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ARBITRATION AND ALTERNATE DISPUTE

RESOLUTION

PROJECT WORK:
SECTION 80 OF CPC & ADR

Submitted By:
Gurpreet Singh
A11911111029
Semester 9
Section A

ACKNOWLDGEMENT

It is not possible to prepare a project report without the assistance & encouragement of other
people. This one is certainly no exception.
I take this opportunity to express my profound gratitude and deep regards to Dr Aditya Tomer
, the professor of Arbitration and Alternate Dispute Resolution subject for ninth semester
Professor for his exemplary guidance, monitoring and constant encouragement throughout
the course of this assignment. The blessing, help and guidance given by his time to time shall
carry me a long way in the journey of life on which I am about to embark.

Table of Contents
INTRODUCTION...................................................................................................... 4
OBJECT OF SECTION 80 OF CIVIL PROCEDURE CODE.............................................4
STATUTORY NOTICE WHETHER MANDATORY............................................................5
STATUTORY NOTICE WHETHER AN EMPTY FORMALITY.............................................5
CONSOLIDATION OF ALL THE LAW COMMISSION REPORTS ON THE SECTION........7
ADR: PHILOSOPHY & IMPLEMENTATION IN INDIA....................................................9
VARIOUS TYPES OF ALTERNATE DISPUTE RESOLUTION:.......................................10
ADVANTAGES OF ARBITRATION AS A MODE OF ADR:...........................................11
MEDIATION AS MODE OF ALTERNATE DISPUTE RESOLUTION:..............................12
CONCILIATION AS A MODE OF ALTERNATE DISPUTE RESOLUTION:......................13
BIBLIOGRAPHY..................................................................................................... 16

INTRODUCTION
Section 80(1) of Code of Civil Procedure lays down that no suit shall be instituted against
government or public officer unless a notice has been delivered at the government office
stating the cause of action, name, etc. The whole object of serving notice u/s 80 is to give the
government sufficient warning of the case which is going to be instituted against it and that
the government, if it so wished can settle the claim without litigation or afford restitution
without recourse to the court of law. It provides an opportunity to consider its or his legal
position and if the course is justified to make amends or settle the claim out of court.

OBJECT OF SECTION 80 OF CIVIL PROCEDURE CODE


The object of the above section is to see to it that there is advancement of justice and also see
to it that Public welfare is secured by avoiding unnecessary litigations.
The primary object underlying Section 80 is to afford an opportunity to the Government or
the public officer to consider the legal position and to settle the claim put forward by the
prospective plaintiff if the same appears to be just and proper. The government, unlike private
parties, is expected to consider the matter objectively and dispassionately and often obtaining
proper legal advice, it can take an appropriate decision in the public interest within a period
of two months allowed by the section by saving public time and money and without driving a
person to avoidable litigation. The legislative intent behind the provision is that public money
should not be wasted for unnecessary litigation. The Section has been intended to alter the
government or a public officer to negotiate just claims and to settle them if well-founded
without adopting an unreasonable attitude by inflicting wasteful expenditure on the public
exchequer.
In Bihari Chowdhary v. State of Bihar (1984) 2 SCC 627: AIR 1984 SC 1043, the purpose
behind the provision has been highlighted by the Apex Court thus:
when we examine the scheme of the section it becomes obvious that the section has been
enacted as a measure of public policy with the object of ensuring that before a suit is
instituted against the government or a public officer, the government or the officer concerned
is afforded an opportunity to scrutinize the claim in respect of which the suit is proposed to
be filed and if it be found to be a just claim, to take immediate action and thereby avoid
unnecessary litigation and save public time and money by settling the claim without driving

the person, who has issued the notice, to institute the suit involving considerable expenditure
and delay. The government, unlike private parties, is expected to consider a matter covered by
the notice in a most objective manner, after obtaining such legal advice as they may think fit,
and take a decision in public interest within the period of two months allowed by the section
as to whether the claim is just and reasonable and the contemplated suit should, therefore, be
avoided by speedy negotiations and settlement or whether the claim should be resisted by
fighting out the suit if and when it is instituted. There is clearly a public purpose underlying
the mandatory provision contained in the section insisting on the issuance of a notice setting
out the particulars of the proposed suit and giving two months time to government or a
public officer before a suit can be instituted against them. The object of the section is the
advancement of justice and the securing of public good by avoidance of unnecessary
litigation.

