Orissa High Court: In the present petition, the petitioners challenged the Trial Court’s order, which declined to pass a decree on the compromise, and sought direction to enforce a mediated settlement in a suit over easementary rights through government land, arguing that such refusal violated the mandate under Section 89 of the Civil Procedure Code, 1908 (‘CPC’) and the Civil Procedure Mediation Rules, 2007 (‘Mediation Rules’).
A Single Judge Bench of Sashikanta Mishra, J., while allowing the petition held that the Trial Court’s action nullified the entire exercise undertaken under Section 89 read with Order 10 Rule 1-A CPC and failed to comply with the mandate of Rule 25 of the Mediation Rules. The Court emphasised that once the dispute was settled and a report submitted before the Court, there was no other option available than to pass a decree in accordance with the settlement.
Background:
The petitioners, plaintiffs in a civil suit before the Additional Civil Judge (Senior Division), filed an application challenging the order dated 27-06-2024. In the suit, they sought a declaration of their right of user over a scheduled property as a passage, a perpetual injunction restraining the defendants from raising any construction or interfering with such use, and a mandatory injunction for removal of any obstruction, if raised during the pendency of the suit.
During the proceedings, the defendants expressed willingness to resolve the dispute amicably and jointly filed a petition under Section 89 CPC, requesting referral to mediation. Consequently, the Court allowed the request, and the matter was referred to a mediator.
In the mediation, the parties acknowledged that the disputed land was government land and agreed not to claim any right, title, or possession over it. They further agreed not to obstruct each other’s use of the land as a passage and not to construct any permanent structure thereon. Accordingly, the mediator submitted a report recording the successful settlement.
Both parties prayed for acceptance of the report and for a decree to be passed in accordance with the settlement. However, the Trial Court, after perusing the report, though accepting it, declined to pass a decree. It was held that a decree of declaration cannot be passed upon mere compromise or understanding entered between the parties and that positive evidence must be led for such a decree. Consequently, the plaintiffs challenged this order under Article 227 of the Constitution.
Analysis and Decision:
The Court observed that the Trial Court proceeded on a misconceived notion that the suit being one for declaration could not be decreed based on a compromise. The Court emphasised that Clause (d) of sub-Section (2) of Section 89 CPC makes it clear that the Court has the power to affect a compromise between the parties in cases where the dispute has been referred to mediation. The Court further noted that the procedure for mediation is governed under the Mediation Rules, and relevant provisions therein are applicable to such cases.
The Court highlighted that alternative dispute resolution (‘ADR’) has become a statutory imperative in cases that have elements of settlement. It is mandatory for the Court to consider, at the time of first hearing, whether the matter could be settled outside the Court as per Section 89(1) CPC by opting for any of the prescribed modes. The Court noted that in the present case, the Trial Court on the prayer of the parties, referred their dispute to mediation, which implied that the Trial Court considered the dispute suitable for settlement through mediation, and otherwise such a reference would not have been made. Consequently, the Court expressed its confusion as to how, despite the dispute being settled, the Trial Court held that no decree recording such settlement could be passed.
The Court referred to the decision in Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (P) Ltd., (2010) 8 SCC 24, where the Supreme Court illustrated a list of cases not suitable for ADR processes. The Court noted that suits for declaration of title against the Government were among those excluded. However, the Court clarified that in the present case, although a declaration was sought, it was exclusively about the right of user over the scheduled property as passage and injunction. No declaration of title was sought against the Government.
The Court observed that disputes between neighbours relating to easementary rights are clearly mentioned as suitable for mediation. In the present case, the plaintiffs and defendants were adjoining landowners, each claiming right of passage over the scheduled land, which admittedly belonged to the Government. The parties did not claim any title against the Government and had agreed not to raise any such claim. The Court noted that the dispute was settled with both parties agreeing to have equal access to the passage, and this agreement was recorded by the mediator who submitted a report before the Court.
The Court emphasised that once the dispute was settled and a report submitted before the Court, there was no other option available than to pass a decree in accordance with the settlement, subject to the situations envisaged under sub-Rule (3) of the Mediation Rules. However, the Court found that the Trial Court, despite accepting the report of the mediator, did not proceed to pass a decree in terms thereof and instead asked the plaintiff to adduce evidence. The Court held that this action nullified the entire exercise undertaken under Section 89 read with Order 10 Rule 1-A CPC and failed to comply with the mandate of Rule 25 of the Mediation Rules. Therefore, the Court concluded that the order could not be sustained in the eye of law.
The Court, thus, allowed the petition and set aside the order passed by the Trial Court, holding that its refusal to decree the suit in terms of the mediated settlement was legally unsustainable. The Court further directed the Trial Court to pass an appropriate decree for disposal of the suit in accordance with the compromise arrived at between the parties, as recorded in the report submitted by the mediator.
[Charulata Beura v. Ranjana Pradhan, 2025 SCC OnLine Ori 3902, decided on 24-10-2025]
Advocates who appeared in this case:
For the Petitioners: K.M. Dhal, Advocate
For the Opposite Parties: D.P. Mohanty, Advocate
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