Alternate Dispute Resolution under the Code of Civil Procedure,1908
The term alternative dispute resolution (ADR) means any procedure, agreed to by the parties of a dispute, in which they use the services of a neutral party to assist them in reaching agreement and avoiding litigation.ADR provides a forum for creative solutions to disputes that better meet the needs of the parties.
INTRODUCTION
In every civilized society there are two sets of laws that govern the lives of citizens– (i) substantive laws and (ii) procedural laws. While the substantive laws determine the rights and obligations of citizens, procedural laws provide for the framework for enforcement of the same. Despite the fact that substantive laws are comparatively more important, but the efficacy of substantive laws in contingent upon the qualitative deliverance of procedural laws. The latter needs to be efficient, simple, expeditious and inexpensive, lest the substantive provisions fail in fulfillment of their purpose and object.
Throughout the history of civilized states, it has been determined that for proper dispensation of justice the procedural and substantive law have to work hand in hand. The same cannot be held to contradict each other, as one provides the manner of realization of the objective of the other. As such, both streams of law work in consonance with each other, wherein neither exceeds the scope, which is determined to be in the other’s field.
The Code of Civil Procedure, 1908 (hereinafter the Code) is a consolidated document that is the primary procedural law relating to all civil disputes in India. The Code is a collection of all the laws that relate to the procedure adopted by civil courts and parties appearing thereunder. After three different formulations that governed the British colony of India in the late 19th century, the Code in its present form was formally brought into force in 1908.
Over the years a number of amendments have been passed to ensure the Code is more efficient and justice oriented but still a judicial lag exists in India. The number of cases keep on rising day by day while the adjudicators are limited. In light of the same, a provision is provided under Section 89 of the Code which calls for settlement of disputes outside courts.
The long drawn nature of litigation which ironically subverts the ends of justice due to delay makes it viable for parties to resort to alternate dispute resolution would indeed curb delays and the limitations of the traditional system, such as limited number of judges, the voluminous number of cases etc.
The provision under Section 89 is an attempt to bring about the resolution of disputes between parties, minimize costs and reduce the burden of the courts. It is provided for with the sole objective of blending judicial and non-judicial dispute resolution mechanism and bringing alternate dispute mechanism to the center of the Indian Judicial System. The long drawn process of litigation, the costs incurred by both parties for the same have and limited number of adjudicators have made Alternate Dispute Resolution an important aspect of the Judicial system to ensure swifter and speedier justice.
The Researchers in this research note make a humble attempt to understand the provision for Settlement of Disputes outside Courts as provided under Section 89 of the Civil Procedure Code. The same shall be done by, firstly, briefly overviewing the history of the section, the recommendations of various law commissions with respect to the same, the relation of the section with other statutes of India and the position of the provision as it stands today.
HISTORY AND BACKGROUND OF THE SECTION
Section 89 of the Code of Civil procedure was introduced with a purpose of amicable, peaceful and mutual settlement between parties without intervention of the court. In countries all of the world, especially the developed few, most of the cases (over 90 per cent) are settled out of court. The case/ dispute between parties shall go to trial only when there is a failure to reach a resolution. Section 89 of the Code of Civil Procedure States that:
(1) Where it appears to the court that there exist elements of a settlement which may be acceptable to the parties, the court shall formulate the terms of settlement and give them to the parties for their observations and after receiving the observation of the parties, the court may reformulate the terms of a possible settlement and refer the same for (a) arbitration;
(b) conciliation
(c) judicial settlement including settlement through Lok Adalat; or
(d) mediation.
(2) Where a dispute had been referred-
(a) for arbitration or conciliation, the provisions of the Arbitration and Conciliation Act, 1996 shall apply as if the proceedings for arbitration or conciliation were referred for settlement under the provisions of that Act.
(b) to Lok Adalat, the court shall refer the same to the Lok Adalat in accordance with the provisions of sub-section (1) of section 20 of the Legal Services Authority Act, 1987 and all other provisions of that Act shall apply in respect of the dispute so referred to the Lok Adalat;
(c) for judicial settlement, 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 Authority Act, 1987 shall apply as if the dispute were referred to a Lok Adalat under the provisions of that Act;
(d) for mediation, the court shall effect a compromise between the parties and shall follow such procedure as may be prescribed.]