Code of Civil Procedure Section 88. Where interpleader-suit may be instituted.
PART V
SPECIAL PROCEEDINGS
ARBITRATION
1[89.
Settlement of disputes outside the Court.—(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 observations 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) Were a dispute has been
referred—
(a) for arbitration or
conciliation, the provisions of the Arbitration and Conciliation Act, 1996 (26
of 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 (39 of
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 (39 of 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.]
Note 1: Ins. by Act 46 of 1999, s. 7 (w.e.f. 1-7-2002), earlier rep. by Act 10 of 1940, s. 49 and the Third Schedule.
Part in Red is
original provisions from CPC reproduced here for reference.
Code of Civil
Procedure Section
History:
Section 89- Civil Procedure Code, 1859 contained Section 89 providing for arbitration by judicial intervention. The Code has repealed the earlier CPC 1882, and it added Section 89 providing for arbitration by judicial intervention. After commencement of the Arbitration Act, 1940, the provisions of Section 89 CPC were repealed considering that there was a duplication, and as special law prevails over general law, the provisions of Section 89 CPC 1908 would not serve any purpose. Subsequently because of the scientific developments, change in the nature of the litigation, globalisation, and industrialization etc., it was felt that neither the Arbitration Act 1940 nor CPC was able to cope with the problems. Thus, Arbitration Act, 1940 was repealed by Arbitration and Conciliation Act 1996, and vide CPC Amendment 1999, Section 89 was re-introduced with amendment, which came into force w.e.f. 1st July, 2002.
Simplified
Explanation:
The newly added Section 89 contains 4 alternative forums of dispute resolution, putting an obligation on the Court that once the issues are framed after considering the contents of the plaint, written statement, explanation and statement of the parties recorded under Order 10 Rule 1; the Court may consider as to whether there is any element of settlement which may be acceptable to the parties. It may formulate those points and give them to the parties for the purpose of their observations and after receiving their observations, the Court may re-assess and re-formulate a term by a possible settlement and refer the same for
(a) arbitration,
(b) conciliation,
(c) judicial settlement including Lok Adalat, or
(d) Mediation.
Why provisions of Section 89 are required?
Such a
requirement is there so that the Court may not become prejudice against a
party, due to which the proceedings could not succeed. The Courts have to frame
the Rules in this regard.
The remedies
prescribed by Section
89 has advantage as the parties are in control of their proceedings. The
matter can be settled within short span of period. There will be no strained
relations between the parties, and in case the matter is resolved by any of the
procedures provided under Section 89 of the Code, the plaintiff shall be
entitled for claim of refund of the Court Fees paid by him, as provided under
Section 16 of the Court Fees Act, 1870. The said provision has been amended
recently, and it reads as under:- “Where the Court refers the parties to the
suit to any one of the code of settlement of disputes referred to in Section 89
of the Code of Civil Procedure 1908, the plaintiff shall be entitled to a
certificate from the Court authorising him to receive back from the Collector
the full amount of fee paid in respect of such plaint.”
Provisions for working of Section 89:
In order
to facilitate the working of alternative forums, as provided under Section 89
of the Code, the provision contained in Order 10 Rule 1A provides for a direction
of the Court to the party to opt for any one mode of alternative dispute
resolution. Order 10 Rule 1B similarly provides for a procedure for appearance
etc. when the matter is referred to the conciliatory forum. Order 10 Rule 1C
provides for the reference back to the Court consequent to failure of efforts
of conciliation.
Section
89 proceedings at appellate stage:- There is no dispute to the
settled legal provision that the pleadings can be amended at any stage. A party
can also be impleaded at any stage of the proceedings. In such an eventuality,
as the appeal is a continuation of suit, there should be no problem in
resorting to the procedure prescribed under Section 89 by the Court at
appellate stage.
To know more read these: -
Order 10 Rule 1. Ascertainment whether allegations in pleadings are admitted or denied.
Order 10 Rule 1A. Direction of the court to opt for any one mode of alternative dispute resolution.
Order 10 Rule 1B. Appearance before the conciliatory forum or authority.
Order 10 Rule 1C. Appearance before the court consequent to the failure of efforts of conciliation.
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