Alternate Dispute Resolution Notes | B.A. LL.B. (Five Year Course) Semester 7 | Mumbai University | munotes

A forum is the body before which a dispute is brought. A court is a forum, and so is an arbitral tribunal, and so is a Lok Adalat.

A tribunal is a body that decides disputes but is not part of the ordinary court hierarchy. An arbitral tribunal is the arbitrator or arbitrators appointed to decide one particular dispute.

An award is the decision of an arbitral tribunal, or of a Lok Adalat, corresponding to what a court calls a decree.

A decree, defined in section 2(2) of the Code of Civil Procedure 1908, is the formal expression of a court's adjudication conclusively determining the rights of the parties. Why this matters here is simple: several statutes in this subject take an outcome reached outside court and say it shall be deemed to be a decree, and that single sentence is what makes it enforceable.

Pre-litigation describes a stage before any case has been filed. Pending describes a case already before a court.

The four families, and the one line that separates them

Everything in this book is a variation on two questions. Who decides, and is the outcome imposed or agreed?

Negotiation is the parties talking to each other, with or without their lawyers, and nobody else present. There is no third person at all. If they agree, the agreement binds them as a contract. This is Module III, topic 3.3.

Mediation adds a neutral third person whose job is to help the parties reach their own agreement. The mediator does not decide anything. This is Module III, and the Indian statute on it, the Mediation Act 2023, is not yet in force in the part that matters, which is why chapter 620 exists.

Conciliation also adds a neutral third person, and in India that person may go further than a mediator traditionally does: section 67(4) of the Arbitration and Conciliation Act 1996 expressly lets a conciliator make proposals for a settlement at any stage. Part III of that Act is a complete statutory code for it, and it is Module III, topic 3.2.

Arbitration is different in kind from the other three. The parties agree, usually in advance and usually in a contract, that if a dispute arises it will be decided by a private tribunal of their choosing rather than by a court. The arbitrator hears both sides and makes an award, and that award binds them whether they like it or not. Arbitration is adjudication; it is simply adjudication by somebody other than a judge. The whole of Module II is the Act that governs it.

The Lok Adalat does not fit the four neatly, and that is the point of it. It is a forum organised under section 19 of the Legal Services Authorities Act 1987 where disputes are settled by agreement, and the settlement is then given the force of a civil court decree by section 21 of that Act. It settles rather than decides, which puts it with mediation and conciliation; but its outcome is as binding as a decree, which puts it with arbitration. Chapters 100 to 130 work it through.

One exception matters and is met in chapter 150. The Permanent Lok Adalat, created by Chapter VIA of the same Act, tries conciliation first and, if that fails, may go on to decide the dispute on its merits. It is the only body in this subject that does both.

The distinctions in a table

A worked example, so the differences are concrete

Meera runs a small printing press in Kurla. Aftab, who owns a chain of stationery shops, ordered forty thousand notebooks. Meera delivered them. Aftab paid part of the price and refused the balance of two lakh eighty thousand rupees, saying the paper was thinner than the sample.

Meera has choices, and each one is a different chapter of this book.

She can negotiate. She telephones Aftab, they argue, and eventually she offers to accept two lakh forty thousand rupees in full settlement. He agrees. They sign a letter recording it. That is negotiation, and the letter is a contract.

She can propose mediation. Neither will speak to the other, so they ask a retired professor both of them trust to sit with them for an afternoon. The professor decides nothing. He gets each of them to say what actually went wrong, and by the evening they have an agreement neither would have reached alone.

If their contract had an arbitration clause, she has no choice at all in one sense and a great deal of control in another. Section 7 of the Arbitration and Conciliation Act 1996 defines the agreement that makes arbitration possible; if the purchase order said that disputes would go to a sole arbitrator in Mumbai, then that is where the dispute goes, and if Aftab sues in court instead, section 8 requires the court to send the parties to arbitration. The arbitrator will hear the evidence about paper thickness and make an award, and Meera may lose.

She can take it to a Lok Adalat. She has not filed a case, but section 19(5)(ii) covers a matter falling within a court's jurisdiction that has not been brought before it, and section 20(2) lets the authority organising the Lok Adalat take it up on her application. If Aftab attends and they agree on two lakh sixty thousand rupees, the Lok Adalat passes an award, and by section 21 that award is deemed to be a decree of a civil court, executable if he does not pay, with no appeal against it.

She can also just file a suit. Sometimes that is right. If Aftab has no intention of settling anything and Meera needs an attachment before judgment to stop him moving his stock, a court is where she should be. ADR is an alternative, not a substitute, and a lawyer who cannot say when to litigate has learned this subject badly.

What this subject is called on your syllabus, and why that matters

The University of Mumbai prints this course as PRACTICAL TRAINING II, Alternate Dispute Resolution, and the syllabus opens by saying the course is in compliance with the Bar Council of India's prescription of compulsory clinical courses.

Two things follow that are worth knowing at the start.

It is a clinical paper, so the examiner expects you to be able to do things, not only describe them. Module IV is entirely skills: writing a case comment, researching a public interest petition, using legal databases, running a law office. Module III ends with counselling. Even in Modules I and II, a question is as likely to give you a set of facts and ask what forum you would use as to ask what section 34 says.

It is assessed by your college rather than by a University theory paper. MU's Winter 2026 examination timetable for the three-year LL.B., Semester III, sets four papers, and this is not one of them. That does not make the syllabus smaller. It is printed in full, it names two Acts outright, and everything in it can be asked of you. It does mean that the form your assessment takes is set by your college, so ask your teacher early what it will be.

What beginners get wrong

ADR is not a lesser form of law for smaller disputes. The largest commercial disputes in the world, running to billions, are arbitrated rather than litigated, and by choice. Size is not the criterion.

"Alternative" does not mean optional. Section 12A of the Commercial Courts Act 2015 makes mediation a condition that must be satisfied before certain suits can be filed at all, and an arbitration clause in a contract removes the parties' right to go to court on that dispute. Chapters 240 and 610 work both through.

Arbitration and mediation are not two words for the same thing. This is the single commonest error in this subject, and it is not a small one: an arbitrator imposes a decision and a mediator cannot impose anything. If you write them as interchangeable, you have said something plainly wrong.

A Lok Adalat is not a court holding a shorter hearing. It cannot try a dispute or pronounce on who is right. It can only record what the parties themselves agree, and chapter 120 works through the case where the Supreme Court set an award aside precisely because a Lok Adalat had gone further than that.

Quick revision

• ADR means resolving a dispute otherwise than by a court deciding it after trial.
• The families are negotiation, mediation, conciliation, arbitration, and the Lok Adalat.
• Only arbitration, and the Permanent Lok Adalat, produce a decision imposed on the parties. The rest produce agreements.
• The Lok Adalat is organised under section 19 of the Legal Services Authorities Act 1987, and section 21 deems its award a decree of a civil court, with no appeal.
• Arbitration rests on an arbitration agreement, defined in section 7 of the Arbitration and Conciliation Act 1996. Conciliation is Part III of the same Act, beginning at section 61.
• This subject is MU's Practical Training II, a Bar Council of India clinical course, assessed by your college.

Test yourself

1. In one sentence, what is the difference between a mediator and an arbitrator? A mediator helps the parties reach their own agreement and cannot impose anything; an arbitrator hears both sides and makes an award that binds them whether they agree with it or not.

2. A settlement reached in a Lok Adalat and a settlement reached over the telephone are both agreements. What makes them different in law? Section 21 of the Legal Services Authorities Act 1987 deems every award of a Lok Adalat to be a decree of a civil court, so it can be executed directly and no appeal lies against it. A telephone settlement is only a contract, and a party who wants to enforce it must sue on it.

3. Two companies are in dispute over a supply contract that contains no arbitration clause. Can one of them force the other to arbitrate? No. Arbitration rests on agreement. Without an arbitration agreement within section 7, there is nothing to refer, and the only routes are negotiation, mediation, conciliation, a Lok Adalat, or a suit.

4. Which of the forums in this subject can decide a dispute against a party who refuses to settle? An arbitral tribunal, under Part I of the Arbitration and Conciliation Act 1996, and a Permanent Lok Adalat, which may decide on the merits under section 22C(8) if conciliation fails and the dispute does not relate to an offence. An ordinary Lok Adalat cannot.

5. Why is it wrong to say ADR is always better than going to court? Because some disputes need adjudication: where a point of law must be settled, where one party will not engage at all, where an urgent coercive order is needed, or where the matter is one the law does not permit to be settled privately at all, such as a serious criminal offence.

Article 21, and why procedure has to be fair

Article 21 says no person shall be deprived of his life or personal liberty except according to procedure established by law.

Read literally that is a weak protection: any procedure a legislature enacts would do. In Maneka Gandhi v. Union of India the Supreme Court held otherwise, that the procedure contemplated by article 21 must be reasonable, fair and just. Everything in this chapter follows from that sentence.

Article 22(1), the right to consult a legal practitioner

Article 22(1) provides that no person who is arrested shall be denied the right to consult, and to be defended by, a legal practitioner of his choice.

Note its limit, because this is a classic distinction question. Article 22(1) is a right not to be denied a lawyer. It says nothing about who pays. A person who cannot afford one is not helped by it at all. The right to a lawyer at State cost had to come from article 21, and it did.

Article 14 and the equal-opportunity argument

Article 14 guarantees equality before the law. A system in which the outcome of a case depends on whether the litigant could afford counsel delivers formal equality and nothing else. This reasoning runs underneath the cases rather than being their formal basis, and the long title of the Act picks it up in the words "on a basis of equal opportunity".

The three cases, worked

M.H. Hoskot: legal aid reaches the appeal

Madhav Hayawadanrao Hoskot v. State of Maharashtra, AIR 1978 SC 1548, (1978) 3 SCC 544, decided on 17 August 1978, Krishna Iyer J.

