Friday, 2 June 2017

Whether parties can unilaterally withdraw from agreement entered before mediator?

The mediator


appointed will have to report to the court as to whether the matter is

settled or not settled. In case, the mediation has not taken place; he

will have to report, 'not mediated'. He has no duty other than the

above. The mediator cannot forward any agreement to the court to

the effect as to what course of procedure to be followed by the court

for passing a decree.

      8.    However, when the parties settled the disputes by signing

an agreement, detailing the procedures to be followed to work out

such settlement, certainly, that agreement is having all the

characteristics of compromise in terms of Order XXIII Rule 3 CPC.

Once a compromise is arrived at between the parties, it is a

settlement of dispute referred to in the mediation pending before the

court. When the parties to the dispute sign the compromise, this

settlement comes to the public domain.           Confidentiality of the

mediation covers the matters only upto the stage of reaching at a

settlement or till the termination of the mediation. The parties when

put their signature by accepting the terms and conditions in writing,

the agreement is having all the characteristics of the compromise as

referred to under Order XXIII Rule 3 CPC and no party can withdraw

from it unilaterally. The moment it reaches the court, the court will


have to act upon the compromise and to pass a decree in terms of

the compromise.       No doubt, the court concerned will have to be

satisfied with the legality of the compromise as well as jurisdiction to

pass a decree based on such compromise. Once a settlement has

been arrived at between the parties in relation to the matter in the

suit, that concludes as far as the court concerned in relation to the

dispute resolved in the settlement. It is to be noted that the court

recording the compromise is entering into a satisfaction in terms or

Order XXIII Rule 3 CPC and the court is not merely acting upon

agreement. If one party wants to withdraw from the agreement, the

court has every power to decide whether the agreement was effected

lawfully or not. If it is proved to the satisfaction of the court that the

dispute has been settled wholly or in part by a compromise, the court

shall pass a decree in accordance with the agreement. The proviso

to Order XXIII Rule 3 has a significant guidance in this regard.

Therefore, if in the case of denial of an agreement or in the case of

unilateral withdrawal, the court will have to enter a satisfaction

whether there was a compromise of the subject matter of the suit or

not. In fact, in the case of denial or withdrawal of the agreement, the


court is bound to frame a question in this regard and decide the

matter as contemplated under Order XXIII Rule 3 CPC.
IN THE HIGH COURT OF KERALA AT ERNAKULAM

                                                      PRESENT:

                   MR. JUSTICE A.MUHAMED MUSTAQUE

            15TH DAY OF FEBRUARY 2017

                                          OP(C).No. 3131 of 2016 (O)
                                                
         MOHANAN P.K.,
         V
          SUDAKSHINA RAMAKRISHNAN,
           




      In this original petition, a serious question arises as to the

procedure to be followed by the courts in regard to the settlement

arrived at between the parties in a court-annexed mediation.

      2.    In a suit for recovery of possession, the parties were

referred to mediation. The parties have settled their dispute as seen

from Ext.R3(c). The settlement reads as follows:

       {Vernaculars omitted}
      3.     Thereafter, it appears that the court below awaited the

report of the surveyor to pass a decree in terms of the compromise.

As the plaintiffs were not satisfied with the report of the surveyor,

they filed I.A.No.559/2015 to revoke the mediation settlement and to

permit him to proceed with the case. Aggrieved by the course of

procedure adopted by the court below, the defendants approached

this court in O.P.No.900 of 2015.          This court by judgment in

O.P.No.900 of 2015 directed the court below to refer the parties once

again to mediation. Ext.P1 is the judgment in O.P.No.900 of 2015

dated 26.6.2015. The directions issued therein are as follows:

             "In the result, this Original Petition (Civil) is allowed and

         the court below is directed to refer the matter once again for

         mediation. In the mediation, the parties can come to terms

         with regard to the appointment of another Surveyor in the

         place of the earlier Surveyor and once again measurement

         can be carried out afresh."


     4.    The parties were again referred to mediation and they

have arrived at the following settlement:

     "1.     Both parties hereby mutually agreed to get the property

             measured by the Taluk Surveyor, Ernakulam. The said

             surveyor shall measure the property after giving notice

             to all the concerned parties to the suit and also to the

             neighbouring parties on all the four boundaries. The

             expenses shall be borne by the plaintiffs. The

             measurement shall be conducted in accordance with

             the mediation agreement dated 13-12-2013 as early as

             possible within three months. The surveyor shall

             measure the property.

     2.      In view of the aforesaid agreement entered into

             between the parties, the parties pray that the suit(s)

             petition(s), appeal(s) be decreed/dismissed/disposed of

             in terms of the aforesaid agreement.

     3.      In view of the aforesaid agreement, the plaintiff(s)/

             Appellant(s) pray(s) for refund of the full Institution Fee.

     4.      Parties will appear on ..... before the Hon'ble Court for

             passing Orders/Decree in terms of the above said

             agreement."

     5.      After arriving at the above settlement, the plaintiffs filed

I.A.No.911 of 2016 to appoint an Advocate Commissioner for

measurement. This was dismissed by the court below holding that


the mediation agreement as above does not contemplate the

appointment of an Advocate Commissioner.            However, the court

below referred the parties to mediation to enable them to measure

the properties with the assistance of a Taluk Surveyor as agreed to in

the mediation agreement earlier. Again the matter was referred back

to the court stating that the matter was not settled in mediation. Then,

again the plaintiff filed an application for appointment of an Advocate

Commissioner with the help of a Taluk Surveyor after ignoring the

mediation agreement. This has been dismissed by Ext.P6 order,

stating that, unless and until the mediation agreement is not wiped off

by the court, the petitioners cannot maintain such an application.

