Mediation (Important Judicial Pronouncements)

Mediation (Important Judicial Pronouncements)
1. Salem Bar Association v. Union of India (2003) 1 SCC 49 -

The amendment to CPC requiring the pending matters to be referred to
ADR was not appreciated by the lawyers and thus the amendment was
challenged. Writ Petitions were filed challenging the Amendments made
to the CPC in 1999 ..
Holding the amendment constitutional, the Hon'ble Supreme Court
observed that –
 the provision of Section 89 of the Code of Civil Procedure has
been inserted to ensure that all the cases which are filed in the
courts need not necessarily be decided by the courts.
 There is a need to promote Alternate Dispute Resolution and there
fore Section 89 is a welcome step.
 A Committee be constituted to ensure that the amendments made
to the Code of Civil Procedure become effective and result in
quicker dispensation of justice.
 Thus a committee headed by Justice M. Jagannath Rao , Judge SC
of India and the then Chairperson of LCI to ensure that amendment
become effective in quick dispensation of justice. This committee
formulated Model Rules to implement S.89 CPC viz. Civil
Procedure Alternative Dispute Resolution Rules,2003 and Civil
Procedure Mediation Rules,2003.
 The SC also observed that these Model Rules be adopted by
respective HCs of respective States to give effect to S.89(2) of
CPC. Consequently the HCs by adopting these Rules bridged the
gaps left by the 1999 amendment.
The relevant portions of this judgement reads as follows:
"8. Our attention was then drawn to a new Section 89 which has been
introduced in the Code of Civil Procedure. This provides for settlement of
disputes, etc., and reads as under:
“89. Settlement of disputes outside the Court -
1) …….
(2) ………”
"9. It is quite obvious that the reason why Section 89 has been inserted is to
try and see that all the cases which are filed in court need not necessarily be
decided by the court itself. Keeping in mind the law's delay and the limited
number of Judges which are available, it has now become imperative that
resort should be had to Alternative Dispute Resolution Mechanism with a
view to bring to an end litigation between the parties at an early date. The
Alternative Dispute Resolution (ADR) mechanism as contemplated by
Section 89 is arbitration or conciliation or judicial settlement including
settlement through Lok Adalat or mediation. Sub-section (2) of Section 89
refer to different Acts in relation to arbitration, conciliation or
settlement through Lok Adalat, but with regard to mediation Section
89(2)(d) provides that the parties shall follow the procedure as may be
prescribed. Section 89(2)(d), therefore, contemplates appropriate rules
being framed with regard to mediation."
"10. In certain countries of the world where ADR has been successful to the
extent that over 90 per cent of the cases are settled out of court, there is a
requirement that the parties to the suit must indicate the form of ADR which
they would like to resort to during the pendency of the trial of the suit. If the
parties agree to arbitration, then the provisions of the Arbitration and
Conciliation Act, 1996 will apply and that case will go outside the stream
of the court but resorting to conciliation or judicial settlement or
mediation with a view to settle the dispute would not ipso facto take the
case outside the judicial system. All that this means is that effort has to
be made to bring about an amicable settlement between the parties but
if conciliation or mediation or judicial settlement is not possible, despite
efforts being made, the case will ultimately go to trial."
"11. Section 89 is a new provision and even though arbitration or

conciliation has been in place as a mode for setting the disputes, this has not
really reduced the burden on the courts. It does appear to us that modalities
have to be formulated for the manner in which Section 89 and, for that
matter, the other provisions which have been introduced by way of
amendments, may have to be in operation. All counsel are agreed that for
this purpose, it will be appropriate if a Committee is constituted so as to
ensure that the amendments made become effective and result in quicker
dispensation of justice."
"12.....This Committee will be at liberty to co-opt any other member and to

take assistance of any member of the Bar or Association. This Committee
may consider devising a model case management formula as well as rules
and regulations which should be followed while taking recourse to the ADR
referred to in Section 89. The model rules, with or without modification,
which are formulated may be adopted by the High Courts concerned for
giving effect to Section 89(2)(d)."
2. Afcons Infrastructure v. Cherian Varkey Construction Co. Ltd.

(2010) 8 SCC 24 -
The Apex Court pointed out that –

 Although it is not possible to lay down an exhaustive list concerning
the matters which may be mediated, yet an illustrative list may be laid
down. This list comprises of all cases related to trade and commerce,
all cases arising from strained relationships, all cases where there is a
need of continuation of the pre- existing relationship, inspite of the
disputes, all cases related to tortious liability and all consumer
disputes. All such matters as laid down supra may be mediated.
"26. Section 89 starts with the words "where it appears to the court that
there exist elements of a settlement". This clearly shows that cases which
are not suited for ADR process should not be referred under Section 89 of
the Code. The court has to form an opinion that a case is one that is capable
of being referred to and settled through ADR process. Having regard to the
tenor of the provisions of Rule 1A of Order 10 of the Code, the civil court
should invariably refer cases to ADR process. Only in certain recognized
excluded categories of cases, it may choose not to refer to an ADR process.
Where the case is unsuited for reference to any of the ADR process, the
court will have to briefly record the reasons for not resorting to any of the
settlement procedures prescribed under Section 89 of the Code. Therefore,
having a hearing after completion of pleadings, to consider recourse to ADR
process under Section 89 of the Code, is mandatory. But actual reference to
an ADR process in all cases is not mandatory. Where the case falls under an
excluded category there need not be reference to ADR process. In all other
case reference to ADR process is a must."
"27. The following categories of cases are normally considered to be not

