law commission report no. 222- need for justicedispensation through adr etc

8/19/2019 Law Commission Report No. 222- Need for Justicedispensation Through ADR Etc.

1/41

GOVERNMENT OF INDIA

LAW COMMISSION OF INDIA

Need for Justice-dispenstion t!rou"! ADRetc#

Report No. 222

Apri$ %&&'

LatestLaws.com


2/41

LatestLaws.com

LAW COMMISSION OF INDIA

(RE)ORT NO# %%%*

Need for Justice-dispenstion t!rou"! ADR etc#

For+rded to t!e ,nion Minister for L+ ndJustice Ministr. of L+ nd Justice Go/ern0ent of Indi 1. Dr# Justice AR# L2s!0nn C!ir0nL+ Co00ission of Indi on t!e 3&t! d. of Apri$

%&&'#

T!e 45t! L+ Co00ission +s constituted for period of t!ree .ers fro0 4st Septe01er %&&6 1.Order No# A#78&4%949%&&6-Ad0n#III (LA* dted t!e46t! Octo1er %&&6 issued 1. t!e Go/ern0ent of

2

LatestLaws.com


3/41


4/41

LatestLaws.com

L+ Co00ission Stff

Me01er-Secretr.

Dr. Brahm A. Agrawal

Reserc! Stff

S!ri Sus!i$ =u0r ? Joint Secretr.@ L+Officer

Ms# )+n S!r0 ? Addition$ L+ Officer Shri J. . S!la"a# Rao $ A%%itio#al Law &ffi'er

S!ri A# =# ,pd!.. ? Deput. L+ Officer Dr# V# =# Sin"! ? Assistnt Le"$

Ad/iser Dr# R# S# S!rinet ? Superintendent (Le"$*

Ad0inistrti/e Stff

S!ri Sus!i$ =u0r ? Joint Secretr.@ L+Officer

S!ri D# C!oud!ur. ? ,nder Secretr.S!ri S# =# ni S!r0 ? Assistnt Li1rr. @

Infor0tion Officer

4

LatestLaws.com


5/41

LatestLaws.com

T!e tet of t!is Report is /i$1$e on t!e Internett?

!ttp?99+++#$+co00issionofindi#nic#in

B Go/ern0ent of IndiL+ Co00ission of Indi

T!e tet in t!is docu0ent (ec$udin" t!eGo/ern0ent Lo"o* 0. 1e reproduced free of c!r"e in n. for0t or 0ediu0 pro/ided t!t it isreproduced ccurte$. nd not used in 0is$edin"contet# T!e 0teri$ 0ust 1e c2no+$ed"ed sGo/ern0ent cop.ri"!t nd t!e tit$e of t!e docu0entspecified#

An. enuiries re$tin" to t!is Report s!ou$d 1eddressed to t!e Me01er-Secretr. nd sent eit!er 1. post to t!e L+ Co00ission of Indi %nd F$oorILI

Indi or 1. e0i$ to $ci-d$nic#in

5

LatestLaws.com


6/41

LatestLaws.com

Dr. Justice AR. Lakshmanan(Former Judge, Supreme Court of India),Chairman, Law Commission of India

ILI Building(IInd Floor)BhagwandasRoad,

New Dehi ! ""# ##"Tel. !"!!"#$$%&&'Fa. !"!! *#$$%$+&

$

LatestLaws.com


7/41

LatestLaws.com

.-. o. +($)/!&/#00'"LC (LS) $0th 1pril, #00

ear r. Bhardwa2 Ji,

Su32e4t5 eed for Justi4e"dispensation through 1R et4.

I am forwarding herewith the ###nd Report of the LawCommission of India on the a3o6e su32e4t.

The Law Commission has alread7 gi6en 6ariedre4ommendations in its earlier reports on the su32e4t of 2udi4ialreforms, whi4h is a su32e4t 6er7 dear to m7 heart. The present Reportis in the 4ontinuum of those reports.

The present Report has drawn on m7 two"6olume 3oo8 titledVoice of Justice, and re"emphasi9es and reaffirms that there is anurgent need for 2usti4e"dispensation through 1R me4hanisms. The

1R mo6ement needs to 3e 4arried forward with greater speed.Besides, man7 other suggestions, whi4h ma7 now 3e 4alledha48ne7ed, need a fresh loo8.

:ith warm regards,

;ours sin4erel7,

(r 1R. La8shmanan)

r. inister for Law and Justi4e,?o6ernment of India,Shastri Bhawan,

ew elhi * !!0 00!.

%

LatestLaws.com


8/41

LatestLaws.com

Need for Justice-dispenstion t!rou"! ADR etc#

C-T@TS Aage os.

I. AR-A-SITI-S % " $'

II. R@C->>@1TI-S $%

&

LatestLaws.com


9/41

LatestLaws.com

I# )RO)OSITIONS

"." 'ne of the terms of reference of the "&th

Law Commission of India

reads(

)*o kee+ under reiew the s-stem of udicia administration to ensurethat it is res+onsie to the reasona/e demands of the time and in

+articuar to secure(0

1i imination of dea-s, s+eed- cearance of arrears andreduction in costs so as to secure uick and economica

dis+osa of cases without affectin the cardina +rinci+e thatdecision shoud /e ust and fair.

1ii 6im+ification of +rocedure to reduce and eiminatetechnicaities and deices for dea- so that it o+erates not as an

end in itsef /ut as a means of achiein ustice.

1iii Im+roement of standards of a concerned with theadministration of ustice.7

".2 *he +resent Re+ort is in the continuum of the Law Commission8s

arious earier re+orts on the su/ect of udicia administration.

".3 9an is not made for aw, /ut the aw is for man. Law is a reuator of

human conduct. No aw works smooth- uness the interaction /etween the

two is ountar-. An act is ustified /- aw, on- if it is warranted, aidated

and made /ameess /- aw.

