presented to the court in which the suit should have been instituted.
Explanation: For the removal of doubts, it is hereby declared that a
court of appeal or revision may direct, after setting aside the decree
passed in a suit, the return of the plaint, under this sub-rule.
(2)
Procedure on returning —On returning a plaint, the Judge
shall endorse thereon the date of its presentation and return, the
name of the party presenting it, and a brief statement of the reasons
for returning it.

The “Court” as mentioned is the basic requirement. The words

“Court” and “jurisdiction” are not specifically defined in CPC. However, the
concepts of “Court” and “jurisdiction” are read and referred in most of the part
of the CPC. It is well settled also. The proper forum as read and referred and
included within the term of Court by the learned Judge, in view of plain reading
of above, itself is wrong. The effect of such clauses where parties agree to settle

and/or decide their disputes, arising out of the terms and conditions of the
contract through a private forum is always an alternative mode/mechanism. Such
dispute redressal system other than the Court, has various facets. The same are
elaborated in Section 89 of CPC. The concept therefore itself is very clear that
the proceedings in the Court, are different that the proceedings initiated and/or
referred before the dispute resolution mechanism and or the forum like
arbitration, mediation, conciliation and lokadalat. The clause with such
mechanism as adopted and in spite of notice, the disputes could not be settled,
and there was a delay, and the contractor wanted an interim order and injunction
from the Court, the alleged forum, as recorded in the clause, in no way
competent to deal with the situation and/or grant such declarative/interim/reliefs.
The option so agreed, in no way debars the parties to initiate and/or to file a civil
suit in the competent court for the reliefs including damages for the work done
by them. There is nothing even pointed out and/or referred in the terms and
conditions and/or in the order that such suit and/or initiation of such proceedings

is barred. The forum so provided, cannot be compared with the power of civil
court jurisdiction to decide and/or grant relief as prayed in such suits. The
“forum” is not the “Court” as contemplated under CPC. The judgment so cited,
in no way dealt with the aspect in question specifically to return the plaint for
presentation before the alleged proper forum as contemplated under Order 7 Rule
10 of CPC. The jurisdiction of Court is not restricted by such clauses. The

jurisdiction of civil court is not restricted by such clauses.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
APPEAL FROM ORDER NO. 449 OF 2013

Shri Pravin Pandurang Patil Vs. Executive Engineer,
Pradhan Mantri Gram Sadak Yojana,
Zilla Parishad Premises, Sangli.

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Whether litigant who settles case in Lok Adalat is entitled to get refund of 100% Court Fees?

 For the reasons which we have recorded, we are of the view that
subSection
(1) of Section 21 is a case of legislation by incorporation.
Therefore, provisions of Section 16 of the Central Court Fees Act will
have to be read in into subSection
(1) of Section 21 of the 1987 Act.
To conclude, Section 16 of the Central Court Fees Act stands
incorporated in subSection
(1) of Section 21 of the said Act of 1987
and, therefore, when a civil suit is referred to a Lok Adalat which ends
with an Award of the Lok Adalat, the plaintiff is entitled to 100% refund
of Court fees paid in the said suit. Thus, a defendant who files a
counter claim in the suit is entitled to 100% refund of the Court fees
paid on a counter claim which is settled before a Lok Adalat.

Therefore, in the three cases in hand, the learned Trial Judge was not
justified in calling upon the petitioner to deposit 75% of the amount of
Court fees out of the refund amount paid to the petitioner. Hence, we
dispose of the petitions by passing the following order :ORDER
(i) We hold and declare that petitioners being plaintiffs in the
suits settled before the Lok Adalat held under the Legal Service
Authority Act, 1987 are entitled to 100% refund of Court fees.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 9864 OF 2017

Maharishi Shankarrao MohitePatil Sahakar Sakhar Karkhana Ltd,  v/s. The State of Maharashtra

CORAM : A.S. OKA &
M.S. SANKLECHA, J.J.
DATED : 2nd APRIL, 2019
 (Per A.S. Oka, J.)
Citation: 2019(5) MHLJ 175,AIR 2019(NOC) 821 Bom

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Whether a party can back out from mediation settlement after pocketing money under said settlement?

