Central University of

South Bihar

SCHOOL OF LAW AND GOVERNANCE

Under the guidance of Mrs. Swati Kumari

Name : PRIYA RANJAN

Course : B.A. LL.B. (Hons)
Semester : VIII
Enrollment No.: CUSB1513125031
Subject : ADR
Project Topic : CRITICAL ANALYSIS OF SECTION 89

1
 ACKNOWLEDGEMENT

Dear Reader,
You are most welcome in my project work of Criminal Procedure
Code, 1973, on the Topic CRITICAL ANALYSIS OF SECTION 89 which is
assigned by our honourable subject Mrs. Swati Kumari
I would like to thank to him for giving such important topic to me .I would
like to thank to our seniors also for giving knowledge about this topic.
I would like to thank to library also from where we get the book related to
such topic.
I would like to thank to internet also from where we get idea to generate this
topic most attractive to reader..
So, I hope that if you come once inside my project you feel surely very glad.

Thanking you
PRIYA RANJAN
CUSB1513125031

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 INDEX

S.NO CONTENTS PAGE NO.

1 Introduction 4
2 Implementation Of Section 89-Literal Or Actual 4

3 Development Of ADR In The Code Of Civil 6

Procedure 1908

4 Function Of The Court After Filling The Suit 6

By The Plaintiff

5 Application By The Party For ADR 6

6 Appointment Of The Mediator 7

7 Non Qualification Of Mediator 7

8 Incapability Of The Court 7

9 Time Limitation To Inform The Court Of Their 7

Consent
10 Rules And Functions Of The Mediators 8

11 If The Mediation Attempt Is Failed 8

12 Panel Of The Mediator 8

13 Mediation In The Appellate Stage 9

14 Arbitration 9
15 Weaknesses Facing In Introducing The ADR In 9
The CPC
16 Conclusion 11

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 A Critical Study of Alternative Dispute Resolution (ADR) in the Code of
Civil Procedure, 1908

Introduction

The proliferation and pendency of litigation in Civil Courts for a variety of reasons
has made it impracticable to dispose of cases within a reasonable time. The overburdened
judicial system is not in a position to cope up with the heavy demands on it mostly for reasons
beyond its control. Speedy justice has become a casualty, though the disposal rate per-Judge
is quite high in our country. The need to put in place Alternative Dispute Resolution (ADR)
mechanisms has been immensely felt so that the courts can offload some cases from
their dockets. The ADR systems have been very successful in some countries, especially USA
wherein the bulk of litigation is settled through one of the ADR processes before the case
goes for trial. The Constitution of Bangladesh enjoins that the State shall secure that the
operation of the legal system promotes justice, on a basis of equal opportunity, and
shall, in particular, provide free legal aid, by suitable legislation or schemes, to ensure
that opportunities for securing justice are not denied to any citizen by reason of economic
or other disabilities. Thus, easy access to justice to all sections of people and provision of
legal aid for the poor and needy and dispensation of justice by an independent Judiciary within
a reasonable time are the cherished goals of our Constitutional Republic and for that
matter, of any progressive democracy.

Justice Malimath Committee Report

Justice Malimath Committee in its Report recommended that “If a law is enacted giving
legal sanction to such machinery for resolution of disputes and resort thereto is made
compulsory, much of the inflow of commercial litigation in regular civil courts gradually
moving up hierarchically would be controlled and reduced.” This Committee agreeing with
the Law Commission recommended that Conciliation Courts should be established all over
the country with power, authority and jurisdiction to initiate conciliation proceedings in all
types of cases at all levels and that the amendment suggested by the Law Commission should
be carried out to enable the Scheme to function effectively. The conciliation procedure
should also be made applicable to the Motor Accident Claims Tribunal 1

Implementation of Section 89-Literal or Actual

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

1
Justice Malimath Committee-(Chapter VIII, page 112 and Chapter IX pp. 168, 170 and 171). See also Avtar
Singh Supra pp. 395-397.

