Section 89 CPC As A Gateway To Quicker Justice - A Study Of Its Efficacy, Interpretation, And Implementation

Author: LawSphereX

Category: Evidence & Procedure

Published: 2026-08-23T21:03:41.683729+00:00

Updated: 2026-08-26T17:06:23.034+00:00

SECTION 89 CPC AS A GATEWAY TO QUICKER JUSTICE:

A STUDY OF ITS EFFICACY, INTERPRETATION, AND

IMPLEMENTATION

Mr. Abhishek Mishra, Assistant Professor, Amity Law School, Lucknow, AUUP Shruti Singh, BALLB, Amity University, Lucknow, Uttar Pradesh

INTRODUCTION

The legislative mandate to refer sub judice disputes to various ADR mechanisms outlined in Section 89 of the Code of Civil Procedure, 1908, when the court deems it appropriate to do so, allows the parties to ultimately settle their outstanding cases through established dispute resolution methods other than litigation. ADR's necessity and significance have thus been acknowledged by Section 89 CPC, even at the post-litigation stage. In accordance with section 89 of the Code of Civil Procedure, 1908, the court may refer the parties to judicial settlement, arbitration, conciliation, mediation, or Lok Adalat in order to settle their differences in the post-litigative stage.

The Delhi High Court has actually gone a step further and ruled that, in accordance with Section 89 of the Code of Civil Procedure, 1908, Early Neutral Evaluation (ENE), a distinct type of alternative dispute resolution (ADR) that is comparable to mediation, may be used to achieve the goal of a negotiated settlement, particularly when the parties agree to do so. 1

RATIONALE OF SECTION 89

The Law Commission of India2 emphasized the value of conciliation and mediation as an ADR method and suggested the establishment of a conciliation court system. The Malimath Committee3 had also argued that a legal revision was necessary in order to introduce ADR procedures.4 The Code of Civil Procedure (Amendment) Bill was introduced in 1997 based on the Law

1 Bawa Masala Co. v. Bawa Masala Co. Pvt. Ltd, AIR 2007 Delhi 284.

2Law Commission of India, 129th Report, Urban Litigation: Mediation as Alternative to Litigation (1988). 3The Malimath Committee submitted its report in August 1990. 4Sudipto Sarkar & V.R. Manohar (Eds.), Sarkar’sCode of Civil Procedure (Wadhwa and Company, Nagpur, 11th Ed., 2006).

Commission of India's and the Malimath Committee's5 recommendations. The following is the Statement of Objects and Reasons that was attached to the aforementioned bill6: “3. (d) it is proposed to make it mandatory for the court to refer the dispute after the issues are framed for settlement either by way of arbitration, conciliation, mediation, judicial settlement, or through Lok Adalat in order to implement the 129th Report of the Law Commission of India and to make the conciliation scheme effective.” The litigation will only move forward in the section where it was filed if the parties are unable to resolve their differences through any of the alternative dispute resolution procedures. As a result, on July 1, 2002, the Code of Civil Procedure (Amendment) Act, 1999, placed Section

89 CPC into the statute book in its current form. Following the implementation of this clause,

the civil courts are now required to endeavor to settling disagreements by sending the parties to an alternative dispute resolution procedure7. In order to terminate the parties' litigation as soon as possible, it is increasingly essential to use alternative dispute resolution (ADR) processes8. In fact, this is the rule in the west as well, where court initiatives to promote civil case settlement—whether through court-related mediation or judicial settlement conferences— have become standard practice. 9 According to the Supreme Court, the legislature intended for Section 89 CPC to be enacted so that, in cases where it believes that there are aspects of a settlement that the parties may find acceptable, the parties will be forced to consider their options and choose one of the five alternative dispute resolution (ADR) methods listed in the section.

If the parties cannot agree, the court will refer them to one of the aforementioned modes. 10 The trial judge's inability to give sufficient time and attention to achieving conciliation between the parties was one of the factors that led to the introduction of section 89 CPC, which states

5 A.R. Lakshmanan, “Settlement of Disputes Outside the Court under section 89(1) read with Order

X Rules 1A, 1B and 1C of the Code of Civil Procedure, 1908”, Keynote address delivered at the

Karnataka Judicial Academy, Bangalore on 14.07.2007, 5 MLJ 22 (2007). 6The notes attached to the bill further stated that clause 7 seeks to insert a new section 89 in the Code in order to provide for alternative dispute resolution based on the recommendations made by the Law Commission of India and the Malimath Committee.

that the matter should be sent to another ADR forum for settlement. Every trial judge must determine whether there are any aspects of a settlement that might be acceptable to the parties before framing issues, formulate the terms of the settlement, give them to the parties for comments, and then reformulate the terms of a potential settlement before referring it to arbitration, conciliation, judicial settlement, Lok Adalat, or mediation, if sub-section (1) of Section 89 CPC is to be literally followed. From this point forward, the ADR forum has nothing else to do. Since a judge cannot perform these functions unless he serves as a conciliator or mediator and conducts in-depth discussions and negotiations that take hours, the trial court may as well record the settlement if all of these must be completed before referring the parties to alternative dispute resolution procedures.