In this case, disputes involved in the suit had been referred to the Delhi High Court Mediation & Conciliation Centre vide order dated 5th May, 2011 within the meaning of Section 89(1)(d) and the settlement has been arrived at before the learned Mediator after comprehensive mediation sessions held as many as on eight occasions in the presence of the counsel for the parties and thereafter, parties had reached an amicable settlement, which has been reduced in writing by the learned Mediator and has been duly signed by not only the parties but their counsels as well on 5th August, 2011. Thereafter, Mediator has sent the 'Settlement Agreement' to the court. No such objection was raised either by Defendant No. 1 or her counsel immediately after the settlement was drawn and signed by the parties on 5th August, 2011. It is only when the matter has been taken up by the Court after about fifteen days the new counsel for Defendant No. 1 has tried to assail the settlement on flimsy grounds, even though Settlement Agreement had been acted upon, inasmuch as, Defendant No. 1 had accepted two post dated cheques bearing Nos. 520237 and 520238 from Defendant No. 2; Defendant No. 2 has also paid pay order for `15 lakhs to the Plaintiff in Court on 30th August, 2011.

12. In my view, if such pleas are sustained the very sanctity and purpose of an amicable settlement through the process of mediation, would stand totally eroded. In Double Dot Finance Limited v. Goyal MG Gases Ltd. 2005 (2) AD Del 534 though that case arose out of the arbitration proceedings, a Single Judge of this Court has observed as under:

If such pleas are sustained, the sanctity and purpose of 'amicable settlements' between the parties would stand totally eroded. Amicable resolution of disputes and negotiated settlements is 'public policy in India'. Section 89 of the Code of Civil Procedure, Arbitration and Conciliation Act, 1996 as well as Legal Services Authorities Act, 1995 call upon the Courts to encourage settlements of legal disputes through negotiations between the parties. If amicable settlements are discarded and rejected on flimsy pleas, the parties would be wary of entering into negotiated settlements and making payments thereunder as a shrewed party after entering into a negotiated settlement, may pocket the amount received under it and thereafter challenge the settlement and reagitate the dispute causing immeasurable loss and harassment to the party making payment thereunder. This tendency has to be checked and such litigants discouraged by the Courts. It would be in consonance with public policy of India.

IN THE HIGH COURT OF DELHI

CS (OS) No. 2248/2010

Decided On: 01.09.2011

 Naveen Kumar Vs.  Khilya Devi and Ors.

Hon'ble Judges/Coram:

A.K. Pathak, J.

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Whether court can strike off defence of party if he fails to appear before mediator?

The reading of the above provision makes it very clear that neither Section 89 of Code of Civil Procedure nor Order 10 Rule 1-A nor the Karnataka (Case Flow Management in Sub-ordinate Courts) Rules 2005 nor the Karnataka Code of Civil Procedure (Mediation) Rules 2005 provide for striking of the defence for non-appearance of the parties before the Mediator. Only Sub-rule (2) of Rule 13 of the Karnataka Code of Civil Procedure (Mediation) Rules 2005 contemplates that the Court may impose cost for non-appearance of the parties before the Mediator. Hence, I am of the view that the order passed by the Learned Civil Judge striking off the defence of Defendants 1 to 3 is contrary to law and Rules referred above. If the parties fail to appear before the Mediator, the Court may impose some penalty fixing some other date to appear before the Mediator and accordingly the order passed by the Learned Civil Judge striking off the defence of the Defendants is liable to be set aside.

IN THE HIGH COURT OF KARNATAKA

W.P. No. 2208/2009 (GM- CPC)

Decided On: 16.04.2010

 Rudraaradya Vs.  Nanjundappa @ Nanjundaswamy and Anr.