STATUTORY NOTICE WHETHER MANDATORY


The provisions of Section 80 are express, explicit and mandatory and admit no implications
or exceptions. They are imperative in nature and must be strictly complied with. They impose
absolute and unqualified obligation on the court. No court can entertain a suit unless the
notice is duly served under sub-section (1) of Section 80. If the section has done injustice, it
is a matter which can be rectified by a legislature and not by a court.
As the Supreme Court has observed:
The section is imperative and must undoubtedly be strictly constructed; failure to serve a
notice complying with the requirements of the statute will entail dismissal of the suit.

STATUTORY NOTICE WHETHER AN EMPTY FORMALITY


Statutory notice is not as empty a formality. The object is to afford an opportunity to the
government or a public officer to reconsider the matter in the light of the settled legal position
and take an appropriate decision in accordance with law. Such notice has, however become
an empty formality. The administration is often unresponsive and shows no courtesy even to
intimate the aggrieved party why his claim is not accepted.
The Law Commissions 14th Report, Vol. I, pp. 475-76, therefore, recommended for the
deletion of Section 80 It stated:

The evidence disclosed that, in large majority of cases, the government or the public officer
made no use of the opportunity afforded by the section. In most cases the notice given under
Section 80 remained unanswered till the expiry of the period of two months provided by the
section. It was also clear that, in a large number of cases, government and public officer
utilized the section merely to raise technical defence contending either that no notice had
been given or that the notice actually given did not comply with the requirements of the
section. These technical defences appeared to have succeeded in a number of cases defeating
the just claims of citizens.
In State of Punjab v. Geeta Iron & Brass Works (1978) 1 SCC 68 (69): AIR 1978 SC 1608
(1609).
Krishna Iyer, J. also stated: we like to emphasize that government must be made accountable
by parliamentary social audit for wasteful litigative expenditure inflicted on the community
by inaction. A statutory notice of the proposed action under Section 80, CPC is intended to
alert the State to negotiate a just settlement or at least have the courtesy to tell the potential
outsider why the claim is being resisted. Now Section 80 has become a ritual because the
administration is often unresponsive and hardly lives up to Parliaments expectation in
continuing Section 80 in the code despite the Central Law commissions recommendations
for its deletion. An opportunity for settling the dispute through arbitration was thrown away
by sheer inaction. A litigative policy for the state involves settlement of governmental
disputes with citizens in a sense of conciliation rather than in a fighting mood. Indeed, it
should be a directive on the part of the state to empower its law officer to take step to
compose disputes rather than continue them in court. We are constrained to make these
observations because much of the litigation in courts for which governments are involved
adds to the caseload accumulation in courts for which there is public criticism. We hope that a
more responsive spirit will be brought to bear upon governmental litigation so as to avoid
waste of public money and promote expeditious work in courts of cases which deserve to be
attended to.
In Ghanshyam Das (1984) 3 SCC 46: AIR 1984 SC 1004, also, without referring to Geeta
Iron & Brass Works (1978) 1 SCC 68 (69): AIR 1978 SC 1608 (1609), the Supreme Court
noted that in a large majority of cases the government or the public officers concerned made
no use of the opportunity afforded by the section, but utilized the section merely to raise
technical defence with a view to defeat just claims of citizens.

The Court, however, deprecated the practice of granting urgent relief in a suit filed without
complying with the provisions of Section 80. Laying down the principle, A.P. Sen, J. stated:
Before parting with the case we consider it necessary to refer to one more aspect. It has
frequently come to our notice that the strict construction placed by the Privy Council In
Bhagchand AIR 1927 PC 176: 104 IC 257, which was repeatedly reiterated in subsequent
cases, has led to a peculiar practice in some courts. Where urgent relief is necessary, the
practice adopted is to file a suit without notice under Section 80 and obtain interim relief and
thereafter to serve a notice, withdraw the suit and institute a second suit after expiry of the
period of the notice. We have to express our strong condemnation of this highly objectionable
practice. We expect that the High court will take necessary steps to put a stop to such
practice.