11In addition to wasting valuable court time, this would make the ensuing ADR procedures unnecessary. Therefore, it is completely inappropriate for the court to formulate and reformulate the terms of settlement during the pre-reference phase of the ADR procedure. 12 Furthermore, the terms of the settlement that the court has formed will be useless if arbitration is to be referred to. In the event that conciliation, mediation, or Lok Adalat are mentioned, the conciliator, mediator, or Lok Adalat is responsible for drafting or reformulating the conditions of the settlement after completing the whole conciliation or mediation procedure. Therefore, in any future ADR process, the conditions of the settlement that the court drafted will be completely meaningless.

Thus, the Supreme Court has now categorically ruled that the court does not have to develop or reformulate the conditions of a potential settlement before sending the parties to an ADR process. 13

MANDATORY NATURE OF SECTION 89

The courts are required by Section 89 CPC to consider the possibility of resolving the dispute by referring to one of the various ADR mechanisms provided therein.14However, the court must be satisfied that there are elements of settlement before referring the matter, and the court must

11 D.M. Popat, “ADR and India: An Overview”, The Chartered Accountant (December 2004).

12 R.V. Raveendran, “Section 89 CPC: Need for an Urgent Relook” 4 SCC Journal 23 (2007).

13 Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (P) Ltd., JT 2010 (7) SC 616.

14 A.M. Khanwilkar, “Need to Revitalise ADR Mechanism”, available at: http://bombayhigh

court.nic.in/mediation/Mediation_ Concept_and_Articles/need to revitalis.pdf (last visited on September 30, 2016).

determine that a case is one that can be referred to and settled through any of the ADR processes. According to a harmonic interpretation of provisions15, it is required to hold a hearing following the conclusion of pleadings in order to discuss using the ADR process under section 89 CPC. However, mentioning an ADR procedure in every situation is not required. In cases where the case is not appropriate for any of the ADR processes16, the court must briefly document why it is not using any of the settlement procedures outlined in section 89 CPC. ADR must be mentioned in other situations. Following the recording of admissions and denials, the court must instruct the parties to the suit to choose one of the designated out-of-court settlement options.

The court must set the date of appearance before the forum or authority that the parties may choose by mutual accord and at their discretion under sub-section (1) of section 89 CPC17. With the exception of arbitration and conciliation, which call for the parties' express consent, the court must transfer the case to an appropriate ADR mechanism under section 89 CPC if the parties are unable to choose one of the specific ADR options listed in that section. 18 In this regard, the idea of mandatory ADR was introduced under Section 89 CPC. 19The parties are then expected to come before the forum or authority in order to settle the matter. 20However, the matter is returned to the court if it cannot be resolved. 21 If a settlement is reached, the court records the agreement and the matter is closed.

22The plaintiff is entitled to a reimbursement of court costs in cases where the court sends the parties to any of the dispute resolution procedures listed in section 89 CPC and the matter is resolved. 23

15 See S. 89(1) and Order X Rules 1A, 1B and 1C, Code of Civil Procedure, 1908.

16 Cases which are normally considered to be not suitable for ADR process are representative suits under Order 1 Rule 8 CPC, disputes relating to election to public offices, cases involving grant of authority by the court after enquiry. See Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (P) Ltd., JT 2010 (7) SC 616.

17 A. S. Alterkar, “State and the Government in Ancient India”, (1958). pg. 245

18 H. S. Bhatia, “Origin And Development of Legal And Political System in India”, (1976). pg. 16-17.

19 However, such mandatory court referred/ court annexed ADR should be complemented by

education and other steps to increase the general awareness regarding the ADR processes and their benefits.

20 Order X Rule 1B, Code of Civil Procedure, 1908.

21 Order X Rule 1C, Code of Civil Procedure, 1908.

22 Except in case of arbitration where an arbitral award on merits is passed by the arbitral tribunal.

23 S. 16, Court Fees Act, 1870 (again inserted by Act 46 of 1999, s. 34).

The appellant is entitled to a reimbursement of court costs even if the case is resolved on appeal.24Using the provisions of section 89 CPC is further encouraged by this.