4
 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. The Apex Court 2 has
said: If Section 89 is to be read and required to be implemented in its literal sense, it will be
a Trial Judge's nightmare. It puts the cart before the horse and lays down an impractical, if
not impossible, procedure in subsection (1). It has mixed up the definitions in sub-section
(2). In view of its laudable object, the validity of Section 89, with all its imperfections, was
upheld in Salem Bar-(I)3 but referred to a Committee, as it was hoped that Section 89 could
be implemented by ironing the creases. In Salem Bar-(II)4, the Apex Court applied the
principle of purposive construction in an attempt to make it workable. The first
inconsistency is the mixing up of the definitions of `mediation' and `judicial settlement'
under Section 89(2) (c) and Section 89(2) (d) of the Code. It makes no sense to call a
compromise effected by a court, as mediation, as is done in Section 89 (2) (d). Nor does it
make any sense to describe a reference made by a court to a suitable institution or person
for arriving at a settlement as judicial settlement, as is done in Section 89 (2) (c). The mix-
up of definitions of the terms judicial settlement and mediation in Section 89 is apparently
due to a clerical or typographical error in drafting, resulting in the two words being
interchanged in clauses (c) and (d) of Section 89(2). If the word mediation in clause (d) and
the words judicial settlement in clause (c) are interchanged, we find that the said clauses
make perfect sense. The second inconsistency is that Section 89(1) imports the final stage
of conciliation referred to in section 73(1) of the 1996 Act into the pre-ADR reference stage
under Section 89 of the Code. If sub-section (1) of Section 89 is to be literally followed,
every Trial Judge before framing issues, is required to ascertain whether there exists any
elements of settlement which may be acceptable to the parties, formulate the terms of
settlement, give them to parties for observations and then reformulate the terms of a possible
settlement before referring it to arbitration, conciliation, judicial settlement, Lok Adalat or
mediation. There is nothing that is left to be done by the alternative dispute resolution forum.
If all these have to be done by the trial court before referring the parties to alternative dispute
resolution processes, the court itself may as well proceed to record the settlement as nothing
more is required to be done, as a Judge cannot do these unless he acts as a conciliator or
mediator and holds detailed discussions and negotiations running into hours. Section 73 of
1996 Act shows that formulation and reformulation of terms of settlement is a process
carried out at the final stage of a conciliation process, when the settlement is being arrived
at. What is required to be done at the final stage of conciliation by a conciliator is borrowed
lock, stock and barrel into Section 89 and the court is wrongly required to formulate the
terms of settlement and reformulate them at a stage prior to reference to an ADR process.
This becomes evident by a comparison of the wording of the two provisions. It is not
possible for courts to perform these acts at a preliminary hearing to decide whether a case
should be referred to an ADR process and, if so, which ADR process. If the reference is to
be made to arbitration, the terms of settlement formulated by the court will be of no use, as

2
M/S. Afcons Infra. Ltd. & Anr v. M/S Cherian Varkey Constructio Co. (P) Ltd. & Anr.... Decided on 26 July,
2010, CIVIL APPEAL NO.6000 OF 2010 (Arising out of SLP (C) No.760 of 2007)
3
Salem Advocate Bar Association v. Union of India reported in [2003 (1) SCC 49 - for short, Salem Bar - (I)]
4
Salem Advocate Bar Association v. Union of India [2005 (6) SCC 344 - for short, Salem Bar-(II)]

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 what is referred to arbitration is the dispute and not the terms of settlement; and the
Arbitrator will adjudicate upon the dispute and give his decision by way of award. If the
reference is to conciliation/mediation/Lok Adalat, then drawing up the terms of the
settlement or reformulating them is the job of the conciliator or the mediator or the Lok
Adalat, after going through the entire process of conciliation/ mediation. Thus, the terms of
settlement drawn up by the court will be totally useless in any subsequent ADR process.
Why then the courts should be burdened with the onerous and virtually impossible, but
redundant, task of formulating terms of settlement at preference stage? It will not be possible
for a court to formulate the terms of the settlement, unless the judge discusses the matter in
detail with both parties. The court formulating the terms of settlement merely on the basis
of pleadings is neither feasible nor possible. The requirement that the court should formulate
the terms of settlement is therefore a great hindrance to courts in implementing Section 89
of the Code. The Apex Court therefore diluted this anomaly in Salem Bar (II) by equating
terms of settlement to a summary of disputes meaning thereby that the court is only required
to formulate a `summary of disputes' and not `terms of settlement'.

