Say the ratio out loud before you open Reasoning — recalling it unprompted is exactly what the exam pays for.
Why it matters
Section 89 CPC directs a court to formulate terms of settlement and refer the parties to one of the ADR processes, but the Code stops there. It says nothing about how the court is to guide the parties to a choice, what happens when the process fails, or what rules govern mediation, for which India then had no comprehensive statute. This is the decision that filled the gap, and it is the source of the model Rules that every question on court-annexed mediation turns on.
Facts
The working of the amendments to the Code, and in particular of s. 89, was under consideration. The Law Commission of India had framed model Civil Procedure Alternative Dispute Resolution Rules and model Civil Procedure Mediation Rules.
Held
On the reach of the two Acts. The 1996 Act and the Legal Services Authorities Act, 1987 do not contemplate a situation in which the court asks the parties to choose one of the ADR mechanisms — arbitration, conciliation or Lok Adalat. Those Acts are applicable only from the stage after a reference is made under s. 89 of the Code.
On the model Rules. In view of the right to speedy trial being implicit in Art. 21, and in order to provide fair, speedy and inexpensive justice, the High Courts were recommended to adopt, with or without modification, the model Civil Procedure Alternative Dispute Resolution Rules and the model Civil Procedure Mediation Rules framed by the Law Commission.
On rule-making power. It is permissible for the High Courts to frame rules under Part X of the Code covering the manner in which the option to one of the ADR processes can be made, and rules so framed are to supplement the rules framed under the Family Courts Act, 1984.
On the character of conciliation. This is also the decision in which conciliation is described as a more pro-active form of mediation, in which the neutral explores and suggests solutions.
Reasoning
Step one — find the gap. Section 89 hands the court a duty but no procedure. The 1996 Act governs an arbitration or conciliation once it exists; the 1987 Act governs a Lok Adalat once the case reaches it. Neither tells a judge how to conduct the referral stage.
Step two — locate the source of the rule-making power. Part X of the Code empowers High Courts to make rules, so the gap can be filled without fresh legislation.
Step three — supply a model. The model Rules prescribe the procedure for directing parties to opt for an alternative mode, and mandate the court to give such guidance as it deems fit by drawing the parties' attention to the relevant factors they must take into account before exercising their option. They provide for reference to the different modes, for referral back to the court, and for appearance before the court on failure to settle.
Step four — make the mediation rules workable. The Mediation Rules provide for the appointment and qualifications of a mediator and the procedure for mediation. The mediator is not bound by the Evidence Act or the Code, but is guided by fairness and justice, having regard to the rights and obligations of the parties, usages of trade and the nature of the dispute. The mediator's role is to facilitate a voluntary resolution: to communicate each party's view to the other, assist in identifying issues, reduce misunderstandings, clarify priorities, explore areas of compromise and generate options, emphasising that the decision is the parties' own — and he shall not impose any terms of settlement on them.
Exam use
It opens: Discuss s. 89 CPC and court-annexed ADR, and State the role and duties of a mediator. The prohibition on imposing terms is the single most quotable proposition on the mediator's role.
Pair it with Afcons, which supplies the substantive rules for the same reference: the court cannot send parties to arbitration or conciliation without the consent of all, but may send them to Lok Adalat, mediation or judicial settlement without consent; simple cases and cases governed by settled principles suit a Lok Adalat and complicated ones suit mediation; and a settlement in a suit is decreed under Order 23 Rule 3.
Use the pro-active description whenever the question asks you to distinguish mediation from conciliation: the mediator facilitates, the conciliator may also suggest terms, and under the 1996 Act a conciliated settlement signed by the parties has the status of an award — which is Haresh Dayaram Thakur.
Note the change in the statutory landscape. India now has a dedicated mediation statute, which has been brought into force in part; where a question asks for the present framework for mediation, say that the model Rules were the earlier answer and that the position must now be read with that legislation.
It does not decide anything about the enforceability of a mediated settlement outside a pending suit, or about mediation in criminal matters — for which see Dayawati, Gian Singh, Parbatbhai Aahir and K. Srinivas Rao.