Facts. Hoskot, a reader in a university department, was convicted of attempting to make a counterfeit university seal. He was in prison, was given no copy of the judgment in time, and had no lawyer, so his ability to appeal against the sentence was in practice destroyed.

Held. Because procedure under article 21 must be fair and reasonable, the State owes a prisoner who wants to appeal two things: a free copy of the judgment in time to file the appeal, and, where he is indigent and the ends of justice require it, free legal services, meaning a lawyer assigned at State cost. The right to counsel is not spent at the end of the trial. It runs into the appeal, because an appeal a prisoner cannot in practice bring is not an appeal at all.

Why it matters. It is the authority for legal aid at the appellate stage, and it is the earliest of the three. Do not describe it as following Hussainara Khatoon: Hoskot is August 1978 and Hussainara is 1979.

Hussainara Khatoon: the right is stated in terms

Hussainara Khatoon v. Home Secretary, State of Bihar, AIR 1979 SC 1369, (1980) 1 SCC 98, decided on 9 March 1979, Bhagwati J.

Facts. This is one of a series of orders on a habeas corpus petition about undertrial prisoners in Bihar. Large numbers of them had been in jail for years without their trials being taken up, many for longer than the maximum sentence they could have received if convicted, and most had no lawyer because they could not afford one.

Held. The Court reasoned from Maneka Gandhi. A procedure that makes no legal services available to an accused who is too poor to afford a lawyer, so that he must go through his trial without assistance, cannot possibly be regarded as reasonable, fair and just. Article 39A confirms it, because free legal service is an inalienable element of that procedure. The right to free legal service is therefore implicit in the guarantee of article 21, and it is a constitutional right of every accused person who is unable to engage a lawyer by reason of poverty, indigence or an incommunicado situation. The State is under a mandate to provide a lawyer where the circumstances of the case and the needs of justice so require.

Why it matters. This is the sentence to quote. It is also the judgment the Act of 1987 was eventually passed to implement.

Suk Das: the court must offer, the accused need not ask

Suk Das v. Union Territory of Arunachal Pradesh, AIR 1986 SC 991, (1986) 2 SCC 401, decided on 10 March 1986, Bhagwati CJ.

Facts. Suk Das and five others were tried before an Additional Deputy Commissioner for criminal intimidation under section 506 read with section 34 of the Indian Penal Code, the allegation being that they had threatened an Assistant Engineer of the Central Public Works Department to make him cancel their transfer orders. Suk Das was too poor to afford a lawyer and was not represented, and as a result he could not cross-examine some of the prosecution witnesses. Four of the accused were acquitted; he was convicted and sentenced to two years' simple imprisonment. He was also dismissed from service on the strength of the conviction. The High Court upheld the conviction, reasoning that he had never applied for legal aid.

Held. Allowing the appeal, the Supreme Court set aside the conviction and sentence and quashed the dismissal order that rested on it. Free legal assistance at State cost is a fundamental right of a person accused of an offence which may involve jeopardy to his life or personal liberty, and it does not depend on the accused asking for it. Most people in India are unaware that they have any such right, so a right that had to be claimed would be no right at all. The court is therefore under a duty to inform the accused that he is entitled to free legal services and to enquire whether he wants them. Where that is not done and the accused goes undefended for want of means, the trial is vitiated.

Why it matters. It is the strongest of the three, because it converts the right from a claim into a duty, and because it attaches a real consequence: not a reprimand, but the conviction going. It is also the answer to the High Court's reasoning, which is exactly what a problem question will put in front of you.

The three cases side by side

A worked example

Rafiq is arrested in Bhiwandi and produced before a Magistrate on a charge under section 324 of the Indian Penal Code. He is a daily-wage painter. Nobody asks him whether he has a lawyer, and he does not know he can ask for one. He is tried, undefended, and convicted.

Which provision does he rely on? Article 22(1) is not enough on its own. Nobody stopped him from engaging a lawyer; he could not pay for one. That is the gap article 22(1) leaves.

So the right comes from article 21, read with article 39A, as Hussainara Khatoon held: free legal service is an essential ingredient of reasonable, fair and just procedure, and it is a constitutional right of an accused unable to engage a lawyer because of poverty.

Does it matter that he never applied? No, and that is the whole of Suk Das. The Magistrate was under a duty to inform him of the right and to enquire whether he wanted it. Failure to do so vitiates the trial.

What about the statute? Section 12(h) of the Legal Services Authorities Act 1987 covers a person whose income falls below the prescribed limit, and section 12(g) covers a person in custody outright, so Rafiq is entitled to legal services under the Act as well. Chapter 70 works that through. He therefore has both a constitutional right and a statutory entitlement, and they are not the same thing.

What beginners get wrong

Article 39A is not enforceable by itself, and saying it is loses marks. It is a Directive Principle. Its force comes from being read into article 21. Say both.

Article 22(1) is not the right to a free lawyer. It is the right not to be denied one you arrange yourself.

The right is not confined to the trial court. Hoskot puts it in the appeal, and it applies from the earliest stage at which the accused's liberty is in jeopardy.

"Legal aid" and "legal services" are not synonyms in this subject. Legal aid is the ordinary phrase. "Legal service" is a defined expression in section 2(1)(c) of the Act and includes giving advice on any legal matter, whether or not there is a case at all.

The constitutional right is not limited to criminal cases, but the cases that establish it are criminal ones. Be careful how you state the scope: what the three judgments above decide is about persons accused of offences, where liberty is in jeopardy. The Act's own entitlement under sections 12 and 13 is much wider and covers civil matters too.

Quick revision

• Article 39A, inserted by the Forty-second Amendment 1976, is a Directive Principle. Not enforceable by itself; used to give content to article 21.
• Article 21 requires procedure to be reasonable, fair and just, per Maneka Gandhi.
• Article 22(1) is the right not to be denied a legal practitioner of one's choice. It says nothing about cost.
• M.H. Hoskot (1978) 3 SCC 544: free copy of the judgment and a lawyer at State cost for an appeal.
• Hussainara Khatoon (1980) 1 SCC 98: free legal service is an essential ingredient of reasonable, fair and just procedure and is implicit in article 21.
• Suk Das (1986) 2 SCC 401: the accused need not ask; the court must inform and enquire, and failure vitiates the trial.
• The Legal Services Authorities Act 1987 is the legislation article 39A called for, and its long title repeats article 39A's words.

Test yourself

1. Can a citizen go to court and enforce article 39A directly? No. It is a Directive Principle in Part IV and article 37 makes it unenforceable by any court. Its effect comes from the Supreme Court reading it together with article 21, which is enforceable.

2. What is the difference between article 22(1) and the right established in Hussainara Khatoon? Article 22(1) guarantees that an arrested person shall not be denied the right to consult and be defended by a legal practitioner of his choice, but does not require the State to pay. Hussainara Khatoon holds that free legal service, at State cost, is implicit in article 21 for a person who cannot afford a lawyer.

3. An accused is tried without a lawyer because he was too poor to engage one and never applied for legal aid. Is the trial good? No. Suk Das holds that the right does not depend on the accused asking. The court must inform him of the entitlement and enquire whether he wants it, and if the accused goes undefended for want of means the trial is vitiated and the conviction must be set aside.

4. Which of the three cases would you cite for legal aid on appeal, and what exactly did it require? M.H. Hoskot v. State of Maharashtra. It requires the State to furnish a prisoner with a free copy of the judgment in time to file his appeal, and to assign a lawyer at State cost where he is indigent and the ends of justice require it.

5. Why does the long title of the Legal Services Authorities Act 1987 matter to this topic? Because it repeats the language of article 39A almost word for word, which shows the Act is the "suitable legislation" that article contemplates, and it is a legitimate aid in construing the Act's purpose.

Two later Acts rebuilt this one, and their footnotes are all over the text you will read.

• Act 59 of 1994, in force 29 October 1994, was the larger of the two. It substituted whole sections, inserted the Supreme Court Legal Services Committee (section 3A), the High Court Legal Services Committee (section 8A) and the Taluk Legal Services Committee (sections 11A and 11B), and replaced sections 19 and 20 with the Lok Adalat provisions now in force.
• Act 37 of 2002, in force 11 June 2002, inserted Chapter VIA, which is the Permanent Lok Adalat, and changed the words "Lok Adalat" to "Lok Adalat or Permanent Lok Adalat" wherever that was needed.

Almost everything a student finds strange about the Act's numbering is explained by those two Acts. A section with a letter after it, 3A, 8A, 11A, 11B, 22A to 22E, 29A, was inserted later.

One more change is recent and easy to miss. Section 1(2) now reads simply that the Act extends to the whole of India. The words "except the State of Jammu and Kashmir" were omitted by Act 34 of 2019, the Jammu and Kashmir Reorganisation Act, with effect from 31 October 2019. Since then the Act has applied there too.

How the Act is laid out

Reading a statute is easier when you know its shape before you start. This one has seven chapters and thirty numbered sections, forty once the inserted ones are counted.

Chapter VIA carries the heading "Pre-litigation conciliation and settlement", not "Permanent Lok Adalat". That heading is a fair warning of what the chapter actually does, and chapter 150 of this book returns to it.

Section 2: the definitions the rest of the Act runs on

Section 2(1) defines fifteen expressions. Five of them decide real questions and are worth knowing exactly; the rest you can read once.

"Case" includes a suit or any proceeding before a court, in clause (a). It is an inclusive definition, so it is wider than the two things it names.

"Court" means a civil, criminal or revenue court and includes any tribunal or any other authority constituted under any law for the time being in force, to exercise judicial or quasi-judicial functions, in clause (aaa).

This is the most important definition in the Act and the one students never look at. It is deliberately wide. A consumer commission, a motor accidents claims tribunal and a rent authority are all "courts" for this Act, which is why a Lok Adalat can take up matters pending before them. The odd clause number, (aaa), is because Act 59 of 1994 inserted it between the existing (a) and (b).