Hon'ble Judges/Coram:

B. Manohar, J.

Citation: ILR 2011Kar 221

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Guidelines of Supreme court regarding confidentiality in Mediation

 In this connection, we would like to state that mediation proceedings are totally confidential proceedings. This is unlike proceedings in Court which are conducted openly in the public gaze. If the mediation succeeds, then the mediator should send the agreement signed by both the parties to the Court without mentioning what transpired during the mediation proceedings. If the mediation is unsuccessful, then the mediator should only write one sentence in his report and send it to the Court stating that the 'Mediation has been unsuccessful'. Beyond that, the mediator should not write anything which was discussed, proposed or done during the mediation proceedings. This is because in mediation, very often, offers, counter offers and proposals are made by the parties but until and unless the parties reach to an agreement signed by them, it will not amount to any concluded contract. If the happenings in the mediation proceedings are disclosed, it will destroy the confidentiality of the mediation process.

3. We are compelled to observe this because the mediators should know what kind of reports they should send to the Courts. The report sent in this core should not have mentioned the proposals made by the parties, but should only have stated that the mediation was unsuccessful.

IN THE SUPREME COURT OF INDIA

C.A. No. 1095 of 2008

Decided On: 07.12.2010

 Moti Ram  Vs.  Ashok Kumar and Ors.

Hon'ble Judges/Coram: 

Markandey Katju and Gyan Sudha Misra, JJ.

Citation: (2011)1 SCC 466

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What is appropriate stage for referring dispute to mediation in Family disputes?

Having regard to the provisions of Section 89 and Rule 1A of Order 10, the stage at which the court should explore whether the matter should be referred to ADR processes, is after the pleadings are complete, and before framing the issues, when the matter is taken up for preliminary hearing for examination of parties under Order 10 of the Code. However, if for any reason, the court had missed the opportunity to consider and refer the matter to ADR processes under Section 89 before framing issues, nothing prevents the court from resorting to Section 89 even after framing issues. But once evidence is commenced, the court will be reluctant to refer the matter to the ADR processes lest it becomes a tool for protracting the trial.

30. Though in civil suits, the appropriate stage for considering reference to ADR processes is after the completion of pleadings, in family disputes or matrimonial cases, the position can be slightly different. In those cases, the relationship becomes hostile on account of the various allegations in the petition against the spouse. The hostility will be further aggravated by the counter-allegations made by the respondent in his or her written statement or objections. Therefore, as far as Family Courts are concerned, the ideal stage for mediation will be immediately after service of respondent and before the respondent files objections/written statements. Be that as it may.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 6000 of 2010 (Arising out of SLP (C) No. 760 of 2007)

Decided On: 26.07.2010

Afcons Infrastructure Ltd. Vs.  Cherian Varkey Construction Co. (P) Ltd. and Ors.

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Procedure to be adopted by court U/S 89 of Civil Procedure Code

We may summarize the procedure to be adopted by a court under Section 89 of the Code as under:

a) When the pleadings are complete, before framing issues, the court shall fix a preliminary hearing for appearance of parties. The court should acquaint itself with the facts of the case and the nature of the dispute between the parties.

b) The court should first consider whether the case falls under any of the category of the cases which are required to be tried by courts and not fit to be referred to any ADR processes. If it finds the case falls under any excluded category, it 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 issues and trial.

c) In other cases (that is, in cases which can be referred to ADR processes) the court should explain the choice of five ADR processes to the parties to enable them to exercise their option.

d) The court should first ascertain whether the parties are willing for arbitration. The court should inform the parties that arbitration is an adjudicatory process by a chosen private forum and reference to arbitration will permanently take the suit outside the ambit of the court. The parties should also be informed that the cost of arbitration will have to be borne by them. Only if both parties agree for arbitration, and also agree upon the arbitrator, the matter should be referred to arbitration.

e) If the parties are not agreeable for arbitration, the court should ascertain whether the parties are agreeable for reference to conciliation which will be governed by the provisions of the AC Act. If all the parties agree for reference to conciliation and agree upon the conciliator/s, the court can refer the matter to conciliation in accordance with Section 64 of the AC Act.

f) If parties are not agreeable for arbitration and conciliation, which is likely to happen in most of the cases for want of consensus, the court should, keeping in view the preferences/options of parties, refer the matter to any one of the other three other ADR processes: (a) Lok Adalat; (b) mediation by a neutral third party facilitator or mediator; and (c) a judicial settlement, where a Judge assists the parties to arrive at a settlement.

