Settlement Of Disputes Outside Courts | Section 89 CPC Applies To Proceedings Before Rent Control Court: Kerala High Court

The Kerala High Court has laid down that Section 89 of the Code of Civil Procedure (CPC) shall apply to proceedings before the Rent Control Court. 

Section 89 of CPC provides for 'settlement of disputes outside courts' including arbitration, conciliation, and judicial settlement including settlement through Lok Adalat, or mediation. 

The Division Bench comprising Justice P.B. Suresh Kumar and Justice Johnson John took the view that Section 89 CPC does not run counter to any of the provisions of the Kerala Buildings (Lease and Rent Control) Act (hereinafter, 'the Act'), including Section 23 of the Act which states that the Rent Control Court and the appellate authority shall have the powers vested in a civil court as per CPC. 

The Bench discerned that the Rent Control Court is vested with the power conferred on the civil court on various other matters, as well, and thereby ascertained that Section 89 CPC would apply to proceedings before the Court. 

The Court was fortified in its view in light of the various provisions in the Legal Services Authorities Act, 1987 ('1987 Act'), as well. It found that Section 2(1)(aaa) of the 1987 Act which defines “court” is wide enough to include within its sweep, the Rent Control Court also, since the same is a forum exercising judicial functions, and Section 20 of the 1987 Act confers power on the Rent Control Court to refer a pending matter to the Lok Adalat and if such a matter is settled and an award is passed in terms of Section 21

"In other words, if a matter referred by the Rent Control Court to a Lok Adalat is settled at the Lok Adalat, an award passed by the Lok Adalat in relation to the matters covered by the Act, as also matters not covered by the Act, but brought before the Lok Adalat by the parties, can certainly be enforced in the light of the provisions contained in the 1987 Act," the Bench observed. 

It went on to add,

"Yet another reason for us to take this view is that alternative dispute resolution mechanisms are now considered, having regard to the challenges faced by the justice delivery system in place, especially the huge pendency, as the appropriate dispute resolution mechanisms...The huge pendency of the rent control matters and the time taken by courts for disposal of the same also prompt us to hold that alternative dispute resolution mechanisms shall be made applicable to the proceedings under the Act". 

As per the factual matrix, during the pendency of the eviction proceedings, the dispute between the petitioner tenant and the respondent landlord had been referred to mediation before the Ernakulam Mediation Centre, where it had been amicably settled, and a settlement agreement had also been executed, which was accepted by the Rent Control Court and the eviction petition was disposed of in terms of the settlement. 

Subsequently, although the petitioner surrendered vacant possession of the premises pursuant to the settlement agreement, the property agreed to be transferred towards arrears of rent was not so transferred, nor were the arrears of rent paid to the respondent. Pursuant to the same, the respondent filed an execution petition before the Munsiff Court, and it is subsequent to the same that the present plea has been filed before the High Court seeking a declaration that the Munsiff Court lacks jurisdiction to entertain the execution petition. 

The petitioner contended that the Rent Control Court lacked jurisdiction to dispose of eviction proceedings in favour of the landlord unless it holds that one or other grounds prescribed in the Act exists in the case, which had not been so rendered by the Court in the present case. 

On the other hand, the respondent landlord argued that the Rent Control Court is empowered to refer to pending eviction proceedings for mediation and that if the matter is settled at the mediation, the Court would be acting within its jurisdiction in disposing of the eviction proceedings based on the settlement agreement. It was added that the Rent Control Court doesn't have to examine the question of whether there exists any ground for eviction as prescribed in the Act, and that the settlement agreement accepted by the Court could be executed treating the same s an award of the Lok Adalat. 

The afore argument raised by the respondent was supported by Amicus Curiae George Varghese Perumpallikuttiyil, who submitted that since the eviction petition had been referred for mediation, in light of Section 89 CPC, the Ernakulam Mediation Centre shall be deemed a Lok Adalat Adalat and that all provisions of the 1987 Act would apply. He further asserted that Section 89 CPC would apply to proceedings before the Rent Control Court, and that the Court would be justified in giving a stamp of approval to a settlement arrived at between the parties to proceedings on reference of the same for mediation. 

Having found that Section 89 CPC would certainly apply to proceedings before the Rent Control Court for the reasons mentioned hereinbefore, the Court was posed with the question as to whether the Rent Control Court would be competent to give its approval to a settlement agreement between the parties not covered under the Act. 

Perusing various provisions of the 1987 Act, as well as the decision in Afcons Infrastructure Ltd., wherein the Apex Court held that for disputes which are not the subject matter of suit/proceedings, settlement agreements once accepted by the court would become enforceable under law as per Section 21 of the 1987 Act (which deems every award of Lok Adalat a decree of a Civil Court), the Court answered that settlement agreements arrived at, at the mediation and accepted by the Rent Control Court are enforceable.

The Court however found that the Munsiff Court, Kottayam did not have the pecuniary jurisdiction to deal with the execution petition, and clarified that the respondent would be free to insitute proceedings for execution of the settlement agreement before the appropriate forum. 

Counsel for the Petitioner: Advocates M.S. Aneer, and Sreelakshmi Suresh

Counsel for the Respondent: Advocates Usha Kumari P., C. Muralikrishnan, Abraham George Jacob, and P.I. Raheena

Citation: 2023 LiveLaw (Ker) 744

Case Title: Sindhu A.K. v. Nizar Kochery

Case Number: OP (RC) NO. 39 OF 2023

Click Here To Read/Download The Judgment