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Resolving Pending cases through ADR Mechanism: Advantages & Disadvantages

Written By: Shekhar Yadav, Student, Himachal Pradesh National Law University


“Justice delayed is Justice Denied” meaning thereby the parties must get the relief in a timely fashion if it is not given timely it is same as having no remedy at all.

1. Introduction

Alternative Dispute Resolution (ADR) is the alternative method to avoid the formal mechanism of litigation and courts for the resolution of civil disputes. ADR mechanisms are evolved to provide a quick solution to legal disputes and to do complete justice to the parties in conflict. The most common feature of ADR is that parties opted for it voluntarily. All ADR practices introduce a third party into the resolution procedure it is an ancillary means of resolving disputes saving parties time and expense. Denial of justice through delay is one of the major legal problems in India[1]. This delay in fact kills the entire justice dispensation system due to which people are losing faith in the legal system. The right to access justice is the most basic human right in the words of Justice Krishna Iyer “If people lose faith in the bench and the bar, they will easily take to remedies in the streets this will inevitably lead to downfall of democracy and the impotency of the court.


One of the reasons for demand of ADR mechanism was also that British rules were imposed on Indians by ignoring culture value and ethics of Indians the place of their laws in English judicial system was negligent due to which there was a need to settle some system to resolve dispute at local level[2].

2. History of ADR mechanism

The roots of ADR mechanism are found in ancient India also people at that time take the advice of experienced person to resolve the dispute instead of going to king. The trace of ADR mechanism can be found in Yajnavalkiya and Narada highlighted that kula SRENI and puga tribunals were resolving the dispute in ancient India. Kula was created to solve the dispute between the family, community or caste SRENI consist of trade expert and solve the dispute between the traders Puga consist of elder members of the same locality. In ancient times these ADR was found in hirerchy that is the decision of Kula may be challenged before Sreni and the decision of sreni can be challenged before pradvivaca and the final appeal was before king[3].


The former CPC section 89 was related to referral of the pending dispute to the arbitration upon the agreement between the parties for it. Later on this provision was repealed by making mandatory provision. The legislature amended section 89 of civil procedure code and introduced new mechanism for ADR under section 89 which mandates the ADR in the circumstances which the court deems fit for the settlement between the parties.


In 1982 settlement of disputes out of courts started through Lok Aadalat the first lok adalat was held on March 14, 1982 at Junagarh in Gujarat initially Lok Adalats functioned as a voluntary and conciliatory agency without any statutory backing for its decisions. By the enactment of the legal service authorities act 1987 Lok Adalats received statutory status from November 9, 1995.


3. Why we need ADR mechanism?

According to National Judicial Data Grid[4] data till 25/10/2020 total number of cases pending in India is 34587079 out of which civil cases pending more than one year old are 7552825 and criminal cases older than one year are 19928416 because of these huge number of cases pending in court government along with judiciary has taken various steps like increasing number of courts and judges but these are not enough steps we need ADR mechanism accepted by more number of people so that parties can get justice in less time. Alternate dispute resolution mechanism has been successfully translated in various countries. ADR is at present a movement world-over to find an answer to never-ending litigation.


4. Convention negotiation theory of ADR

A common feature of ADR is that they operate within a framework of convention negotiation theory. The working assumption is that there is fixed pie of assets or resources, and the main purpose of negotiator is to maximize his or her share. Each party will have a reserve price below which they would rather walk away from the deal. If both parties are ready to accept a given trade and there is positive bargaining zone and a deal should take place even if the offers does not match some amount that they would ideally like to pay or receive. One of the important role of ADR is that when parties recognize that it is in their interest to come to a deal, but reach an impasse over the precise terms, they can turn to a third party to determine the appropriate distribution.


5. Provision related to ADR

The former section 89 was not mandatory referral to any form of ADR mechanism in India, other acts like Lok service authority act has given power to parties to approach Lok Aadalat but it was not mandatory referral to overcome the burden of work government amended section 89 of civil procedure code in 1999 and make it mandatory.


Section 89[5] of CPC states that where it appear to the court that there exist element of settlement which may be acceptable to the parties, the court shall formulate the terms of settlement of both the parties and then put it for the observation of parties after the term of observation court can refer the same for -:

a) Arbitration

b) conciliation

c) Judicial settlement including settlement through Lok Aadalat or

d) Mediation


In Salem Advocate Bar Association v. Union Of India the validity of amended section 89 was challenged the apex court upheld the amendment constitutional valid and for effective implementation of section 89 formed a committee, apex court directed high courts to frame similar issues as per the rules suggested by the committee.


6. Cases which can or cannot be referred to ADR

Apex court in Afcons Infrastructure Ltd. V. Cherian Varkey[6] construction co ltd. has laid down the guidelines for the referral of civil dispute to ADR mechanism and has said court before referring must ascertain which ADR mechanism they are referring.


