The Hon'ble Supreme Court in the case of Afcons Judgment has interpreted Section 89 of CPC. In the said judgment Hon'ble Supreme Court has laid down what the referral judge is supposed to do while referring the case for any Alternative Dispute Resolution (ADR). New Mediation Rules come into existance in the year 2015. Wherein also provisions for referral judges are made. This ppt will help Hon'ble Judges to refer cases for Mediation. This document also speaks about Lok Adalat, Conciliation, Arbitration and Judicial Settlement and intricacies involved therein.

1. ROLE OF REFERRAL
JUDGES
Prepared by
H. S. MULIA

2. Judges who refer
the cases for
settlement through
any of the ADR
methods are known
as Referral Judges.

3. Prior to the existence of Section
89 of the Civil Procedure Code,
there were various provisions that
gave the power to the courts to
refer disputes to any ADR system,
which sadly have not really been
utilized. Such provisions, inter
alia, are in the Industrial Disputes
Act, the Hindu Marriage Act and
the Family Courts Act and also
present in a very nascent form

4. Section 80 - (Notice), Section
107(2) - (Appellate Court has
same powers as the Court of
Original Jurisdiction has), Section
147(2) – (Consent or agreement
by persons under disability), Rule
3 of Order 23 (Compromise of
suit), Rule 5-B of Order 27 (Suit by
or against the Government or
Public Officers), Order 32-A (Suit
by or against Minors and persons

5. In para No.16 of the Afcons
Infrastructure Ltd. v. Cherian Varkey
Construction Co. (P) Ltd., reported in
AIR 2010 SCW 4983 it is observed
that:-
“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

6. (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;

7. (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

8. Reference to ADR and statutory
requirement
Section 89 and Rule 1-A of Order X
Code of Civil Procedure, 1908
requires the court to direct the
parties to opt for any of the five
modes of alternative dispute
resolution and to refer the case for
Arbitration, Conciliation, Judicial
Settlement, Lok Adalat or mediation.
While making such reference the
court shall take into account the

9. In para No.34 of the Afcons judgment it is
held that:-
“We find that section 89 of the CPC has
been a non-starter with many courts.
Though the process under Section 89 of
the CPC appears to be lengthy and
complicated, in practice the process is
simple. The Referral Judge has to know
the dispute; exclude 'unfit' cases (para
No.18 the Afcons Judgment); ascertain
consent for arbitration or conciliation; if
there is no consent, select Lok Adalat
for simple cases and mediation for all

10. Above referred issue is discussed in detail
in para No.26 of the Afcons judgment,
which reads as under:-
If the parties are not agreeable for
either arbitration or conciliation, both of
which require the consent of all parties,
the court has to consider which of the
other three ADR processes (Lok Adalat,
Mediation and Judicial Settlement) which
do not require the consent of parties
for reference, is suitable and appropriate
and refer the parties to such ADR process.
If mediation process is not available (for
want of a mediation centre or qualified

11. If facility of mediation is available,
then the choice becomes wider. If the
suit is complicated or lengthy,
mediation will be the recognized
choice. Mediation is not
recommended in all kinds of
disputes, specially in those, where
interim orders are required from the
Court or where an important question
of law is to be settled. The mediation
is also not recommended, when
there is serious imbalance between
position of the parties in which fair

12. If the suit is not complicated and the
disputes are easily sortable or could
be settled by applying clear cut
legal principles, Lok Adalat will be
the preferred choice. If the court
feels that a suggestion or
guidance by a Judge would be
appropriate, it can refer it to
another Judge for dispute
resolution. The court has used its
discretion in choosing the ADR
process judiciously, keeping in view
the nature of disputes, interests of

13. As held in para No.18 the
Afcons Judgment, having
regard to their nature, the
following categories of
cases are normally
considered unsuitable for
ADR process.

