BACKGROUND TO ADOPTION OF ADR

SYSTEM IN INDIA

My joy was boundless. I had learnt the true practice of law. I had learnt to find out the
better side of human nature and to enter mens hearts. I realized that the true function of
a lawyer was to unite parties driven as under. The lesson was so indelibly burnt into me
that a large part of my time during the twenty years of my practice as a lawyer was
occupied in bringing about private compromises of hundreds of cases. I lost nothing
thereby not even money, certainly not my soul.

Mahatma Gandhi1

1.) Introduction

ADR as the name suggests, is an alternative to traditional process of dispute resolution

through courts. It refers to a set practices and techniques to resolve dispute outside the
courts. It is mostly a non-judicial means or procedure for the settlement of dispute. In its
wider sense, the term refers to everything from fascillated settlement, negotiations in
which parties are encouraged to negotiate directly with each other prior to some other
legal process, to arbitration system or mini trails that look and feel very much like a
court process.
The institution of arbitration came into being as a very useful alternative to
litigation. But it is now being viewed as closer to litigation because it has to be in
accordance with statutory provisions and becomes virtually an adjudicatory process
with all the formalities of the functioning of a court. A method of dispute resolution
would be considered as a real alternative only if it can dispense with the adjudicatory
process, even if it is not wholly a consensual process. It may be worked by a neutral

1
The Story of My Experiments with Truth, General Press, Edn. 2009

1
third person who may bridge the gap between the parties by bringing them together
through a process of conciliation, medication or negotiations. 2

The ADR procedure are an array of Hybird procedures and they include natural
evaluation of the cases. In several democratic countries judges have incorporated ADR
techniques in their court room practices and call upon litigants to utilize the ADR
system. The three wings of the Govt. i.e. legislature, executive and judiciary are
committed to encourage ADR system for the resolution of public disputes and
differences.

In several types of disputes like civil, commercial, industrial and family disputes. The
ADR system have worked smoothly in business disputes, banking and contract
performance, construction contracts, intellectual property rights, insurance coverage,
joint ventures, partnership difference, personal injury, product liability professional
liability and security etc. ADR system can be best utilized in resolution of the dispute
relating to international commercial matters.

ADR can be defined as a technique of dispute resolution through the

intervention of a third party whose decision is not legally binding on the parties. It can
also be described as mediation though mediation is only one of the modes of ADR.
The method is neither that of litigation nor that of arbitration. ADR flourishes because
it avoids rigidity and inflexibility which is inevitable in the litigation process apart
from high lawyer and court fee and long delays. ADR aims to provide the parties with
cheap, speedy and less formalistic remedy to the aggrieved party. It aims at providing
a remedy which is most appropriate in the circumstances of the case. This makes ADR
a viable substitution for arbitration or litigation.

Thus, settlement of dispute outside the scope of formal legal system may be called as
an alternative means of settlement of' dispute. However in the content of law of
arbitration the settlement of dispute through a mediator is necessarily treated as an
alternative means.

2
Avtar Singh: Law of Arbitration and Conciliation (7th Ed.) 2005, Page no.-394

2
 2.) ADR in Olden Days in India :

India has a long history of dispensation of justice and that of judicial reforms. In the
ancient period, when religion and customary law occupied the field, reform process
had been ad hoc and not institutionalized through duly constituted law reform
agencies. With the advent of British rule, significant judicial developments and
reforms took place.36 Before formation of Law Courts in India, people used to settle
matters of dispute by themselves by mediation. The mediation was normally headed
by a person of higher status and respect among the village people and such mediation
was called in olden days Panchayat. The Panchayat will be headed by a person of
higher statues, quality and character who will be deemed to be unbiased by people of
the locality called Village headman and he was assisted by some people of same
character or cadre from several castes in the locality. The dispute between individuals
and families will be heard by the Panchayat and decision given by the Panchayat will
be accepted by the disputants. The main thing that will be considered in such
Panchayat will be the welfare of the disputants as also to retain their relationship
smooth. Similarly, in the case of dispute between two villages, it will be settled by
mediation consisting of person acceptable to both villages and people from both the
villages and the decision of such mediation will be accepted by both village people.
The disputes in olden days seldom reached Law Courts. They will be even settling the
complicated civil disputes, criminal matters, family disputes, etc. Such type of dispute
resolution maintained the friendly relationship between the disputants even after
resolution of their disputes. But subsequently, this type of Panchayat has failed due to
intervention of politics and communal feeling among the people.

In present scenario, ADR has assumed a great importance in resolving disputes among
the conflicting parties. ADR may be regarded as an attempt to devise machinery that
should be capable of providing an alternative to the conventional methods of
adjudicating disputes. It, however, does not mean the choice of an alternative Court
but something which is an option to the cumbersome and tardy court procedure that
consumes a lot of time in adjudicating the matter. ADR has assumed a great
significance by providing cheaper, quicker and less strained resolution of disputes.

3
It would be wrong to assert that the concept of ADR is an outcome of the present
society where there are large numbers of human conflicts and adding to it equally large
number of commercial disputes. There are instances that are evident of the fact that
redressal of disputes without the intervention of the Court was prevalent in our ancient
days even.

Referring a dispute to the Panch, considered as Parmeshwar, had been one of the
natural ways of deciding variety of disputes reflects that our society has always strived
for resolving the dispute and not adjudicate the same.

Our holy text book Bhandarnayaka Upanishad authored by great philosopher and
scholar Yajnavalakya
refer to the three kind of institution which resolved disputes without the
intervention of the King, the Sovereign:-5

1. PUGA : Board of persons residing in a locality to resolve local disputes and

conflicts.

2. SRENI :Assembly of tradesman and artisan deciding over commercial dispute

3. KULA :Group of persons bound by familial ties to resolve the familial matters.

The proceedings before these institutions were informal. Members of these institutions
were adept in their field and the decision by these bodies was binding on to the parties.
Against the decision of these Arbitration Courts, appeals were provided to the Court of
Judges appointed by the King himself 3.

3
Prof. S.C. Srivastava in his Article, Dispute Resolution Process in India, Indian Law Institute. Pg 26,
March, 2002 Japan on http://www.ide.go.jp/English/Publish/Download/Als/pdf/16.pdf visited on September 14,
2017.

4
 With the upcoming of Muslims in India, a hybrid of such institutions grew up.
These institutions governed the disputes between Muslims and Non-Muslims
community without the intervention of the Sovereign, the King. Hedaya containing the
Islamic laws refer Arbitration as Tahkeen. Thus, it could be inferred that the alternative
modes of redressal of disputes existed in India much before the time when the
Britishers formally introduced in India.

Due to the Divide and Rule policy of Britishers, all these modes of resolving disputes
lost their significance. Britishers also codified the procedural courts and set up courts
for adjudication of the disputes. But Britishers also faced the problem of long pendency
of cases and the long procedure involved in its disposal and reverted back to these
alternative methods to resolve the disputes. This is rightly said necessity is the
mother of invention. Arbitration is the mother of all other modes of resolving dispute
without the intervention of courts and, therefore, the growth of Arbitration is much
more important.

Britishers firstly brought a provision in the Bengal

Regulation of 1772 that said In all cases of disputed
accounts, etc., it shall be recommended to the parties to submit the decision of their
cause to Arbitration, the award of which shall become the decree of Court39. Further,
facilities for Arbitration were given by the Regulations of 1780 and 1781. The
Regulations of 1781 provided that No award of any Arbitrator be set aside except on
full proof made by oath of two credible witnesses that the Arbitrator have been guilty of
gross corruption or partially in the cause in which they have made their award4.

The Regulation of 1787 empowered the Court to refer certain disputes to

arbitration but made no provision for difference of opinion among Arbitrators. The
Bengal Regulation of 1793 empowered the Court to refer matters to arbitration with the
consent of the parties where the value of the suit did not exceed sicca Rs.200 and the
suit were for accounts, partnership debts, non-performance of contracts, etc., the
regulation laid down also the procedure for the conduct of arbitral proceedings41.

4
M.A. Sujan, Law Relating to Arbitration and Conciliation, Universal Law Publishing Co. Pvt. Ltd, IInd ed.
2001, p. 2.

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 The Regulation of 1795 extended the Bengal Regulation to Banaras and the
Regulation of 1803 extended it further to the territory ceded by Nawab Wazir. Lord
Hastings, in 1813, allowed arbitration in the land disputes. In 1816, certain powers were
conferred on to the Panchayats to settle dispute by the madras Regulation and similar
provisions were incorporated in the Bombay Regulation of 1827.
Lord William Bentick became the first Governor General of India to enact a
legislation to regulate the procedure of civil courts known as Act VIII of 1859 and
provision pertaining to arbitration was incorporated in Chapter VI of the said Act.
Sections 312 to 317 of the said Act dealt with arbitration in pending suits as well as
intervention of the Court43. The Act of 1859 was repealed by the Act X of 1877, which
made no change in the law relating to arbitration. The Code of Civil Procedure was
again revised in 1882 which repeated the same provision about references of arbitration
with or without the intervention of court. There was yet no provision for the reference
of future disputes to arbitration.