Cases which can be referred to ADR mechanism are-:

a) Cases relating to trade commerce and contracts.

b) Cases that required pre existing relationship in spite of disputes.

c) Cases related to tort and claim for compensation.

d) Cases related to consumer.


Cases which cannot be referred to ADR are-:

a) Cases involving grant of authority by the court after inquiry.

b) Cases given under order 1 rule 8 that is representative suit.

c) Cases involving serious and specific allegation of fraud, misplacement of document etc.

d) Cases for election of public offices.


7. Reports on ADR

The report of the committee on Legal Aid constituted by state of Gujarat in 1971 chaired by Justice P.N. Bhagwati, which inter alia recommended adoption of Neighbourhood Law Network then in vogue in the USA. The report of two-member committee of Justice Bhagwati and Krishna Iyer appointed to examine the existing legal aid schemes and suggest a framework of legal services programme that would help achieve social objectives. This Report formulated a draft legislation institutionalizing the delivery of legal services and identifying ADR as a key activityof the legal services committees. Reports submitted by these committees recommended the process of improving access to justice through legal aid mechanism and ADR as a part of the systematic reform of the institution of the judiciary coupled with substantive reforms in laws and processes.


8. Various forms of ADR are-:

a) Arbitration

There are various forms of ADR pre essential condition for the opting of ADR is made by the choice of the parties. Arbitration is an adjudicatory ADR mechanism in which neutral third party called arbitrator will decide the dispute on merits. Once the parties have agreed to resolve the dispute through arbitrator they will not be allowed to approach the court for the same dispute unless the award given by arbitral is made on some defect mentioned under section 34 of the Indian Arbitration and conciliation act[7] .The arbitrator is mutually and voluntary accepted by the parties who agree to be bound by his or her ruling in the, arbitrator can be anyone the parties agree to. The parties have freedom to appoint the arbitrators and place of the arbitrations with the language for this procedure the arbitral tribunal hear the dispute on merits and the arbitral award is considered as the decree of the court. As per the section 7 of Arbitration act[8] such agreement must be in writing the object of Arbitration is settlement of dispute in an expeditious, convenient inexpensive and private manner so that they do not become the subject of future litigation between the parties.


b) Conciliation

Conciliation means bringing of opposite parties or individuals into harmony. Conciliator is one who brings opponents into harmony or one who conciliates the parties. Conciliation has acquired statutory recognization in the arbitration and conciliation act 1996 by incorporating provision in section 61 to 81 of part-3rd of the arbitration and conciliation act 1996. Conciliator Assist the disputing parties to explore the potential solution and find a mutually acceptable solution by communicating the parties. Conciliation is neutral third which helps to solve the dispute amicably. In conciliation conciliator may give his views and suggestion to the parties for the resolution of the disputes. In 1980 UNCITRAL has framed conciliation rules for international commercial dispute India was signatory of this rule. Based on the experience of various countries conciliation method Himachal Pradesh high court first initiated conciliation court pilot project in the entire state of Himachal Pradesh and asked all the trial court to refer all the case before trial to conciliation court. Law commission in its 129th report suggested conciliation court establishment across the country based on the success of the project in Himachal Pradesh[9].


c) Mediation

Mediation has been defined as private informal dispute resolution process in which a neutral third person the mediator helps disputing parties to reach an agreement. In mediation mediator plays a passive role. Mediation is a process of dispute resolution focused on effective communication and negotiation skills. Mediator act as a facilitator assisting the parties in communicating and negotiating more effectively thereby enhancing their ability to reach a settlement. Mediator makes no binding decision on the contrary parties to the dispute themselves ultimately determine whether the process result in a resolution of the dispute. The role of the mediator is limited to help the disputing parties communicate with each other in the hope that they can find a way to work their disagreement and differences.


d) Lok Adalats

Lok adalats are para judicial institutions and is the result of modern judicial reforms. Lok Adalats (Lok Nyayalaya) means people’s court. Lok stands for people and Adalat is court.

Lok adalat is constituted under the National Legal Service Authority Act 1987 pursuant to the constitutional mandate in Article 39-A of the constitution of India which contains various provisions for settlement of dispute including Lok Adalat. One of the important features of Lok Adalat is that the disputes are settled summarily without going through their complexities of legal proceedings of the routine court[10].


Lok adalats is not a court in the strict sense of the term though it has some attributes of a court. It is certainly different from adjudication as the methods used for the settlement of disputes are non-adversal and free from the formal technical court’s procedures.


The system of Lok Adalat was visualized as an ADR mechanism, evolved as a part of the legal aid scheme (CILAS) with the object of taking justice to the doorsteps of the poor and to give speedy and justice to those who cannot afford to fight costly legal battle.


