Institutional Mediation mechanism more productive in dispute resolution than protracted litigation: SC [Read Judgment]

The Supreme Court, in Suresh Narayan Kadam vs. Central Bank of India, has stated that mediation through an institutional mechanism is more productive than one without it. Apex Court Bench comprising of Justices Madan B. Lokur and R.K. Agrawal said that institutionalized mediation is yet to be recognized as an acceptable method of dispute resolution.

The Court made this observation while hearing a decade-old dispute between Central Bank of India and its employees in Mumbai. The Maharashtra housing authority had given a 90-year lease of land to accommodate its middle-level staff in 1982. Later it wanted to demolish the ten buildings and raise a better complex for the managerial staff. The residents challenged the move in several tiers of courts and lost.

In the opening statement of the Judgment, the Court remarked “The proceedings in these petitions as indeed the proceedings in the Bombay High Court (out of which the present petitions have arisen) indicate a clear need for encouraging an amicable settlement process, preferably through mediation, in which the services of a mediator well-versed in the art, science and technique of mediation may be taken advantage of. The alternative, of course, is protracted litigation which may not be the best alternative for the contesting parties or for a society that requires expeditious justice delivery.”

The Court also added that it has consistently encouraged the settlement of disputes through an institutionalized alternative dispute resolution mechanism. The Court referred to following decision in this regard (i) Salem Advocate Bar Assn. (II) v. Union of India1 (ii) Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (P) Ltd. (iii) K. Srinivas Rao v. D.A. Deepa.

The Court dismissing the employees' final appeal, said that that the employees could not interfere in the lease agreement between the housing authority and the bank as they were outside it. Further, housing was not part of the service conditions. The court, while ordering the employees to vacate the premises, however prevented the bank from recovering compensation from the occupants.

Read the Judgment here.