14. A. (i) Representative suits under Order I Rule 8
CPC which involve public interest or interest of
numerous persons who are not parties before
the court.
ii. Disputes relating to election to public offices.
iii. Cases involving grant of authority by the court
after enquiry, as for example, suits for grant of
probate or letters of administration.
iv. Cases involving serious and specific allegations
of fraud, fabrication of documents, forgery,
impersonation, coercion, etc.
v. Cases requiring protection of courts, as for
example, claims against minors, deities and
mentally challenged
vi. Suits for declaration of title against the

15. All other suits and cases of civil nature in
particular the following categories of cases
(whether pending in civil courts or other special
tribunals/forums) are normally suitable for ADR
processes:
i) All cases relating to trade, commerce and
contracts, including
- disputes arising out of contracts(including all
money suits);
- disputes relating to specific performance;
- disputes between suppliers and customers;
- disputes between bankers and customers;
- disputes between developers/builders and
customers;
- disputes between landlords and

16. ii) All cases arising from strained
or soured relationships, including
- disputes relating to matrimonial
causes, maintenance, custody of
children;
- disputes relating to
partition/division among family
members/coparceners/co-
owners; and
- disputes relating to partnership
among partners.

17. iii) All cases where there is a need for
continuation of the pre-existing
relationship inspite of the disputes,
including
- disputes between neighbours
(relating to easementary rights,
encroachments, nuisance, etc.);
- disputes between employers and
employees;
- disputes among members of
societies/associations/apartment
owners' associations;

18. iv) All cases relating to tortious liability,
including
- claims for compensation in motor
accidents/other accidents; and
v) All consumer disputes, including
- disputes where a
trader/supplier/manufacturer/service
provider is keen to maintain his
business/professional reputation and
credibility or product popularity.
The proviso of Regulation No.10(2) of
the NALSA (Lok Adalats) Regulations,
2009 provides that matters relating to
Divorce and Criminal Cases which are not

19. The above enumeration of "suitable"
and "unsuitable" categorization of
cases is not exhaustive or rigid. They
are illustrative which can be
subjected to just exceptions or
addition by the courts/ tribunals
exercising its jurisdiction/discretion in
referring a dispute/case to an ADR
process.
In spite of the categorization
mentioned above, the Referral Judge
must independently consider the

20. In view of above, under section 89 CPC,
consent of all the parties to the suit is
necessary for referring the suit for arbitration
where there is no pre-existing arbitration
agreement between the parties. Similarly the
court can refer the case for conciliation under
section 89 CPC only with the consent of all
the parties.
However, in terms of Section 89 CPC and
the judicial pronouncements, consent of the
parties is not mandatory for referring a case
for Mediation, Lok Adalat or Judicial
Settlement. The absence of consent for
reference does not affect the voluntary nature
of the mediation process as the parties still

21. In para No.16 of the case of
Afcons Judgment, it is held that a
Referral Judge is not required to
formulate the terms of
settlement or to make them
available to the parties for their
observations. The Referral Judge
is required to acquaint
himself/herself with the facts of
the case and the nature of the
dispute between the parties and

22. Referral Order for Mediation
The mediation process is
initiated through a referral order.
The Referral Judge should
understand the importance of a
referral order in the mediation
process and should not have a
casual approach in passing the
order. The referral order is the
foundation of a court-referred
mediation.

23. Court Case No.... of …
In the Court of Hon'ble Additional District Judge, Surat.
Applicant/Plaintiff/Appellant/Complainant ….......................
v/s
Opponent/Defendant/Respondent/Accused….......................
ORDER
Upon going through the record of the case and further
considering the facts and circumstances of the cases, it
appears to this Court that there exist elements of a settlement
which may be acceptable to the parties. Therefore, in exercise
of powers conferred u/s 89 of CPC, 1908, I refer this case for
exploring the possibilities of settlement through Mediation, on
the following conditions.
(1) Parties to the lis and their advocates/attorneys shall
remain present along with the necessary cases papers before
the Mediation Centre, District Court Building at …. a.m/p.m on
00/00/20...
(2) Mediation process/proceeding shall be conducted by the
MCPC Trained Mediator. In a Court annexed mediation, the
coordinator of the mediation Centre shall appoint the mediator