Thereafter the Indian Arbitration Act 1899, Act IX of 1899, was passed modeled on
the English Arbitration Act which had its applicability to Presidency Towns earlier and
then was extended to a few more commercial towns. The Code of Civil Procedure,
1908 in its Second Schedule had a provision similar to the above-said regarding
arbitration which had its applicability to whole of the Indian Territory44.

A need was felt thereafter by the British Govt. that provisions of arbitration should be
transferred into a comprehensive and separate Act. This led to the enactment of Indian
Arbitration Act, 1940 repealing all earlier Acts relating to arbitration & also amended
Second Schedule of Code of Civil Procedure, 1908. This Act of 1940 consolidated and
amended the law relating to Arbitration in British India.

The Arbitration Act, 1940 did not deal with foreign awards. The Geneva Protocol on
Arbitration Clauses 1923 and the Geneva Convention on the execution of the foreign
arbitral awards 1927 were implemented in India by the Arbitration (Protocol and
Convention) Act, 1937. The New York Convention, 1958 on the recognition and

6
enforcement of foreign arbitral awards was implemented in India by the enactment of
the Foreign Awards (Recognition and Enforcement) Act, 196145.

It was felt that 1940 Act, which contained the general law of arbitration, had become
outdated. The Law Commission of India, several other bodies, experts in the field of
arbitration, traders and industrialists etc. proposed several amendments to the 1940 Act
to make it more responsive to contemporary requirements. Like arbitration,
conciliation was also getting attention throughout the world and was recognized as the
mode for settlement of disputes, but there was no law in India which is related to same.

The United Nations Commissions on International Trade Law (UNCITRAL) adopted

the UNCITRAL model Law on International Commercial Arbitration in 1985 and
UNCITRAL Conciliation Rules in 1980. These model law and rules were
recommended by the General Assembly of the United Nations to all the countries for
adoption in their own laws.

This resulted in enactment of a new Act, which could cater to the contemporary needs.
The Arbitration and Conciliation Act, 1996 was passed on 16th August, 1996 taking
into account UNCITRAL Model law and rules and vastly making amendments in the
law relating to the domestic arbitration contained in the 1940 Act. The 1996 Act
repealed the Arbitration Act 1940; Arbitration (Protocol and Convention) Act, 1937
and the Foreign Awards (Recognition and Enforcement) Act, 196147. It also repealed
the Arbitration and Conciliation Ordinance, 1996, which was in promulgation before
the Act came into the force. The Act of the 1996 seeks to consolidate and amend the
law relating to Domestic Arbitration, International Commercial Arbitration,
Enforcement of Foreign Arbitral Award and to define the law relating to conciliation
and for matter incidental and connected therewith5.

Our Constitution under Articles 39-A and 21 provide for free legal aid to the indigent
persons and right to life respectively. Since our Courts are over-burdened and face the
crisis of large number of pendency and law has to help the poor, who do not have the

5
Arbitration and Conciliation Act, 1996

7
means, i.e., economic means to fight their causes, the concept to ADR has been
recognized constitutionally in India to meet the end of justice.

Following the mandate of our Constitution, our legislators passed the Legal Service
Authorities Act, 1987 and brought the establishment of Lok Adalats as a means of
ADR. The Lok Adalats are an innovative form of voluntary efforts for amicable
settlements of disputes between the parties. These are not akin to regularly constituted
law Courts and are to supplement and not to supplant the existing adjudicatory
machinery. One of the important aspects is that it provides speedy and inexpensive
justice at the very doorsteps of the people6.

The first Lok Adalats movement was started in Gujarat in March 1982 and the first
Lok Adalats were held at Village Una in Junagarh District and presently crossed the
figure of 1000 all over the territory of India with encouraging results. These Lok
Adalats are being organized by the State Legal Service Authorities and Advice Board
at different places in the country and have become popular for post litigation
settlements and as a supplementary forum for resolution of disputes, especially among
the rural poor. The decision arrived at the Lok Adalats become enforceable after the
concerned courts or competent courts in respect of such cases endorse them.

Thus, it can safely be concluded that what our legislators have done is merely the
reinforcement of earlier existing modes of settlement of dispute with a new facet.

6
K Ramaswamy J, while delivering his keynote addresses at Law Ministers Conference, 1975, Hyderabad cited
from the book Alternative Dispute Resolution edited by P.C. Rao & William Sheffield, p. 104.

8
3.) Historical Development of ADR :

The concept of ADR is not a new one. During ancient time also arbitration,
conciliation and mediation were the means of settlement of dispute outside the formal
legal system these alternative means were recognized not only in India but also in
other parts of the world. The concept of ADR is not a very new one for the last two
decades the topic was enunciated and introduced in various legal discussions and now
it has even got statutory force.
ADR in a term which refers to various procedures developed for U.S.A. Following its
inspiration, several countries including Australia, Canada, Germany, Holland, Hong
Kong, New Zealand, South Africa, Switzerland and the United Kingdom.

The adoption of ADR system in India is our old tradition. In ancient India, the choice
of private tribunal was well-known. The cases of Indian people were decided by
Nyaya Panchayats. This system was quite prevalent till the advent of Britishers in
India. Even in daily affairs, the disputes with neighbors, family disputes and disputes
involving employment, etc, were decided by Nyaya Panchayats. But they ceased to
occupy that place in British India.

With the advent of our present constitution, Panchayats have been again provided
statutory status. Further, the constitution of India has provided free legal aid to ensure
the opportunities for social justice which has been denied since long to the citizens
specially the weaker sections of the society, due to the reasons of economic and other
disabilities To discharge this obligation, a committee for implementing Legal Aid
Schemes was established by the Central Government in 1980. This committee
recommended the establishment of Lok Adalats in the country. These days Lok
Adalats are giving yeoman services for the amelioration of people's lot and are
working hard for resolving people's disputes and differences.

In 1981, the Supreme Court in Guru nanak Foundation v. Rattan Singh and Sons Case
emphasized the importance of arbitration.

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In the past, the decisions taken in Panchayats were graciously accepted by the people
as final and binding upon them. But with the passage of time, panchayat awards were
considered no longer to have finality which led to a spate of litigations. Justice Desai
of the Supreme Court has observed in the above case the importance of "arbitration" as
an effective ADR system.

Again in Ramji Dayawala and Sons (Pvt.) Ltd. V Invest Import 7, Justice Desai of the
Supreme Court emphasized the importance of arbitration" as an ADR system and
observed as under:

"Protracted, time-consuming, exasperating and atrociously expensive courts trials

impelled an alternative mode of resolution of disputes between the parties."

In India the subject-matter of arrears of cases in the courts had engaged the attention of
various committees and commission. In 1989, the Government of India, on the advice
of the Chief Justice of India, constituted a Committee under the Chairmanship of
Justice Malimath, Chief Justice of Kerala High Court. The Committee recommended
the introduction of Conciliation procedure in writ matters and setting up of
Neighborhood Justice Centers with statutory status. The Report of Malimath
Committee became the basis of finding solutions of the problems of arrears during the
Law Ministers' meetings which took place in 1992-93 at Bangalore, Pondicherry,
Pachmarhi and Calcutta. A joint Conference of Chief Ministers of the States and Chief
Justices of High Courts was held on 4th December, 1993 at New Delhi under the
Chairmanship of the then Prime Minister of India and presided over by the Chief
Justice of India. It adopted the following resolution:

"The Chief Ministers and chief Justices were of the opinion

that Courts were not in bear the entire burden of justice
system and that a number of disputes lent themselves to
resolution by alternative modes such as arbitration,
mediation and negotiation. They emphasized the
desirability of disputants taking advantage of alternative
7
AIR. 1981 S.C. 2085.

10
 dispute resolution which provided procedural flexibility,
saved valuable time and money and avoided the stress of a
conventional trial".
The Central Government felt that its economic reforms would not be complete till
corresponding changes are brought in the law relating to settlement of disputes through
arbitration and conciliation. Therefore, the question of repeal of the Arbitration Act,
1940 was considered. Besides the recommendations of the Law Commission of India,
the Government had representations from among others, the Indian Council of
Arbitration, the Indian Society of Arbitrators, the Confederation of Indian Industries, the
Federation of Indian Chamber of Commerce and Industry, the Associated Chambers of
Commerce and Industry, proposed certain amendments in the provisions of the
Arbitration Act, 1940. The proposals for certain amendments of the Arbitration Act,
1940 were received from eminent lawyers.