".4 *he Indian Constitution uarantees ustice to a. A Indian citi:ens

are uaranteed eua rihts of ife and +ersona i/ert-, /esides man- other

fundamenta rihts. *here are arious other ea rihts conferred /-

different socia wefare eisations, such as, Contract La/our 1Reuation

;

LatestLaws.com


10/41

LatestLaws.com

and A/oition Act ";%#, ua Remuneration Act ";%$, 9inimum


11/41

LatestLaws.com

".% *o et ustice throuh courts one has to o throuh the com+e> and

cost- +rocedures inoed in itiation. 'ne has to /ear the costs of

itiation, incudin court fee and, of course, the aw-er8s fee. A +oor

itiant who is /are- a/e to feed himsef wi not /e a/e to afford ustice

or o/tain ea redressa for a wron done to him, throuh courts. @urther a

are +art of the +o+uation in India is iiterate and ie in a/ect +oert-.

*herefore, the- are tota- inorant a/out the court0+rocedures, are terrified

and confused when faced with the udicia machiner-. *hus, most of the

citi:ens of India are not in a +osition to enforce their rihts, constitutiona or

ea, which in effect enerates ineuait-.

".& It is one of the most im+ortant duties of a wefare state to +roide

udicia and non0udicia dis+ute0resoution mechanisms to which a

citi:ens hae eua access for resoution of their ea dis+utes and

enforcement of their fundamenta and ea rihts. Boert-, inorance or

socia ineuaities shoud not /ecome /arriers to it. *he Maneka Gandhi"

+rinci+e, as enunciated /- the Indian 6u+reme Court, that fundamenta

rihts do not constitute se+arate isands unto themsees /ut constitute a

continent ushered in what rishna I-er, J. terms the uris+rudence of access

to ustice. e said(

?+and the uris+rudence of Access to Justice as anintera +art of 6ocia Justice and e>amine the constitutionaism of court0fee e- as a facet of human rihts hihihted in our NationEs

Constitution. If the 6tate itsef shoud traest- this /asic +rinci+e, inthe teeth of Artices "4 and 3;A, where an indient widow isinoed, a second ook at its +oic- is oerdue. *he Court must iethe /enefit of dou/t aainst e- of a +rice to enter the tem+e of

ustice unti one da- the whoe issue of the aidit- of +rofit0makin

" 1";%& " 6CC 24&

""

LatestLaws.com


12/41

LatestLaws.com

throuh sae of cii ustice, disuised as court0fee is fu- reiewed /- this Court?.2

".; Artice 3;A, as noted a/oe, +roides for eua ustice and free ea

aid. *he said artice o/iates the 6tate to in +articuar +roide free ea

aid, /- suita/e eisation or schemes or in another wa-, to +romote

ustice on the /asis of eua o++ortunit-. Artice 3;A +uts stress u+on ea

ustice. *he directie reuires the 6tate to +roide free ea aid to deserin

+eo+e so that ustice is not denied to an-one mere- /ecause of economic

disa/iit-. *he 6u+reme Court in Sheela Barse v. State of Maharashtra3 has

em+hasi:ed that ea assistance to a +oor or indient accused arrested and +ut in eo+ard- of his ife or +ersona i/ert- is a constitutiona im+eratie

mandated not on- /- artice 3;A /ut aso /- artices "4 and 2" of the

Constitution. In the a/sence of ea assistance, inustice ma- resut. er-

act of inustice corrodes the foundation of democrac- and rue of aw.

Artice 3;A makes it cear that the socia o/ectie of eua ustice and free

ea aid has to /e im+emented /- suita/e eisation or /- formuatin

schemes for free ea aid.

"."# *houh Artice 3;A was introduced in the Constitution in ";%$, its

o/ectie of +roidin access to ustice coud neer hae /een fufied /ut

for the maestic roe +a-ed /- the 6u+reme Court in FBu/ic Interest

Litiation 9oement8. *his is a moement where/- an- +u/ic0s+irited

+erson can moe the Court for remed-in an- wron affectin the +u/ic.

*his is a sinificant ste+ /- the 6u+reme Court in iin access to ustice to

the +eo+e /eonin to the owest strata of societ-. @urther, it was on-

throuh cases fied in +u/ic interest that the 6u+reme Court was a/e to

2 State of Haryana v. Darshana Devi, AIR ";%; 6C &553 AIR ";&3 6C 3%&

"2

LatestLaws.com


13/41

LatestLaws.com

encourae ea aid serice to +oor and indient +ersons. *hrouh +u/ic

interest itiation the courts are a/e to dea with +oor +eo+e sufferin from

inustice and e>+oitation, such as, /onded a/our, daits, women, chidren,

+h-sica- chaened, menta- chaened and so on.

"."" *he Lok Adaats, N-a-a Bancha-ats, Lea 6erices Authorities are

aso +art of the cam+ain to take ustice to the +eo+e and ensure that a

+eo+e hae eua access to ustice in s+ite of arious /arriers, ike socia

and economic /ackwardness.

"."2 *he Judiciar- is +a-in a sinificant roe in +roidin ustice to theunder0+riieed, indient and he+ess indiiduas throuh +u/ic interest

itiation. *he ea aid network is takin firm roots and ea serices

functionaries are actie- enaed in fufiin the constitutiona +romise of

euait- /efore the aw. *he +roision of ea aid to eii/e +ersons, the

s+eed- settement of their ea dis+utes /- counsein and conciiation and

faiin that /- Lok Adaats rank hih on the aenda of ea serices

functionaries, as hih as runnin ea education awareness +rorammes. 'f

course, we hae mies to o /efore we can caim that the ream of eua

ustice for a has /ecome a reait-. Dr. A. 6. Anand, a former Chief Justice

of India, has wished that the ne>t centur- woud not /e a centur- of

itiation, /ut a centur- of neotiation, conciiation and ar/itration. *his

dream has to /e fufied for settin dis+utes /oth +endin in courts as we

as at +re0itiatie stae. +ertise of the udicia officers /oth in serice and retired coud /e

effectie- utii:ed in resoution of matters /- conciiation. A are num/er

"3

LatestLaws.com


14/41

LatestLaws.com

of consumers in our countr- fee handica++ed in ettin ustice due to

+oert-, iiterac-, socia /ackwardness and aso eora+hica /arriers.

"."3 arier, in India, dis+utes were setted /- a counci of iae eders,

known as a Bancha-at. *his was an acce+ted method of confict resoution.