24. (3) In case of failure of resolution of the
referred dispute, the Mediator shall inform the
Mediation Centre, by a report, only stating
that MEDIATION HAS BEEN UNSUCESSFUL and
the Co-ordinator of the Mediation Centre shall
inform the same to this Court.
(4) When an agreement is reached between
the parties with regard to all the issues in the
suit or proceeding or some of the issues, the
same shall be reduced to writing and signed
by the parties or their constituted attorney,
and counsel, if any.
(5) The agreement of the parties so signed
shall be submitted to the co-ordinator,
Mediation Centre, who shall, with a covering

25. (6) On the expiry of 90 from the date fixed
for the first appearance of the parties before the
mediator, the mediation shall stand terminated,
unless this Court, either suo moto, or upon
request by any of the parties, and upon hearing
all the parties, is of the view that extension of
time is necessary or may be useful; but such
extension shall not be beyond a further period of
thirty days.
(7) Next date of formal hearing is fixed on
00/00/20.. (to check the progress of the
mediation)
(8) Photo Copy of relevant case papers/record
shall be forwarded to Mediation Centre, forthwith.
Place:
................................

26. Rule 25 of the Mediation Rules, 2015
provides that:-
On receipt of settlement agreement, if the
Court is satisfied that the parties have
settled their disputes voluntarily, the Court
may pass appropriate order/decree on the
basis of settlement, if the same is not
found collusive/illegal/unworkable.
However, if the settlement disposed of
only certain issues arising in the matter,
the Court may record settlement in
respect of the issues settled in the
mediation and may proceed to decide
other issue which are not settled.

27. Referral Order for Lok Adalat and
Judicial Settlement-
Referral Judge may refer the case for
Lok Adalat or judicial Settlement u/s
89(c) of CPC. While referring the case
for Lok Adalat, provisions contained
under Section 89 2(b) of CPC, Section
20 of the Legal Services Authorities
Act, 1987 and the NALSA (Lok
Adalats) Regulations, 2009 has to be
scrupulously followed.

28. While referring the case for Judicial
Settlement provisions contained under
Section 89 2(c) of CPC, Section 20 of
the Legal Services Authorities Act shall
apply. Judicial settlement means a
compromise entered by the parties
with the assistance of the court
adjudicating the matter or another
judge to whom the court had referred
the dispute.
In Black’s Law Dictionary, “judicial
settlement” is defined as “the
settlement of a civil case with the help

29. Appropriate Stage/s of Reference
to ADR processes
The appropriate stage for considering
reference to ADR processes in civil
suits is after the completion of
pleadings and before framing the
issues (please see Order X of CPC). If
for any reason, the court did not
refer the case to ADR process before
framing issues, nothing prevents the
court from considering reference
even at a later stage.

30. However, considering the possibility of
allegations and counter allegations
vitiating the atmosphere and causing
further strain on the relationship of the
parties, in family disputes and matrimonial
cases the ideal stage for mediation is
immediately after service of notice on the
respondent and before the filing of
objections/written statements by the
respondent (para No.30 of the Afcons
judgment).
An order referring the dispute to ADR
processes may be passed only in the

31. Avoiding delay in Mediation
Proceedings
In order to prevent any misuse of the
provision for mediation by causing
delay in the trial of the case, the
Referral Judge, while referring the
case for mediation, shall post the
case for further proceedings on a
specific date, granting time to
complete the mediation process as
provided under Rule 18 of the
Mediation Rules, 2015.

