Section 89 of the CPC talks of out of court settlement through the means of Alternative Dispute Mechanism. Mediation, Conciliation, Lok Adalats are the new tools of the justice dispensing system. It is to be understood here that, it will be wrong to infer from the provision that if the parties agree they can take the case completely out of court’s court. Still, the case will be regulated as per the provisions of the relevant ADRs Act.Order 23 Rule 1 of CPC talks of withdrawal of suit or a part of the claim in a suit. The order of CPC discusses out of court settlement without naming it.
- Make it sure you mention your clear intention of out of court settlement before the court.
- Under Order 23 Rule 1 of CPC when a suit is withdrawn for an out of court settlement, litigants are precluded from initiating fresh proceedings of the matter withdrawn.
- Out of court proceedings can be quashed by the court. Court can do this only under special circumstances.
- In the following case, the parties opted for an out of court settlement. The settlement was later found out to be malafide. The parties filed a Civil Miscellaneous Appeal (C.M.P) to quash the settlement results.
Out of Court Settlement in criminal matters
Criminal cases which are mostly concerned with private wrong can be settled out of court. These categories of offences are termed as compoundable offences. Therefore, only compoundable offences can be settled out of court.Offences arising from commercial, financial, mercantile, civil, partnership, relating to matrimony or dowry can be opted for out of court settlement. The court observes that the offence should not be of such grave nature to harm the society at large.