6ince the Vedic times, India has /een heraded as a +ioneer in the

achieement of the socia oa of s+eed- and effectie ustice throuh

informa /ut cuminatin resoution s-stems. ADR methods are not new to

India and hae /een in e>istence in some form or the other in the da-s

/efore the modern ustice deier- s-stem was introduced /- the coonia

=ritish ruers. *here were arious t-+es of ar/itra /odies., which ed to the

emerence of the cee/rated Bancha-ati Ra s-stem in India, es+ecia- in

the rura ocaes. *he decisions of the Bancha-at were acce+ted and treated

as /indin. In ";&2, in Junaarh in the 6tate of Guarat, a forum for

Aternatie Dis+ute Resoution was created in the form of Lok Adaat

1Beo+eEs Court. ee+in in iew the usefuness of Lok Adaats, the

Goernment of India aso set u+ in "; a Committee under the

chairmanshi+ of 9r. B. N. =hawati, a former Chief Justice of India, and

ater, the Bariament enacted the Lea 6erices Authorities Act, ";&% in

iew of the mandate of artice 3;A of the Constitution. *he Lea 6erices

Authorities Act, ";&% im+emented in its true s+irit has created +o+uarit-

for and utiit- of Lok Adaats for s+eed- resoution of dis+utes.

"."4 *he +hioso+h- /ehind settin u+ of +ermanent and continuous Lok Adaats is that in our countr-, the itiant +u/ic has not so far /een

+roided an- statutor- forum for counsein and as such, these Lok Adaats

ma- take u+on themsees the roe of counseors as we as conciiators.

>+eriment of Lok Adaat as an ADR mode has come to /e acce+ted in

"4

LatestLaws.com


15/41

LatestLaws.com

India as a ia/e, economic, efficient and informa one. *he +roisions

reatin to Lok Adaat are contained in sections "; to 22 of the Lea

6erices Authorities Act ";&%.

!.! Se4tion ##B of the Legal Ser6i4es 1uthorities 14t, !%', as

amended in #00#, ena3les esta3lishment of permanent Lo8 1dalats

and its su3"se4tion (!) reads as follows5

otwithstanding an7thing 4ontained in se4tion !, the Central 1uthorit7 or, as the 4ase ma7 3e, e6er7 State 1uthorit7 shall, 37notifi4ation, esta3lish Aermanent Lo8 1dalats at su4h pla4esand for eer4ising su4h 2urisdi4tion in respe4t of one or more

pu3li4 utilit7 ser6i4es and for su4h areas as ma7 3e spe4ified inthe notifi4ation.

"."$ Bermanent and continuous Lok Adaats esta/ished in eer- District

Court8s Com+e> +roide a statutor- forum to the itiants where the- ma-

o themsees /efore itiation and courts ma- aso refer to them, +endin

cases, for counsein and conciiation. *hese +ermanent and continuous

Lok Adaats woud certain- /e in a /etter +osition to tr- conciiator-settements in more com+icated cases arisin out of matrimonia, andord0

tenant, +ro+ert- and commercia dis+utes, etc., where re+eated sittins are

reuired for +ersuadin and motiatin the +arties to sette their dis+utes in

an atmos+here of ie and take.

"."% *he dis+osa of ea dis+utes at +re0itiatie stae /- the +ermanent

and continuous Lok Adaats +roides e>+ense0free ustice to the citi:ens of

this countr-. It aso saes courts from additiona and aoida/e /urden of

+ett- cases, ena/in them to diert their court0time to more contentious and

od matters.

"5

LatestLaws.com


16/41

LatestLaws.com

"."& *he +hioso+h- of +ermanent and continuous Lok Adaats s+routs

from the seeds of com+assion and concern for the +oor and downtrodden in

the countr- and deseres su++ort from a of us to make it row as a tree

iin fruit, frarance and shade to a.

!.! The Statement of -32e4ts and Reasons appended to the Bill

pre4eding the Legal ser6i4es 1uthorities (1mendment) 14t #00#

points out that the s7stem of Lo8 1dalat, whi4h is an inno6ati6e

me4hanism for alternate dispute resolution, has pro6ed effe4ti6e for

resol6ing disputes in a spirit of 4on4iliation outside the 4ourts.

!.#0 The elhi Legal Ser6i4es 1uthorit7 has set up permanent Lo8

1dalats in ?o6ernment 3odies/departments and ' >1CT permanent

Lo8 1dalats ha6e 3een fun4tioning regularl7 in elhi.& Similarl7,

permanent Lo8 1dalats ha6e also 3een set up in some other States.

But, there is a need to esta3lish more permanent Lo8 1dalats

throughout the 4ountr7.

".2"


17/41

LatestLaws.com

education woud ena/e the +eo+e to sette seera of their dis+utes outside

the courts at the rass roots ee without seekin he+ from ea e>+erts

who are enera- e>+ensie.

".23 It is hih time that fora for the +oor and need- +eo+e for redressa of

their rieances s+eedi- are created. As we a know, dea- in dis+osa of

cases in aw courts, for whateer reason it ma- /e, has rea- defeated the

+ur+ose for which the +eo+e a++roach the courts for redressa. It is said that

ustice dea-ed is ustice denied. 6o, we wi hae to find out a ia media to

render socia ustice to the +oor and need- who want their rieances

redressed throuh aw courts.

".24 It is heartenin to note that the Bariament has er- recent- enacted

the Gram N-a-aa-as Act 2##&. Justice to the +oor at their doorste+ as the

common man8s dream is souht to /e achieed throuh the settin u+ of

Gram N-a-aa-as which wi trae from +ace to +ace to /rin to the

+eo+e of rura areas s+eed-, afforda/e and su/stantia ustice.

Alter#atie Disp!te Resol!tio# (ADR) i# mo%er# #%ia

".25 *he first aenue where the conciiation has /een effectie-

introduced and reconi:ed /- aw is in the fied of a/our aw, name-,

Industria Dis+utes Act ";4%. Conciiation has /een statutori- reconi:ed

as an effectie method of dis+ute resoution in reation to dis+utes /etween

workers and the manaement. *he +roision in the Industria Dis+utes Act

";4% makes it attractie for dis+utin +arties to sette dis+utes /-

neotiation and faiin that throuh conciiation throuh an officer of the

Goernment, /efore resortin to itiation.