"Legal service" includes the rendering of any service in the conduct of any case or other legal proceeding before any court or other authority or tribunal and the giving of advice on any legal matter, in clause (c).

Two halves, and the second is the one people forget. Legal service is not only fighting a case. Giving advice on any legal matter is legal service under this Act, so a person entitled under section 12 is entitled to be advised, whether or not there is a case at all.

"Lok Adalat" means a Lok Adalat organised under Chapter VI, in clause (d). Short, and it does real work: a settlement meeting that is not organised under Chapter VI is not a Lok Adalat and its outcome is not an award under section 21, whatever anybody calls it.

"Scheme" means any scheme framed by the Central Authority, a State Authority or a District Authority for the purpose of giving effect to any of the provisions of this Act, in clause (g). Much of what NALSA actually does is done through schemes, and this is where they get their statutory footing.

The remaining definitions are labels for the bodies the Act creates and are covered where those bodies are: Central Authority in clause (aa) is NALSA under section 3; State Authority in clause (h) is under section 6; District Authority in clause (b) is under section 9; High Court Legal Services Committee in clause (bb) is under section 8A; Supreme Court Legal Services Committee in clause (j) is under section 3A; and Taluk Legal Services Committee in clause (k) is under section 11A. Clauses (e), (f) and (ff) define notification, prescribed and regulations in the ordinary way, and clause (i) makes State Government include the administrator of a Union territory appointed under article 239 of the Constitution.

Note the difference between prescribed and regulations, because the Act uses both and they are not the same. Prescribed means prescribed by rules, which the Central Government makes under section 27 and a State Government under section 28. Regulations are made by the Central Authority under section 29 or a State Authority under section 29A. So when a section says a thing shall be "prescribed", look for a rule; when it leaves a matter to regulations, look for NALSA.

Section 2(2) is a machinery provision: a reference in this Act to another enactment is to be read, in an area where that enactment is not in force, as a reference to the corresponding law in force there.

A worked example on the definitions

Ramesh has a claim before the Maharashtra Real Estate Regulatory Authority against a builder who did not hand over his flat. He wants it taken to a Lok Adalat, and the builder is willing.

Work through the definitions rather than guessing.

Is this a "case"? Clause (a) says case includes a suit or any proceeding before a court. It is a proceeding, so the question becomes whether the Authority is a court.

Is the Authority a "court"? Clause (aaa) includes any tribunal or any other authority constituted under any law for the time being in force to exercise judicial or quasi-judicial functions. The Authority is constituted under the Real Estate (Regulation and Development) Act 2016 and decides disputes between allottees and promoters, which is a quasi-judicial function. So yes.

Does that get him to a Lok Adalat? It gets him past the definitions. Section 19(5)(i) gives a Lok Adalat jurisdiction over any case pending before a court for which the Lok Adalat is organised, and section 20(1) is the route by which the case is referred. Chapters 100 and 110 finish the analysis.

The point of the exercise is the method. In this Act, the definitions in section 2 are not preliminary throat-clearing; they are how you find out whether a section applies at all.

What beginners get wrong

The Act did not create legal aid in India. Legal aid schemes existed before it, and the Supreme Court had already held free legal aid to be part of the right under article 21, which chapter 20 works through. What the Act did was give the system a statutory structure, funding and permanence.

The Act is not only about Lok Adalats. Six of its seven chapters are about legal services. Students who meet it through the ADR syllabus often come away thinking the reverse.

"Weaker sections" in the long title is not the operative test. The long title states the purpose. Who actually gets legal services is decided by sections 12 and 13, which is chapter 70, and those sections name categories rather than a general standard of weakness.

Quick revision

• Legal Services Authorities Act 1987, Act 39 of 1987, assented 11 October 1987, in force 9 November 1995 by S.O. 893(E).
• Amended substantially by Act 59 of 1994 (w.e.f. 29 October 1994) and Act 37 of 2002 (w.e.f. 11 June 2002, which inserted Chapter VIA, the Permanent Lok Adalat).
• Extends to the whole of India; the Jammu and Kashmir exception was omitted by Act 34 of 2019 w.e.f. 31 October 2019.
• Seven chapters. II, III set up the authorities; IV says who qualifies; V is money; VI is Lok Adalats; VIA is Permanent Lok Adalats; VII is miscellaneous.
• Section 2(1)(aaa) defines court very widely, to include any tribunal or authority exercising judicial or quasi-judicial functions.
• Section 2(1)(c) defines legal service to include both conducting a case and giving advice on any legal matter.
• Prescribed means by rules (sections 27, 28); regulations are made by the Authorities (sections 29, 29A).

Test yourself

1. When did the Legal Services Authorities Act 1987 come into force, and how do you know? On 9 November 1995. Section 1(3) leaves commencement to a Central Government notification, and the notification is S.O. 893(E) of that date. The Act was assented to on 11 October 1987, which is a different thing.

2. Is a Motor Accidents Claims Tribunal a "court" for this Act? Yes. Section 2(1)(aaa) includes any tribunal or other authority constituted under any law in force to exercise judicial or quasi-judicial functions, and a Claims Tribunal is constituted under the Motor Vehicles Act to decide claims.

3. A person entitled under section 12 wants advice on whether to sue, but does not want to file anything. Is that legal service under the Act? Yes. Section 2(1)(c) expressly includes the giving of advice on any legal matter, which does not depend on there being a case.

4. Which chapter of the Act creates the Permanent Lok Adalat, and which amending Act inserted it? Chapter VIA, headed "Pre-litigation conciliation and settlement", sections 22A to 22E, inserted by Act 37 of 2002 with effect from 11 June 2002.

5. A section says a matter shall be "prescribed". Where do you look? In the rules: those made by the Central Government under section 27, or by the State Government under section 28. Regulations under sections 29 and 29A are a different source, made by the Central or State Authority.

Section 3(3) provides for a Member-Secretary, appointed by the Central Government in consultation with the Chief Justice of India, who exercises the powers and performs the duties the Executive Chairman may assign, on the prescribed terms. The Member-Secretary is the full-time officer who runs the organisation day to day; the Patron-in-Chief and Executive Chairman do not.

Section 3(4) lets the Central Government, in consultation with the Chief Justice of India, provide the officers and employees the Authority needs, and section 3(5) makes their conditions of service prescribed. Section 3(6) makes the administrative expenses payable out of the Consolidated Fund of India, and section 3(7) provides that all orders and decisions of the Central Authority shall be authenticated by the Member-Secretary or another authorised officer. Section 3(8) is the standard saving: no act or proceeding of the Central Authority is invalid merely because of a vacancy or a defect in its constitution.

Section 3A: the Supreme Court Legal Services Committee

Inserted by Act 59 of 1994, this Committee exists to do one thing: administer and implement the legal services programme in so far as it relates to the Supreme Court of India.

Its Chairman is a sitting Judge of the Supreme Court, nominated by the Chief Justice of India. Its other members have the experience and qualifications prescribed by the Central Government, and are nominated by the Chief Justice of India. It has a Secretary, appointed by the Chief Justice, with prescribed powers and functions, and its officers and employees are appointed by the Central Authority.

The distinction students miss is jurisdictional. A person who needs a lawyer to defend a criminal appeal in the Supreme Court is helped by this Committee, not by their own State Authority, because the case is in the Supreme Court.

Section 4: what NALSA actually does

Section 4 is the functions section, and it is the one worth knowing clause by clause, because it is where an examiner finds a question. The Central Authority shall perform all or any of the following functions, and the list runs through clause (m).

(a) Lay down policies and principles for making legal services available under the Act. This is the leading function and the one everything else serves.

(b) Frame the most effective and economical schemes for the purpose of making legal services available. Note "economical": the Act is realistic about money.

(c) Utilise the funds at its disposal and make appropriate allocations of funds to the State Authorities and District Authorities. NALSA is also the funder.

(d) Take necessary steps by way of social justice litigation with regard to consumer protection, environmental protection, or any other matter of special concern to the weaker sections of society, and for that purpose give training to social workers in legal skills.

Clause (d) is the surprising one and it is examinable: NALSA is expressly empowered to take steps by way of social justice litigation, which is public interest litigation by another name. That is a statutory bridge to Module IV's topic 4.2, and chapters 730 and 740 pick it up.

(e) Organise legal aid camps, especially in rural areas, slums or labour colonies, with the dual purpose of educating the weaker sections about their rights and encouraging the settlement of disputes through Lok Adalats.

(f) Encourage the settlement of disputes by way of negotiations, arbitration and conciliation. Notice that the legal aid statute itself directs the Authority towards the very methods this whole subject teaches. Module I is not a detour from ADR; it is part of it.

(g) Undertake and promote research in the field of legal services, with special reference to the need for such services among the poor.

(h) Do all things necessary for the purpose of ensuring commitment to the fundamental duties of citizens under Part IVA of the Constitution.

(i) Monitor and evaluate the implementation of the legal aid programmes at periodic intervals and provide for independent evaluation of programmes and schemes implemented in whole or in part by funds provided under the Act.

(j) Provide grants-in-aid for specific schemes to various voluntary social service institutions and the State and District Authorities, from out of the amounts placed at its disposal for the implementation of legal services schemes under the provisions of the Act.

(k) Develop, in consultation with the Bar Council of India, programmes for clinical legal education and promote guidance and supervise the establishment and working of legal services clinics in universities, law colleges and other institutions.

Clause (k) is the one that describes the course you are sitting. Clinical legal education, legal services clinics in law colleges: this is the statutory basis of the Bar Council's clinical papers, of which Alternate Dispute Resolution is one. Chapter 160 works through the legal services clinics themselves.

(l) Take appropriate measures for spreading legal literacy and legal awareness amongst the people and, in particular, to educate weaker sections of the society about the rights, benefits and privileges guaranteed by social welfare legislation and other enactments as well as administrative programmes and measures.

This clause is where MU's topic 1.5, "para legal training and legal literacy", finds its home in the Act.