The Government of India also took initiative in the matter. It repealed the old Arbitration
Act, 1940 and introduced new and effective arbitration system by enacting the
Arbitration and Conciliation Act, 1996. It came into force on 22nd August, 1996. It is
based on the United Nations Commission on International Trade Law (UNCITRAL)
model law on International Commercial Arbitration. The objectives of this Act are to
make provision for an arbitral procedure which is fair, efficient and capable of meeting
the needs of the specific arbitration; and to permit an arbitral tribunal to use mediation,
conciliation or other procedures during the arbitral proceedings to encourage settlement
of disputes. At the initiative of some of the leading legal luminaries, an International
Centre for Alternative Dispute Resolution was established at New Delhi to effectively
implement the provisions of the Arbitration and Conciliation Act, 1996 and to achieve
its objectives. The Centre has its Regional Centers at Hyderabad and Bangalore. More
Regional Centers are proposed to be opened in other States. The ICADR is an
autonomous organization and the Regional Centers of ICADR are hilly funded and
supported by the respective State Governments. The Chief Justice of India is the Patron
of ICADR. At the regional level, the Chief Justice of the concerned High Court is the
Patron of the Regional Centre of ICADR. Dr. H.R.Bhardwaj, Union Minister Ibr Law
and Justice, Government of India is the Chairman of ICADR. The Governing Council of
ICADR comprises of several eminent personalities drawn from various fields. It is

11
expected that this institution will open new channels of dispute resolution, will provide
necessary relief to the litigants and will help the courts in reducing arrears. It will also
train the manpower required for conciliation and mediation work.

Besides ICC Rules on Conciliation and Arbitration the UNCITRAL Model Law was
available with the Government of India. The Government felt, that there were definite
advantages in repealing the old Arbitration law and enacting a new law on the subject,
which was to be based on Model Law. Extensive consultations were held with arbitral
institutions, arbitration experts and the State Governments, before the enactment of the
new law of arbitration. On 17th November, 1994, a conference was held at Calcutta
under the auspices of the Ministry of Law, Justice and Company Affairs, with the Law
Ministers of States and Union Territories. This conference considered the desirability of
total repeal of the Arbitration Act. 1940. and enacting a new law of arbitration on the
pattern of Model Law of United Nations on the subject. The Government of India
considered the efficacy of the ICC Rules on the subject and also the Rules for
Conciliation of the Society of Maritime Arbitrators, Inc. of New York, adopted in 1988.
It is significant to note that the new Arbitration and Conciliation Act, 1996, is largely
based on UNCITRAL conciliation Rules including the Conciliation Rules of domestic
disputes.

With the above background the passing of Arbitration and Conciliation Act, 1996, is
an effective step of the Government of India in the direction of adoption of alternative
dispute resolution systems for the settlement of public dispute. Through establishment
of the International Centre for Alternative Dispute Resolution a new chapter in the
history of the administration of Justice in India has commenced. It is hoped that in the
coming years the use of alternative means of resolving disputes would Increase
tremendously in the country for the convenience of the public.

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4.) Constitutional background of ADR 8 :

"It is settled law that frees legal aid to the indigent persons. Who cannot defend
themselves in a Court of law is a Constitutional mandate under Articles 39-A and 21 of
the Indian Constitution. The right to life is guaranteed by Article 21." The law has to
help the poor who do not have means i.e. economic means, to fight their causes.

Indian civilization put at about 6000 years back, at the dawn of civilization57
(i.e. the age of Vedas), when habitation was growing at river banks, was devoid of
urbanization, where the Creator was presumed to be the - head of humanity. With the
dawn of industrialization, man walking into orderly society. State and nation,
dependence on law, for orderly conduct gained momentum. Then came on the horizon
the-social dispute resolution mechanism. With Indian Courts piling up cases for
millennium (in the place of indigenous system which was cheap and quick), alternative
dispute systems had to be found, Thus this system took birth. Once the dispute was
resolved, there was no further challenge.

The Constitutional mandate rescue operation began with Justice V.R. Krishna
lyer and Justice P.N.Bhagawati's Committees' report, weaker section thus became
enabled to approach law courts, right from Munsif Courts to the Supreme Court.

Based upon report of this committee, States adopted (through State Legal Aid
and Aavice Boards) Lok Adalats and Legal Aid Camps, Family Courts, Village
Courts, Mediation Centers, Commercial arbitration, Women Centers, Consumer
Protection Forums, etc which are but various facets of effective Alternative Disputes
Resolution systems.

The soul of good Government is justice to people. Our Constitution, therefore,

highlights triple aspects of Economic Justice, Political Justice and Social Justice.
Mediation, Conciliation and Arbitration are historically more ancient than the Anglo-
Saxon adversarial system of law. Mediation was very popular amongst businessmen
during pre-British rule in India. The Mahajans - impartial and respected businessmen -
8
Singh, Avtar: Law of Arbitration and Conciliation (7th ed.) 2005, page no-397.

13
used to resolve disputes between members of the business associations by the end of
the day. This informal procedure, once in vogue in the province of Gujarat, was a
combination of mediation and arbitration, now known in the western world as med-
arb. This type of mediation had no legal sanction in spite of its common acceptance in
the business world.
The concept of mediation got legislative recognition for the first time in the Industrial
Disputes Act, 1947. The conciliators appointed under Section 4 of the Act are "charged
with the duty of mediating in and promoting the settlement of industrial disputes". A
complete machinery for conciliation proceedings is provided under the Act. The
conciliators appointed under the Act and the services provided by them are part and
parcel of the same administrative machinery provided under the Act.

Arbitration, as a dispute resolution procedure, was recognized as early as in 1879 and

found its place in the Codes of Civil Procedure of 1879, 1882 and 1908. When the
Arbitration Act was enacted in the year 1940, the provision for arbitration made in
Section 89 of the Code of Civil Procedure, 1908, was repealed.

The Indian Legislature made a headway by enacting The Legal Services Authorities
Act, 1987, and therein constituting the National Legal Services Authority as a Central
Authority with the Chief Justice of India as its patron-in- chief. The Central Authority
has been vested with duties to perform, inter alia, the following functions:

To encourage the settlement of disputes by way of negotiation, arbitration and

conciliation.

To lay down policies and principles for making legal services available in the
conduct of any case before the court, any authority or tribunal.

To frame most effective and economical schemes for the purpose.

To utilize funds at its disposal and allocate them to the State and District
Authorities appointed under the Act.

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 To undertake research in the field of legal services.

To recommend to the Government grant-in-aid for specific schemes to

voluntary institutions for implementation of legal services schemes.

To develop legal training and educational programmes with the Bar Councils
and establish legal services clinics in Universities, Law Colleges and other
institutions.

To act in coordination with governmental and non - governmental agencies

engaged in the work of promoting the cause of legal services.

The Arbitration and Conciliation Act, 1996, has made elaborate provisions for
conciliation of disputes arising out of legal relationships, whether contractual or not
and to all proceedings relating thereto. It provides for commencement of conciliation
proceedings, appointment of conciliators and the assistance of a suitable institution for
the purpose of recommending the name(s) of the conciliator(s) or even appointment of
the conciliator(s) by such an institution and submission of statements to the conciliator.
It also provides that the conciliator is not bound by the Code of Civil Procedure or the
Evidence Act. It defines the role of the conciliator in assisting the parties in negotiating
the settlement of their disputes.

Finally the introduction of Alternative Dispute Resolution (ADR) mechanisms in the

Code of Civil Procedure, 1908, is one more radical step taken in recent times by the
Indian legislature by enacting Section 89 and Order X Rules 1A, IB and 1C providing
for ADR machinery even in cases pending before the civil courts and has further
authorized the High Courts to frame rules for the purpose. Thus, now the Indian
legislature has made sufficient provisions in law to facilitate introduction of court-
annexed mediation.

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The introduction of ADR mechanisms in the Indian justice system has raised great
expectations and hopes in the minds of the litigants for a more satisfactory, acceptable
and early resolution of their disputes. Skeptics, out with their sharp- tongued criticism,
pose a challenge to the visionaries by raising questions: "Do we have the know how,
wherewithal and the will to implement the law reforms systematically and in right
earnest?" As stated above, legislative foresight in introducing ADR procedures and
vesting ample power in the judicial administration to carry out the reforms are now
required to be supported by a strong will and administrative ability to provide for a
redressal machinery to utilize ADR procedures with advantage.

