[Section 89 – Settlement of disputes outside the Court. —
- Where it appears to the Court that there exists 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: --
- Judicial settlement including settlement through Lok Adalat; or
- Where a dispute has been referred—
- 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;
- 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) an all other provisions of that Act shall apply in respect of the dispute so referred to the Lok Adalat;
- 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;
for mediation, the Court shall effect a compromise between the parties and shall follow such procedure as may be prescribed.
Examination of parties by the court
After recording the admissions and denials, the courts shall direct the parties to the suit to opt either mode of the settlement outside the court as specified in sub-section (1) of section 89. On the option of the parties, the court shall fix the date of appearance before such forum or authority as may be opted by the parties.
Where a suit is referred under rule 1A, the parties shall appear before such forum or authority for conciliation of the suit.
Where a suit is referred under rule 1A, and the presiding officer of conciliation forum or authority is satisfied that it would not be proper in the interest of justice to proceed with the matter further, then, it shall refer the matter again to the court and direct the parties to appear before the court on the date fixed by it.
Suits relating to matters concerning the family
- The provisions of this Order shall apply to suits or proceedings relating to matters concerning the family.
- In particular, and without prejudice to the generality of the provisions of sub-rule (1), the provisions of this Order shall apply to the following suits or proceedings concerning the family, namely:-
- a suit or proceeding for matrimonial relief, including a suit or proceedings for declaration as to the validity of a marriage or as to the matrimonial status of any person;
- a suit or proceeding for a declaration as to legitimacy of any person;
- a suit or proceeding in relation to the guardianship of the person or the custody of any minor or other member of the family, under a disability;
- a suit or proceeding for maintenance;
- a suit or proceeding as to the validity or effect of an adoption;
- a suit or proceeding, instituted by a member of the family, relating to wills, intestacy and succession;
- a suit or proceeding relating to any other matter concerning the family, relating to wills, intestacy and succession.
- So much of this Order as related to a matter concerning the family in respect of any suit or proceeding shall not apply to that suit or proceeding.
In every suit or proceeding to which this Order applies, the proceedings may be held in camera if the Court so desires and shall be so held if either party so desires.
- In every suit or proceeding to which this Order applied, an endeavor shall be made by the Court in the first instance, where it is possible to do so consistent with the nature and circumstances of the case, to assist the parties in arriving at a settlement. In respect of the subject-matter of the suit.
2. If, in any such suit or proceeding, at any stage it appears to the Court that there is a reasonable possibility of a settlement between the parties, the Court may adjourn the proceeding for such period as it thinks fit to enable attempts to be made to effect such a settlement.
3. The power conferred by sub-rule (2) shall be in addition to, and not in derogation of, any other power of the Court to adjourn the proceedings.
In every suit or proceeding to which this Order applies, it shall be open to the Court to secure of such person (preferably a woman where available), whether related to the parties or not, including a person professionally engaged in promoting the welfare of the family as the Court may think fit, for the purpose of assisting the Court in discharge the functions imposed by rule 3 of this Order.
In every suit or proceeding to which this Order applies, it shall be the duty of the Court to inquire, so far it reasonably can, into the facts alleged by the plaintiff and into any facts alleged by the defendant.
- For the purposes of this Order, each of the following shall be treated as constituting a family, namely:-
- (i) a man and his wife living together,
(ii) any child or children, being issue of theirs; or of such man or such wife,
(iii) any child or children being maintained by such man and wife;
- A man not having a wife or not living together with his wife, any child or children, being issue of his, and any child or children being maintained by him;
- A women not having it husband or not living together with her husband, any child or children being issue of hers, and any child or children being maintained by her;
- A man or woman and his or her brother, sister or ancestor or lineal descendant living with him or her, and
- Any combination of one or more of the groups specified in clause (a), clause (b), clause (c) or clause (d) of this rule.
Explanation.- For the avoidance of doubts, it is hereby declared that the provisions of rule 6 shall be without any prejudice to the concept of “family” in any personal law or in another law for the time being in force.
The Court Fees Act, 1870
[Section 16- Refund of fee- Where the Court refers the parties to the suit to anyone of the mode of settlement of dispute referred to in section 89 of the Code of Civil Procedure, 1908 (5 of 1908), the plaintiff shall be entitled to a certificate from the Court authorizing him to receive back from the collector, the full amount of paid in respect of such plaint.] 