(g) If the case is simple which may be completed in a single sitting, or cases relating to a matter where the legal principles are clearly settled and there is no personal animosity between the parties (as in the case of motor accident claims), the court may refer the matter to Lok Adalat. In case where the questions are complicated or cases which may require several rounds of negotiations, the court may refer the matter to mediation. Where the facility of mediation is not available or where the parties opt for the guidance of a Judge to arrive at a settlement, the court may refer the matter to another Judge for attempting settlement.

(h) If the reference to the ADR process fails, on receipt of the Report of the ADR Forum, the court shall proceed with hearing of the suit. If there is a settlement, the court shall examine the settlement and make a decree in terms of it, keeping the principles of Order 23 Rule 3 of the Code in mind.

(i) If the settlement includes disputes which are not the subject matter of the suit, the court may direct that the same will be governed by Section 74 of the AC Act (if it is a Conciliation Settlement) or Section 21 of the Legal Services Authorities Act, 1987 (if it is a settlement by a Lok Adalat or by mediation which is a deemed Lok Adalat). If the settlement is through mediation and it relates not only to disputes which are the subject matter of the suit, but also other disputes involving persons other than the parties to the suit, the court may adopt the principle underlying Order Rule 3 of the Code. This will be necessary as many settlement agreements deal with not only the disputes which are the subject matter of the suit or proceeding in which the reference is made, but also other disputes which are not the subject matter of the suit.

(j) Settlement is ex facie illegal or unenforceable, the court should draw the attention of parties thereto to avoid further litigations and disputes about executability.

32. The Court should also bear in mind the following consequential aspects, while giving effect to Section 89 of the Code:

(i) If the reference is to arbitration or conciliation, the court has to record that the reference is by mutual consent. Nothing further need be stated in the order sheet.

(ii) If the reference is to any other ADR process, the court should briefly record that having regard to the nature of dispute, the case deserves to be referred to Lok Adalat, or mediation or judicial settlement, as the case may be. There is no need for an elaborate order for making the reference.

(iii) The requirement in Section 89(1) that the court should formulate or reformulate the terms of settlement would only mean that court has to briefly refer to the nature of dispute and decide upon the appropriate ADR process.

(iv) If the Judge in charge of the case assists the parties and if settlement negotiations fail, he should not deal with the adjudication of the matter, to avoid apprehensions of bias and prejudice. It is therefore advisable to refer cases proposed for Judicial Settlement to another Judge.

(v) If the court refers the matter to an ADR process (other than Arbitration), it should keep track of the matter by fixing a hearing date for the ADR Report. The period allotted for the ADR process can normally vary from a week to two months (which may be extended in exceptional cases, depending upon the availability of the alternative forum, the nature of case etc.). Under no circumstances the court should allow the ADR process to become a tool in the hands of an unscrupulous litigant intent upon dragging on the proceedings.

(vi) Normally the court should not send the original record of the case when referring the matter for an ADR forum. It should make available only copies of relevant papers to the ADR forum. (For this purpose, when pleadings are filed the court may insist upon filing of an extra copy). However if the case is referred to a Court annexed Mediation Centre which is under the exclusive control and supervision of a Judicial Officer, the original file may be made available wherever necessary.

33. The procedure and consequential aspects referred to in the earlier two paragraphs are intended to be general guidelines subject to such changes as the concerned court may deem fit with reference to the special circumstances of a case.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 6000 of 2010 (Arising out of SLP (C) No. 760 of 2007)

Decided On: 26.07.2010

Afcons Infrastructure Ltd. Vs.  Cherian Varkey Construction Co. (P) Ltd. and Ors.

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Whether court can refer dispute to lok Adalat and for mediation without consent of parties?

 If the parties are not agreeable for either arbitration or conciliation, both of which require consent of all parties, the court has to consider which of the other three ADR processes (Lok Adalat, Mediation and Judicial Settlement) which do not require the consent of parties for reference, is suitable and appropriate and refer the parties to such ADR process. If mediation process is not available (for want of a mediation centre or qualified mediators), necessarily the court will have to choose between reference to Lok Adalat or judicial settlement. If facility of mediation is available, then the choice becomes wider. It the suit is complicated or lengthy, mediation will be the recognized choice. If the suit is not complicated and the disputes are easily sortable or could be settled by applying clear cut legal principles, Lok Adalat will be the preferred choice. If the court feels that a suggestion or guidance by a Judge would be appropriate, it can refer it to another Judge for dispute resolution. 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.


