Section 89 of C.P.C
Section 89 of the Code of Civil Procedure was enacted to encourage parties to reach an amicable, peaceful, and mutually beneficial agreement without the need for court interference. The majority of disputes are settled out of court in nations all over the world, particularly in the developed few of them. Only if the parties are unable to reach an agreement will the case/dispute proceed to trial. Where it appears to the court that there are elements of a settlement that 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 parties' observations, the court may reformulate the terms of a possible settlement and refer it to (a) arbitration; (b) conciliation; and (c) judicial settlement, including settlement through loc Adalat. Or (d) the use of mediation,
Where a dispute has been referred to arbitration or conciliation, the provisions of the Arbitration and Conciliation Act, 1996 apply as if the arbitration or conciliation proceedings had been referred for resolution under those provisions. to Lok Adalat, the court shall refer the dispute to the Lok Adalat in accordance with the provisions of sub-section of section 20 of the Legal Services Authority Act, 1987, and all other provisions of that Act shall apply to the dispute so referred to the Lok Adalat; for judicial settlement, the court shall refer the dispute to a suitable institution or person, and such institution or person shall be deemed to be a Lok Adalat, and all other provisions of that Act for mediation the court shall effect a compromise between the parties and shall follow such procedure as may be prescribed.
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.
The courts are required by Section 89 CPC to investigate the possibility of resolving the dispute by referring to one of the numerous ADR methods specified therein. 17 Section 89 CPC: However, the court must be satisfied that there are elements of settlement before the case can be referred. The court must determine whether a case is suitable for referral to and resolution through any of the ADR methods. Simultaneously, Order X Rule 1A CPC requires the court to advise the parties to the suit to choose between two modes of out-of-court settlement as defined in sub-section (1) of section 89 CPC and at the parties' discretion.
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