"%

LatestLaws.com


18/41

LatestLaws.com

".2$ In Rajasthan State Road Transport Corporation v. Krishna Kant 5 the

6u+reme Court o/sered(

)*he +oic- of aw emerin from Industria Dis+utes Act and itssister enactments is to +roide an aternatie dis+ute0resoutionmechanism to the workmen, a mechanism which is s+eed-,ine>+ensie, informa and unencum/ered /- the +ethora of

+rocedura aws and a++eas u+on a++eas and reisions a++ica/e tocii courts. Indeed, the +owers of the courts and tri/unas under theIndustria Dis+utes Act are far more e>tensie in the sense that the-can rant such reief as the- think a++ro+riate in the circumstancesfor +uttin an end to an industria dis+ute.7

".2% *he on- fied where the courts in India hae reconi:ed ADR is in

the fied of ar/itration. *he ar/itration was oriina- oerned /- the

+roisions contained in different enactments, incudin those in the Code of

Cii BrocedureH the first Indian Ar/itration Act was enacted in "&;;, which

was re+aced /- the Ar/itration Act ";4#. *he courts were er- much

concerned oer the su+erision of Ar/itra *ri/una and the- were er-

keen to see whether the ar/itrator has e>ceeded his urisdiction whie

decidin the issue which was referred to him for ar/itration.

".2& *here was much dea- in settement of dis+utes /etween +arties inaw courts, which +reented inestment of mone- in India /- other

countries. India has undertaken maor reforms in its ar/itration aw in the

recent -ears as +art of economic reforms initia- in ";;". *he Ar/itration

5 ";;5 15 6CC %5

"&

LatestLaws.com


19/41

LatestLaws.com

and Conciiation Act of ";;$ was thus enacted /- the Bariament /rinin

in su/stantia reforms in ar/itration, reardin domestic and internationa

dis+utes.

".2; *he decision of the 6u+reme Court in Konkan Rail!ay Corpn. "td. v.

M#S. Meh$l Constr$ction Co.% summari:es the eoement of the

Ar/itration Conciiation Act ";;$ and the main +roisions of the Act

thus(

)4. At the outset, it must /e /orne in mind that +rior to the ";;$ Act,

the Ar/itration Act of ";4#, which was in force in India +roided for domestic ar/itration and no +roision was there to dea with theforein awards. 6o far as the @orein Awards are concerned, the samewere /ein deat with /- the Ar/itration 1Brotoco and ConentionAct, ";3%, and the @orein Awards 1Reconition and nforcement

Act, ";$". *he increasin rowth of o/a trade and the dea- indis+osa of cases in Courts under the norma s-stem in seeracountries made it im+eratie to hae the +erce+tion of an aternatieDis+ute Resoution 6-stem, more +articuar-, in the matter of commercia dis+utes.


20/41

LatestLaws.com

9ercantie communit- and the rowin oume of IndiaEs trade andcommercia reationshi+ with the rest of the word after the newi/eraisation +oic- of the Goernment, Indian Bariament was

+ersuaded to enact the Ar/itration and Conciiation Act of ";;$ inNCI*RAL mode and, therefore, in inter+retin an- +roisions of the ";;$ Act Courts must not inore the o/ects and +ur+ose of theenactment of ";;$. A /are com+arison of different +roisions of the

Ar/itration Act of ";4# with the +roisions of the Ar/itration andConciiation Act ";;$ woud uneuioca- indicate that ";;$ Actimits interention of Court with an ar/itra +rocess to the minimumand it is certain- not the eisatie intent that each and eer- order

+assed /- an authorit- under the Act woud /e a su/ect matter of udicia scrutin- of a Court of Law. nder the new aw the roundson which an award of an Ar/itrator coud /e chaened /efore the

Court hae /een seere- cut down and such chaene is now +ermitted on the /asis of inaidit- of the areement, want of urisdiction on the +art of the ar/itrator or want of +ro+er notice to a

+art- of the a++ointment of the ar/itrator or of ar/itra +roceedins.*he +owers of the ar/itrator hae /een am+ified /- insertion of s+ecific +roisions of seera matters. '/structie tactics ado+ted /-the +arties in ar/itration +roceedins are souht to /e thwarted /- ane>+ress +roision inasmuch as if a +art- knowin- kee+s sient andthen sudden- raises a +rocedura o/ection wi not /e aowed to doso. *he roe of institutions in +romotin and oranisin ar/itration

has /een reconised. *he +ower to nominate ar/itrators has /eenien to the Chief Justice or to an institution or +erson desinated /-him. *he time imit for makin awards has /een deeted. *he e>istin

+roisions in ";4# Act reatin to ar/itration throuh interention of Court, when there is no suit +endin or /- order of the court whenthere is a suit +endin, hae /een remoed. *he im+ortance of transnationa commercia ar/itration has /een reconised and it has

/een s+ecifica- +roided that een where the ar/itration is hed inIndia, the +arties to the contract woud /e free to desinate the awa++ica/e to the su/stance of the dis+ute. nder the new aw unessthe areement +roides otherwise, the ar/itrators are reuired to iereasons for the award. *he award itsef has now /een ested withstatus of a decree, inasmuch as the award itsef is made e>ecuta/e as

a decree and it wi no oner /e necessar- to a++- to the court for adecree in terms of the award. A these aim at achiein the soeo/ect to resoe the dis+ute as e>+editious- as +ossi/e with the

2#

LatestLaws.com


21/41

LatestLaws.com

minimum interention of a Court of Law so that the trade andcommerce is not affected on account of itiations /efore a court.


22/41

LatestLaws.com

endeaour sha /e made to ensure that +ersons committed to the need to

+rotect and +resere the institution of marriae and to +romote the wefare

of chidren and uaified /- reason of their e>+erience and e>+ertise to

+romote the settement of dis+utes /- conciiation and counsein are

seected.

".3" Another riht and wecome ste+ taken was the enactment of the

Consumer Brotection Act ";&$ for the settement of consumers8 dis+utes.

*he Act +roides effectie, ine>+ensie, sim+e and s+eed- redressa of

consumers8 rieances, which the cii courts are not a/e to +roide. *his

Act is another e>am+e of ADR for the effectie adudication of consumers8

dis+utes. *he Act +roides for three0tier fora, that is, District @orum, 6tate

Commission and the Nationa Commission for redressa of rieances of

consumers. Lare num/ers of consumers are a++roachin these fora to seek

uick redressa of their rieances. *here has aso /een a s+urt in socia

action itiation on /ehaf of consumers /- Consumer Actiists, ountar-

Consumer 'ranisations and other 6ocia Action Grou+s.