32. Rule 18 of the Mediation Rules, 2015 reads
as under:-
Time limit for completion of
mediation:- On the expiry of Ninety
days from the date fixed for the first
appearance of the parties before the
mediator, the mediation shall stand
terminated, unless the Court, which
referred the matter, either suo moto,
or upon request by any of the
parties, and upon hearing all the
parties, is of the view that extension
of time is necessary or may be

33. In Rule 14 of the Mediation Rules
it is provided that:
If a party fails to attend a session
notified by the mediator on account
of deliberate or willful act, the other
party or the mediator can apply to
the Court in which the suit or
proceeding is pending, in that case
Court may issue the appropriate
directions having regard to the facts
and circumstances of the case.

34. Motivating and preparing the parties
for Mediation
The Referral Judge plays the most crucial
role in motivating the parties to resolve
their disputes through mediation. Even if
the parties are not inclined to agree for
mediation, the Referral Judge may try to
ascertain the reason for such disinclination
in order to persuade and motivate them for
mediation. The Referral Judge should
explain the concept and process of
mediation and its advantages and how
settlement to mediation can satisfy
underlying interest of the parties. Even
when the case in its entirety is not suitable

35. Role after conclusion of mediation
The Referral Judge plays a crucial role even
after the conclusion of mediation. Even though
the dispute was referred for mediation the court
retains its control and jurisdiction over the
matter and the result of mediation will have to
be placed before the court for passing
consequential orders.
In para No.28 of the Afcons judgment it is
held that - Where the reference is to a neutral
third party ('mediation' as defined above) on a
court reference, though it will be deemed to be
reference to Lok Adalat, as court retains its
control and jurisdiction over the matter, the
mediation settlement will have to be placed
before the court for recording the settlement

36. However, before considering the
report of the mediator the Referral
Judge shall ensure the presence of
the parties or their authorized
representative in the court. If there is
no settlement between the parties,
the court proceedings shall continue
in accordance with law. In order to
ensure that the confidentiality of the
mediation process is not breached,
the Referral Judge should not ask for
the reasons for failure of the parties
to arrive at a settlement.

37. Referral Judge should not allow the
parties or their counsel to disclose such
reasons to the court. However, it is
open to the Referral Judge to explore
the possibility of a settlement between
the parties. To protect confidentiality of
the mediation process, there should not
be any communication between the
Referral Judge and the mediator
regarding the mediation during or after
the process of mediation. If the dispute
has been settled in mediation, the
Referral Judge should examine whether

38. If the agreement is found to be
unlawful or unenforceable, it shall be
brought to the notice of the parties and
the Referral Judge should desist from
acting upon such agreement. If the
agreement is found to be lawful and
enforceable, the Referral Judge should act
upon the terms and conditions of the
agreement and pass consequential orders.
To overcome any technical or procedural
difficulty in implementing the settlement
between the parties, it is open to the
Referral Judge to modify or amend the
terms of settlement with the consent of

39. Question:- When an agreement
is reached between the parties
with regard to all the issues in
the suit or proceeding or some of
the issues, what next to be done
by the Court?

40. Answer is in Rule 24 of the
Mediation Rules, 2015. Rule 24 of the
Mediation Rules provides as under:
When an agreement is reached
between the parties with regard to all
the issues in the suit or proceeding
or some of the issues, the same shall
be reduced to writing and signed by
the parties or their constituted
attorney. If any counsel has
represented the parties, the mediator
may also sign on the settlement

41. [1] The agreement of the
parties so signed shall be
submitted to the co-ordinator,
Mediation Centre, who shall,
with a covering letter signed
by him forward the same to
the Court in which the suit or
proceeding is pending.

42. [2] Where no agreement is arrived at
between the parties or where the
mediator is of the view that no
settlement is possible, he shall report
the same in writing to the
coordinator, Mediation Centre (only
mentioning that Mediation has
been unsuccessful - Moti Ram V.
Ashok Kumar, Civil Appeal No. 1095
of 2008, December 7, 2010, reported
in 2011 (1) SCC 466), who shall, with
a covering letter signed by him

43. Rule 25 the Mediation Rules provides as
under:-
Court to record settlement and pass
decree:- On receipt of settlement
agreement, if the Court is satisfied that the
parties have settled their disputes
voluntarily, the Court may pass appropriate
order / decree on the basis of settlement, if
the same is not found collusive / illegal /
unworkable. However, if the settlement
disposed of only certain issues arising in the
matter, the Court may record settlement in
respect of the issues settled in the
mediation and may proceed to decide other
issue which are not settled.