Till court-annexed mediation services are made available everywhere within the justice
system, how can mediation reference be effectively made by the courts? The courts
may have to depend upon private mediators or non - governmental organizations
providing mediation services, if at all available. However, till mediation is popularized
in the country as an accepted dispute resolution mechanism, litigants will be slow to
accept private mediators. The questions are - where and to whom will the court refer
the cases for mediation? Are there persons equipped, trained or experienced enough to
handle complex civil and commercial disputes? How will courts be able to monitor the
cases sent to mediation? If appropriate machinery for providing mediation services is
not made available, the moot question the administration will have to answer is - are
the ADR provisions introduced in legislation to remain in the statue books?

The answers can be found by drawing on the experience and implementation of such
provisions in other countries who have successfully achieved the results. In USA the
number of cases where the parties choose to go to mediation has shot up much higher
in percentage than the ratio of disposal by the courts. However, the United States of
America took nearly 20 years to introduce court-annexed mediation in their system as
a result of continued efforts, experiments and research. Their rewards are that the
parties are happier, the courts are less burdened and spared for cases that deserve
handling by Courts and the system has become cost efficient.

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5.) Need and Scope of ADR :

After 65 years of coming into force of the Constitution of India people have started
thinking whether constitution has failed or we have failed the constitution. Time has
come and really we are thinking aloud today"Whether the justice delivery system is
failed or we have failed the justice delivery system. "Who is held responsible for it".

But these questions are of little importance to the litigants, they are not interested in
this. They are only interested in getting their disputes resolved as early as possible,
within a reasonable time through a process which is cheap, flexible and not based on
rigid formula or technicalities. The justice dispensing system in India has come under
great stress for several reasons, chief of them being the huge pendency of cases in
courts underlining the need for Alternative Dispute Resolution (ADR) methods. The
Government of India thought it necessary to provide a new forum and procedure for
resolving international and domestic disputes quickly. In 1989, the Government of
India, on the advice of the Chief Justice of India, constituted a Committee under the
Chairmanship of Justice Malimath, Chief Justice of Kerala High Court. The other
members of this Committee were Dr. Justice A.S. Anand, Chief Justice of Madras
High Court (as his Lordship then was) and Mr. Justice P.D. Desai, then Chief Justice
of Calcutta High Court. The terms of reference of the Committee were, inter alia, to
suggest ways and means, "to reduce and control arrears in the High Courts and
subordinate Courts." The Malimath Committee submitted its comprehensive Report in
August, 1990. It identified causes of accumulation of arrears like.
Litigation explosion;
Increased legislative activity;
Accumulation of First Appeals;
Continuation of ordinary civil jurisdiction in some High Courts;
Inadequate number of Judges;
Appeals against orders of quasi-judicial forums going to High Courts;
Unnecessary numbers of revisions and appeals;
Lack of Modern Infrastructure in the High Courts;
Unnecessary adjournments;

17
 Indiscriminate use of writ jurisdiction in High Courts;
Lack of facilities to monitor, track and bunch cases for hearing in courts;
Changing pattern of litigation and lack of strategies to deal with new litigation
with new techniques;
Social awareness in the masses.

The Committee recommended the introduction of Conciliation procedure in writ

matters and setting up of Neighborhood Justice Centers with statutory status. The
function of such centers should be confined to resolving disputes by conciliation. The
Committee also favoured the machinery of Conciliation Courts for resolving disputes
arising under the Rent Act. The Report of Malimath Committee became the basis of
finding solutions of the problems of arrears during the Law Ministers' meetings which
took place in 1992-93 at Bangalore, Pondicherry, Pachmarhi and Calcutta. A joint
Conference of Chief Ministers of the States and Chief Justices of High Courts was
held on 4th December, 1993 at New Delhi under the Chairmanship of the then Prime
of Minister of India and presided over by the Chief Justice India. It adopted the
following resolution:

The Chief Ministers and Chief Justices were of the opinion that Courts were not,
in a position to bear the entire burden of justice system and that a number of disputes
lent themselves to resolution by alternative modes such as arbitration, mediation and
negotiation. They emphasized the desirability of disputants taking advantage of
alternative dispute resolution which provided procedural flexibility, saved valuable
time and money and avoided the stress of a conventional trial. The problem of delay
injustice and backlog of cases has again come up for, consideration in the Conference
of the Chief Ministers and the Justices of High Courts held on 18th September, 2004
in New Delhi. The Honble Chief Justice of India Mr. Justice R.C. Lahoti, during the
course of his address, observed that:-"The philosophy of Alternate Dispute Resolution
systems is well-stated by Abraham Lincoln: "discourage litigation, persuade your
neighbours to compromise whenever you can. Point out to them how the normal
winner is often a loser in fees, expense, cost and time." Litigation does not always
lead 10 a satisfactory result. It is expensive in terms of time and money. A case won

18
 or lost in court of law does not change the mindset of the litigants who continue to be
adversaries and go on fighting in appeals after appeals. Alternate Dispute Resolution
systems enable the change in mental approach of the parties. A Conference on ADR
systems is being held in Mumbai on 20th November this year where, leading experts
in the world on ADR system would be available for launching the movement on a
large scale". In a developing country like India with major economic reforms under
way within the frame-work of rule of law, strategies for swifter resolution of disputes
for lessening the burden on the Courts and to provide means for expeditious
resolution of disputes, there is no better option but to strive to develop alternative
modes of dispute resolution by establishing facilities for providing settlement of
disputes through arbitration, conciliation, mediation, negotiation, etc.

The probable answer to all these questions lies in alternative dispute resolution
system known as ADR. It is not intended to replace or supplement to court of land but
is in addition to the traditional system. The traditional system of dispute resolution is
afflicted with inordinate delays. Nowhere, however, does backlog and delay appear to
be more accentuation than in modem day India. ADR, mechanisms play an
important role in doing away with delays and congestion in court. An estimated
backlog of 25 million cases and reported delay in some Urban areas in recent years
currently undermine the effective enforcement of substantive civil and commercial
rights. Backlog and delay have broad political and economic implications for Indian
Society. If India fails to face and feet there challenges, it will not be able to realize
fully its legal commitment to democratic and liberal economic policies59 Court have
become overcrowded with litigants. According to an official report of the year 2000,
there is a pendency of over two crore cases in our District Court. Naturally, litigants
have to face so much loss of time and money that at long last when a relief is
obtained, it may not be worth the cost9.

There is now a growing shift of the world over to Mediation/ Conciliation which
unlike arbitration and court trials does not involve a determination of issues by a third
party. A Mediator/Conciliator is a neutral third party appointed with the mutual
consent of the disputants to facilitate a negotiated settlement of the dispute. Today
9
Website : http://www.iacdr. Org/

19
Mediation/Conciliation is the most rapidly growing form of ADR. It is being actively
utilised in almost every conceivable type of dispute resolution and comes in various
forms.

The process has also been effectively adapted for multiple party dispute resolution
with tremendous success. On average the success rates of mediation processes range
from 80% to 85%61.Under the Arbitration and Conciliation Act, 1996 a Settlement
Agreement arrived at among the disputants has the same status and effect as if it is an
arbitral award on agreed terms and it is final and binding on them. These alternative
dispute resolution methods are not new to India and have been in existence in some
form or the other in the olden days. It is only now that there is world-wide acceptance
and statutory recognition for such procedures to facilitate early settlement of disputes.

6.) Advantages of ADR :

Resolution of Dispute by more Involvement of Parties :

One of the foremost advantages of the Alternate Dispute Resolution process is that
the dispute remains under the control of the parties themselves and any settlement
entered into is their own and does not represent a dictate from an outsider. The
process of Alternate Dispute Resolution be it mediation, negotiation or Lok Adalats
implies a greater involvement of the disputing parties. The parties are actively
involved in the process of dispute resolution and can, therefore, more effectively
reach a settlement of the dispute.

Relaxation from Rigorous and Traditional Court room Rules:

ADR processes, as mentioned earlier are not afflicted with the rigorous rules of
procedure. No fixed set of rules are employed as such, be it in mediation or
negotiation or even in Lok Adalats. In case of arbitration, however, the rules of

20
arbitration institutions, which are fixed, are sometimes applied. In fact the parties may
meet and fix the procedures for themselves with the help of a mediator. It is much
easier with more informal procedures to avoid the confusion involved in the usually
stringent procedures.