".32 Adantaes of ADR(

" It is ess e>+ensie.

2 It is ess time0consumin.

3 It is free from technicaities as in the case of conductin cases

in aw Courts.

4 Barties are free to discuss their differences of o+inion without

an- fear of discosure of this fact /efore an- aw courts.

22

LatestLaws.com


23/41

LatestLaws.com

5 Barties hae the feein that there is no osin or winnin side

/etween them /ut at the same time their rieance is redressed

and their reationshi+ is restored.

".33 Justice in a its facets ! socia, economic and +oitica ! is reuired to

/e rendered to the masses of this countr- without an- further oss of time !

the need of the hour. *he new strate- consists in dis+ute0resoution /-

conciiation, mediation and neotiation. *he constitutiona +romise of

securin to a citi:ens ustice, socia, economic and +oitica, as +romised in

the Bream/e of the Constitution, cannot /e reaised uness the three orans

of the 6tate, i.e., the eisature, the e>ecutie and the udiciar- oin toether

to find wa-s and means for +roidin to the Indian +oor eua access to the

6tate8s ustice s-stem.

!.$& In Sitanna v. Marivada Viranna', the Ari67 Coun4il affirmed

the de4ision of the Aan4ha7at in a famil7 dispute. Sir John :allis,

J. stated the law in the following words5

Referen4e to a 6illage Aan4ha7at is the time"honouredmethod of de4iding disputes of this 8ind, and has thesead6antages, that it is 4omparati6el7 eas7 for thepan4ha7atdars to as4ertain the true fa4ts, and that, as in this4ase, it a6oids protra4ted litigation whi4h, as o3ser6ed 37one of the witnesses, might ha6e pro6ed ruinous to theestate. Loo8ing at the e6iden4e as a whole their Lordshipssee no reason for dou3ting that the award was a fair andhonest settlement of a dou3tful 4laim 3ased 3oth on legaland moral grounds, and are therefore of opinion that there isno grounds for interfering with it.

!.$ There is lot of flei3ilit7 in the use of 1R methods. The

flei3ilit7 is a6aila3le in the pro4edure as well as the wa7 solutions

% AIR ";34 BC "#5

23

LatestLaws.com


24/41

LatestLaws.com

are found to the dispute. The solutions 4an 3e pro3lem"spe4ifi4.

The rigidit7 of pre4edent as used in ad6ersarial method of dispute"

resolution will not 4ome in the wa7 of finding solutions to the

disputes in a 4reati6e wa7.

!.$+ If the 1R method is su44essful, it 3rings a3out a

satisfa4tor7 solution to the dispute and the parties will not onl7 3e

satisfied, the ill"will that would ha6e eisted 3etween them will also

end. 1R methods, espe4iall7 mediation and 4on4iliation not onl7

address the dispute, the7 also address the emotions underl7ing

the dispute. In fa4t, for 1R to 3e su44essful, first the emotions

and ego eisting 3etween the parties will ha6e to 3e addressed.

-n4e the emotions and ego are effe4ti6el7 addressed, resol6ing

the dispute 3e4omes 6er7 eas7. This reDuires wisdom and s8ill of

4ounselling on the part of the >ediator or Con4iliator.

!.$' The 1R method is parti4ipator7 and there is s4ope for theparties to the dispute to parti4ipate in the solution"finding pro4ess.

1s a result, the7 honour the solution with 4ommitment. 13o6e all,

the 1R methods are 4heaper and afforda3le 37 the poor also. 1s

of now, there are some a3errations when it 4omes to the

epenses in4urred in ar3itration. In 4ourse of time, when there is

good num3er of Dualit7 ar3itrators, the epenses of ar3itration will

also de4rease. The promotion of institutional ar3itration will go a

long wa7 in impro6ing the Dualit7 of 1R ser6i4es and ma8ing

them reall7 4heaper.

24

LatestLaws.com


25/41

LatestLaws.com

!.$% The de6elopment of 1R methods will pro6ide a44ess to

man7 litigants. It helps in redu4ing the enormous wor8"load that is

put on the Judi4iar7. This will go a long wa7 in impro6ing not onl7

the a44ess to 2usti4e, 3ut e6en the Dualit7 of 2usti4e.

!.$ :e ha6e dis4ussed a3o6e a3out ar3itration, whi4h is a

pro4ess of dispute"resolution 3etween the parties through the

ar3itration tri3unal appointed 37 the parties to the dispute or 37 the

Chief Justi4e or a designate of the Chief Justi4e under se4tion !!

of the 1r3itration and Con4iliation 14t !+. The parties ha6e the

option to go for ad hoc ar3itration or institutional ar3itration

depending on their 4on6enien4e.

!.&0 Ad hoc ar3itration is ar3itration agreed to and arranged 37

the parties themsel6es without re4ourse to an ar3itral institution. In

ad hoc ar3itration, if the parties are not a3le to agree as to who

will 3e the ar3itrator or one of the parties is relu4tant to 4ooperatein appointing the ar3itrator, the other part7 will ha6e to in6o8e

se4tion !! of the 1r3itration and Con4iliation 14t !+ whereunder

the Chief Justi4e of a


26/41

LatestLaws.com

!.&! Institutional ar3itration is an ar3itration administered 37 an

ar3itral institution. The parties ma7 stipulate in the ar3itration

agreement to refer an ar3itral dispute 3etween them for resolutionto a parti4ular institution. The Indian institutions in4lude the Indian

Coun4il of 1r3itration and the International Centre for 1lternati6e

ispute Resolution. International institutions in4lude the

International Court of 1r3itration, the London Court of International

1r3itration and the 1meri4an 1r3itration 1sso4iation. 1ll these

institutions ha6e rules epressl7 formulated for 4ondu4ting

ar3itration. These rules are formulated on the 3asis of eperien4e

and hen4e, the7 address all possi3le situations that ma7 arise in

the 4ourse of ar3itration.