DEVELOPMENT OF ADR IN THE CODE OF CIVIL PROCEDURE 1908

In our country many civil suits are filed in the regular court but according to the proportion
of the of the filing suit very small amount of suits are dismissed by the court as a result the
court becomes the overloaded place with the suits. The suits which are decided by the courts
again go to the appellate court if the other party is not satisfied. Besides this the aggrieved
party has the right to apply for review and revision. It takes a lot time to dismiss a suit finally;
apparently 20/30 years5.To recover from this situation, historical step is taken to introduce
ADR in the code of civil procedure 2003 by inserting the Section 89A and 89B. In 2003
Section 89A and 89B empowers the trial court to settle the dispute by ADR. Again in 2006 a
new amendment is brought to provide this power to the Appellate court by Section 89C.

FUNCTION OF THE COURT AFTER FILLING THE SUIT BY THE PLAINTIFF

Section 89A(1) provides that except in a suit under the Arthar in Adalat in, 1990 (Act No. 4
of 1990), after filing of written statement, if all the contesting parties are in attendance in the
Court in person or by their respective pleaders, the Court may by adjourning the hearing,
mediate in order to settle the dispute or disputes in the suit or refer the dispute or disputes to
the engaged pleaders of the parties or to the party or parties where no pleader or pleaders have
been engaged or to a mediator from the panel as may be prepared by the District Judge under
sub-section (10) for undertaking efforts for settlement through mediation.6

APPLICATION BY THE PARTY FOR ADR

If all the contesting parties in the suit through application or pleadings state to the Court that
they are willing to try to settle the dispute or disputes in the suit through mediation, the Court
shall so send it to mediate or make reference under this section. In this case the court is bound
to send for ADR.7

5
MdAkhtaruzzaman, concept and law of on alternative dispute resolution and legal aid 2 nded, shabdaokoli
printers p.104
6
Section 89A(1) of the Code of civil Procedure 1908
7
Section 89A(1) of the Code of civil Procedure 1908

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 APPOINTMENT OF THE MEDIATOR

When the reference is made through the pleaders, the pleaders shall by their mutual
agreement in consultation with their respective clients appoint
1. another pleader, not engaged by the parties in the suit, or
2. a retired judge, or
3. a mediator from the panel as may be prepared by the District Judge under sub-section
(10), or
4. any other person whom they may seem to be suitable, to act as a mediator for settlement
or
The court itself.8

NON QUALIFICATION OF MEDIATOR

1. Aperson holding an office of profit in the service of the Republic shall not be eligible
for appointment as mediator;
The person who acts as the advocate of the parties.9

INCAPABILITY OF THE COURT

While referring a dispute or disputes in the suit for mediation, the Court shall not dictate or
determine the fees of the pleaders and the mediator and procedure to be followed by the
mediator and the parties. It shall be for the pleaders, their respective clients and the mediator
to mutually agree on and determine the fees and the procedure to be followed for the purpose
of settlement through mediation.9Provided that if the pleaders, their respective clients and the
mediator fail to determine the fees, the Court shall fix the fees and the fees so fixed shall be
binding upon the parties.10
But when the Court shall mediate, it shall determine the procedure to be followed and shall
not charge any fee for mediation.11

TIME LIMITATION TO INFORM THE COURT OF THEIR CONSENT

The parties shall inform the Court in writing as to whether they have agreed to try to settle
the dispute or disputes in the suit by mediation and whom they have appointed as mediator
within ten days from the date of reference under sub-section (1). If they fail to inform the
court within the fixed time which the reference will stand cancelled and the suit shall be
proceeded with for hearing by the Court.12
But when the parties inform the Court about their agreement to try to settle the dispute or
disputes in the suit through mediation and appointment of mediator as aforesaid, the
mediation shall be concluded within 60 (sixty) days from the day on which the Court is so
informed unless the Court of its own motion or upon a joint prayer of the parties extends the
time for a further period of not exceeding 30 (thirty) days.13

8
Section 89A(2) of the Code of civil Procedure 1908
9
Section 89A(2,provisio) of the Code of civil
10
Section 89A(3,provosio) of the Code of Civil Procedure 1908
11
Section 89A(3) of the Code of civil Procedure 1908
12
Section 89A(4) of the Code of civil Procedure 1908
13
Ibid

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RULES AND FUNCTIONS OF THE MEDIATORS