(m) Make special efforts to enlist the support of voluntary social welfare institutions working at the grass-root level, particularly among the Scheduled Castes and the Scheduled Tribes, women and rural and urban labour.

Section 5: working with everybody else

Section 5 requires the Central Authority, in the discharge of its functions under the Act, to act in coordination with other governmental agencies, non-governmental voluntary social service institutions, universities and other bodies engaged in the work of promoting the cause of legal services to the poor, and it may issue such directions as it may think fit to those agencies.

It is a short section that answers a real problem. Legal aid touches prisons, police, hospitals, labour departments and district administration, none of which NALSA controls.

A worked example

Sunita is an agricultural labourer in a village in Beed district. She has not been paid the statutory minimum wage for four months, and nor have about sixty others working on the same land.

Which body helps her? Not NALSA directly. NALSA's job under section 4 is to lay down the policy and fund the work; the help itself comes from the District Legal Services Authority in Beed, and possibly the Taluk Legal Services Committee, which is chapter 60.

But NALSA's sections still shape what happens. The legal aid camp that reaches her village is organised under clause (e). The para-legal volunteer who tells her that non-payment of minimum wages is actionable is trained under clause (l) and under the Legal Services Clinics Regulations 2011. The scheme under which the District Authority pays for her lawyer is framed under clause (b) and funded under clause (c). If the sixty workers' claim raises a systemic problem with how the labour department is enforcing the Minimum Wages Act, clause (d) permits social justice litigation about it.

That is the honest picture of how the Act works: NALSA is not the body a poor litigant meets, it is the body that makes it possible for them to meet somebody.

What beginners get wrong

NALSA does not give legal aid to individuals. It lays down policy, frames schemes, allocates funds, monitors and evaluates. The delivery happens at the State, District and Taluk levels.

The Chief Justice of India is the Patron-in-Chief, not the Executive Chairman. The Executive Chairman is a serving or retired Supreme Court Judge nominated by the President in consultation with the Chief Justice. Getting these two the wrong way round is the commonest slip in an answer on section 3.

The Supreme Court Legal Services Committee is not a part of NALSA's tiers. It is a separate body under section 3A for Supreme Court matters, chaired by a sitting Supreme Court Judge.

Section 4 is not a list of aspirations. It is the source of NALSA's power to do anything at all. If NALSA does something, it is doing it under one of these clauses.

Quick revision

• Section 3: the Central Government shall constitute NALSA. Chief Justice of India is Patron-in-Chief; a serving or retired Supreme Court Judge, nominated by the President in consultation with the Chief Justice, is Executive Chairman; there is a Member-Secretary who runs it. Expenses come from the Consolidated Fund of India. A vacancy does not invalidate its acts.
• Section 3A: Supreme Court Legal Services Committee, chaired by a sitting Supreme Court Judge nominated by the Chief Justice, for legal services in the Supreme Court.
• Section 4: functions, clauses (a) to (m). The ones that carry marks are (a) policy, (b) schemes, (c) funds, (d) social justice litigation, (e) legal aid camps, (f) encourage negotiation, arbitration and conciliation, (k) clinical legal education and legal services clinics, and (l) legal literacy.
• Section 5: coordinate with other agencies, and it may issue directions to them.

Test yourself

1. Who is the Patron-in-Chief of NALSA, and who runs it? The Chief Justice of India is the Patron-in-Chief under section 3(2)(a). The Executive Chairman, under section 3(2)(b), is a serving or retired Judge of the Supreme Court nominated by the President in consultation with the Chief Justice. The Member-Secretary under section 3(3) is the full-time officer who runs it day to day.

2. A law college wants to set up a legal aid clinic. Which provision supports it? Section 4(k), which requires NALSA to develop, in consultation with the Bar Council of India, programmes for clinical legal education, and to promote, guide and supervise the establishment and working of legal services clinics in universities, law colleges and other institutions.

3. Can NALSA file a public interest petition? Section 4(d) empowers the Central Authority to take necessary steps by way of social justice litigation with regard to consumer protection, environmental protection, or any other matter of special concern to the weaker sections of society, and to give training to social workers in legal skills for that purpose.

4. A prisoner in Tihar Jail needs a lawyer for an appeal in the Supreme Court. Which body is responsible? The Supreme Court Legal Services Committee under section 3A, because its function is to administer and implement the legal services programme in so far as it relates to the Supreme Court.

5. Where does the money for NALSA's administrative expenses come from? Section 3(6): the administrative expenses of the Central Authority, including salaries, allowances and pensions of the Member-Secretary, officers and other employees, are paid out of the Consolidated Fund of India.

Sections 6(4) to 6(6) deal with terms of office, and with appointing officers and employees and their salaries, all prescribed by the State Government in consultation with the Chief Justice of the High Court.

Section 6(7) makes the administrative expenses of the State Authority, including salaries, allowances and pensions of the Member-Secretary, officers and employees, payable out of the Consolidated Fund of the State.

Section 6(8) requires all orders and decisions to be authenticated by the Member-Secretary or another officer authorised by the Executive Chairman.

Section 6(9) is the standard saving: no act or proceeding of a State Authority is invalid merely because of a vacancy in it or a defect in its constitution.

Section 7: what a State Authority does

Section 7(1) is the sentence that defines the whole tier: it shall be the duty of the State Authority to give effect to the policy and directions of the Central Authority.

Read that against section 4, which gives NALSA the job of laying down policies and framing schemes. NALSA decides, the State Authority delivers. That single division explains why section 7's own list is so much shorter than section 4's.

Section 7(2), without prejudice to that duty, lists four functions:

• (a) give legal service to persons who satisfy the criteria laid down under this Act. The criteria are sections 12 and 13, chapter 70.
• (b) conduct Lok Adalats, including Lok Adalats for High Court cases. The words "including Lok Adalats for High Court cases" were substituted by Act 59 of 1994, and they matter: a Lok Adalat is not confined to the lower courts.
• (c) undertake preventive and strategic legal aid programmes. A programme is preventive when it stops a dispute arising at all, by getting entitlements paid or documents issued; it is strategic when one case is chosen because it will settle a question affecting many people.
• (d) perform such other functions as the State Authority may, in consultation with the Central Authority, fix by regulations.

Section 8: coordination, and being directed

Section 8 does two things in one sentence. In the discharge of its functions the State Authority shall act in coordination with other governmental agencies, non-governmental voluntary social service institutions, universities and other bodies engaged in promoting the cause of legal services to the poor; and it shall also be guided by such directions as the Central Authority may give to it in writing.

Note the words in writing. NALSA's control over a State Authority is exercised through written directions, not informally. Compare section 5, where NALSA "may issue such directions as it may think fit" to outside agencies: within the system the direction is mandatory and written, outside it is discretionary.

Section 8A: the High Court Legal Services Committee

Inserted by Act 59 of 1994, section 8A does for a High Court what section 3A does for the Supreme Court.

Section 8A(1): the State Authority shall constitute a Committee called the High Court Legal Services Committee for every High Court, exercising such powers and performing such functions as the State Authority determines by regulations.

Section 8A(2): the Committee consists of (a) a sitting Judge of the High Court, who shall be the Chairman, and (b) such number of other members with the experience and qualifications determined by regulations made by the State Authority, all nominated by the Chief Justice of the High Court.

Section 8A(3): the Chief Justice appoints the Secretary to the Committee.

Sections 8A(4) to 8A(6) cover terms of office, officers and employees and their salaries.

Two things students get wrong here. The Chairman is a sitting Judge, not a retired one, unlike the Executive Chairman of the State Authority who may be either. And the Committee is constituted by the State Authority, although its members are nominated by the Chief Justice: two different bodies doing two different things in the same section.

The Maharashtra picture, since that is where the reader is

For a student in Mumbai the names are worth knowing, because these are the offices they will actually deal with.

• The Maharashtra State Legal Services Authority is the section 6 body for this State. Its Patron-in-Chief is the Chief Justice of the Bombay High Court and its Executive Chairman is a Judge of that Court.
• The High Court Legal Services Committee at the Bombay High Court is the section 8A body, chaired by a sitting Judge of that Court, and it is the body that handles legal services for matters in the High Court itself, including at the benches.
• Each district has a District Legal Services Authority under section 9, which is chapter 60.

Verify current office-holders and addresses from the Authority's own website before relying on them; they change, and this book does not print them for that reason.

A worked example

Fatima has been fighting a rent matter in the Small Causes Court at Mumbai. She has now lost, and wants to appeal. She is a widow earning about eight thousand rupees a month as a tailor.

Who helps her with the appeal? It depends on where the appeal lies. If it is to be filed in the High Court, the High Court Legal Services Committee under section 8A is the body, because its function is legal services for matters in that Court. If the appeal lies within the district judiciary, the District Legal Services Authority under section 9 is the body.

Who decides whether she qualifies? The concerned Authority, applying sections 12 and 13. Section 7(2)(a) is the source of the State Authority's power to give her legal service; it is not the test of whether she gets it.

Where does the money come from? The administrative expenses of the State Authority come from the Consolidated Fund of the State under section 6(7). The cost of her lawyer comes from the State Legal Aid Fund under section 16, which is chapter 90.

The exercise is worth doing slowly once, because the commonest mistake in an examination answer on this Module is to name the wrong tier.

What beginners get wrong

The State Authority is not a branch office of NALSA. It is a separate statutory body constituted by the State Government. It is bound by NALSA's written directions under section 8, which is a different thing from being part of it.

The Executive Chairman of a State Authority may be a serving or retired Judge; the Chairman of a High Court Legal Services Committee must be a sitting Judge. Section 6(2)(b) against section 8A(2)(a).

Section 7 is not a copy of section 4. A State Authority's first duty is to give effect to NALSA's policy. It does not lay down its own.

Lok Adalats are not only a district-level thing. Section 7(2)(b) expressly lets a State Authority conduct Lok Adalats including for High Court cases, and section 19(1) lists five different bodies that may organise them.