44. Question:- Whether mediation is
possible in pre-litigation cases?
Yes. As per the Modalities Regarding
Referring Of Any Pre-Litigative
Matters for Mediation in the
Mediation Centres Functioning at the
Relevant Places (As approved in the
Meeting of the Hon’ble Mediation
Monitoring Committee, held on
05.08.2011 and implemented in the
State of Gujarat w.e.f. 15.08.2011).

45. Hon'ble Apex Court in the case of K.
Srinivas Rao v/s D.A. Deepa,
delivered in Civil Appellate
Jurisdiction Civil Appeal No. 1794 of
2013 (Arising out of Special Leave
Petition (Civil) No. 4782 of 2007),
dated 22nd
February, 2013 (reported
in AIR 2013 SC 2176) has in para
No.36(c) has observed as under:-
“All mediation centres shall set up
pre-litigation desks/clinics; give them
wide publicity and make efforts to

46. Recently (5th
February, 2016)
Hon'ble Apex Court in the case of
Suresh Narayan Kadam v/s
Central Bank of India, Petitions
for Special Leave to Appeal (C)
Nos.1878-1879 of 2009 has
emphasized on need for
encouraging an amicable
settlement process, preferably
through mediation, in which the
services of a mediator well

47. Hon'ble Mediation Monitoring
Committee has approved the
Scheme for Identification of
cases for Mediation Reference.
Said Scheme is uploaded on the
webpage of the GSLSA as well as
same has been circulated to all
Judicial Officers through Hon'ble
Chairpersons of DLSAs/DLSCs.
Kindly follow the instructions
contained therein.

48. Difference Between Conciliation and Mediation
Sr.
No.
Conciliation Mediation
1 Professional or Non professional
Conciliator, which may even include
relative, common friend.
When matter is referred to the
court annexed Mediation Centre,
only trained mediator trained by
MCPC is allowed to mediate.
2 Person facilitating settlement also
suggest terms of settlement.
Mediator facilitating settlement
does not suggest terms of
settlement.
3 If both the parties agree, with the
consent of parties conciliator is
appointed as provided u/s 64 of A &
C Act, 1996.
Even if, one party agrees or non of
the parties agree for settlement
through mediation process, Referral
Judge may refer the case for
Mediation if he/she prima facie
finds that there exist element of a
settlement.
4 Award of Conciliator is enforceable
under the A & C Act, 1996.
Once case is settled through
mediation process, referral court
passes decree in terms of the
settlement under Order XXIII of
CPC.
5 If the case is referred to the
Conciliator under the A & C Act,
1996, such case goes out of the
court jurisdiction.
If the case is referred to the
Court annexed Mediation Centre u/s
89 of CPC, referral Judge still
retains the control over said
matter.
6 As per the old concept Conciliation As per the old concept Mediation is

49. Difference between Arbitration and
Conciliation.Sr.
No.
Arbitration Conciliation
1 Govern by the First and the
Second part of A & C Act.
Govern by the Third part of
A & C Act.
2 Adjudicatory form of
litigation.
Non­Adjudicatory form of
litigation.
3 Normally at the litigating
stage.
Litigation may be pending in
court or may be in the
offing.
4 Once cases is referred for
Arbitration, it does not
come back to the Court of
law (except for filing an
application for setting
aside of an award or
execution of the award).
It is not always the case in
the Conciliation. For
example ­ Labour matters.
5 Normally there is an
Arbitration Clause in the
Agreement.
Not always the case.
6 Expert of the subject works
as Arbitrator.
Any neutral person works as
Conciliator.