MECHANISMS FOR ADR UNDER SECTION 89 OF THE CPC

A. ARBITRATION

Arbitration can now be used to refer to a dispute in a sub judice matter under Section

89 CPC. Additionally, statute25 stipulates that the provisions of the 1996 Arbitration and

Conciliation Act would apply to arbitration in the same way that they would if the arbitration proceedings had been referred to for settlement under the Act's provisions. Once the subject is directed to arbitration, however, it ceases to be a matter of court proceedings, and the suit is disposed of at that point. The Arbitration and Conciliation Act of 1996 must then be followed in order to resolve the matter.

B. CONCILIATION

Additionally, Section 89 CPC allows a dispute in a sub judice matter to be referred to conciliation. A further section of law26 states that the provisions of the 1996 Arbitration and Conciliation Act will apply to conciliation procedures as if they had been referred for resolution under those provisions. Therefore, Section 89 of the CPC allows for the creation of conciliation rules and permits the referral of a dispute in a sub judice matter to conciliation. A further section of law27 states that the provisions of the 1996 Arbitration and Conciliation Act will apply to conciliation procedures as if they had been referred for resolution under those provisions. In order to determine the process for choosing “conciliation” and up to the point of reference to conciliation, conciliation rules can be adopted under Part X of the Code of Civil Procedure, 1908.

28Furthermore, without the express approval of each party, the court cannot refer the parties to conciliation under section 89 CPC, just like in the case of arbitration. However, a matter does not permanently exit the judicial process when it is directed to conciliation. The 24Vallabh Das Gupta v. Geeta Bai, 2004(4) R. C. R. (Civil) 85.

25 S. 89(2) (a), Code of Civil Procedure, 1908.

26 Ibid

27 Ibid

28 Supra Note 23

case is sent back to the court if the parties are unable to reach a definitive resolution during the conciliation process.

C. LOK ADALATS

The provisions of sub-section (1) of section 20 of the Legal Services Authority Act, 1987, as well as all other provisions of the same Act that apply to the dispute so referred to the Lok Adalat, must be used by the court in order to refer a pending dispute to the Lok Adalat. 392 The reference court then dismisses the suit in accordance with the settlement when the Lok Adalat makes a settlement under the Legal Services Authorities Act of 1987 and issues the award. Even without the parties' assent, Lok Adalat’s may be referred to under section 89 CPC.

D. MEDIATION

In accordance with section 89 CPC, the court may also order mediation of a pending dispute. The statute has changed significantly after the Supreme Court's ruling in the Afcons case.29 The Afcons ruling states that the disagreement must be brought to a suitable individual or organization30 for mediation, which is to be regarded as a Lok Adalat. It is also possible to refer to mediation under section 89 CPC without the parties' consent.

E. JUDICIAL SETTLEMENT

The term “judicial settlement” implies that a dispute is being resolved by some form of judge mediation. In an informal process known as a judicial settlement conference, a judge who has received mediation and settlement conference training actively assists parties in dispute in reaching a mutually agreeable conclusion31. Thus, a judicial settlement is a civil case settlement that is mediated by a judge who has not been given the authority to decide the disagreement.32

29 Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (P) Ltd., JT 2010 (7) SC 616.

30 However, the disputes are being only referred to the court annexed mediation centres where they are dealt by empanalled judicial or lawyer mediators

31 http://www.courts.state.va.us (last visited on December 2, 2024).

32Rule 4, ADR and Mediation Rules, 2003 (Draft).

As a result, a judge leads a judicial settlement conference and employs fair settlement strategies to help the parties reach a mutually agreeable resolution. In order to enhance communication between the parties, look into settlement obstacles, and assist in developing solutions, some settlement judges also employ mediation techniques during court settlement conferences. 33However, a settlement court cannot compel the parties to reach a settlement. The fact that the judge overseeing the judicial settlement conference does not try the matter on its merits is a crucial aspect of the process. 34 From the perspective of Indian law, the term “judicial settlement” was first used in Section 89 of the Code of Civil Procedure, 1908. One kind of ADR is judicial settlement, which is permitted by Section 89 CPC.