IN THE SUPREME COURT OF INDIA

Civil Appeal No. 6000 of 2010 (Arising out of SLP (C) No. 760 of 2007)

Decided On: 26.07.2010

Afcons Infrastructure Ltd. Vs.  Cherian Varkey Construction Co. (P) Ltd. and Ors.

Hon'ble Judges/Coram:

R.V. Raveendran and J.M. Panchal, JJ.

Citation: ( 2010 ) 8 SCC 24

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Whether agreement entered in mediation can be used as evidence in criminal case?

 Then, the question is whether the agreement entered into between the parties in a mediation can be treated as evidence in a criminal matter. It may be mentioned here, unless the agreement is accepted by the court and a decree is passed under Section 89 of the Code of Criminal Procedure r/w O. 23 R. 3 of Code of Civil Procedure, that will have no effect, unless that has been converted into a conciliation agreement based on which an award is passed by the Conciliator under the provisions of the Arbitration and Conciliation Act Further, it is the cardinal principle in the mediation that whatever transpired in the mediation cannot be disclosed even before the court of law and that cannot be called upon to be produced as evidence as well as it will affect the confidentiality of the things transpired in the process of mediation. So the party who did not honour the settlement which was effected in the process of mediation, then, is not entitled to use the same as evidence before the court and agreement also cannot be marked in evidence as it has no legal effect unless it is accepted by the court and a decree is passed under Section 89 r/w O. 23 R. 3 of the Code of Civil Procedure, That cannot be possible in a Criminal Court. Further even if the party had agreed to settle the matter for a lesser amount than the amount mentioned in the cheque in the mediation, it cannot be said that, that was the amount payable as in the mediation, parties can forgo so many things for the purpose of achieving harmony between the parties and restore their relationship. So the amounts arrived in a mediation also cannot be used as evidence for coming to the conclusion that the amount mentioned in the cheque is not the real amount due, and the complainant is not entitled to maintain the action on the basis of that cheque. The court has to allow the parties to adduce evidence ignoring the mediation agreement and dispose of the case on the basis of evidence adduced by parties as it should not be put in evidence in view of the bar under rules 20, 21 and 22 of the Civil Procedure (Alternative Disputes Resolution) Rules Kerala 2008

IN THE HIGH COURT OF KERALA

Crl. M.C. No. 1864 of 2014

Decided On: 10.07.2014

 Sreelal  Vs.  Murali Menon

Hon'ble Judges/Coram:

K. Ramakrishnan, J.

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Whether court can refer case to arbitration on oral consent of Advocate?

 REFERENCE TO ARBITRATION: After pointing out the disputed claims of additional work (Ex. P59) and on the oral consent of the counsel for the Appellant, the High Court has referred the parties to arbitration appointing Justice K.A. Nayar as the arbitrator. Arbitrator/Tribunal is a creature of the contract between the parties. There was no arbitration agreement between the parties. The question falling for consideration is whether the High Court was right in referring the parties to arbitration on the oral consent given by the counsel without written instruction from the party.

35. Jurisdictional pre-condition for reference to arbitration Under Section 7 of the Arbitration and Conciliation Act is that the parties should seek a reference or submission to arbitration. So far as reference of a dispute to arbitration Under Section 89 Code of Civil Procedure, the same can be done only when parties agree for settlement of their dispute through arbitration in contradistinction to other methods of alternative dispute resolution mechanism stipulated in Section 89 Code of Civil Procedure. Insofar reference of the parties to arbitration, oral consent given by the counsel without a written memo of instructions does not fulfill the requirement Under Section 89 Code of Civil Procedure. Since referring the parties to arbitration has serious consequences of taking them away from the stream of civil courts and subject them to the rigour of arbitration proceedings, in the absence of arbitration agreement, the court can refer them to arbitration only with written consent of parties either by way of joint memo or joint application; more so, when government or statutory body like the Appellant-Board is involved.