Confidentiality :

ADR processes are sometimes confidential and generally without prejudice. For
instance in the case of conciliation proceedings, Section 75 of the Arbitration and
Conciliation Act, 1996 specifically provides for the confidentiality of all matters
relating to the proceedings. In arbitration agreements also, the parties themselves,
often provide for confidentiality of the proceedings and the award.

Amicable Settlement of Dispute :

As ADR is not adversail and aims for all sides ending up with at least a solution
that is acceptable to all the parties involved, disputants can save face, which again is
important and indeed vital in relationships. Differences can be eased through this
process and future relationships may be preserved and continued. Particularly in
business relationships, the parties may wish to resolve their disputes amicably and
carryon their trade in future. In such Circumstances, ADR mechanisms such as
mediation or arbitration may provide more effective means for the settlement of their
disputes.

Another advantage of Alternate Dispute Resolution I mechanisms is that they can be

used at any time - immediately after dispute arises or when dispute is pending with
the court. In case of commercial relationships, the parties may agree at the time of
entering into the contract to resort to any of the Alternate Dispute Resolution
Mechanisms in case a dispute arises. It can be terminated at any stage by anyone one
of the disputants. In Salem Advocate Bar Association, T.N. v. Union of India 62,
Hon'ble Mr. Justice B.N. Kirpal then ,Chief Justice of India, observed "in certain
countries of the World, where ADR has been successful to that extent, that over 90 per
cent of the cases are settled out of the court. There is a requirement that the parties to

21
the suit must indicate the form of ADR which they would like to resort during the
pendency of the trial of the suit".

Choice of Mediator / Arbitrator :

The parties are free to choose their mediator or arbitrator. This can lead to the
appointment of persons who are familiar with the business or have other relevant
expertise and can this play a role in the effective resolution of the dispute.

The Supreme Court has appointed a, committee for framing rules under Section 89 of
the Code of Civil Procedure for the ADR procedures and rules of mediation and for
case management. The Committee was headed by Justice M. Jagganadhha Rao,
Chairman, and Law Commission of India. The Committee has submitted its report in
2005. The said report was accepted by the Supreme Court in Salem Advocate Bar
Association T.N. v. Union of India.

Less Expensive and Time saving :

ADR saves unnecessary court expenses and give a cheap remedy. It is
faster than judicial system. It is economical instead of being expensive In the
case of M/s Guru Nanak Foundation v. M/S Rattan Singh & Sons 10, the
Supreme Court laid down the same rule.

10
(1981) 4 SCC 634: AIR 1981 S.C. 2073.

22
7.) Different modes of ADR :

The different modes of Alternate dispute resolution system through -

which the various can be resolution areas follow:

Arbitration

Mediation

Conciliation

Negociation

Med-Arbitration

Medola

Mini-Trial

Fast Track Arbitration

These different of ADR can be widely used for resolution of various dispute and
to justice to all sectors of society irrespective of their social or economic conditions.
These alternative dispute resolution system are very important in reducing the strain and
burden of courts by dispensing justice to all and to achieve the constitutional goal to
provide justice to all.

23
8.) Application of ADR in Different Forums:

Different ADR procedures are being utilized in various fields for resolution of
different disputes. As these methods are easy to be followed and involve very less
expenses their use in resolving dispute is increasing day by day. Various fields in
which these methods are utilized to a great success involve the following:

8.1. Labour Law :

The Industrial Disputes Act, 1947 provides for the constitution of various authorities
for the resolution of industrial disputes. At the lowest level is the Work Committee.
The various methods involved for settlement of industrial disputes under the Act are:

Conciliation;
Court Of Enquiry;
Adjudication
Voluntary Arbitration.

Quite apart from the aforesaid statutory machinery, several non-statutory

machineries such as Code of Discipline, Joint Management Council, Tripartite
Machinery and Joint Consultative Machinery play an important role in preventing
and settling industrial disputes. A survey of the time taken by Labour Court and
Industrial Tribunal reveals that it is time consuming. The following reasons may be
attributed for delays in disposal of cases.

Poor Quality Of Personnel

Low Status And Pay
Procedural Delay
interference by the High Courts and stay of proceedings;
indifferent attitude of the parties;
indiscriminate adjournment granted by the Presiding Officer of Labour
Court or Tribunal.

24
 Apart from the above, there is also the provision for voluntary labour
arbitration. But unlike the early 60s, the number of disputes referred to voluntary
Arbitrators is generally declining after 1990s with the evolution of new foras for
redressal of labour disputes. Some of the factors for this trend have already been
referred to. Other factors, which are responsible for this trend, are:

(i) lack of proper atmosphere;

(ii) reluctance of the parties to resort to arbitration machinery;
(iii) lack of persons who enjoy the confidence of both the parties; and
(v) the question of bearing the cost of arbitration.

The first avenue where the conciliation has been effectively introduced and recognized
by law was in Labour law, namely, Industrial Disputes Act, 1947. Conciliation has been
statutorily recognized as an effective method of dispute resolution in relation to disputes
between workers and the management. The provision in the Act65 makes it attractive
for disputing parties to settle disputes by negotiation and failing that through
conciliation by an Officer of the Government, before resorting to litigation.
Several provisions in the Act get the scene for conciliation to be more successful.

The conciliation is by an Officer of the Labour Department in the Government.

The parties may not go on strike or declare a lock out during the period of
conciliation.
The conciliation officer shall make all effort to settle the dispute by
conciliation66.
The agreement reached in the process of conciliation shall be certified by
the Conciliation Officer as fair settlement.
Such settlement shall bind all the other trade Union that are party to the
dispute and are invited to participate in the conciliation but prefer to stay away
from the conciliation process68.

25
 The settlement is a self-executing document and breach of the settlement
condition by the Management is a ground for recovery of the due under
simplified summary procedure.

All parties to an industrial dispute, who have had the misfortune of going through
litigation, knew that it is a tedious process and one which could go well beyond the
life-time of some of the beneficiaries. It is this factor that has contributed greatly to
the success of conciliation in industrial relations.

8.2) Family Law:

The other area where Alternate Dispute Resolution recognized in India is in

family law. The Family Court Act provides provision for the Government to require
the association of Social Welfare Organisation to hold the Family Court to arrive at
a settlement70. The Act provides for appointment of permanent counsellors to effect
settlement in the family matters71. Further, the Act imposes an obligation on the
Court to make effort for settlement before taking evidence in the case72. In fact, the
practice in Family Court shows that most of the cases are filed on sudden impulse
between the members of the family, spouse and they are being settled in the
conciliation itself. To this extent, the ADR has got much recognition in the matter of
settlement of family disputes. Similar provision has been made in Order XXXII A
of the Code of Civil Procedure, 1908, which deals with family matters.

8.3) Code of Civil Procedure :

By amendment of the Code of Civil Procedure, 1908 in the year 2002,

Section 89 has been included in the Code, which gives importance to
mediation, conciliation and arbitration. This Section casts an obligation on the
part of the Court to refer the matter for settlement either before the Lok Adalat
or other methods enumerated in that Section itself.
The validity of Section 89 of the Code of Civil Procedure, 1908 was challenged in the
case of Salem Advocate Bar Association, Tamil Nadu v. Union of India wherein
upholding its validity, the Honble Supreme Court of India observed that:

26
It is quite obvious that the reason why Section 89 has been inserted is to try
and see that all the cases which are filed in Court need not necessarily be
decided by the Court itself. Keeping in mind the laws, delays and the limited
number of Judges which are available, it has now become imperative that
resort should be had to

Alternative Dispute Resolution (ADR) Mechanism with a view to bring to an

end litigation between the parties at an early date. The ADR Mechanism as
contemplated by Section 89 is arbitration or conciliation or judicial settlement
including settlement through Lok Adalat or mediation. Sub-section (2) of
Section 89 refers to different Acts in relation to arbitration, conciliation or
settlement through Lok Adalat, but with regard to mediation Section 89(2)(d)
provides that the parties shall follow the procedure as may be prescribed.
Section 89(2)(d), therefore, contemplates appropriate rules being framed with
regard to mediation.
In certain countries of the world where ADR has been successful to the extent
that over90 per cent of the cases are settled out of court, there is a requirement
that the parties to the suit must indicate the form of ADR which they would like
to resort to during the pendency of the trial of the suit. If the parties agree to
arbitration, then the provisions of the Arbitration and Conciliation Act, 1996
will apply and that case will go outside the stream of the court but resorting to
conciliation or judicial settlement or mediation with a view to settle the dispute
would not ipso facto take the case outside the judicial system. All this means is
that effort has to be made to bring about an amicable settlement between the
parties but if conciliation or mediation or judicial settlement is not possible,
despite efforts being made, the case will ultimately go to trial.