The Arbitration and Conciliation Act, 1996 as amended by The Arbitration and Conciliation (Amendment) Act, 2015 (3 of 2016)
Section 30- Settlement-
- It is not incompatible with an arbitration agreement for an arbitral tribunal to encourage settlement of the dispute and, with the agreement of the parties, the arbitral tribunal may use mediation, conciliation or other procedure at any time during the arbitral proceedings to encourage settlement.
- If, during arbitral proceedings, the parties settle the dispute, the arbitral tribunal shall terminate the proceedings and, if requested by the parties and not objected to by the arbitral tribunal, record the settlement in the form of an arbitral award on agreed terms.
- An arbitral award on agreed terms shall be made in accordance with section 31 and shall state that it is an arbitral award.
An arbitral award on agreed terms shall have the same status and effect as any other arbitral award on the substance of the dispute.
- Save as otherwise provided by any law for the time being in force and unless the parties have otherwise agreed, this Part shall apply to conciliation of disputes arising out of legal relationship, whether contractual or not and to all proceedings relating thereto.
- This Part shall not apply where by virtue of any law for the time being in force certain disputes may not be submitted to conciliation.
- The party initiating conciliation shall send to the other party a written invitation to conciliate under this Part, briefly identifying the subject of the dispute.
- Conciliation proceedings, shall commence when the other party accepts in writing the invitation to conciliate.
- If the other party rejects the invitation, there will be no conciliation proceedings.
If the party initiating conciliation does not receive a reply within 30 days from the date on which he sends the invitation, or within such other period of time as specified in the invitation, he may elect to treat this as a rejection of the invitation to conciliate and if he so elects, he shall inform in writing the other party accordingly.
- There shall be one conciliator unless the parties agree that there shall be two or three conciliators.
- Where there is more than one conciliator, they ought, as a general rule, to act jointly.
- Subject to sub-section (2)-
- in conciliation proceedings, with one conciliator, the parties may agree on the name of a sole conciliator;
- in conciliation proceedings with two conciliators, each party may appoint one conciliators;
- in conciliation proceedings with three conciliators, each party appoint one conciliator and the parties may agree on the name of the third conciliator who shall act as the presiding conciliator.
- Parties may enlist the assistance of a suitable institution or person in connection with the appointment of conciliators, and in particular,-
- a party may request such an institution or person to recommend the names of suitable individuals to act as conciliator; or
- tshe parties may agree that the appointment of one or more conciliators be made directly by such an institution or person:
Provides that in recommending or appointing individuals to act as conciliator, the institution or person shall have regard to such considerations as are likely to secure the appointment of an independent and impartial, conciliator and, with respect to a sole or third conciliator, shall take into account the advisability of appointing a conciliator of a nationality other than the nationalities of parties.
- The conciliator, upon his appointment, may request each party to submit to him a brief written statement describing the general nature of the dispute and the points at issue. Each party shall send a copy of such statement to the other party.
- The conciliator may request each party to submit to him a further written statement of his position and the facts and grounds in support thereof, supplemented by any documents and other evidence that such party deems appropriate. The party shall send a copy of such statement, documents and other evidence to the other party.
- At any stage of the conciliation proceedings, the conciliator may request a party to submit to him such additional information as he deems appropriate.
Explanation.- In this section and all the following sections of this Part, the term “conciliator” applies to a sole conciliator, two or three conciliators, as the case may be.
The conciliator is not bound by the Code of Civil Procedure 1908 (5 of 1908) or the Indian Evidence Act, 1872 (1 of 1872).
- The conciliator shall assist the parties in an independent and impartial manner in their attempt to reach an amicable settlement of their dispute.
- The conciliator shall be guided by principles of objectivity, fairness and justice, giving consideration to, among other things, the rights and obligations of the parties, the usages of the trade concerned and the circumstances surrounding the dispute, including any previous business practices between the parties.
- The conciliator may conduct the conciliation proceedings in such a manner as he considers appropriate, taking into account the circumstances of the case, the wishes the parties may express, including any request by a party that the conciliator hear oral statements and the need for a speedy settlement of the dispute.
- The conciliator may, at any stage of the conciliation proceedings, make proposals for a settlement of the dispute. Such proposals need not be accompanied by a statement of the reasons therefor.
In order to facilitate the conduct of the conciliation proceedings, the parties, or the conciliator with the consent of the parties, may arrange for administrative assistance by a suitable institution or person.
- The conciliator may invite the parties to meet him or may communicate with them orally or in writing. He may meet or communicate with the parties together or with each of them separately.
