Section 89 CPC — The Gateway to ADR
Landmark Case: Salem Advocate Bar Association v. Union of India (2005) 6 SCC 344 — Section 89 CPC is mandatory. Every civil court must explore ADR before proceeding to trial.
The Provision
Section 89, Civil Procedure Code, 1908: “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.”
In Simple Terms:
- Before deciding a civil case, the judge must check if it can be settled outside court.
- The judge can send the case to one of 4 ADR routes.
How Section 89 Works — Step by Step
- Civil Suit Filed in court.
- Court frames issues.
- Court examines whether elements of settlement exist.
- If yes → court formulates draft terms → sends to parties for observations.
- Court refers the case to one of 4 ADR methods.
- If settlement is reached → decree in terms of settlement.
- If no settlement → case returns to trial.
The Four ADR Routes Under Section 89
| Route | Who handles it | Outcome |
|---|---|---|
| Arbitration | Private arbitrator | Binding award |
| Conciliation | Conciliator (neutral) | Settlement agreement |
| Lok Adalat / Judicial Settlement | Judicial officer panel | Decree; no appeal |
| Mediation | Mediator (neutral) | Settlement agreement |
Key Cases
- Salem Advocate Bar Assn. v. UOI (2005) 6 SCC 344 — Section 89 is mandatory; courts cannot skip ADR reference.
- Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (2010) 8 SCC 24 — Laid down operational guidelines; clarified which cases are suitable/unsuitable for ADR reference.
Cases Suitable for ADR Reference (per Afcons)
- All money disputes (recovery, damages, compensation).
- Matrimonial cases (except divorce on fault grounds).
- Labour disputes.
- Disputes involving immovable property (partition, tenancy).
- Compoundable criminal offences.
Cases NOT Suitable
- Matters involving serious criminal offences.
- Insolvency, winding-up proceedings.
- Cases involving rights of third parties not before the court.
Info
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