IN THE SUPREME COURT OF INDIA

Civil Appeal Nos. 3164-3165 of 2017

Decided On: 09.03.2018

 Kerala State Electricity Board and Ors. Vs. Kurien E. Kalathil and Ors.

Hon'ble Judges/Coram:

Ranjan Gogoi and R. Banumathi, JJ.

Citation: AIR 2018 SC 1351

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Whether court can refer dispute to arbitration during pendency of civil suit?

On making such an application based on arbitration agreement between
the parties, order is passed in terms of Section 89 of the CPC referring
the matter to arbitration. The purpose for enacting Section 89 is to
encourage the parties to the dispute to settle their dispute by adopting
one of the four methods provided therein. Not only that it results in
lessening the burden of the court, experience has shown that many
cases which come to the Court can be resolved more suitably and with
better outcomes if the methods of ADR prescribed in Section 89 of the
CPC are resorted to. It is here that depending upon the nature of
dispute and relationship between the parties etc., the Court may suggest
a particular form of ADR, whether arbitration or mediation etc. can be
chosen. Therefore, what is to be kept in mind is that once arbitration
agreement was entered into between the parties, that too in a pending
suit, the intention of the parties was to settle the matter through
arbitration and not to come back to the Court again for decision of thesame dispute by court adjudicatory process.

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
 CIVIL APPEAL NO. 8731 OF 2015
(Arising out of S.L.P. (Civil) No.19617 of 2015)
SHAILESH DHAIRYAWAN 

V
MOHAN BALKRISHNA LULLA 

R.F. Nariman, J.
Dated;OCTOBER 16, 2015.
Citation;(2016)3 SCC619,2016(6) MHLJ 13

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When court can appoint substitute arbitrator?

Once we keep in mind the aforesaid fundamental aspects of the
arbitration, the irresistible conclusion would be that whenever parties
agree for mediation, and even name a specific arbitrator with no specific
provision for appointment of another arbitrator on the recusal/withdrawal
of the said arbitrator, the said omission is made up by Section 15(2) of
the Act and unless arbitration agreement between the parties provides a
categorical prohibition or debarment in resolving a question or dispute or
difference between the parties by a substitute arbitrator in case of death
or the named arbitrator or non-availability of the said arbitrator, Courts
have the power to appoint substitute arbitrator, which power is given by
Section 15(2) of the Act as this provision is to be given liberal
interpretation so as to apply to all possible circumstances under which

the mandate of the earlier arbitrator may be terminated.

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
 CIVIL APPEAL NO. 8731 OF 2015
(Arising out of S.L.P. (Civil) No.19617 of 2015)
SHAILESH DHAIRYAWAN 

V
MOHAN BALKRISHNA LULLA 

R.F. Nariman, J.
Dated;OCTOBER 16, 2015.
Citation;(2016)3 SCC619,2016(6) MHLJ 13

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Supreme Court: Consent of parties is not required for sending case for mediation

 If the parties are not agreeable for either arbitration or conciliation, both of which require consent of all parties, the court has to consider which 27

of the other three ADR processes (Lok Adalat, Mediation and Judicial Settlement) which do not require the consent of parties for reference, is suitable and appropriate and refer the parties to such ADR process. If mediation process is not available (for want of a mediation centre or qualified mediators), necessarily the court will have to choose between reference to Lok Adalat or judicial settlement. If facility of mediation is available, then the choice becomes wider. It the suit is complicated or lengthy, mediation will be the recognized choice. If the suit is not complicated and the disputes are easily sortable or could be settled by applying clear cut legal principles, Lok Adalat will be the preferred choice. If the court feels that a suggestion or guidance by a Judge would be appropriate, it can refer it to another Judge for dispute resolution. The court has used its discretion in choosing the ADR process judiciously, keeping in view the nature of disputes, interests of parties and expedition in dispute resolution.

Supreme Court of India

M/S. Afcons Infra. Ltd. & Anr. vs M/S Cherian Varkey Constn ... on 26 July, 2010

Author: R.V.Raveendran

Bench: R.V. Raveendran, J.M. Panchal

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