According to section 89 CPC, the court may refer a matter to a suitable institution or individual for judicial settlement; in this case, the institution or individual is considered a Lok Adalat, and all of the requirements of the Legal Services Authority Act, 1987, are applicable. A committee led by Justice M. Jagannadha Rao was established to carry out the goals

of section 89 CPC in accordance with the Supreme Court's directives in the 1st Salem Bar Association Case35. The committee presented the Draft Civil Procedure-ADR and Mediation Rules 2003 to the Supreme Court, which took them into consideration in the 2nd Salem Bar Association Case. In order to establish a consistent rule that judges will not consider a matter on its merits if they hold a settlement conference, the Supreme Court then ordered the various High Courts to review and finalize the aforementioned regulations or their attorneys. In accordance with the aforementioned draft Civil Procedure-ADR and Mediation Rules, 2003, a “judicial settlement” is defined as a final compromise reached before a suitable institution or individual to whom the court has referred the dispute.

According to the provisions of the Legal Service Authority Act, 1987 (39 of 1987), these institutions or individuals are deemed to be the Lok Adalat’s, and following such a

33 Elizabeth Plapinger & Donna Stienstra, ADR and Settlement in the Federal District Courts: A

Sourcebook for Judges and Lawyers, available at: http://www.fjc.gov (last visited on December 2, 2024).

34 Justice Sunil Ambwani, “Alternative Dispute Resolution: National Judicial Excellence

Enhancement Programme (JEEP) First Visit”, Speech at National Judicial Academy, Bhopal on September 11th, 2011, available at: www.allahabadhighcourt.in/event/speech_on_ADR (last visited on October 2, 2016). 35Salem Advocate Bar Association v. Union of India, AIR 2003 SC 189.

referral, the provisions of the aforementioned Act apply as though the dispute had been referred to a Lok Adalat under that Act. 36 When every party to the lawsuit agrees to use their right to a judicial settlement, the court must refer the case to an appropriate organization or individual, which will be considered a Lok Adalat. 37Therefore, in order to reach a judicial settlement as stipulated in section 89 CPC, the court must submit the matter to an appropriate organization or individual. Since no process has been established for judicial resolution, there is a serious legal gap. Although it isn't stated explicitly how the compromise would be implemented, it suggests that the court will actively assist the disputing parties in reaching a mutually agreeable resolution. Everyone agrees that a comprehensive process is necessary, but it's unclear who will prescribe it.

On the judicial side, the Supreme Court or the High Courts would need to specify the process. By creating regulations under Part X of the Code of Civil Procedure, the High Courts can also dictate the process. In order to specify the process for judicial settlement, the legislature may also intervene. Judges and parties would not be able to use judicial settlement as a method of dispute resolution under section 89 CPC until and unless such a procedure is specified.

NEED FOR AMMENDMENTS IN SECTION 89

As a result, it is evident that the Supreme Court has identified a number of flaws in the wording of section 89 CPC, and as a result, an immediate amendment is required to remove the irregularities. In actuality, the Supreme Court had clearly mandated that the modifications it had made to section 89 CPC through the interpretive process would stand until they were rendered useless and infructuous.38It is impossible to state more clearly that section 89 CPC has to be changed. In actuality, we might create a distinct, all-inclusive law that addresses ADR in every way rather than changing the clause. The legislature fixes the errors, preventing section

89 from being implemented.

36Rule 4, ADR and Mediation Rules, 2003 (Draft).

37 Rule 5, ADR and Mediation Rules, 2003 (Draft)

38 S.B. Sinha, “ADR: Mechanism and Effective Implementation”, available at: http://bombay

highcourt.nic.in/mediation/index_articles.htm (last visited on December 10, 2024).

The Law Commission of India has examined the Supreme Court's ruling in the Afcons case, and Law Commission39 has also stated that Section 89 CPC, which allows for the resolution of disputes outside of court, should be recast because it is poorly worded and the language used makes it difficult to implement the provision.

CONCLUSION

In matters pending judicial determination, Section 89 CPC embodies the legislative mandate to courts to investigate the possibility of resolving a dispute outside of the litigative process. If deemed appropriate, the courts will refer the dispute to any of the ADR processes specified in the CPC, which include arbitration, conciliation, mediation, Lok Adalat’s, and judicial settlement. Section 89 of the CPC has to be amended because the Supreme Court has identified significant mistakes in it that the Law Commission of India has also acknowledged. But in spite of these egregious mistakes, the Supreme Court has made section 89 CPC feasible by establishing comprehensive rules for its effective application. With the introduction of section 89 CPC403, the idea of using ADR has completely changed, leading to a paradigm shift.

Although the voyage has been positive thus far, there is undoubtedly room for improvement and advancement.

39 Law Commission of India, 238th Report, Amendment of Section 89 of the Code of Civil

Procedure, 1908 and Allied Provisions (December,2024).