1. It is submitted by Counsel for the parties that parties are more or less broadly agreed to settle the matter and they want to compromise the matter amicably with certain terms mentioned in the application and further they are desirous to refer the matter to Lok Adalat for settlement in view of provisions contained in the new Section 89 of CPC, so that the dispute can be settled finally. It is pertinent to quote the new Section 89 which has been introduced in the Code of Civil Procedure. This provides for settlement of disputes etc., and reads as under :--
'89. Settlement of disputes outside the Court--(1) Where it appears to the Court that there exist elements 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-
(c) judicial settlement including settlement through Lok Adalat; or
(2) Where a dispute has been referred-
(a) for arbitration or conciliation, the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply as if the proceedings for arbitration and conciliation were referred for settlement under the provisions of the Act.
(b) to Lok Adalat, the Court shall refer the same to the Lok Adalat in accordance with the provisions of sub-section (1) of Section 20 of the Legal Services Authority Act, 1987 (39 of 1987) and all other provisions of that Act shall apply in respect of the dispute so referred to the Lok Adalat.
(c) for judicial settlement, the Court shall refer the same to a suitable institution or person and such institution or person shall be deemed to be a Lok Adalat and all the provisions of the Legal Services Authority Act, 1987 (39 of 1987) shall apply as if the dispute were referred to a Lok Adalat under the provisions of that Act.
(d) for mediation, the Court shall effect a compromise between the parties and shall follow such procedure as may be prescribed.'
2. Counsel for the parties relied on a decision of the Supreme Court Salem Advocate Bar Association, Tamil Nadu v. Union of India, reported in 2003(1) M.P.H.T. 96 (SC) = AIR SCW 4627, in which it has been held in Paragraphs 9 and 10 as under:--
'9. 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 Mechanism with a view to bring to an end litigation between the parties at an early date. The Alternative Dispute Resolution (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 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.
10. In certain countries of the world where ADR has been successful to the extent that over 90 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 that 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.
3. Having heard Counsel for the parties and in view of the provisions contained in Section 89 of CPC as amended, the judgment of the Supreme Court in case of Salem Bar Association, Tamil Nadu (supra) and as prayed by Counsel for both the parties, the matter is referred to Lok Adalat for amicable settlement expeditiously. The Lok Adalat may keep in view the terms indicated in the application (LA. No. 126 of 2003) filed here before this Court by the parties.
4. Records of the case be sent back immediately.
5. Before parting, the gesture shown by the parties and their respective Counsel is appreciated.
C.C. be supplied to both the parties.