CONSOLIDATION OF ALL THE LAW COMMISSION REPORTS


ON THE SECTION
1. 14th and 27th Law Commission Report
Recommended for the deletion of section 80 from CPC in 14th and the emphasis for
the same we laid down in the 27th report. Reason - The evidences disclosed in the
large majority of cases of the government or the public officer made no use of the
opportunity afforded by the section. In most cases the notice given under section 80
remained unanswered till the expiry of two months provided by the section. It was
also clear that in a large number of cases, governments and public officers utilized
the section merely to raised technical defences contending either no notice was given
or the notice given was did not comply with the requirements of the sections and this
technical defence appears to have been succeeded in a number of cases defeating the
just claims of the citizens

2. 54th Law Commission Report


This report shows the process of incorporation of ADR into the section. It talks about
speedy remedy and fast disposal of cases which is the milk stool on which ADR
stands. In every suit where the party is the government or where the officer has acted
in his official capacity it shall be the duty of the court to make all the efforts to assist
the party in arriving a settlement. Also if in any suit it appears to the court that there
is a chance of settlement between the parties then the court for the time being will
adjourn the matter and make attempts to make such a settlement.

3.

100th Law Commission ReportThe concept of prior notice needs to be given to the government or the officers
acting in its official capacity needs to be repealed.

4. 221st Law Commission Report


Issuing of notice and the legislative intent behind the enactment of such a section is
to give the Government & public official who has acted in its official capacity, the
opportunity to reconsider the claim for which the suit would be filed against him.
Also if possible, to see that the issue can be solved without any litigation because it
would be unnecessary wastage of time and money of the parties, Recommendations
That as such notice of two months needs to be given but if the matter is urgent then
with the prior permission of court one can institute the suit. The commission was of
the view that a similar provision need to be introduced were it will be mandatory to
give notice to the other party before institution of suit i.e. he must give a copy of
plaint through registered post and thereafter he must file an affidavit along with his
plaint stating the fact of service of notice along with a copy of plain. Amendment of
Section 80 and order 5 of the Code of Civil procedure, 1908 and also the concerned
court rules In order to shorten delays, it is necessary that provisions parallel to
section 80 of Code of Civil Procedure 1908 be introduced to all kinds of civil suits
and cases proposed to be filed by a litigant.

ADR: PHILOSOPHY & IMPLEMENTATION IN INDIA


ADR is by no means a recent phenomenon in India, though it has been organized and
systematized, expressed in clearer terms, employed more widely in dispute resolution in
recent years than before. In earlier times, disputes were peacefully decided by intervention of
kulas (family or clan assemblies), srenis (guilds of men following the same occupation),
parishads (assemblies of learned men who knew law) before the king came to adjudicate on
disputes. There were Nyaya panchayats at grass root level before the advent of the British
system of justice. Later on, Lok Adalats (people's court) have provided speedy and
inexpensive justice in both rural and urban areas in India.
In India, laws relating to resolution of disputes have been amended from time to time to
facilitate speedy dispute resolution. The Judiciary has also encouraged out of court
settlements to alleviate the increasing backlog of cases pending in the courts. To effectively
implement the ADR mechanism, organizations like ICA, ICADR were established, Consumer
redressal forums and Lok Adalats revived. The Arbitration Act, 1940 was repealed and a new
and effective arbitration system was introduced by the enactment of the Arbitration and
Conciliation Act, 1996.This law is based on the United Nations Commission on International
Trade Law (UNCITRAL) model law on International Commercial Arbitration.
The Legal Services Authorities Act, 1987 has also been amended from time to time to
endorse use of ADR methods. Section 89 of the Code of Civil Procedure as amended in 2002
has introduced conciliation, mediation and pre-trial settlement methodologies for effective
resolution of disputes. Mediation, Conciliation, Negotiation, Mini Trial, Consumer Forums,
Lok Adalats and Banking Ombudsman have already been accepted and recognised as
effective Alternative dispute resolution methodologies.
Abraham Lincoln puts the philosophy of Alternate Dispute Resolution systems by declaring
"discourage litigation; persuade your neighbours to compromise whenever you can. Point-out
to them how the normal winner is often a loser in fees, expenses, cost and time." Further, the
Constitution of India has defined and declared the common goal for all of us as "to secure
to all the citizens of India Justice social, economic and political; Liberty; Equality and
Fraternity". ADR is a vehicle to achieve these principles and objectives.