".42 *he foowin adantaes accrue in the case of institutiona

ar/itration in com+arison with ad hoc ar/itration(

!. In ad hoc ar3itration, pro4edures will ha6e to 3e

agreed to 37 the parties and the ar3itrator. This needs

4ooperation 3etween the parties. :hen a dispute is in

eisten4e, it is diffi4ult to epe4t su4h 4ooperation. In

institutional ar3itration, the rules are alread7 there.

There is no need to worr7 a3out formulating rules or

spend time on ma8ing rules.

#. In ad hoc ar3itration, infrastru4ture fa4ilities for

4ondu4ting ar3itration is a pro3lem, so there is

temptation to hire fa4ilities of epensi6e hotels. In the

pro4ess, ar3itration 4osts in4rease. ?etting trained

2$

LatestLaws.com


27/41

LatestLaws.com

staff is diffi4ult. Li3rar7 fa4ilities are another pro3lem.

In institutional ar3itration, the ar3itral institution will

ha6e infrastru4ture fa4ilities for 4ondu4t of ar3itrationE

the7 will ha6e trained se4retarial and administrati6estaff. There will also 3e li3rar7 fa4ilities. There will 3e

professionalism in 4ondu4ting ar3itration. The 4osts of

ar3itration also are 4heaper in institutional ar3itration.

$. In institutional ar3itration, the institution will maintain a

panel of ar3itrators along with their profiles. The

parties 4an 4hoose from the panel. It also pro6ides for

spe4iali9ed ar3itrators. :hile in ad hoc ar3itration,

these ad6antages are not a6aila3le.

&. In institutional ar3itration, man7 ar3itral institutions

ha6e an eperien4ed 4ommittee to s4rutini9e the

ar3itral awards. Before the award is finali9ed and gi6en

to the parties, it is s4rutini9ed 37 the eperien4ed

panel. So the possi3ilit7 of the 4ourt setting aside theaward is minimum. This fa4ilit7 is not a6aila3le in ad

hoc ar3itration.


28/41

LatestLaws.com

from the panel for not 4ondu4ting the ar3itration

properl7, whereas in ad hoc ar3itration, there is no

su4h fear.

'. In 4ase, for an7 reason, the ar3itrator 3e4omesin4apa3le of 4ontinuing as ar3itrator in institutional

ar3itration, it will not ta8e mu4h time to find su3stitutes.

:hen a su3stitute is found, the pro4edure for

ar3itration remains the same. The pro4eedings 4an

4ontinue from where the7 were stopped, whereas

these fa4ilities are not a6aila3le in ad hoc ar3itration.

%. In institutional ar3itration, as the se4retarial and

administrati6e staff is su32e4t to the dis4ipline of the

institution, it is eas7 to maintain 4onfidentialit7 of the

pro4eedings. In ad hoc ar3itration, it is diffi4ult to

epe4t professionalism from the se4retarial staff.

!.&$ In Food Corporation of India v. Joginderpal Mohinderpal

%

,the Supreme Court o3ser6ed5

:e should ma8e the law of ar3itration simple, less te4hni4aland more responsi3le to the a4tual realities of the situations,3ut must 3e responsi6e to the 4anons of 2usti4e and fair pla7and ma8e the ar3itrator adhere to su4h pro4ess and normswhi4h will 4reate 4onfiden4e, not onl7 37 doing 2usti4e3etween the parties, 3ut 37 4reating sense that 2usti4eappears to ha6e 3een done.

& 1";&; 2 6CC 34%

2&

LatestLaws.com


29/41

LatestLaws.com

!.&& The o32e4t of the alternati6e dispute resolution pro4ess of

ar3itration is to ha6e epeditious and effe4ti6e disposal of the

disputes through a pri6ate forum of partiesG 4hoi4e.

!.& Fa6ouring institutional ar3itration to sa6e ar3itration from the

ar3itration 4ost, the Supreme Court has re4entl7 in Union of India

v. M/S. Singh Builders Syndicate! o3ser6ed5

:hen the ar3itration is 37 a Tri3unal 4onsisting of ser6ingoffi4ers, the 4ost of ar3itration is 6er7 low. -n the other hand, the 4ost of ar3itration 4an 3e high if the 1r3itralTri3unal 4onsists of retired Judge/s. :hen a retired Judge

is appointed as 1r3itrator in pla4e of ser6ing offi4ers, thego6ernment is for4ed to 3ear the high 4ost of 1r3itration 37wa7 of pri6ate ar3itrators fee e6en though it had not4onsented for the appointment of su4h non"te4hni4al non"ser6ing persons as 1r3itrator/s. There is no dou3t apre6alent opinion that the 4ost of ar3itration 3e4omes 6er7high in man7 4ases where retired Judge/s are 1r3itrators.The large num3er of sittings and 4harging of 6er7 high feesper sitting, with se6eral add"ons, without an7 4eiling, ha6eman7 a time resulted in the 4ost of ar3itration approa4hing

or e6en e4eeding the amount in6ol6ed in the dispute or theamount of the award. :hen an ar3itrator is appointed 37 a4ourt without indi4ating fees, either 3oth parties or at leastone part7 is at a disad6antage. Firstl7, the parties feel4onstrained to agree to whate6er fees is suggested 37 the

1r3itrator, e6en if it is high or 3e7ond their 4apa4it7.Se4ondl7, if a high fee is 4laimed 37 the 1r3itrator and onepart7 agrees to pa7 su4h fee, the other part7, who is ena3leto afford su4h fee or relu4tant to pa7 su4h high fee, is put toan em3arrassing position.


30/41

LatestLaws.com

this pro3lem to sa6e ar3itration from the ar3itration 4ost.Institutional ar3itration has pro6ided a solution as the

1r3itrators fees is not fied 37 the 1r3itrators themsel6es on4ase to 4ase 3asis, 3ut is go6erned 37 a uniform ratepres4ri3ed 37 the institution under whose aegis the

1r3itration is held. 1nother solution is for the 4ourt to fi thefees at the time of appointing the ar3itrator, with the 4onsentof parties, if ne4essar7 in 4onsultation with the ar3itrator 4on4erned. Third is for the retired Judges offering to ser6eas 1r3itrators, to indi4ate their fee stru4ture to the Registr7of the respe4ti6e


31/41

LatestLaws.com

4on4iliation, mediation, 2udi4ial settlement or through Lo8 1dalat. It is onl7 when the parties fail to get their disputessettled through an7 of the alternate dispute resolutionmethod that the suit 4ould pro4eed further. In 6iew of thea3o6e, 4lause ' see8s to insert a new se4tion % in theCode in order to pro6ide for alternate dispute resolution.