Quick revision

• Section 6: every State Government shall constitute a State Legal Services Authority. Chief Justice of the High Court is Patron-in-Chief; a serving or retired High Court Judge nominated by the Governor in consultation with the Chief Justice is Executive Chairman; the Member-Secretary comes from the State Higher Judicial Service, not below District Judge rank. Expenses from the Consolidated Fund of the State. Vacancy does not invalidate.
• Section 7(1): the duty is to give effect to the policy and directions of the Central Authority. Section 7(2): give legal service to those who qualify; conduct Lok Adalats, including for High Court cases; undertake preventive and strategic legal aid programmes; other functions fixed by regulations in consultation with NALSA.
• Section 8: coordinate with other agencies, and be guided by NALSA's directions in writing.
• Section 8A: the State Authority constitutes a High Court Legal Services Committee for every High Court; a sitting Judge of the High Court is Chairman; members and the Secretary are appointed by the Chief Justice.

Test yourself

1. Who nominates the Executive Chairman of a State Legal Services Authority? The Governor, in consultation with the Chief Justice of the High Court, under section 6(2)(b). The person must be a serving or retired Judge of the High Court.

2. What is the primary duty of a State Authority? Under section 7(1), to give effect to the policy and directions of the Central Authority. Its own functions in section 7(2) are stated to be without prejudice to that duty.

3. Who constitutes the High Court Legal Services Committee, and who appoints its members? The State Authority constitutes it under section 8A(1). Its Chairman, a sitting Judge of the High Court, and its other members are nominated by the Chief Justice of the High Court under section 8A(2), and the Chief Justice appoints its Secretary under section 8A(3).

4. From which fund are the administrative expenses of a State Authority met? The Consolidated Fund of the State, under section 6(7). Compare NALSA, whose expenses come from the Consolidated Fund of India under section 3(6).

5. A State Authority ignores a written direction from NALSA. Is it entitled to? No. Section 8 requires it to be guided by such directions as the Central Authority may give it in writing, and section 7(1) makes giving effect to NALSA's policy and directions its duty.

Sections 9(4) to 9(6) deal with terms of office, and with officers, employees and their salaries.

Section 9(7) makes the administrative expenses of every District Authority payable out of the Consolidated Fund of the State, as with the State Authority.

Section 9(8) requires orders and decisions to be authenticated by the Secretary or another officer authorised by the Chairman, and section 9(9) saves the Authority's acts from being invalid merely because of a vacancy or a defect in its constitution.

Section 10: what a District Authority does

Section 10(1) is the delegation clause: it shall be the duty of every District Authority to perform such of the functions of the State Authority in the District as may be delegated to it from time to time by the State Authority.

Read that carefully. A District Authority's main workload is delegated, so what it does can change without amending the Act. That is why section 10(2) is so short.

Section 10(2) adds three functions of its own:

• (a) coordinate the activities of the Taluk Legal Services Committee and other legal services in the District.
• (b) organize Lok Adalats within the District.
• (c) perform such other functions as the State Authority may fix by regulations.

Clause (b) is where the Lok Adalats a student is most likely to see come from. Section 19(1) names the bodies that may organise one, and the District Authority is the one that does it most.

Section 11: coordination and direction

Section 11 mirrors sections 5 and 8. In the discharge of its functions the District Authority shall, wherever appropriate, act in coordination with other governmental and non-governmental institutions, universities and others engaged in promoting the cause of legal services to the poor, and shall be guided by such directions as the Central Authority or the State Authority may give it in writing.

Two differences from section 8 are worth a mark. The words "wherever appropriate" soften the coordination duty at this level. And a District Authority takes written directions from both tiers above it, not only from the one immediately above.

Sections 11A and 11B: the Taluk Legal Services Committee

Both were inserted by Act 59 of 1994, which is the amendment that pushed the machinery below the district.

Section 11A(1): the State Authority may constitute a Committee, called the Taluk Legal Services Committee, for each taluk or mandal or for a group of taluks or mandals.

"May", not "shall". A District Authority must exist for every district under section 9(1); a Taluk Committee is optional and is constituted where the State Authority decides one is needed. That contrast is a fair examination question.

Section 11A(2): the Committee consists of (a) the senior-most Judicial Officer operating within its jurisdiction, who is the ex officio Chairman, and (b) such number of other members with prescribed experience and qualifications, nominated by the State Government in consultation with the Chief Justice of the High Court.

The words "senior-most Judicial Officer" were substituted by Act 37 of 2002 for "senior Civil Judge". The change widens the pool: whoever is in fact the senior-most judicial officer in the taluk chairs it.

Sections 11A(3) and (4) cover officers, employees and their conditions of service.

Section 11A(5) is different from every tier above and worth noticing: the administrative expenses of the Taluk Committee are defrayed out of the District Legal Aid Fund by the District Authority, not out of the Consolidated Fund of the State. The District Legal Aid Fund is section 17, chapter 90.

Section 11B gives the Committee three functions: (a) coordinate the activities of legal services in the taluk; (b) organize Lok Adalats within the taluk; and (c) perform such other functions as the District Authority may assign to it.

The four tiers in one table

A worked example

Baban is a landless labourer in a village in Osmanabad taluk. A moneylender has taken his ration card and is threatening him over a debt of eleven thousand rupees. He cannot read, has never been inside a court, and cannot travel to the district headquarters more than twice.

Where does he start? The Taluk Legal Services Committee, if one has been constituted for that taluk under section 11A. It is the nearest body, it coordinates legal services in the taluk under section 11B(a), and its Chairman is the senior-most judicial officer there.

What if there is no Taluk Committee? Then the District Legal Services Authority at Osmanabad, which exists because section 9(1) requires one for every district.

Who decides if he qualifies? The concerned Authority under sections 12 and 13. Baban is very likely covered by section 12(h) on income, and if he belongs to a Scheduled Caste or Scheduled Tribe, by section 12(a) as well.

Who might reach him first? In practice, a para-legal volunteer or a legal services clinic operating in the village, which is chapter 160. That is the part of the system designed for a person who does not know he has a remedy.

And if the moneylender is willing to talk? The District Authority may take the matter up in a Lok Adalat under section 10(2)(b) at the pre-litigation stage under section 20(2), and an award there is a decree under section 21, which is chapters 110 and 120.

What beginners get wrong

The District Judge is the Chairman by virtue of the office. There is no separate nomination and there is no Patron-in-Chief at this level.

Member-Secretary and Secretary are different titles at different levels. Sections 3(3) and 6(3) say Member-Secretary; sections 8A(3) and 9(3) say Secretary.

A Taluk Committee is optional. Section 11A says the State Authority "may" constitute one. Do not write that every taluk has one.

Section 10(1) is where most of a District Authority's work comes from. It performs functions delegated by the State Authority, and section 10(2) is only the short list of what it does in its own right.

The Taluk Committee is paid for differently. Out of the District Legal Aid Fund under section 11A(5), not out of the Consolidated Fund of the State.

Quick revision

• Section 9: the State Government, in consultation with the Chief Justice of the High Court, shall constitute a District Legal Services Authority for every district. The District Judge is Chairman. The Secretary is appointed by the State Authority and must be not below the rank of a Subordinate Judge or Civil Judge at the seat of the District Judiciary. Expenses from the Consolidated Fund of the State. Vacancy does not invalidate.
• Section 10: duty to perform the State Authority's functions in the district as delegated; and to coordinate Taluk Committee activities, organise Lok Adalats in the district, and do what regulations fix.
• Section 11: coordinate wherever appropriate, and be guided by written directions of the Central or State Authority.
• Section 11A: the State Authority may constitute a Taluk Legal Services Committee, chaired ex officio by the senior-most Judicial Officer in the taluk. Its expenses come from the District Legal Aid Fund.
• Section 11B: coordinate legal services in the taluk, organise Lok Adalats in the taluk, and perform functions assigned by the District Authority.

Test yourself

1. Who is the Chairman of a District Legal Services Authority, and how does he get the post? The District Judge, under section 9(2)(a), ex officio, by virtue of holding that judicial office. No separate nomination is required.

2. Must every taluk have a Taluk Legal Services Committee? No. Section 11A(1) says the State Authority "may" constitute one for each taluk or mandal or for a group of them. Contrast section 9(1), where a District Authority is mandatory for every district.

3. Who appoints the Secretary of a District Legal Services Authority? The State Authority, in consultation with the Chairman of the District Authority, under section 9(3). The person must belong to the State Judicial Service and be not lower in rank than a Subordinate Judge or Civil Judge posted at the seat of the District Judiciary.

4. From where are a Taluk Legal Services Committee's administrative expenses met, and why is that different? From the District Legal Aid Fund, by the District Authority, under section 11A(5). The tiers above are met from the Consolidated Fund of India or of the State; the Taluk Committee is funded through the district instead.

5. Which body may give a District Authority written directions? Both. Section 11 says the District Authority shall be guided by such directions as the Central Authority or the State Authority may give it in writing.

(e) A person under circumstances of undeserved want such as being a victim of a mass disaster, ethnic violence, caste atrocity, flood, drought, earthquake or industrial disaster.

The words are "such as", so the list is illustrative and not closed. The governing idea is undeserved want: misfortune the person did not bring on themselves.

(f) An industrial workman.

(g) A person in custody, including custody in a protective home within the meaning of section 2(g) of the Immoral Traffic (Prevention) Act 1956, or in a juvenile home within the meaning of section 2(j) of the Juvenile Justice Act 1986, or in a psychiatric hospital or psychiatric nursing home within the meaning of section 2(g) of the Mental Health Act 1987.

Custody is not only jail. The clause is deliberately drafted to cover institutions where a person is held for their own protection or treatment, because a person in any of them is equally unable to reach a lawyer. Two of the three Acts named have since been replaced, by the Juvenile Justice (Care and Protection of Children) Act 2015 and the Mental Healthcare Act 2017, and again the clause has not been redrafted.