VARIOUS TYPES OF ALTERNATE DISPUTE RESOLUTION:

Arbitration alone is not ADR; ADR may be through the following modes of ADR:
1. Negotiation: Is a non-binding procedure, in which discussions between the parties are
initiated without the intervention of any third party, with the sole objective of arriving
at a negotiated settlement of a dispute.
2. Conciliation/Mediation: A non-binding procedure in which an impartial third party i.e
the conciliator or the mediator, assists the parties to a dispute in reaching a mutually
satisfactory and agreed settlement of disputes.
3. Mediation/Arbitration: A Procedure which combines conciliation and mediation at a
subsequent stage in instances where the dispute is not settled through either
conciliation /mediation within a period of time agreed in advance by the parties to
arbitration.
4. MEDOLA : Is a procedure in which ,if parties fail to reach an agreement through
mediation, a neutral person ,who may be the original mediator or an arbitrator ,will
select between the final negotiated offers of parties, such selection being binding on
the parties.
5. Mini Trial: A Non-binding procedure in which the disputing parties are presented
with summaries of their cases, so as to enable them to access the strengths,
weaknesses and prospects of their case and then an opportunity to settle it is explores.
6. Arbitration: Is a procedure in which the dispute is submitted to an arbitral tribunal
which makes a decision(an award) on the dispute, that is binding upon the parties.
7. Fast Track Arbitration: A form of Arbitration in which the arbitration procedure is
rendered in a particularly short time and that too at a reduced cost.
8. Lok Adalats: Besides the above, Lok Adalats are also doing well as a mode of
alternate dispute resolution system.
9. Ombudsman: Ombudsman is a person with special powers to investigate cases in
certain areas such as health, pensions or in instances where there may be a dispute
particularly if a government body is involved. An ombudsman can only recommend
as to how a dispute may be resolved, however his/her recommendations cannot be
enforced.

10. Tribunals: Tribunals are similar to a court without the ritual or formality they, there
are a no. of specialized tribunals which bear the name of their specialization, eg:
Employment Tribunal, Immigration Tribunal.

ADVANTAGES OF ARBITRATION AS A MODE OF ADR:


Supporters of Arbitration hold that it has a multitude of advantages over the regular court
litigation, The Advantages of Arbitration as a mode of ADR can be summarized as follows:
1. Freedom of choice of Decision Maker: Parties to Arbitration are free to choose a
technical person as arbitrator, in case of disputes involving questions of technical
nature.
2. Efficiency: Hearings of arbitration proceedings are finished sooner than court
proceedings, In addition Arbitration proceedings are of a shorter length and
preparation work is less demanding.
3. Privacy: Arbitration hearings are confidential private meetings in which attendance of
media and members of public is not permitted and even final decision of such
proceedings is not published, this procedure is particularly beneficial to those who
dont wish to wash their dirty linen in public, and has consequently become a routine
with corporate enterprises.
4. Convenience: Arbitration hearings are arranged at times and places which suit the
parties, arbitrators and witnesses.
5. Flexibility: Arbitration Procedures can be segmented, streamlined or simplified
according to change of circumstances.
6. Finality: There is as such no right of appeal in arbitration, even though the court has
the power to remit or set aside the arbitration, more or less the award of an arbitrator
is final.

MEDIATION AS MODE OF ALTERNATE DISPUTE


RESOLUTION:
Mediation is basically negotiations carried out with the assistance of a neutral third party;
however recommendations of a mediator are not binding.

In true sense of the term mediation is a method of non-binding dispute resolution involving a
neutral third party, who tries to assist the disputing parties to reach a mutually agreeable
solution.
Advantages of Mediation as an ADR:
The Advantages of Mediation as Enumerated In Conciliation and Mediation Centre are:
1. It puts the parties in control of both dispute as well as its resolution.
2. Law Mandates mediation and the courts encourage and enforce it.
3. Process of Mediation is confidential.
4. Procedure adopted in mediation is simple and the atmosphere at mediation cell is
informal.
5. Mediation as a mode of ADR is voluntary and parties to mediation can at any time
opt out of mediation, if it does not help.
6. Mediation saves costs on what actually becomes a prolonged litigation.
7. Mediation makes the disputing parties aware of the strengths and weaknesses of their
case and helps them find a realistic solution.
8. Mediation as a mode of dispute resolution concentrates on long term interest and
creates an opinion for settlement.
9. Mediation is instrumental in restoring broken relationships; its main focus is on
improving future and not dissecting the past.
10. Parties to mediation can, in fact opt for more by signing a settlement that works to the
benefit of both the aggrieved as well as his opponent.
11. At the end of the mediation, the relationship of the parties can be restored to a
position as had existed before the culmination of such a dispute.
Role Played By A Mediator In Making Mediation A Success:
A Mediator plays an active role in settling the dispute between parties to mediation: Some of
the Key roles played by a mediator for settling the conflict between the disputing parties are
as follows:
1. Mediator organizes meeting related logistics.
2. Ensures adequate representation of interests of both parties to dispute.
3. Mediator assists in keeping the discussion focused on track.
4. Mediator actively participates in assisting the development of an agreement.
5. Presents series of settlement options available to parties.