The system of Lok Adalat is not new in India it is also found in our traditional Nyaya Panchayats system.


In 1987 Legal Services Authorities Act was enacted to give a statutory status to the institution of Lok Adalat chap sixth of the legal service authorities Act contain provisions providing for organization of Lok Adalats the power and functions of the Lok Adalat. Once a compromise or settlement is arrived at before the Lok Adalat, then the award based thereon, acquires the force of a decree of a civil court it is final and binds the parties to the dispute. This act forbids filing of Appeal to any court against such an award except on the ground of fraud. In Lok Adalats, justice is dispensed with free of cost and it is faster.


Permanent Lok Adalat

The Indian government has amended the Legal Service Authority Act in 2002 and inserted a new institution called Permanent Lok Adalat. The permanent Lok Adalat can hear the dispute relating to public utility service like transport, postal, communication section 22A and 22B of Legal service authority act gives power to the government to add any other service[11].


Either party can approach permanent Lok Adalat or Lok Adalat when the dispute is brought in one forum it cannot be brought in another forum. Permanent Lok Adalat award is considered as a decree of the court and it is final and binding upon the parties However if it involved grave injustice then it can be challenged.


9. Advantage of ADR mechanism

The process of Litigation is a long term procedure involving many stages due to which it is not expeditious and can dissatisfied the meaning of justice between the parties, Alternative Dispute Resolution is expeditious, whereas if court proceedings are required, the parties may have to wait years before the court hearing can be obtained[12]. The decision given by ADR institution can be quickly implemented, on the other hand, in the case of court decisions take long as the decision given by one court can be challenged in appeal.


The expenses of ADR mechanism are also less as compared to the cost of the court. The procedure can be more flexible than those of courts, such as in respect of the times of setting, the proper law to be applied, the introduction of evidence, and in ensuring that the arbitrator has personal expertise in the field of the dispute.


ADR encourages the participation of the people in the process of dispute resolution and create legal awareness and respect for rights of others and promotes self reliant development. ADR processes provide opportunity to parties to reduce hostility and decision made between the parties is by parties themself.

10. Disadvantage of ADR mechanism

In ADR mechanism parties cannot be compelled to go in for ADR unless they sign an agreement or mutually agree to resolve their dispute by ADR. Arbitrators were frequently and strongly attacked as partial and immature in resolving the disputes. Many person are not good and ignorant of the alternative methodology in dispensing the even justice process through arbitral process. Success of ADR depend upon the capability of the attorney and faith of the parties however unrepresented party are at disadvantage of succeeding in an ADR. In ADR process there can be no exhaustive set of rules but rules are framed for proper procedure.


11. Conclusion

Courts are flooded with work to reduce the burden of court it is necessary for a court to create a system for maximum settlement of dispute which can be resolved by the agreement between the parties.ADR is potential tool for resolving the dispute accepted worldwide. Indian government has started various projects for training of judges and lawyer for ADR mechanism by which they can help parties to resolve their dispute. Lawyers are trained so that they can make their client aware for opting ADR mechanism. Most of the people in a suit want disposition of the suit expeditiously ADR can help to get justice in less time with minimum cost. ADR can also help litigants who are unable to meet the expenses involved in the ordinary process of dispute resolution through courts. It is not replacement of courts but it helps our court system to work more effectively and efficiently. Lawyers play the most important role in ADR mechanism they act as bridge between the parties due to this responsibility is more on them therefore courts should frequently give them training so that they make people aware about the procedure and resolve them effectively.


References [1] Prof.Anurag K. Agrawal, Strengthening ‘Lok Adalat’ Movement in India, (AIR JL. Section, Vol. I, 2006) [2] VD Mahajan jurisprudence and legal theory (5th edition 2015) [3] O. P Malhotra, The Law and Practice of Arbitration and Conciliation (2nd edn, LexisNexis 2006) [4] 'National Judicial Data Grid (District and Taluka Courts of India)' (NJDG, 2019) accessed 20 August 2019. [5] Civil Procedure Code (Amendment) Act 1999, s 89. [6] Afcons Infrastructure Ltd. v Cherian Varkey Construction Co. (P) LTD [2010] 8 SCC 24. [7] Indian Arbitration and conciliation act 1996 S-34 [8] Arbitration and conciliation act 1976 S-7 [9] 'Urban Litigation: Mediation As Alternative To Adjudication' (LAW COMMISSION OF INDIA 1998) [10] Mayank Madhaw ,jurisprudence,5th edition 2020 [11] Rebecca Furtado, 'Permanent Lok Adalats- A Critical Study - Ipleaders' (iPleaders, 2016) [12] SUJAY DIXIT, ADR Mechanism in India (7th edition 2017).

Opinions expressed in the blogs are the sole responsibility of the author(s) and do not necessarily reflect the views of The L Word Blog.

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