      6.       The question that looms large in this case is, what is

the effect of an agreement entered into between the parties in a

mediation? Is that to be considered only as a piece of agreement

between the parties for prosecuting the original suit or has it become

final as to the dispute referred to the mediation.

      7.     The "court-annexed mediation" has become part of the

administration of justice by an amendment to the Civil Procedure

Code with effect from 1.7.2002. The power is conferred upon the

court in terms of Section 89 to refer the dispute for settlement on any



of the prescribed modes therein. In exercise of the power conferred

under Section 122 of CPC, the High Court of Kerala framed Civil

Procedure (Alternative Disputes Resolution) Rules, 2008. Part II of

the above Rules refers to Mediation Rules. The parties may agree to

the procedure to be followed by the mediator in the conduct of

mediation proceedings (See Rule 13). Therefore, it is open for the

parties to have the assistance of others to enable them to arrive at a

settlement. The parties themselves could obtain such assistance. If

not possible, through the court. This is for enabling the parties to

arrive at a settlement. In a matter like this, it is open for the parties to

approach the Taluk Surveyor or such other private surveyors to

measure the properties and place it before the mediator before

arriving at a settlement. If parties are unable to settle in spite of such

assistance obtained, the mediator can very well report before the

court that the matter is not settled. The entire procedure and steps

taken therein will be protected in terms of Rule 20.           Neither the

mediator nor the parties shall disclose the information so collected

through the procedure adopted by them. Rule 20 stipulates that

Mediator, as well as parties, shall maintain confidentiality in respect

of the events that transpired during the mediation. The mediator


appointed will have to report to the court as to whether the matter is

settled or not settled. In case, the mediation has not taken place; he

will have to report, 'not mediated'. He has no duty other than the

above. The mediator cannot forward any agreement to the court to

the effect as to what course of procedure to be followed by the court

for passing a decree.

      8.    However, when the parties settled the disputes by signing

an agreement, detailing the procedures to be followed to work out

such settlement, certainly, that agreement is having all the

characteristics of compromise in terms of Order XXIII Rule 3 CPC.

Once a compromise is arrived at between the parties, it is a

settlement of dispute referred to in the mediation pending before the

court. When the parties to the dispute sign the compromise, this

settlement comes to the public domain.           Confidentiality of the

mediation covers the matters only upto the stage of reaching at a

settlement or till the termination of the mediation. The parties when

put their signature by accepting the terms and conditions in writing,

the agreement is having all the characteristics of the compromise as

referred to under Order XXIII Rule 3 CPC and no party can withdraw

from it unilaterally. The moment it reaches the court, the court will


have to act upon the compromise and to pass a decree in terms of

the compromise.       No doubt, the court concerned will have to be

satisfied with the legality of the compromise as well as jurisdiction to

pass a decree based on such compromise. Once a settlement has

been arrived at between the parties in relation to the matter in the

suit, that concludes as far as the court concerned in relation to the

dispute resolved in the settlement. It is to be noted that the court

recording the compromise is entering into a satisfaction in terms or

Order XXIII Rule 3 CPC and the court is not merely acting upon

agreement. If one party wants to withdraw from the agreement, the

court has every power to decide whether the agreement was effected

lawfully or not. If it is proved to the satisfaction of the court that the

dispute has been settled wholly or in part by a compromise, the court

shall pass a decree in accordance with the agreement. The proviso

to Order XXIII Rule 3 has a significant guidance in this regard.

Therefore, if in the case of denial of an agreement or in the case of

unilateral withdrawal, the court will have to enter a satisfaction

whether there was a compromise of the subject matter of the suit or

not. In fact, in the case of denial or withdrawal of the agreement, the


court is bound to frame a question in this regard and decide the

matter as contemplated under Order XXIII Rule 3 CPC.

      9.    There cannot be any settlement between the parties as to

the manner in which the suit has to be conducted or concluded. For

that, the court is only bound by the Civil Procedure Code and other

relevant statutory provisions.     That means when a settlement is

arrived at, and the court is satisfied that a decree can be passed, the

court is bound to pass a decree.

      10.   In this case, it appears that based on the settlement,

petitioners want to proceed further by invoking the original jurisdiction

of the court to ensure that compromise is worked out. The various

petitions filed by the petitioners would clearly indicate that the

petitioners want to execute the settlement through the original

jurisdiction of the court.    If such procedure is allowed, that will

amount to obliterating the original jurisdiction of the court with that of

an executing court. Certainly, such procedure is disastrous to the

mediation process as well as to the adjudicatory process of the court

concerned.

      11.     In fact, it appears that the learned officer now presiding

the court had realised that the procedure earlier adopted by him and


his predecessor in office was wrong. That is the reason why the

learned Sub Judge observed that "unless and until the mediation

agreement is wiped off by the court, the petitioners cannot maintain a

petition to depute an Advocate Commissioner to measure the plaint

schedule property". The learned Sub Judge is right in finding so. In

such circumstances, the only course open for the court below is to

consider the nature of settlement to find whether a decree can be

passed or not based on such settlement. Therefore, there is no

scope for interfering with the order of the court below. The court

below, after adverting to the nature of the settlement, is directed to

pass appropriate orders in this matter without any delay.

      The original petition is disposed of as above.

                                              

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