CONCILIATION AS A MODE OF ALTERNATE DISPUTE


RESOLUTION:
Conciliation is a settlement of a dispute in an agreeable manner, it is a process in which a
neutral person meets with a party to dispute and explores how the dispute might be resolved.

Any Democracy worth the name must provide adequate means of dispute resolution.
Settlement of disputes by mutual compromise is a much better method, than seeking
adjudication in the adversary legal system. The System of conciliation was for the first time
tried in Japan, France and Norway. In India the idea of conciliation was evolved on an
experimental basis by the High Court of Himachal Pradesh.
Conciliation as a method of alternate dispute resolution has been quite instrumental in
relieving congestion, particularly at trial court level; in addition it has been quite successful in
reducing the inflow of cases in superior courts. It was in fact the conciliatory principle of not
allowing revision or appeal at the insistence of any of the reconciled parties that led to a
dramatic reduction in the increasing inflow of revision and appeal cases in superior courts.
Settlement by disputes my mutual compromise, envisaged by conciliation as a mode of
alternate dispute resolution is a much better method than seeking adjudication in the
adversary legal system which apart from generating tension and leaving a trail of bitterness,
burdens the parties with heavy financial expenditure. In certain instances even the successful
party, has to wait for years before enjoying the fruits of litigation.
Conciliation as a Beneficial Means of ADR
Conciliation as a means of alternate dispute resolution has stood the test of time and has
emerged as a beneficial mode for sharing the burden of litigation by encouraging quick
amicable settlement of disputes. Conciliation has minimized the pendency of old cases and
has been instrumental in ensuring that litigation is brought to an end by resorting to a
mutually acceptable and amicable settlement of issues pending litigation.
With a view to relieve regular courts of the excessive overflow of litigation, certain
categories of cases with reasonable possibility of amicable settlement are transferred to
conciliation courts ,which in fact do their best to assist parties to dispute to arrive at a
mutually agreeable reconciliation.
A settlement agreement reached by parties to conciliation has a status and effect similar to an
arbitral award.
The liberty given to civil courts under sec-89 of CPC, to refer a dispute for conciliation even
where the parties do not consent, provided the court in all earnestness deems it fit for
conciliation, has been one of the most important reasons for the phenomenal success of
conciliation as a key alternate dispute resolution procedure.
Drawbacks of Conciliation

Though Conciliation proceedings have proved themselves to be a beneficial mode of


Alternate Dispute Resolution, yet certain aspects of the system demand an overhaul.
Some Drawbacks of Conciliation as a Mode of Alternate Dispute Resolution: which need a
mention are:1. Once litigation starts there will rarely be negotiations as litigants have already
invested some money and would not be willing to give up their chance of winning.
2. In addition to this lawyers of both sides, who charge their fee on the basis of every
appearance, would have no incentive for considering any possible compromise.

BIBLIOGRAPHY
1. Aiyer, P. Ramnatha, The Law Lexicon- The Encyclopedic Law Dictionary,
Wadhwa, Nagpur, 2nd Edition, Reprint 2006.
2. Edited by Rao, P.C., & Sheffield William, Alternative Dispute Resolution,
Universal Law Publishing Co. Pvt. Ltd.
3. Jhunjhunuwal, S. M., Justice; Saraf Dr. B. P., Justice, Law of Arbitration And
Conciliation, Snow White, Fourth Edition, 2006.Publications Pvt. Ltd.
4. Malhotra, O.P.; Malhotra, Indu, The Law And Practice of Arbitration And
Conciliation, Lexis Nexis, Butterworths, second Edition.
5. Singh, Avtar, Law of Arbitration And Conciliation, Eastern Book Company,
Lucknow, Eighth Edition, 2007.

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