CPC Section 89 — Settlement of disputes outside the Court
Civil
Summary
If a court believes there is a chance the parties in a case can reach a settlement, it must write down the possible terms of that settlement and share them with the parties for their feedback. After receiving their feedback, the court may revise those terms and then send the dispute to one of four options: arbitration, conciliation, judicial settlement (including through a Lok Adalat), or mediation. Once the dispute is sent to arbitration or conciliation, the rules of the Arbitration and Conciliation Act, 1996 apply. If it is sent to a Lok Adalat, the court follows the Legal Services Authority Act, 1987. For judicial settlement, the court sends the case to a suitable person or institution, which is treated as a Lok Adalat under that same Act. For mediation, the court works to bring the parties to a compromise and follows the procedure set by rules.
Official Text
89. Settlement of disputes outisde 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.