Section 89 is a new provision and even though arbitration or conciliation

has been in place as a mode for settling the disputes, this has not really reduced
the burden on the courts. It does appear to us that modalities have to be

27
formulated for the manner in which Section 89 and, for that matter, the other
provisions which have been
introduced by way of amendments, may have to be in operation. All counsel are
agreed that for this purpose, it will be appropriate if a Committee is constituted so as to
ensure that the amendments made become effective and result in quicker dispensation
of justice.

8.4 Legal Services Authority Act :

The other legislation, which has given more emphasis on the ADR, is the Legal
Services Authority Act, 1985. Though settlements were effected by conducting Lok
Nyayalayas prior to this Act, the same has not been given any statutory recognition.
Matters settled in the Nyayalayas earlier were made decree by the Court in which the
case was filed on the basis of settlement arrived at between the parties. But under the new
Act, a settlement arrived at in the Lok Adalats has been given the force of a decree which
can be executed through Court as if it is a decree passed by a Competent Court. Further,
provision has been made in the Act for settling pre-litigation cases through such Adalats.
Power has been given to the Lok Adalats constituted under the Act, to decide the dispute
referred to them, to effect settlement by mediation and if settlement is arrived at between
parties to draw a decree on the basis of compromise and the same will be signed by the
members of the Adalat which consist of a Judicial Officer working or retired, a lawyer
and a person of social welfare association preferably women and a copy of the same will
be given to the parties free of costs. This has really reduced delay in getting copy of the
decree by the parties. Lok Adalats have acquired wide acceptance among the public as
the results are quick, less expensive and no appeal will lie against the award passed in a
Lok Adalat.

8.5 Consumer Law :

The enactment of the Consumer Protection Act, 1986 is a historic

milestone in the history of the consumer movement in the country. Prior to that,
the remedies in this area were available under the common law, viz., law of
torts and contract along with other piecemeal legislations. The Consumer

28
Protection Act is a benevolent piece of legislation intended to protect the
consumers from exploitation. The Act provides an alternative system of
consumer justice by summary trial. The Act applies to all goods & services. It
provides a framework for speedy disposal of consumer disputes and seeks to
remove the evils of the ordinary court system. The Act provides for a three-tier
consumer disputes redressal machinery (consumer forums) at the national, state
and district levels, which provides inexpensive and speedy redressal for
consumer disputes/complaints against defective goods, deficiency in services,
unfair and restrictive trade practices, or a matter of charging excessive prices,
etc. However, the Act does not cover breach of contract of potential consumers,
i.e., a person who has entered into an agreement for purchase of goods or hiring
of any service or provider of a service. In this manner, a person suffers harm or
damage but such potential consumer is not covered by definition of
consumer under the Act.

The functioning of the Consumer Forums reveals that in majority of

cases, there is a prolonged litigation on account of recurrent delays. In most of
the cases, the time taken for final resolution went beyond the stipulated period
of 90 days. Moreover, there are no existing guidelines, which govern the
damages to be awarded. The premise of the Act is fault liability. It does not
deal with the product liability concept based on strict liability as
implemented in many jurisdictions.

8.6 Environmental Law :

At present, there exist 41 legislations to regulate environmental pollution in India.

A survey of decided cases reveals that the prosecutions launched in ordinary criminal
courts under the provisions of the Water (Prevention and Control of Pollution) Act 1974;
the Air (Prevention and Control of Pollution) Act 1981; and the Environment Protection
Act, 1986 never reach their conclusion either because of the workload in those courts or
because there is no proper appreciation of the significance of the environment matters on
the part of those in-charge of conducting those cases. Moreover, any orders passed by

29
the authorities under Water and Air Acts and the Environment Act are immediately
questioned by the industries in Courts. These proceedings take years to reach
conclusion. Very often, interim orders are granted thereby disabling the authorities from
ensuring the implementation of their orders.

India has an extensive framework of environmental laws. Its legislative commitment to

environmental policy objectives is highlighted by the inclusion of provisions in the
Constitution. This represents an extent of legislative commitment rare in international
experience. The Honble Supreme Court of India also, in a series of cases, has
recognized the right to environment as an inherent part of the right to life under Article
21 of the Constitution.

Prior to 1986, laws were not exhaustive even in respect of control of pollution. The
scope of the Water (Prevention and Control of Pollution), Act 1974 and the Air
(Prevention and Control of Pollution) Act, 1981 is limited to air and water pollution.
The Environment Protection Act, 1986 has widened the scope to cover other kinds of
pollution such as by solid waste, hazardous substance and perhaps even by noise.
However, one may have a doubt as to whether the definition of environmental
pollutant is comprehensive enough to cover all species of pollutants. It covers only
solid, liquid or gaseous substances, whereas pollution is caused by heat, radiation, and
vibration also. It may well be that the measure for protecting and improving the quality
of environment may relate to any kind of pollution impacting on the environment.
Although the objective of the Environment Protection Act is wider than control of
pollution and extends to protection and improvement of environment, no positive
measures of mechanisms of the purpose are envisaged in the Act.

However, the environmental regime, as exists presently, needs to be reoriented and

strengthened with more expert mechanisms to deal with the larger spectrum of
problems hitherto unattended by law. It is primarily meant as a guiding principle for the
administrative process to prevent adverse effects on the environment. There is a need of
precautionary approach to be adopted by expert environmental agencies at the initial
decision making as well as at appellate and reviewing levels.

30
Although there are issues that remain to be addressed relating to adequacy of the
substantive coverage of laws and coordination among existing laws and regulations, the
key issue to be addressed at this time is how to strengthen the implementation of the
existing laws.

Despite this impressive array of ADR Mechanisms in different forms, the workload of
the courts has in no way lessened. It is also noticeable that these ADR Mechanisms,
except for Lok Adalats, have not ruled out the access to Law Courts. This situation has,
thus, in no way affected the attitude of litigants and the general public towards the
judicial system in general and towards courts in particulars. Be that as it may, notions
of supreme authority of the Courts make parties reluctant to submit to ADR forums,
which may or may not conclude matters deemed by the litigants to be of paramount
interest to them to them in their favour.

In order to make ADR really effective, their cost effectiveness, time frame for settling
the dispute, the knowledge and status of the Presiding Officer and simplification of the
procedure, etc. must be kept in mind.

8.7 Mobile Courts :

Various states also started mobile court system which resolve the dispute of various
sections of society and resolve their disputes in a very effective way and in a very short
period of time and resolves the dispute on the spot.

Thus in short we can say that ADR system is a boon to our legal system and also to
society and these helps in resolution of disputes very easily in a less expensive and time
consuming way and helps to lesson the burdens of the court.

31
 9. Barriers to Formal Legal System:

The shortcomings, which are more apparent in the existing Formal Legal System, may
be enlisted as follows:

Lack of Awareness: The lack of awareness relates to another major barrier to

access i.e. the psychic willingness of the people to resort to legal procedure.11 Even
those who know how to find qualified legal advice may not do so. The general lack of
awareness of legal rights and remedies acts as a formidable barrier to accessing the
Formal Legal System.

Mystification: The language of law invariably is very difficult and complicated

English makes it unintelligible even to the literate or educated person, while this is the
language that courts and lawyers are comfortable with. Very little attempt has been
made at vernacularizing the language of law and making it simpler and easily
comprehensible to the person engaging with the Formal Legal System. This is the
second major barrier.

Delays : The average waiting time, both in civil and criminal cases, can extend to
several years. There are instances of civil as well as criminal matters where cases are
pending for over a decade. This virtually negates the concept of fair justice12.

Expenses and Costs : Litigation in the courts is generally very expensive. The
litigants have to bear the costs of settling the disputes e.g. the court fee, attorneys fee
and other costs and expenses. The risk of losing the case operates as a great barrier to
the access of justice because the plaintiff/petitioner will not be able to estimate how
much it will cost him to lose and so the indigent chooses not to pursue the right of
which he is not very sure, though in litigation none can be sure about the result of the
case.
Geographical Location : Geographical situation of the court(s) can also act as one of
the barriers. A centralized system of courts may probably save money for the

11
Professor Dr. P.C. Juneja, Equal Access to Justice, The Bright Law House, 1993 at p. 23.
12
Professor Dr. P.C. Juneja, Equal Access to Justice, The Bright Law House, 1993 at p. 23.

32
government, but it is definitely inconvenient for the litigants living at far of places. It
may become physically or economically impossible for most of the disputants to use
the courts for small disputes13.

