Mediated Settlements Enforceable Only with Court Approval: J&K High Court
Last Updated on January 7, 2025 by Athi Venkatesh
Mediated Settlements Must Follow Procedural Compliance
The Jammu and Kashmir and Ladakh High Court has reaffirmed that mediated settlements become enforceable only after court approval under the Jammu and Kashmir Mediation and Conciliation Rules, 2019. Justice Sanjay Dhar emphasized that settlements require written documentation, signatures from parties or their representatives, and subsequent judicial scrutiny.
Citing Rules 24 and 25 of the mediation rules, the court explained that a mediator must forward the settlement to the court for evaluation. If the court finds the resolution amicable, it must pass a decree or order based on the settlement terms.
This clarification arose from a property dispute involving Nazir Ahmad Bhat, who sought an injunction against interference in his property dealings. The dispute stemmed from agreements to sell immovable property valued at ₹2.19 crores. Allegations of non-compliance and counterclaims over payments led the trial court to order a status quo and deposit of funds in May 2024.
During mediation in July 2024, the parties agreed on terms, including payment of ₹96.50 lakhs and permission to sell the property to third parties. However, the settlement was not presented for judicial approval. Subsequently, the petitioner sought adjudication under Order 12 Rule 6 of the CPC. The trial court directed settlement execution despite lacking judicial approval, prompting the petitioner to challenge the order.
Justice Dhar ruled that mediated settlements must comply with the procedural framework and receive judicial acknowledgment under the Mediation Rules and Order 23 Rule 3 of the CPC. He noted that the trial court failed to issue a decree or address valuation and court fee requirements under the Suits Valuation and Court Fee Acts.
The High Court set aside the trial court’s order, stressing the importance of judicial oversight in mediated settlements.
