Step 1: Understanding the Concept:
Section 89 of the Code of Civil Procedure (CPC) is a pivotal provision that empowers civil courts to refer disputes to various Alternate Dispute Resolution (ADR) mechanisms to facilitate out-of-court settlements. This was not part of the original code.
Step 2: Detailed Explanation:
Based on the recommendations of the Law Commission of India and the Malimath Committee Report, the legislature sought to introduce ADR mechanisms formally into the civil justice system to reduce the pendency of cases.
Section 89 was inserted into the CPC by the Code of Civil Procedure (Amendment) Act, 1999. Although the Act was passed in 1999, this section came into effect on July 1, 2002.
Section 89 provides that if 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 refer the same for:
(a) arbitration;
(b) conciliation;
(c) judicial settlement including settlement through Lok Adalat; or
(d) mediation.