Inaccessibility to Constitutional Courts : This is a matter of concern. In our

Constitutional framework, petitions for protection and enforcement of Fundamental
Rights can be filed only in the High Courts and the Supreme Court. Thus, for
instance, even petitions arising out of issues such as disappearances, custodial
violence, encounter killings or instances where the police cant be activated due to
various reasons, have to be sent or filed in the High Court, invariably, this involves
travel to the High Court, engaging a lawyer there and regular follow up. A lot of time
and expense is involved in the process. Even habeas corpus petitions can only be filed
in the High Court. Thus, the division of jurisdiction between High Courts and
subordinate Courts needs to be re-examined. We have the example of South Africa
where even the subordinate Courts are empowered to enforce some Fundamental
Rights. The question that we need to address is whether we need to permit the
subordinate Courts to deal with some of these critical issues, which have a direct
bearing on the rights to life and liberty, in order to facilitate access to justice.

Lack of relevance : The most serious aspect of concern is that of relevance.

How relevant is the Formal Legal System for addressing the problems of the
poor? The Formal Legal System invariably rejects the demands arising out of
social and economic rights. There is a need to satisfactorily resolve this
conundrum of the Formal Legal System, in which the actual needs of an
impoverished population fail to get addressed.

Overburdened judiciary : The Court system in India, which is based on adversarial

model of common law, is cumbersome, expensive and cumulatively disastrous. It is
overburdened. It has to tackle with voluminous pending as well as fresh litigation
arising everyday. The hierarchy of courts with appeals after appeals adds to the
magnitude of the problem.

13
Times of India, August 8, 2011, Subhash Kothari in his Article
Courting Disaster : A case for Judicial Reform.

33
Inadequacy of judiciary to meet the challenges of total population: Inadequate
strength of Judges throughout the country is the similar biggest factor for huge backlog
of cases. Added to this difficulty is sluggishness shown by the High Courts and
various State Governments in filling up the vacancies of Judges on time. More than
31% posts of Judges in various High Courts and the Supreme Court are lying vacant,
said Honble Law Minister Salman Khurshid in the Lok Sabha in the first week of
August, 2011 81. He also said that out of 895 sanctioned posts of Judges in the Apex
Court and 21 High Courts of the country, 284 posts were vacant as on August 1,
2011and Himachal Pradesh High Court is the only one which has no vacancy.

State is the largest litigator : The Central and State Governments are the single
largest litigants, abetted by government-owned corporations, semi-government bodies
and other statutory organizations.

Adversarial character of administration of justice : In its structure and

organization, the administration of justice in India as at present in vogue has the stamp
of Made in U.K.. It is adversarial in character. It renders the position of a Judge to a
passive listener, a sort of umpire in a game of cricket, denying him active participation
in unraveling the truth and the Court battle is conducted according to medieval rules of
evidence.

Time taken in disposal of cases : One of the major flaws of India is the delay in its
legal system. The average time taken by the Indian Courts for deciding case varies
between 5 to 15 years. In The Guinness Book of Records there is an entry, which says
that the most protracted law suit ever, recorded was in India: A "Mahant", who is a
keeper of a temple, filed a suit in Pune in 1205 AD and the case was decided in 1966
761 years later!14 In spite of the constitutional guarantees, judicial decisions
and the reports by various high-powered Committees, the concept of
speedy justice has remained an elusive goal.

14
82 Manoj Mitra, Indian Express, July 26, 2001 from Dispute Resolution Process in India, Indian Law
Institute, Delhi, March, 2002 Japan on http://www.ide.go.jp/English/Publish/Download/Als/pdf/16.pdf.

34
 Complex reasons for pendency : Lack of responsiveness and transparency in
administration, increase in access to information and institution of cases, rise in
population, radical changes in the pattern of litigation, multifarious litigation,
inadequate strength of Judges / judicial officers, adjournments, etc. Inadequate
strength of Judges throughout the country is the similar biggest factor for huge backlog
of cases.

Constant pressure and demoralizing of trial courts : That the trial Judges in
India work under a charged atmosphere and constantly under a psychological pressure
has been even judicially recognized. In K.P. Tiwari v. State of M.P.15, the Supreme
Court observed:

"The lower judicial officers mostly work under a charged atmosphere and are
constantly under a psychological pressure with all the contestants and their lawyers
almost breathing down their necks more correctly up to their nostrils. They do not
have the benefit of a detached atmosphere of the higher Courts to think coolly and
decide patiently. Every error, however, gross it may look, should not, therefore, be
attributed to improper motive."
Another unique problem of Indian Court system is that Appellate Courts demoralize
subordinate courts by reversing judgments and decrees passed by these courts and
adverse remarks in the judgment itself are made regarding propriety of subordinate
judiciary. The higher judiciary looks down upon it. Appellate Courts do not approach
the case for the first time. The raw materials for the Appellate Court are already
collected, assembled and focused unlike in the trial court. The Appellate Court hears
only the oral arguments in a tension-free atmosphere and it has plenty of time to come
to a conclusion. There is enough time for the Appellate Court to think and re -think on
any legal issue. There is a qualitative difference in the variety, novelty and method in
decision-making by the Appellate Court. Apart from that, unlike in trial court, the
Appellate Courts generally have substantial contribution from the well-prepared
lawyers. The assistance given to the Appellate Court generally is far better than the
assistance given to the trial court. However, the power of the Appellate Courts is used
15
1994 Supp (1) SCC 540.

35
most frequently to find fault with the trial Judge in each and every matter of the
decision-making. Trial Judges are treated with very little respect, even though it is not
proper for the Appellate Court to make derogatory remarks against trial Judge.

In Braj Kishore Thakur v. Union of India and Others 16, Justice K.T. Thomas speaking
for the Supreme Court while deprecating the caustic and severe censure made by the
single Judge of the Patna High Court against the Senior
District and Sessions Judge of Bihar Judicial Service, observed:

"Judicial restraint is a virtue. A virtue, which shall be concomitant of every judicial

disposition. It is an attribute of a Judge, which he is obliged to keep refurbished from
time to time, particularly while dealing with matters before him whether in exercise of
appellate or revisional or other supervisory jurisdiction. Higher Courts must remind
themselves constantly that higher tiers are provided in the judicial hierarchy to set
right errors, which could possibly have crept in the findings or orders of Courts at the
lower tiers. Such powers are certainly not for belching diatribe at judicial personages
in lower cadre.

The above barriers to access are today posing a serious problem of legitimacy of the
Formal Legal System. Even while we examine the feasibility of ADR, we must ensure
that credibility of the Formal Legal System is not eroded. Often we talk of access to
justice for the poor and identify poverty as the main barrier. However, all the above
are barriers faced by all litigants while poverty is an aggravating factor.

These procedures, which constitute ADR, have been devised with an object to afford
easy access to justice to all without undue delay at a much lesser cost as compared to
the Formal Legal System and the disputes involved through these processes are
resolved and not adjudicated. The parties may have a direct participation in resolution
of disputes unlike litigation where they are kept apart from each other.

16
1994 Supp (1) SCC 540.

36
10) The Challenges Ahead :

The concept of the mediation, as a part of judicial system, is comparatively a new idea
which has been recently introduced in India. The introduction of court annexed
mediation may look difficult in this vast country. A pessimist may see many obstacles
in the implementation of the court-annexed mediation programme and may imagine
the unavailability of sufficient funds to introduce the machinery in the country.
However, for a country which provided large priority funds for establishing fast track
courts for expeditious disposal of criminal cases in the recent past, it is not impossible
to make budgetary provisions for a beneficial cause, which, in the long run, can solve
one of the toughest problems of a fast developing country. If the court-annexed
mediation programme can be implemented with determination, it will enable the
country to fulfill out a major legislative intent and provide to the nation a stimulant for
the growth of its commerce, industry and global interests. It will provide a new and
fresh solution to the ailing problem of delays in the court.

The present delay in disposal of court cases is mounting in geometrical proportions

and is likely to create a crisis of confidence and therefore, it requires a resolute
determination and strong will to introduce court-annexed mediation in the Indian legal
system. The task is not easy but not impossible. The United States of America took 20
years to gradually introduce and develop mediation as a comprehensive court system.
In India, the establishment of the Lok Adalat and the administrative machinery for
implementation thereof has also taken almost 20 years. The Lok Adalat is now only
one of the ADR mechanisms implemented in the country. Though arbitration is used
privately by parties, it has not really been expeditious and has proved very expensive.
Since the law has now contemplated various alternatives for dispute resolution
mechanisms including mediation, separate state machinery for providing mediation
can be very beneficial.