(h) A person in receipt of an annual income less than rupees nine thousand, or such other higher amount as may be prescribed by the State Government, if the case is before a court other than the Supreme Court; and less than rupees twelve thousand, or such other higher amount as may be prescribed by the Central Government, if the case is before the Supreme Court.

Do not quote nine thousand and twelve thousand as the operative limits. Those figures were written in 1994 and the clause expressly allows both Governments to prescribe higher amounts, which they have done. The correct statement of the law is that the limits are those prescribed for the relevant court, and the figures in the section are the floor from which prescription starts. Check the current prescribed limit for Maharashtra with the State Authority, and for the Supreme Court with the Supreme Court Legal Services Committee, before advising anybody.

Notice also the split: the State Government prescribes for all courts other than the Supreme Court, and the Central Government prescribes for the Supreme Court. That is why the limit can differ between States.

Section 13: entitlement, and the two things that go with it

Section 12 sets out who may qualify. Section 13 turns that into an entitlement and adds the only further condition.

Section 13(1): persons who satisfy all or any of the criteria specified in section 12 shall be entitled to receive legal services provided that the concerned Authority is satisfied that such person has a prima facie case to prosecute or to defend.

Two points, and both carry marks.

"All or any" means one clause is enough. A person does not have to satisfy several.

"Prima facie case" means a case that appears, on the face of it, to have some substance. It is not a finding that the person will win, and the Authority is not trying the case. It is a filter against using public money on a hopeless claim.

And the filter has an important qualification which is not in the Act but in NALSA's regulations, and which every answer on section 13 should carry: under regulation 7 of the National Legal Services Authority (Free and Competent Legal Services) Regulations 2010, a defendant in a civil case, and an accused or a convict in a criminal case, is deemed to have a prima facie case to defend or to appeal. That is right in principle. A person who is being sued or prosecuted did not choose to be in court, and cannot be told there is no point defending.

Section 13(2): an affidavit made by a person as to his income may be regarded as sufficient for making him eligible, unless the concerned Authority has reason to disbelieve such affidavit.

This is a deliberately low evidentiary bar and it exists for a practical reason: a person poor enough to need legal aid usually cannot produce an income certificate quickly. Regulation 5 of the 2010 Regulations goes further still and provides that a self-certificate, with self-attested copies of any relevant documents, shall ordinarily be sufficient proof that the applicant falls within section 12.

The safeguard against abuse is at the other end. Regulation 6 requires the applicant to be informed that if legal services are obtained by furnishing incorrect or false information, or fraudulently, the services will be stopped forthwith and the expenses incurred will be recoverable from him.

A worked example, and it is worth doing slowly

Four people come to the front office of a District Legal Services Authority on the same morning.

Sharmila, a schoolteacher earning fifty-five thousand rupees a month, wants to file a domestic violence complaint. She is entitled. Section 12(c) covers a woman, and there is no income condition in that clause. Her salary is irrelevant.

Devendra, a factory worker earning eighteen thousand a month, wants to sue his employer over an accident at work. He is entitled, under section 12(f), as an industrial workman. His income is above any prescribed limit, but clause (f) does not depend on income.

Yusuf, a retired clerk with a pension of eleven thousand a month, wants to sue his neighbour over a boundary. This one depends on the prescribed limit. He is not covered by clauses (a) to (g), so he falls to clause (h), and the question is whether his annual income is below the amount prescribed by the Maharashtra Government for courts other than the Supreme Court. Look the figure up; do not use nine thousand.

Nandini, a woman with a substantial business, wants to sue a former partner. She has a clear claim. She is entitled under clause (c), and the Authority's remaining question is only the section 13 one, whether she has a prima facie case. She does.

Three of those four surprise students, and all four are right on the text. Section 12 is a list of categories, not a means test with categories attached.

Now change the last fact. Nandini's claim is time-barred by eleven years and she admits it. The Authority may refuse under the proviso to section 13(1), because there is no prima facie case to prosecute. But if she were the defendant in that suit rather than the plaintiff, regulation 7 deems her to have a prima facie case to defend, and the filter does not apply.

Distinctions worth keeping straight

What beginners get wrong

Legal aid under this Act is not only for the poor. Seven of the eight clauses do not mention income. Writing "legal aid is available to persons whose income is below the prescribed limit" states clause (h) and omits the Act.

Nine thousand and twelve thousand are not the current limits. They are the figures printed in 1994, and clause (h) itself contemplates higher prescribed amounts.

The prima facie test is not a trial. The Authority is not deciding whether the applicant will win, and it cannot apply the filter at all to a defendant or an accused, who is deemed to have a case to defend under regulation 7.

Section 12 is about entitlement to services, not about who may go to a Lok Adalat. Anybody may take a dispute to a Lok Adalat under sections 19 and 20; that has nothing to do with section 12. This confusion is common and it costs marks.

A child is entitled in his or her own right under clause (c). The entitlement does not depend on the parents' income.

Quick revision

• Section 12, eight clauses: (a) Scheduled Caste or Scheduled Tribe; (b) victim of trafficking or begar under article 23; (c) a woman or a child; (d) a person with disability; (e) undeserved want, such as a victim of mass disaster, ethnic violence, caste atrocity, flood, drought, earthquake or industrial disaster; (f) an industrial workman; (g) a person in custody, including a protective home, juvenile home, psychiatric hospital or nursing home; (h) income below the prescribed limit.
• Only clause (h) is a means test. The State Government prescribes for courts other than the Supreme Court; the Central Government for the Supreme Court.
• Section 13(1): satisfying all or any of the criteria gives an entitlement, provided the Authority is satisfied there is a prima facie case to prosecute or to defend.
• Regulation 7 of the 2010 Regulations: a defendant in a civil case, and an accused or convict in a criminal case, is deemed to have a prima facie case.
• Section 13(2): an affidavit as to income is sufficient unless the Authority has reason to disbelieve it. Regulation 5: a self-certificate ordinarily suffices. Regulation 6: services obtained by false information are stopped and the cost is recoverable.

Test yourself

1. A woman who is a company director earning thirty lakh rupees a year applies for legal services. Is she entitled? Yes. Section 12(c) covers a woman with no income condition attached, and section 13(1) requires only that she satisfy any one criterion and have a prima facie case. Her income is irrelevant to clause (c).

2. What exactly must the Authority be satisfied of under section 13, and what must it not do? That the applicant has a prima facie case to prosecute or to defend. It must not try the case or decide the merits, and under regulation 7 of the 2010 Regulations it cannot apply the filter to a defendant, accused or convict at all, since they are deemed to have a case to defend.

3. Is nine thousand rupees the income limit for legal aid? No. That is the figure printed in section 12(h), which itself provides for such other higher amount as may be prescribed by the State Government, or by the Central Government for Supreme Court matters. The operative limit is the prescribed one.

4. How does an illiterate applicant with no documents prove entitlement? Section 13(2) makes an affidavit as to income sufficient unless the Authority has reason to disbelieve it, and regulation 5 of the 2010 Regulations makes a self-certificate with self-attested documents ordinarily sufficient. Regulation 3(4) also requires the Legal Services Institution to help an illiterate applicant fill in the form.

5. Does section 12 decide who may take a dispute to a Lok Adalat? No. Sections 12 and 13 govern entitlement to legal services. Access to a Lok Adalat is governed by sections 19 and 20 and is open to the parties to a dispute regardless of whether they qualify under section 12.

Court fees, process fees and the costs of the proceeding. A legal aid recipient does not pay them.

Copies of documents, including certified copies of orders and judgments, and the preparation of paper books and printing where an appellate court requires them.

Drafting. Preparation of the plaint, written statement, petition, appeal, and the other pleadings the case needs.

Translation. In a country with this many languages, a translated document is a real service and is treated as one.

Advice, under the second limb, whether or not any proceeding follows.

Legal aid does not mean the Authority pays the other side if the aided party loses, and it does not indemnify against an adverse order for costs. Be careful not to overstate what is on offer.

The word "competent", and why it is in the regulations' title

The long title of the Act promises free and competent legal services, and NALSA named its 2010 regulations after both words. That is a deliberate answer to the oldest criticism of legal aid anywhere: that a free lawyer is a bad lawyer.

The machinery for it is in regulation 8 and regulation 10.

Empanelment is selective. Panel lawyers are chosen with regard to their standing at the Bar, and the regulations provide for panels with the experience the work needs.

Monitoring and Mentoring Committees, defined in regulation 2(1)(ea) and set up under regulation 10, exist to watch the quality of the work rather than only the fact that a lawyer was assigned. A senior lawyer mentors, and the Committee monitors.

The design point is worth stating in an answer: the Act's promise is not a lawyer, it is a competent lawyer, and the regulations exist because those are not the same thing.

How a person applies

This is the part MU's clinical paper is most likely to test, because it is what a student on a legal aid clinic actually has to know. It is regulations 3 to 7.

The front office. Regulation 4 requires every Legal Services Institution to have a front office, a room where legal services are made available, manned by a Retainer Lawyer on rotation and one or more para-legal volunteers during office hours. Since the 2019 amendment the front offices are to act as one stop centres for legal aid seekers, for aid, advice and information about their cases. A proviso lets a person with a Master's degree in Social Work, or a diploma or Master's in psychiatry or psychology, be called to the front office when necessary.

The application. Regulation 3(1) says an application may be presented preferably in Form I, in the local language or in English, and regulation 3(2) lets the applicant attach a summary of grievances on a separate sheet. Then come four sub-regulations that between them remove almost every obstacle:

• 3(3): an application not in Form I may still be entertained if it reasonably explains the facts.
• 3(4): if the applicant is illiterate or unable to apply on his or her own, the institution shall make arrangements to help fill in the form and note down the grievances.
• 3(5): oral requests may be entertained in the same way as a written application.
• 3(6): an applicant advised by para-legal volunteers, legal aid clubs, legal aid clinics or voluntary social service institutions shall also be considered.
• 3(7): requests by e-mail or an interactive online facility may be considered, after verifying the applicant's identity and that the grievance is genuinely his own.