suitable for ADR process having regard to their nature:
(i) Representative suits under Order 1 Rule 8 CPC which involve public
interest or interest of numerous persons who are not parties before the court.
(In fact, even a compromise in such a suit is a difficult process requiring
notice to the persons interested in the suit, before its acceptance).
(ii) Disputes relating to election to public offices (as contrasted from

disputes between two groups trying to get control over the management of
societies, clubs, association etc.).
(iii) Cases involving grant of authority by the court after enquiry, as for
example, suits for grant of probate or letters of administration.
(iv) Cases involving serious and specific allegations of fraud, fabrication

of documents, forgery, impersonation, coercion etc.
(v) Cases requiring protection of courts, as for example, claims against

minors, deities and mentally challenged and suits for declaration of title
against government.
(vi) Cases involving prosecution for criminal offences."
"28.All other suits and cases of civil nature ..... (whether pending in civil
courts or other special Tribunals/Forums) are normally suitable for ADR
processes.."
3. MR Krishna Murthi v. New India Assurance Co. Ltd. 2019 SCC

Online SC 315 –
 The Hon'ble Supreme Court while considering a plea seeking reform
in the Motor Vehicle Accident Claims system, asked the Government
to consider the feasibility of enacting Indian Mediation Act to take
care of various aspects of Mediation in general and issued several
directions to the Government.
 The Hon'ble Supreme Court further directed the Government to
examine the feasibility of setting up a Motor Accidents Mediation
Authority (MAMA) by making necessary amendments in the Motor
Vehicles Act.
 The Apex Court further directed National Legal Services Authority
(NALSA) to set up Motor Accident Mediation Cells (MAMC), which
can function independently under the aegis of NALSA or can be
handed over to Mediation and Conciliation Project Committee
(MCPC).
The relevant portions of this judgement reads as follows:
"29. Time is ripe now to have similar mechanism for settling accident
claims as well. Therefore, the suggestion of establishing MAMA is
laudable. We recommend to the Government to examine the feasibility of
setting up MAMA by making necessary amendments in the Motor
Vehicles Act itself. In fact, the way mediation movement is catching up
in this country, there is dire need to enact Indian Mediation Act as well."
"30. Till the time such an amendment is made by the Parliament, National
Legal Services Authority (NALSA) should take up this work as a project.
A complete report/module be made about the functioning of Motor
Accident Mediation Cell (MAMC). This exercise be completed within a
period of two months.."
"31. There is Mediation and Conciliation Project Committee (MCPC) in

the Supreme Court which takes various policy decisions for better
working on mediation, including court annexed mediation. Broadening
the structure of MCPC, so as to have proper coordination with High
Court Mediation Centers as well as Mediation Centers at District Court
Level is achieved.."
"41. ...(a) We impress upon the Government to also consider the
feasibility of enacting Indian Mediation Act to take care of various
aspects of mediation in general.
(b) The Government may examine the feasibility of setting up MAMA by

making necessary amendments in the Motor Vehicles Act...."
4. Ayodhya dispute (M. Siddiq (D) v. Mahant Suresh Das, Civil Appeal
No. 10866-10867 of 2010) vide its Order dated March 8, 2019 -
A Five Judge Constitution bench of the Hon'ble Supreme Court of India
ordered a court-monitored mediation. The relevant portion of the
aforesaid Order dated March 8, 2019 reads as follows:
"3. We have considered the nature of the dispute arising. Notwithstanding

the lack of consensus between the parties in the matter we are of the view
that an attempt should be made to settle the dispute through mediation."
"6. Considering the provisions of CPC, indicated above, we do not find

any legal impediment to making a reference to mediation for a possible
settlement of the dispute(s) arising out of the appeals."
"7..mediation proceedings should be conducted with utmost

confidentiality so as to ensure its success which can only be safeguarded
by directing that the proceedings of mediation and the views expressed
therein by any of the parties including the learned Mediators shall be kept
confidential and shall not be revealed to any other person. We are of the
further opinion that while the mediation proceedings are being carried
out, there ought not to be any reporting of the said proceedings either in
the print or in the electronic media."
The reference of the highly sensitive Ayodhya dispute to mediation by

the Hon'ble Supreme Court of India has brought the mediation process to
the attention of the people. In order to take the mediation ahead and use it
in the best possible manner, it is important to spread its awareness
amongst the public. Those engaged in mediation must acquire mediation
skills in a scientific and structured manner. Many relationships can be
saved through mediation and also the burden of cases upon the courts will
reduce.

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Mediation (Important Judicial Pronouncements)

1. Salem Bar Association v. Union of India (2003) 1 SCC 49 -

“89. Settlement of disputes outside the Court -

"11. Section 89 is a new provision and even though arbitration or

"12.....This Committee will be at liberty to co-opt any other member and to

2. Afcons Infrastructure v. Cherian Varkey Construction Co. Ltd.

The Apex Court pointed out that –

"27. The following categories of cases are normally considered to be not

(ii) Disputes relating to election to public offices (as contrasted from

(iv) Cases involving serious and specific allegations of fraud, fabrication

(v) Cases requiring protection of courts, as for example, claims against

(vi) Cases involving prosecution for criminal offences."

3. MR Krishna Murthi v. New India Assurance Co. Ltd. 2019 SCC

The relevant portions of this judgement reads as follows:

"31. There is Mediation and Conciliation Project Committee (MCPC) in

(b) The Government may examine the feasibility of setting up MAMA by

"3. We have considered the nature of the dispute arising. Notwithstanding

"6. Considering the provisions of CPC, indicated above, we do not find

"7..mediation proceedings should be conducted with utmost

The reference of the highly sensitive Ayodhya dispute to mediation by

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