The legislative foresight and the global acceptance of court- annexed mediation
provides sufficient justification for its introduction in the judicial system. It is
necessary, however, to first introduce court- annexed mediation in a few selected

37
courts as a pilot project and then watch, monitor and analyze its advantages and
success rates. This will require Indian legal visionaries and able administrators to work
together and evolve a scheme to provide an additional legal service in the form of the
court -annexed mediation. A judicial council to establish pilot programmes and to
assess the benefits would be a prudent first step. Adequate funds would be required to
be allocated for implementation of the pilot programmes which can be evaluated on
the basis of different criteria, inter -alia settlement ratio, time factor for achieving
settlements, satisfaction of the litigants and the costs involved. The funds earmarked
for the pilot programmes would be required to be used for providing infrastructural
facilities, administrative staff and honorarium to the mediators.
Deadlines for starting and operation of the pilot programmes will be required to be
prescribed.

The appointment of an administrator for court-annexed mediation, who is

knowledgeable and conversant with the mediation process has proved very helpful in
the state of California in USA. Such administrators would be able to assist the courts
in implementation of the programme including evaluation and monitoring thereof. He
has to be provided with a minimum skeleton staff and infrastructural facilities initially.
His duties may include preparation of a panel of mediators having the knowledge,
experience and aptitude to work as a mediator. It would be necessary to organize
training programmes for such mediators as a first step. The experience in USA
suggests that a 32 hour training programme would be ideally necessary. Literature on
mediation, including mediation journals published all around the world where
mediation has become part of the system, can be subscribed to which can help in
spreading awareness of mediation.

A continuing education programme for lawyers, judges and even litigants as a part of
the pilot programme can be very effective. As observed by World Bank's law reform
group, "legal training ensures that legal and judicial reforms contribute to changing the
attitude and behaviour of lawyers and citizens. For this reason, legal training should be
an integral part of the legal and judicial reform strategies that are anchored on the rule
of law and reflect a country's societal values. Legal education strengthens
professionalism, builds public confidence and facilitates consensus and momentum for

38
further reforms. Continuing legal education also improves the performance of legal
professionals, enhances service quality and stimulates public respect. Therefore,
training programmes should be designed not only to enhance performance but also to
instill the values of the impartiality, professionalism, competency, efficiency and
public service."

Court-annexed mediation has been successful the world over when it has been
managed by the bar. Experience has shown that when lawyers run mediation centres in
courts, the mediation process gains strength and evolves into a movement.
Experienced members of the bar make very successful mediation and mediation gives
a new perspective to the image of litigating lawyers. Mediators can also come from
among law professors, leading and respected businessmen and even retired
bureaucrats. Some judges use their authoritative influence in settlements, and it is
therefore opined in some quarters that judges may not be good mediators. However, in
India there could be more public acceptance of retired judges acting as mediators
because of their multiple years of judicial experience. If such retired judges can be
invited to be on the panel of the court-annexed mediators in India, with training to
change their mind set for their intended role as mediators, their services can be utilized
with advantage. In the words of Hon'ble Benjamin F. Overton, a retired Chief Justice
of Florida Supreme Court, "Judges are the most experienced neutrals in the justice
system and should be excellent mediators but they need to fully understand the process
and know when to bite their tongue and eliminate their authoritative face". However a
basic training for mediators, from whichever class they are chosen, would be essential.
The payment schedule for mediators can be fixed, though it may be possible to obtain
pro bono services of some lawyers in India. The experience of other countries suggests
that the parties who are referred to mediation are asked to contribute towards
mediation expenses including mediation fees. If the parties have made their own
investment in the process they are more likely to work hard to resolve issues. It is
considered necessary for the parties to contribute towards mediation compensation
because, as mediation develops more and more as an alternative to trial, the
administrative duty of a mediator will grow and become burdensome. In most cases,
the parties do not fully appreciate the skill of a mediator because much of what a
skillful mediator does is invisible to them. What seems like an "easy" mediation to a

39
party may, in fact, have considerable professional challenges to the mediator. It is,
therefore, necessary to educate the parties to the very difficult role a mediator plays.
Initially it may become necessary to invite mediators on the panel to provide pro bono
services for a short fixed duration during the mediation process and compensate them
for additional time put in by them.

Mediation is recognized as a suitable dispute redressal mechanism in India88.

Parliament accepted 127th and 129th law commission reports submitted by Justice
Malimath Committee and amended Civil Procedure Code by (11th Loksabha) Code of
Civil Procedure Amendment Act, 1999 where it included ADR mechanism in Section
89 for encouragement of pre-trial alternatives in resolving the disputes which covers
mediation also17. This introduced the concept of judicial mediation as different from
voluntary mediation. Here for mediation, court shall effect a compromise between
parties and follow such procedure as may be prescribed. Mediation is also inbuilt into
O.XXX11 A, Rule 3 of C.P.C. in family matters; O.XXVII

Rule5 B states about the duty of court in suits against the government or a public
officer to assist in arriving at a settlement. Under section 30 of The Arbitration and
Conciliation Act, 1996 arbitral tribunal can adopt mediation to encourage settlement of
dispute 18. In India mediation is applied in family disputes, employment and community
disputes, victim offender disputes, environmental problems, public policy issues,
commercial disputes etc19.

17
Section 89 - Settlement of disputes outside the Court.(1) Where it appears to the court that there exist 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 observation of the parties, the court may
reformulate the terms of a possible settlement and refer the same for -(a) arbitration;(b) conciliation(c) judicial
settlement including settlement through Lok Adalat; or(d) mediation.(2) Where a dispute had been referred-(a)
for arbitration or conciliation, the provisions of the Arbitration and Conciliation Act, 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 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 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.
18
Section 30(1) settlement It is not incompatible with an arbitration agreement for an arbitral tribunal to
encourage settlement of the disputes and with the agreement of parties, the arbitral tribunal may use mediation,
conciliation or other procedures at any time during the arbitral proceedings to encourage settlement.
19
ADR Principles and Practice, Halsbury law, May 2008, P 42

40
 Mediation and Conciliation Project Committee is set up under the auspicious of
Supreme Court of India. On 9 th April 2005 they began Delhi Mediation Centre.
Supreme Court Legal Services Committee is now in the process of establishing
Mediation and Conciliation Centre in the premises of Supreme Court to resolve the
disputes arising out of the matrimonial and other matters 20.

In Salem Advocate Bar Association, Tamil Nadu v. Union of India21, Supreme Court
upheld the validity of section 89 of Civil Procedure Code and held that Section 89, its
first part uses the word 'shall' when it stipulates that the 'court shall formulate terms of
settlement'. The use of the word 'may' in later part of Section 89 only relates to the
aspect of reformulating the terms of a possible settlement. The intention of the
legislature behind enacting Section 89 is that where it appears to the Court that there
exists element of a settlement which may be acceptable to the parties, they, at the
instance of the court, shall be made to apply their mind so as to opt for one or the other
of the four ADR methods mentioned in the Section and if the parties do not agree, the
court shall refer them to one or other of the said modes. Section 89 uses both the word
'shall' and 'may' whereas Order X, Rule 1A uses the word 'shall' but on harmonious
reading of these provisions it becomes clear that the use of the word 'may' in Section 89
only governs the aspect of reformulation of the terms of a possible settlement and its
reference to one of ADR methods. There is no conflict. Supreme court also looked into
the Civil Procedure Code Mediation Rules,2003 in detail covering every aspect.

In Afcons Infrastructure Limited vs. Cherian Varkey Construction Company 22, Kerala
High Court explained that section 89 of C.P.C. is inserted as an alternative remedy to
the heavy and scandalous pendency of civil litigations in India.

In Vineed v. Manju S.Nair23 High Court held that attempt for mediation is not only the
statutory obligation of Court under section 89 of C.P.C. in matrimonial disputes but it is
their duty to the public also.
20
The Supreme Court of India Annual Report 2006-2007, Supreme Court of India, New Delhi,p.133&134
21
AIR 2005 SC 3353
22
2007 (1) KLT 196.

41
 Mediation is now developing in India as a new trend to civil litigation. The Indian
Judiciary and the legal profession have endorsed and supported mediation. This has
resulted in court annexed Mediation centre being created. The Kerala Mediation Centre
was established in 2008. It is the result of a joint initiative of the Bench and the Bar of
Kerala High Court who have committed themselves to mediation as an appropriate
method of Alternative Dispute Resolution. It is coordinated by Organizing Secretary. A
panel of judges and advocates oversee the work of this Centre. The Centre is proud to
have a team of highly qualified and experienced mediator. The centre maintains a list of
trained mediators from among members of the Bar whose services are available for
disputes referred to the Centre.

23
2008 (2) KLT SN.2.

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