!.&' Se4tion % has 3een introdu4ed for the first time for

settlement of disputes outside the Court, with the a6owed

o32e4ti6e of pro6iding speed7 2usti4e5

!. It is now made o3ligator7 for the Court to refer the

dispute after issues are framed for settlement either 37 wa7

of "

(a) 1r3itration,

(3) Con4iliation,

(4) Judi4ial settlement in4luding settlement through Lo8

1dalat, or

(d) >ediation.#. :here the parties fail to get their disputes settled

through an7 of the alternati6e dispute resolution methods,

the suit 4ould pro4eed further in the Court in whi4h it was

filed.

$. The pro4edure to 3e followed in matters referred for

different modes of settlement is spelt out in su3"se4tion (#).

&. Clause (d) of su3"se4tion (#) of se4tion % empowers

the ?o6ernment and the


32/41

LatestLaws.com

!.&% In Sale" Advocate Bar Association v. Union of India, the

Supreme Court re2e4ted the 4hallenge to the 4onstitutional 6alidit7

of the amendment made in CAC and too8 note of the Reports of the Committee headed 37 >. Jagannadha Rao, J., a former

Supreme Court Judge and Chairman of the Law Commission of

India, in4luding the one dealing with >odel 1lternati6e ispute

Resolution and >ediation Rules.

!.& :e should endea6our to inspire parties to settle their

disputes outside the Court 37 more and more utili9ing se4tion %

CAC. It is a 6er7 3enefi4ial pro6ision.

!.0 1 new se4tion !+ has 3een inserted in the Court"fees 14t

!%'0 37 the CAC (1mendment) 14t !, whi4h reads as follows5:here the Court refers the parties to the suit to an7 one of the mode of settlement of dispute referred to in se4tion % of the Code of Ci6il Aro4edure, !0%, the plaintiff shall 3eentitled to a 4ertifi4ate from the Court authorising him tore4ei6e 3a48 from the 4olle4tor, the full amount of the feepaid in respe4t of su4h plaint.

!.! :here a matter referred to a Lo8 1dalat in terms of se4tion

%(#) CAC read with se4tion #0(!) of the Legal Ser6i4es

1uthorities 14t is settled, the refund of the 4ourt"fee is go6erned

"" AIR 2##3 6C "&; and 12##5 $ 6CC 344

32

LatestLaws.com


33/41

LatestLaws.com

37 se4tion !+ of the Court"fees 14t read with se4tion #! of the

Legal Ser6i4es 1uthorities 14t and the plaintiff is entitled to the

refund of the whole of the 4ourt"fee paid on the plaint.!#

!.# 1 Lo8 1dalat award is on a par with a de4ree on

4ompromise, final, unappeala3le, 3inding and eDui6alent to an

ee4uta3le de4ree, and ends the litigation 3etween the parties.!$

!.$ Au3li4 4onfiden4e in the Judi4iar7 is the need of the hour

more than e6er 3efore. The Judi4iar7 has a spe4ial role to pla7 in

the tas8 of a4hie6ing so4io"e4onomi4 goals enshrined in the

Constitution. :hile maintaining their aloofness and independen4e,

the Judges ha6e to 3e aware of the so4ial 4hanges in the tas8 of

a4hie6ing so4io"e4onomi4 2usti4e for the people.

!.& So4rates said that four things impro6e a great Judge5

(a)To hear 4ourteousl7E(3)To answer wisel7E

(4) To 4onsider so3erl7E and

(d)To de4ide impartiall7.

!. The 2udges of the su3ordinate 2udi4iar7, whi4h 4an 3e

termed as the root of our 2udi4ial s7stem, must 3e a3le to inspire

4onfiden4e in themsel6es and do 2usti4e to the so4iet7. It is rightl7

said that 2udi4ial offi4ers dis4harge di6ine fun4tions though the7

are not di6ine themsel6es. @6er7 2udi4ial offi4er of the su3ordinate

"2 Vas$devan V. ). v. State of Kerala, AIR 2##4 eraa 43"3 *. T. Tho+as v. Tho+as ,o-, 12##5 $ 6CC 4%&

33

LatestLaws.com


34/41

LatestLaws.com

2udi4iar7 has to lead a dis4iplined life. The 2udges of all 4adres

should stri4tl7 o3ser6e pun4tualit7 in 4ourt. Integrit7 is an essential

Dualit7 of a 2udi4ial offi4er. 1 2udi4ial offi4er must follow the

standards of integrit7, moralit7 and 3eha6iour. The mem3ers of the 2udi4iar7 should pronoun4e 2udgments within the stipulated time.

Judges must de4ide 4ases without fear or fa6our, affe4tion or ill

will, or the feeling of a friend or foe. The7 must wor8 6er7 hard, 3e

6er7 honest and 4ourteous to the litigants, witnesses and the

mem3ers of the Bar and dis4harge their 2udi4ial fun4tions with all

humilit7 at their 4ommand. The7 should not spea8 out their 6erdi4t,

unless the7 propose to pronoun4e it in open 4ourt then and there.

Judges should 4ulti6ate the art of writing 2udgments, whi4h is a

4reati6e pro4ess. The language should 3e plain, pre4ise and

pointed. Long senten4es lose their pun4h. :ords should 3e

4hosen with apt pre4ision. The fa4ts should 3e stated pre4isel7,

the issues written 4learl7, the e6iden4e should 3e dis4ussed

thread3are, ratio4ination should 3e logi4al and should follow in aseDuen4e from one point to another and then a 4ase 3e de4ided.

In the present times, 2udi4ial edu4ation and training too is a must,

whi4h ma7 3e 4alled an effe4ti6e and rather indispensa3le means

to enhan4e fair administration of 2usti4e. @du4ation enhan4es

8nowledge and sensiti6it7, whereas training re6ol6es round s8ills,

attitude and professionalism. The two reinfor4e ea4h other in

2udi4ial performan4e. That is wh7 there ha6e 4ome into eisten4e

the ational Judi4ial 14adem7 at Bhopal and other 2udi4ial

a4ademies or training dire4torates at the State le6el. r 1. A. J.

