Mediation In Cheque Dishonour Cases: Legality And Binding Effect

This article is an attempt to highlight a very important question of law facing magisterial courts today. The question is ‘the legal permissibility of referring a complaint case u/s 138 of the NI Act for amicable settlement through Mediation, and the legal implications of breach of a mediation settlement agreement’. In what can be termed the locus classicus on the subject - Afcons Infrastructure Limited and another V Cherian Varkey Constructions Company Private Limited, 8 SCC 24, the Hon’ble Supreme Court has laid down an illustrative category of cases where mediation is normally not permissible and those where the same is permissible as a form of dispute resolution :- The following categories of cases are normally considered to be not suitable for ADR process having regard to their nature: Representative suits under Order 1 Rule 8 CPC which involve public interest or interest of numerous persons who are not parties before the court.. Disputes relating to election to public offices. The preamble to the Mediation and Conciliation Rules, 2004 makes this amply clear in the following words :- “In exercise of the rule making power under Part X of the Code of Civil Procedure, 1908 and clause of sub-section of Section 89 of the said Code and all other powers enabling it in this behalf, the High Court of Delhi hereby makes the following Rules.” Therefore, there is a clear vacuum insofar as rules governing mediation in criminal compoundable cases are concerned. There is a need for guidelines laying down the legal basis of referral of criminal compoundable cases to mediation, the procedure to be adopted by the mediators/mediation institution, and also laying down the aftermath of mediation proceedings, it’s enforceability and procedure to be adopted by a criminal court on receipt of a mediation settlement agreement and consequences of breach thereof.