Read those together and the intention is unmistakable: the form must never be the reason a person does not get help.

Proof of entitlement. Regulation 5: a self-certificate, with self-attested copies of any relevant documents or certificates, shall ordinarily be sufficient to show that the applicant falls within section 12. Section 13(2) of the Act separately makes an affidavit as to income sufficient unless the Authority has reason to disbelieve it.

The consequence of lying. Regulation 6: the applicant must be informed that if services are obtained by furnishing incorrect or false information, or fraudulently, the services will be stopped forthwith and the expenses incurred will be recoverable from him.

Scrutiny. Regulation 7(1): the application is scrutinised by the Member-Secretary or Secretary, or an officer deputed by him, for the applicant's eligibility and for the existence of a prima facie case. Two provisos matter:

• A defendant in a civil case, and an accused or convict in a criminal case, is deemed to have a prima facie case to defend or to appeal against conviction and sentence.
• Where there is difficulty in deciding whether there is a prima facie case to prosecute, the Member-Secretary or Secretary may seek the opinion of a panel lawyer of more than seven years' standing at the Bar.

A worked example

Shakuntala, aged sixty-one, comes to the front office of the District Legal Services Authority. She cannot read. Her son has stopped paying her anything and has moved into the room she owns. She has no documents with her at all and no idea what she wants, except help.

Step one, the front office. Regulation 4 means somebody is there: a retainer lawyer on rotation and a para-legal volunteer.

Step two, the application. She cannot fill in Form I. Regulation 3(4) obliges the institution to help her fill it in and note down her grievances, and regulation 3(5) means an oral request would have been enough anyway.

Step three, entitlement. She is a woman, so section 12(c) covers her outright. No income question arises, and regulation 5 makes her self-certificate ordinarily sufficient.

Step four, prima facie case. The Member-Secretary or Secretary scrutinises the application under regulation 7. She would be the applicant in any proceeding, so the deeming proviso does not apply, but a claim for maintenance from a son and a claim to possession of her own room are both plainly arguable. If it were doubtful, an opinion could be taken from a panel lawyer of over seven years' standing.

Step five, what she gets. A panel lawyer, the drafting of the application, the court fee, copies, and translation if the documents are in a language she does not use. And, under limb two of section 2(1)(c), she gets advice: her lawyer may tell her that a proceeding under the Maintenance and Welfare of Parents and Senior Citizens Act 2007 will be faster than a civil suit, which is exactly the sort of thing she could not have known.

What beginners get wrong

Legal service is not only representation in court. Advice on any legal matter is expressly included by section 2(1)(c), and it is available without any case.

The Act does not list what is provided. Section 2(1)(c) defines the phrase; the content comes from NALSA's 2010 Regulations and from the schemes framed under section 4(b).

A defective application is not a ground for refusal. Regulations 3(3) to 3(7) cover applications not in the prescribed form, illiterate applicants, oral requests, referrals from clinics and volunteers, and e-mail.

"Free" does not mean the Authority indemnifies the aided party against everything. It means the applicant does not pay for the lawyer and the costs of running the case.

Quick revision

• Section 2(1)(c): legal service includes rendering any service in the conduct of any case or proceeding before any court, authority or tribunal, and the giving of advice on any legal matter.
• The content of the service comes from the NALSA (Free and Competent Legal Services) Regulations 2010, made under section 29 and amended in 2019.
• What is provided: a panel lawyer or retainer lawyer, court and process fees, drafting, copies and paper books, translation, and advice.
• Regulation 4: every Legal Services Institution has a front office, staffed by a retainer lawyer on rotation and para-legal volunteers, acting as a one stop centre.
• Regulation 3: Form I preferred, but a non-standard application, an illiterate applicant, an oral request, a referral from a clinic or volunteer, and an e-mail request are all to be entertained.
• Regulation 5: a self-certificate ordinarily suffices as proof of entitlement. Regulation 6: false information means services stopped and costs recovered.
• Regulation 7: scrutiny by the Member-Secretary or Secretary; a defendant, accused or convict is deemed to have a prima facie case; a doubtful case may be referred for the opinion of a panel lawyer of over seven years' standing.
• Competence is guarded by empanelment under regulation 8 and by Monitoring and Mentoring Committees under regulation 10.

Test yourself

1. Does a person have to be involved in a case to receive legal service under the Act? No. Section 2(1)(c) includes the giving of advice on any legal matter as legal service, so a person entitled under section 12 may seek advice with no proceeding in existence or contemplation.

2. An applicant arrives with no form, no documents and cannot write. Can he be turned away? No. Regulation 3(4) requires the institution to help him fill in the form and record his grievances, regulation 3(5) permits an oral request, and regulation 5 makes a self-certificate ordinarily sufficient proof of entitlement.

3. What is a Retainer Lawyer, and where is the term defined? A panel lawyer designated as the Retainer Lawyer under regulation 8(9) of the NALSA (Free and Competent Legal Services) Regulations 2010, defined in regulation 2(1)(fa). Under regulation 4 a retainer lawyer mans the front office on a rotational basis.

4. Who scrutinises an application, and what can be done if it is unclear whether a prima facie case exists? The Member-Secretary or Secretary of the institution, or an officer deputed by him, under regulation 7(1). Where it is difficult to decide, he may seek the opinion of a panel lawyer of more than seven years' standing at the Bar.

5. What does the word "competent" in the Act's long title add, and how is it enforced? It promises more than the assignment of any lawyer. It is given effect by the selective empanelment of panel lawyers under regulation 8 and by the Monitoring and Mentoring Committees constituted under regulation 10, whose function is to watch the quality of the work done.

Three details are worth pulling out of that table, because each is a fair question.

Money flows down the tiers. Section 15(2)(a) lets NALSA make grants to State Authorities, section 16(1)(a) records those grants arriving, and section 17(1)(a) does the same for the district. That is how a single parliamentary appropriation reaches a taluk.

Donations are allowed, and only at the district level do they need permission. Section 17(1)(b) requires the prior approval of the State Authority for a donation to a District Authority, which sections 15 and 16 do not require. The reason is obvious enough: a district office is closer to the people who litigate there, and a donor with an interest in local litigation is a risk worth controlling.

Each fund pays for the Committee at its own level. The National Fund pays for the Supreme Court Legal Services Committee under section 15(2)(b), and the State Fund pays for the High Court Legal Services Committee under section 16(2)(b). Both clauses were inserted along with those Committees by Act 59 of 1994.

And one link back to chapter 60: the reference to section 11B in section 17(2)(a) is how the Taluk Legal Services Committee is paid for. Section 11A(5) says its administrative expenses are defrayed out of the District Legal Aid Fund, and section 17(2)(a) is the matching authority on the spending side.

Section 18: accounts and audit

Section 18 applies to the Central, State and District Authorities alike, calling each of them "the authority".

Section 18(1): each shall maintain proper accounts and other relevant records and prepare an annual statement of accounts, including an income and expenditure account and a balance sheet, in the form and manner prescribed by the Central Government in consultation with the Comptroller and Auditor-General of India.

Section 18(2): the accounts shall be audited by the Comptroller and Auditor-General at such intervals as he specifies, and the cost of the audit is payable by the Authority.

Section 18(3): the Comptroller and Auditor-General, and anybody appointed by him for the audit, has the same rights, privileges and authority as in auditing Government accounts, including the right to demand the production of books, accounts, vouchers and other documents and to inspect any of the offices of the Authorities.

Section 18(4): the certified accounts and the audit report are forwarded annually to the Central Government or the State Governments.

Sections 18(5) and 18(6), both inserted by Act 59 of 1994, complete the chain and are the most important part of the section: the Central Government shall cause the accounts and audit report to be laid before each House of Parliament, and the State Government before the State Legislature, as soon as may be after they are received.

That is the point of section 18, and it is worth one sentence in an answer. Legal aid money is publicly accounted for, audited by the constitutional auditor and laid before the legislature that voted it. An Authority run by judges is still answerable for how it spends.

A worked example

A District Legal Services Authority in Maharashtra wants to run a series of legal literacy camps in tribal villages and to pay panel lawyers for forty maintenance cases.

Where does the money come from? The District Legal Aid Fund under section 17. It is credited with grants made by the State Authority, which in turn received them from NALSA under section 15(2)(a).

Is it permitted spending? Yes. Section 17(2)(a) allows the fund to be applied to the cost of the functions in section 10, and organising legal services and Lok Adalats in the district is section 10(2). Legal literacy is one of NALSA's own functions under section 4(l), carried into the district through the delegation in section 10(1).

A local trust offers two lakh rupees towards the camps. May the Authority take it? Only with the prior approval of the State Authority, under section 17(1)(b).

Who checks any of this? The Comptroller and Auditor-General under section 18(2), and the audited accounts of the State's Authorities go before the State Legislature under section 18(6).

What beginners get wrong

There are three funds, not one. National, State and District, in sections 15, 16 and 17.

Administrative expenses do not come out of the legal aid funds. Salaries of an Authority's officers come from the Consolidated Fund of India or of the State. The exception is the Taluk Committee, whose administrative expenses come out of the District Legal Aid Fund under section 11A(5).

The auditor is the Comptroller and Auditor-General, not a private auditor and not the Government.

Donations are allowed at every level, but only a District Authority needs the State Authority's prior approval to accept one.

Quick revision

• Section 14: the Central Government pays grants to NALSA after due appropriation by Parliament.
• Section 15: National Legal Aid Fund; pays for legal services including grants to State Authorities, and for the Supreme Court Legal Services Committee.
• Section 16: State Legal Aid Fund; pays for the section 7 functions and for the High Court Legal Services Committee.
• Section 17: District Legal Aid Fund; pays for the functions in sections 10 and 11B. A donation needs the prior approval of the State Authority.
• Section 18: accounts in the prescribed form; audit by the Comptroller and Auditor-General, who may inspect offices and demand documents; accounts and audit report laid before Parliament or the State Legislature.