13dul alam, a former Aresident of India, has 3een supporti6e of

34

LatestLaws.com


35/41

LatestLaws.com

mediation and 4on4iliation as 1R me4hanisms and emphasi9ed

the need for their training in order that the7 are persons of

impe44a3le integrit7 and a3ilit7 to persuade and 4reate 4on6i4tion

among parties.

!.+ The issue of under"trials detained in 6arious prisons in the

4ountr7 has 3een a matter of 4on4ern. The Central ?o6ernment

reali9ing the plight of under"trials and to ensure 2usti4e to 4ommon

man, made allo4ation of Rs.0#.0 4rores for 4reation of !'$&

4ourts named as Fast Tra48 Courts all o6er the 4ountr7. The

s4heme was for a period of fi6e 7ears, whi4h after inter6ention of

the Supreme Court has 3een 4ontinued for another fi6e 7ears, that

is, until $!st >ar4h #0!0 with a pro6ision of Rs.0 4rores.

".5% A successfu udicia s-stem is a hamark of an- deeo+ed

ciii:ation. *he faiure of crimina ustice s-stem in /rinin crimina

conduct under tiht contro is iewed as eadin to the /reakdown of the

+u/ic order and disa++earance of an im+ortant condition of human

freedom. *he crime0contro im+ies order- and efficient method for

arrestin, +rosecutin, conictin and +unishin the uit- and for

deterrin crime /- others. *he +rotection of indiidua rihts is

necessar- to uard the accused aainst ar/itrar- e>ercise of +owers /-

the 6tate. Lon dea- in courts causes reat hardshi+ not on- to the

accused /ut een to the ictim and the 6tate. *he accused, who is not out

on /ai, ma- sit in ai for num/er of months or een -ears awaitin

concusion of the tria. *hus, effort is reuired to /e made to im+roe the

35

LatestLaws.com


36/41


37/41

LatestLaws.com

cause of ustice. Law-ers must /e men or women of su/stance hain

fu sense of their socia res+onsi/iities as socia technicians and

architects of the usticin +rocess. *he- must hae a ras+ of the endess

tradition and must /e aware of the reatness of their task. *he- must

hae necessar- humiit-, /ein serants of ustice and the conscience of

the communit-.

!.+! The 6ulnera3le se4tions of the so4iet7 who are marginali9ed

ha6e to 3e dealt with sensiti6el7 and with 4are. Being powerless,

poor and ignorant, the7 need assistan4e for empowerment with

8nowledge and 4apa4it7 to uphold their own rights as 3eing integral

part of the so4iet7. Legal litera47 4ampaign, paralegal training

programmes, mo3ili9ation of pu3li4 opinion against in2usti4e and

eploitation, out"of"4ourt settlement of disputes, legal ad6i4e, et4.

are some of the wa7s through whi4h the poor and the

underpri6ileged 4an 3e made to reali9e their rights and also learn

a3out their own importan4e in shaping and re2u6enating this great

nation.

!.+# Sin4e the lower 2udi4iar7 does the 3ul8 of 2udi4ial wor8, it needs

to 3e strengthened. ot onl7 the infrastru4ture of the lower 4ourts

needs to 3e impro6ed, 3ut also the ser6i4e 4onditions of the 2udi4ial

offi4ers need to 3e re6amped. >ore 4ourts needs to 3e 4reated, so

that 2usti4e is ta8en to the doorsteps of the people. The re4ent

4reation 37 the =nion ?o6ernment of Fast Tra48 Court at the distri4t

le6el, to dispose of old 4ases, is a step in the right dire4tion.

3%

LatestLaws.com


38/41

LatestLaws.com

!.+$ In our 4ountr7, the ratio 3etween the population and the 2udges

is unrealisti4. Therefore, the Judi4iar7 is una3le to 4ope up with the

flood of litigation.


39/41

LatestLaws.com

4opies, whene6er ne4essar7. Suffi4ient num3er of ero ma4hines

for that purpose 3e made a6aila3le.

!.+% Judi4ial reform is the 4on4ern not onl7 of the Judi4iar7, 3ut it isthe responsi3ilit7 of the @e4uti6e, of the Legislature, of the Bar and

of the people also. It is not a one"time remed7, 3ut an on"going

pro4ess. The7 must stop 3laming ea4h other, for the mali4e. The7

must unite, to pre6ent and 4ontrol the litigation"epidemi4.

!.+ :ith the ad6ent of the 1R, there is a new a6enue for the

people to settle their disputes. >ore and more 1R 4entres should

3e 4reated for settling disputes out"of"4ourt as is 3eing done in

man7 other 4ountries. 1R methods will reall7 a4hie6e the goal of

rendering so4ial 2usti4e to the people, whi4h reall7 is the goal of the

su44essful 2udi4ial s7stem.

!.'0 Te4hnolog7 has a role to pla7 in diminishing do48ets.Computers should 3e introdu4ed in 4ourts with a faster speed. This

fa4ilitates dissemination of information, 4reation of data, up8eep of

the 2udi4ial re4ords and 3etters 2udi4ial deli6er7 s7stem. The ational

@"Courts Aro2e4t laun4hed 37 the Aresident on 0.0'.#00' needs

fillip.

3;

LatestLaws.com


40/41

LatestLaws.com

II# RECOMMENDATIONS

#.! :e are aware that the propositions 4ontained in the pre4eding

Chapter are not new. e6ertheless, we feel that the7 need to 3e re"

emphasi9ed and reaffirmed. There is an urgent need for 2usti4e"

dispensation through 1R me4hanisms. The 1R mo6ement needs

to 3e 4arried forward with greater speed. Besides, man7 other

suggestions, whi4h ma7 now 3e 4alled ha48ne7ed, need a fresh loo8.

4#

LatestLaws.com


41/41

LatestLaws.com

#.# :e re4ommend a44ordingl7.

(r Justi4e 1R. La8shmanan)

Chairman

(Arof. r Tahir >ahmood) (r Brahm 1. 1grawal)

>em3er >em3er"Se4retar7

LatestLaws.com

law commission report no. 222- need for justicedispensation through adr etc

Documents