When the mediation is completed, then the mediators have duties and liabilities those are:
1. the mediator shall without violating the confidentiality of the parties to the mediation
proceedings submit through the pleaders to the court a report of result of the mediation
proceedings; and
2. if the result is of compromise of the dispute or disputes in the suit, the terms of such
compromise shall be reduced into writing in the form of an agreement bearing signatures
or left thumb impressions of the parties as executants; and
3. Signatures of the pleaders and the mediator as witnesses and 14
4. When the Court itself mediates, it shall make a report and passed order in a manner similar
to that as stated in sub-section (5).15
Then the Court shall thereupon, pass an order or a decree in accordance with relevant
provisions of Order XXIII of the Code.16

IF THE MEDIATION ATTEMPT IS FAILED

When the mediation fails to produce any compromise, the Court shall subject to the provision
of sub- section (9) proceed with hearing of the suit from the stage at which the suit stood
before the decision to mediate or reference for mediation in a manner as if there had been no
decision to mediate or reference for mediation as aforesaid.17The proceedings of mediation
under this section shall be confidential and any communication made, evidence adduced,
admission, statement or comment made and conversation held between the parties, their
pleaders, representatives and the mediator shall be deemed privileged and shall not be referred
to and admissible in evidence in any subsequent hearing of the same suit or any other
proceeding.18 When a mediation initiative led by the Court itself fails to resolve the dispute
or disputes in the suit, the same court shall not hear the suit if the Court continues to be
presided by the same judge who led the mediation initiative and in that instance the suit shall
be heard by another court of competent jurisdiction.19

PANEL OF THE MEDIATOR

For the purposes of this section, the District Judge in consultation with the President of the
District Bar Association shall prepare a panel of mediators to be updated from time to time
consisting of pleaders, retired judges, persons known to be trained in the art of dispute
resolution and such other person or persons, except the persons who are holding office of
profit in the service of the Republic as may be deemed appropriate for the purpose and shall
inform all the Civil Courts under his administrative jurisdiction about the panel.20

14
Section 89A(5) of the Code of civil Procedure 1908
15
Section 89A(6) of the Code of civil Procedure 1908
16
Section 89A(5) of the Code of civil Procedure 1908
17
Section 89A(7) of the Code of civil Procedure 1908
18
Section 89A(8) of the Code of civil Procedure 1908
19
Section 89A(9) of the Code of civil Procedure 1908
20
Section 89A(10) of the Code of civil Procedure 1908

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MEDIATION IN THE APPELLATE STAGE
An Appellate Court may mediate in an appeal or refer the appeal for mediation in order to
settle the dispute or disputes in that appeal, if the appeal is an appeal from original decree
under Order XLI, and is between the same parties who contested in the original suit or the
parties who have been substituted for the original contesting parties.21In mediation under sub-
section (1), the Appellate Court shall, as far as possible, follow the provisions of mediation
as contained in Section 89A with necessary changes (mutatis mutandis) as may be
expedient.22

ARBITRATION
Another method of ADR is stipulated in the Section 89B of the code of Civil Procedure 1908
and that is arbitration. The parties are free to choose either. in Section 89B (1) If the parties
to a suit at any stage of the proceeding apply to the Court for withdrawal of the suit on ground
that they will refer the dispute or disputes in the suit to arbitration for settlement, the Court
shall allow the application and permit the suit to be withdrawn; and the dispute or disputes,
thereafter, shall be settled in accordance with Salish Ain, 2001 (Act No. 1 of 2001) so far as
may be applicable. Provided that if for any reason, the arbitration proceedings referred to
above do not take place or an arbitral award is not given, the parties shall be entitled to re-
institute the suit permitted to be withdrawn under this sub-section. An application under sub-
section (1) shall be deemed to be an arbitration agreement under section 9 of the Salish Ain,
2001.23

THE PROBLEMS/WEAKNESSES FACING IN INTRODUCING THE ADR

IN THE CPC
The ADR in the Code of Civil Procedure 1908 is totally new initiative which leads a lot
problem in application of the ADR. The main problems are:

 In the CPC there is no general or specific guideline for the mediators regarding the
maintenance of equal participation and opportunity for the parties that may create serious
problem in case of power imbalance. There is also no explicit provision pertaining to
reviewing the agreement arrived at upon conclusion of mediation under the CPC.24
 Further, the CPC incorporates mediation provisions at the pretrial and the appellate stage
but mediation mechanism upon conclusion of the trial before the pronouncement of
judgment has not been incorporated into the CPC. It is an established fact that the parties
usually are aware of the merits of their case just upon conclusion of the trial.
Therefore, post-trial mediation may prove to be more effective than that of the mediation