- Unless the parties have agreed upon the place where meetings with the conciliator are to be held, such place shall be determined by the conciliator, after consultation with the parties, having regard to the circumstances of the conciliation proceedings.
When the conciliator receives factual information concerning the dispute from a party, he shall disclose the substance of that information to the other party in order that the other party may have the opportunity to present any explanation which he considers appropriate:
Provided that when a party gives any information to the conciliator subject to a specific condition that it be kept confidential, the conciliator shall not disclose that information to the other party.
The parties shall in good faith co-operate with the conciliator and in particular, shall endeavour to comply with requests by the conciliator to submit written materials, provide evidence and attend meetings.
Each party may, on his own initiative or at the invitation of the conciliator, submit to the conciliator suggestions for the settlement of the dispute.
- When it appears to the conciliator that there exist elements of a settlement which may be acceptable to the parties, he shall formulate the terms of a possible settlement and submit them to the parties for their observations. After receiving the observations of the parties, the conciliator may reformulate the terms of a possible settlement in the light of such observations.
- If the parties reach agreement on a settlement of the dispute, they may draw up and sigh a written settlement agreement. If requested by the parties, the conciliator may draw up, or assist the parties in drawing up, the settlement agreement.
- When the parties sign the settlement agreement, it shall be final and binding on the parties and persons claiming under them respectively.
The conciliator shall authenticate the settlement agreement and furnish a copy thereof to each of the parties.
The settlement agreement shall have the same status and effect as if it is an arbitral award terms on the substance of the dispute rendered by an arbitral tribunal under section 30.
Notwithstanding anything contained in any other law for the time being in force, the conciliator and the parties shall keep confidential all matters relating to the conciliation proceedings. Confidentiality shall extend also to the settlement agreement, except where its disclosure is necessary for purposes of implementation and enforcement.
The conciliation proceedings shall be terminated-
- by signing of the settlement agreement by the parties, on the date of the agreement; or
- by a written declaration of the conciliator, after consultation with the parties, to the effect that further efforts at conciliation are no longer justified, on the date of the declaration; or
- by a written declaration of the parties addressed to the conciliator to the effect that the conciliation proceedings are terminated, on the date of the declaration; or
by a written declaration of a party to the other party and the conciliator, if appointed, to the effect that the conciliation proceeding are terminated, on the date of declaration.
The parties shall not initiate, during the conciliation proceedings, any arbitral or judicial proceedings in respect of a dispute that is the subject-matter of the conciliation proceedings except that a party may initiate arbitral or judicial proceedings where, in his opinion, such proceedings are necessary for preserving his rights.
- Upon termination of the conciliation proceedings, the conciliator shall fix the costs of the conciliation and give written notice thereof to the parties.
- For the purpose of sub-section (1), “costs” means reasonable costs relating to-
- the fee and expenses of the conciliator and witnesses requested by the conciliator with the consent of the parties;
- any experts advice requested by the conciliator with the consent of the parties;
- any assistance provided pursuant to clause (b) of sub-section (2) of section 64 and section 68;
- any other expenses incurred in connection with the conciliation proceedings and the settlement agreement.
- The costs shall be borne equally by the parties unless the settlement agreement provides for a different apportionment. All other expenses incurred by a party shall be borne by that party.
- The conciliator may direct each party to deposit an equal amount as an advance for the costs referred to in sub-section (2) of section 78 which he expects will be incurred.
- During the course of the conciliation proceedings, the conciliator may direct supplementary deposits in an equal amount from each party.
- If the requires deposits under sub-section (1) and (2) are not paid in full by both parties within thirty days, the conciliator may suspend the proceedings or may make a written declaration of termination of the proceedings to the parties, effective on the date of that declaration.
Upon termination of the conciliation proceedings, the conciliator shall render an accounting to the parties.
unless otherwise agreed by the parties,-
- the conciliator shall not act as an arbitrator or as a representative or counsel of a party in any arbitral or judicial proceeding in respect of a dispute that is the subject of the conciliation proceedings;
- the conciliator shall not be presented by the parties as a witness in any arbitral or judicial proceedings.
The parties shall not rely on or introduce as evidence in arbitral or judicial proceedings, whether or not such proceedings relate to the dispute that is the subject of the conciliation proceedings,-
- views expressed or suggestions made by the other party in respect of a possible settlement of the dispute;
- admissions made by the other party in the course of the conciliation proceedings;
- proposals made by the conciliator
- the fact that the other party had indicated his willingness to accept a proposal for settlement made by the conciliator.