50. Difference between Lok Adalat, Permanent Lok Adalat and Continuous
Lok Adalat (in the context of State of Gujarat).
Sr.
No.
Lok Adalat Permanent Lok Adalat Continuous Lok Adalat
1 As provided u/s 89 of
CPC r/w Section 19 of
the LSA Act.
As provided under
Chapter VI­A of the LSA
Act.
As provided under
Chapter VI of the LSA
Act.
2 Normally held on non
working Saturdays or
Sundays.
Proposed to work on all
court working days.
Normally held on all
working Saturdays.
3 Consisting of
Sitting/Retired Judicial
officer and/or Member/s.
Consisting of Retired
PDJ/ADJ as Chairperson
and two other members.
Only Sitting Judge, who
has power and
jurisdiction to decide
the lis.
4 Jurisdiction over
pending and pre­
litigation matters.
Jurisdiction to decide
only Pre­litigation
matters.
Only Pending matters.
5 Jurisdiction to decide
all cases where there
exist element of a
settlement, except the
proviso of Section 19(5)
(ii) of the LSA Act.
Only case relating to
Public Utility Services
(mentioned in
notification dated 5th
February, 2016)
Jurisdiction to decide
pending cases where
there exist element of a
settlement, except the
proviso of Section 19(5)
(ii) of the LSA Act.
6 Helps parties to arrive
at amicable settlement.
First try to conciliate
and if, case is not
settled, proceed to
decide case.
Concept of Con­Arb.
Helps parties to arrive
at amicable settlement.

51. Difference between Lok Adalat and Judicial Settlement.
Sr.
No.
Lok Adalat Judicial Settlement
1 For Lok Adalat NALSA (Lok
Adalats) Regulations, 2009
shall apply.
NALSA (Lok Adalats)
Regulations, 2009 do not
apply.
2 Held on particular
predetermined days (mostly
holidays).
Case can be referred on any
court working day.
3 Even if, only one J.O. is
posted at the particular
station, Lok Adalat can be
held.
If only one J.O. is posted
at the particular station,
Judicial Settlement is not
possible in the same
station.
4 Effective in almost all
cases.
Judge Assisted Settlement
only in exceptional or
special cases.
5 Settlement of a case with
the help of a Judge who is
assigned to adjudicate the
dispute.
Settlement of a case with
the help of a Judge who is
not assigned to adjudicate
the dispute.

52. Which case to be referred to which ADR
System?
Arbitration:- Consent of all the parties to the
suit is necessary for referring the suit for
arbitration where there is no pre-existing
arbitration agreement between the parties. If
there is a pre-existing arbitration agreement
between the parties to refer the dispute to
Arbitrator, matter may be straightway referred to
Arbitral Tribunal.
Conciliation:- Consent of all the parties to the
suit is necessary for referring the suit/litigation for
Conciliation.
Lok Adalat:- MACPs, cases relating to tortious
liability, cases where the suits are not
complicated and the disputes are easily sortable

53. Mediation:- Matrimonial disputes;
maintenance, custody of children;
landlord/tenant or licensor and licensees
disputes; Commercial disputes; disputes
between partners; neighbours (relating to
easementary rights, encroachments,
nuisance, etc.); disputes between employers
and employees; disputes among members of
societies / associations / apartment owners'
associations and / or organization; U/s 138 of
N. I. Act; trader / supplier / manufacturer /
service provider is keen to maintain his
business / professional reputation and
credibility or product popularity; partition /
division among family members / coparceners
/ co-owners; if the suit is complicated or

54. Judicial Settlement:- Only in exceptional
or special cases; under Order 36 of CPC
(Special case for Court's opinion); if a
suggestion or guidance by a Judge would
be appropriate, it can refer it to another
Judge for Judicial Settlement.
If case of urgent nature and parties
could not wait till the ensuing Lok Adalat,
in absence of Mediation Centre and/or
trained Mediators and if, other Judicial
Officer of the same Cadre is available in
the same station, case may be referred for
Judicial settlement.

55. Thank You…