21
Section 89C(1) of the Code of civil Procedure 1908
22
Section 89C(2) of the Code of civil Procedure 1908
23
Section 89B(2) of the Code of civil Procedure 1908
24
Rana P.Sattar, Existing ADR Framework and Practice in Bangladesh: A rapid Assessment, A Study report
prepared for Bangladesh Legal Reform Project (A Collaboration Project between Canadian International
Development Agency (CIDA) and The Ministry of Law, Justice and Parliamentary affairs, Bangladesh), 28
February, 2007

9
 at the appellate stage.
 Section 89A as it stands after the amendment in 2012 requires the court to refer the suit
for compulsory mediation. If either or both the parties and their lawyers remain absent,
the court has no option but to postpone the stage to another date. Again, when the parties
are in attendance and the court has referred the suit to the parties for mediation, but the
parties or any of them does not appear before mediator, then the mediation is bound
to fail. In this backdrop, the section does not empower the court with the tools to enforce
the attendance of the parties. Thus the present provision adds to the existing practice of
delay.
 Quite often it happens that after the suit has been referred to mediation any of the party
does not want to compromise and withdraws from mediation without assigning any reason
in which case a mediator has no other option but to report the court about the failure of
the mediation. Under Section 89A there is no penal provision for the party who
unreasonably withdraws from mediation.
 It is often alleged that lawyers discourage their clients for resolving their disputes through
ADR in fear of reduction of their income level.

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 CONCLUDING REMARKS AND RECOMMENDATIONS:

Although ADR programs can accomplish a great deal, however, no single program can
accomplish all these goals. They cannot replace formal judicial systems which are necessary
to establish a legal code, redress fundamental social injustice, provide governmental
sanction, or provide a court of last resort for disputes that cannot be resolved by voluntary,
informal systems. Furthermore, even the best-designed ADR programs under ideal
conditions are labor intensive and require extensive management. In the development
context, particular issues arise in considering the potential impacts of the ADR. Firstly, some
are concerned that ADR programs will divert citizens from the traditional, community-based
dispute resolution systems. To modernize the ADR in the Civil Procedure Code the
mentioned loopholes should be removed. The legal framework of ADR has developed in
Bangladesh over the last few years and acquired a distinct position in the dispute resolution
process. ADR mechanisms can now be applied in resolving a wide array of commercial
disputes, family disputes and civil disputes, among others, thus easing access to justice.
However, if we juxtapose the ADR provisions under different laws of the country with their
functional aspects, then it will be obvious that the court based ADR mechanisms could not
manage to yield satisfactory results it has been expected at the time of their introduction. It
is true that Court Based ADR under different laws can be transformed not only to an aid
to the earlier resolution of litigation but can also be used as a tool for case management.
Itis in the public interest that the constitutional function of the judiciary should not
compromised by blurring its boundary with non-judicial services. So long as the clarity
of the distinction is maintained and appropriate quality controls, including evaluative and
cost-benefit assessments undertaken, then the ADR has much to offer in connection with
the judicial process. Alternatively, mandatory ADR requires careful oversight to ensure that
it should not be coercive and should not impose too much of a barrier to trial for those parties
who want or need judicial determination.
Section 89 of the Code requires two changes from a plain and literal reading of the section.
Firstly, it is not necessary for the court, before referring the parties to an ADR process to
formulate or re-formulate the terms of a possible settlement. It is sufficient if the court merely
describes the nature of dispute (in a sentence or two) and makes the reference. Secondly, the
definitions of `judicial settlement' and `mediation' in clauses (c) and (d) of Section 89(2) shall
have to be interchanged to correct the draftsman's .

error. Clauses (c) and (d) of Section 89(2) of the Code will read as under when the two terms
are interchanged: (c) for mediation, 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 judicial settlement, the court
shall effect a compromise between the parties and shall follow such procedure as may be
prescribed. The above changes made by interpretative process shall remain in force till the
legislature corrects the mistakes, so that Section 89 is not rendered meaningless and
infructuous.

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