Test yourself

1. Which fund pays for the Supreme Court Legal Services Committee, and which for the High Court Committee? The National Legal Aid Fund under section 15(2)(b) pays for the Supreme Court Legal Services Committee; the State Legal Aid Fund under section 16(2)(b) pays for the High Court Legal Services Committee.

2. Can a District Legal Services Authority accept a donation? Yes, under section 17(1)(b), but only with the prior approval of the State Authority. No such approval is required for donations to the Central or State Authority under sections 15(1)(b) and 16(1)(b).

3. Who audits the accounts of a State Legal Services Authority, and what happens to the report? The Comptroller and Auditor-General of India under section 18(2). The certified accounts and audit report go annually to the State Government under section 18(4), and the State Government must lay them before the State Legislature under section 18(6).

4. From where are the administrative expenses of a Taluk Legal Services Committee met? From the District Legal Aid Fund, by the District Authority, under section 11A(5), and section 17(2)(a) permits that fund to be applied to the functions in section 11B.

5. Why does section 14 refer to appropriation by Parliament? Because money cannot be paid out of the Consolidated Fund of India except under an appropriation made by law, so NALSA's grant has to be voted by Parliament like any other expenditure.

Section 19(3) and (4): the experience and qualifications of those "other persons" are prescribed by the Central Government in consultation with the Chief Justice of India for Lok Adalats organised by the Supreme Court Legal Services Committee, and by the State Government in consultation with the Chief Justice of the High Court for all others.

The Act stops there, which is not much help to a student who wants to know what a Lok Adalat looks like. The detail is in the National Legal Services Authority (Lok Adalats) Regulations 2009, as amended in 2019, made under section 29.

Regulation 6 sets the composition of a bench at each level. In every case the bench is a judicial member plus one or two others, and the others are drawn from a list:

• a member of the legal profession;
• a social worker of repute engaged in the upliftment of the weaker sections, including Scheduled Castes and Scheduled Tribes, women, children and rural and urban labour, and interested in implementing legal services schemes; at district and taluk level this may instead be a person engaged in para-legal activities of the area, preferably a woman;
• a professional from the field related to the subject matter of the Lok Adalat; and
• a mediator, or a professional, or a serving or retired senior executive.

The last two items, and the words "one or two", were inserted or substituted by the amendment of 22 October 2018. Before it, a bench was a judicial officer plus one or two of only the first two categories. The change matters: a Lok Adalat dealing with, say, insurance claims may now include somebody who understands insurance.

The judicial member differs by level. At State Authority and High Court level it is a sitting or retired Judge of the High Court or a serving or retired judicial officer. At District and Taluk level it is a sitting or retired judicial officer.

Regulations 3 to 5 and 8: how a sitting is actually arranged

This is the practical machinery MU's clinical paper is likely to ask about.

Regulation 3(1): Lok Adalats may be organised at regular intervals for a definite geographical area. A proviso requires that Special Lok Adalats shall be organised for all Family Courts at regular intervals.

Regulation 3(2): the organiser may associate members of the legal profession, college students, social organisations, and charitable and philanthropic institutions in organising a Lok Adalat.

"College students" is in the regulation in terms, and it is the clearest official statement that a law student on a clinical course has a place in this work. This is your syllabus describing your own role.

Regulation 4: the organiser must inform the State Authority of the proposal well before the date, giving the place and date, whether any outside organisation is associating, the categories and nature of cases, pending or pre-litigation, the number of cases in each category, and any other relevant information.

Regulation 5: every party whose case is referred must be informed well in time so as to have an opportunity to prepare. Two provisos: notice may be dispensed with if the referring court fixed or announced the date in the presence of the parties or their advocates; and if a party is not willing to refer their case to a Lok Adalat, the case may be considered on its merits by the court concerned.

Regulation 8: Lok Adalats may be held at such time and place and on such days, including holidays, as the organiser thinks appropriate. Regulation 6A, inserted in 2018, provides that where a Lok Adalat is held on a holiday or beyond court hours on a working day, the presiding judges, other members and staff are paid a Special Duty Allowance fixed by the State Authority, which shall not be less than the allowance recommended by NALSA.

Regulation 7: the organiser assigns specific cases to each bench and may prepare a cause list, intimated to all concerned at least two days before. And regulation 7(3) states the standard the bench must meet, which is the sentence to remember from the whole instrument: every bench shall make sincere efforts to bring about a conciliated settlement in every case put before it without bringing about any kind of coercion, threat, undue influence, allurement or misrepresentation.

Section 19(5): the jurisdiction, and the one bar

Section 19(5) is where the Act states what a Lok Adalat may deal with. A Lok Adalat shall have jurisdiction to determine and to arrive at a compromise or settlement between the parties to a dispute in respect of:

• (i) any case pending before; or
• (ii) any matter which is falling within the jurisdiction of, and is not brought before,

any court for which the Lok Adalat is organised.

That is the pending / pre-litigation division, and it runs through the whole of chapters 110 and 120. Clause (i) is a case already filed; clause (ii) is a dispute nobody has filed, which the regulations call a pre-litigation matter and define in regulation 2(ba) as a dispute between the parties which is not filed before the court.

The proviso is the only jurisdictional bar in the section: the Lok Adalat shall have no jurisdiction in respect of any case or matter relating to an offence not compoundable under any law.

A compoundable offence is one the law permits the complainant and the accused to settle, listed in the Code of Criminal Procedure and now in the Bharatiya Nagarik Suraksha Sanhita 2023. Serious offences are non-compoundable, and the reason a Lok Adalat cannot touch them is simple: a Lok Adalat can only record what the parties agree, and the law does not allow the parties to agree away a serious crime.

Regulation 10(2) adds a second bar that is not in the section: matters relating to divorce, and criminal cases which are not compoundable, shall not be referred to a Lok Adalat. Divorce is not excluded by the Act; it is excluded by the regulation, and an answer that credits the Act with it is wrong.

Regulation 9: the sentence that defines the limit of the power

Regulation 9 is worth quoting because it says in one line what the Supreme Court later had to say at length in State of Punjab v. Jalour Singh: Lok Adalats shall have the power only to help the parties to arrive at a compromise or settlement, and while so doing shall not issue any direction or order in respect of such dispute between the parties.

A worked example

The District Legal Services Authority at Thane decides to hold a Lok Adalat on the second Saturday of next month, for motor accident claims and cheque dishonour cases.

Is a Saturday allowed? Yes. Regulation 8 permits Lok Adalats on such days including holidays as the organiser thinks appropriate, and regulation 6A provides a Special Duty Allowance for those who sit on one.

Who organises it? The District Authority under section 19(1), and the Secretary of the District Authority constitutes the benches under regulation 6(c).

What does a bench look like? A sitting or retired judicial officer, plus one or two of: a member of the legal profession, a social worker or a person engaged in para-legal activities in the area preferably a woman, a professional from the relevant field, or a mediator or senior executive. For the motor claims bench, an insurance professional would be a sensible section 6(c)(iii) member.

What has to happen before the date? The Secretary informs the State Authority under regulation 4 with the place, date, categories and numbers. Parties are notified under regulation 5 in time to prepare. Cases are assigned to benches and a cause list is circulated at least two days ahead under regulation 7.

A party writes in to say he does not want his case in the Lok Adalat. Under the second proviso to regulation 5, his case may be taken up on merits by the court instead. Nobody can be compelled into a settlement forum.

Can a bench take up a prosecution for grievous hurt? No. The proviso to section 19(5) bars any case or matter relating to an offence not compoundable under any law.

What beginners get wrong

A Lok Adalat is not a court and holds no trial. Regulation 9 says it may only help the parties to a compromise and may issue no direction or order.

It is not a permanent body. It is convened for a sitting. The Permanent Lok Adalat under Chapter VIA is a different institution.

It is not confined to small or local matters. All five levels of the legal services system may organise one, up to the Supreme Court Legal Services Committee.

Divorce is excluded by the regulations, not by the Act. Section 19(5)'s proviso bars only non-compoundable offences; regulation 10(2) adds divorce.

A Lok Adalat bench is not made up only of judges. Section 19(2) requires judicial officers and other persons, and regulation 6 lists who those others may be.

Quick revision

• Section 19(1): Lok Adalats may be organised by a State Authority, District Authority, Supreme Court Legal Services Committee, High Court Legal Services Committee or Taluk Legal Services Committee, at such intervals, places and areas as it thinks fit.
• Section 19(2) to (4): composition is serving or retired judicial officers plus other persons, whose qualifications are prescribed by the Central Government in consultation with the Chief Justice of India for Supreme Court Committee Lok Adalats, and by the State Government in consultation with the Chief Justice of the High Court otherwise.
• Regulation 6 of the NALSA (Lok Adalats) Regulations 2009: a judicial member plus one or two of a lawyer, a social worker or para-legal worker preferably a woman, a subject-matter professional, or a mediator or senior executive.
• Section 19(5): jurisdiction over (i) any case pending before, or (ii) any matter within the jurisdiction of and not brought before, a court for which the Lok Adalat is organised. Proviso: no jurisdiction over an offence not compoundable under any law.
• Regulation 9: the power is only to help the parties reach a compromise; no direction or order may be issued.
• Regulation 10(2) proviso: divorce and non-compoundable criminal cases are not to be referred.
• Regulation 7(3): sincere efforts at a conciliated settlement, without coercion, threat, undue influence, allurement or misrepresentation.

Test yourself

1. Which five bodies may organise a Lok Adalat? Under section 19(1): every State Authority, every District Authority, the Supreme Court Legal Services Committee, every High Court Legal Services Committee, and every Taluk Legal Services Committee.

2. What is the only jurisdictional bar in section 19 itself? The proviso to section 19(5): a Lok Adalat has no jurisdiction over any case or matter relating to an offence not compoundable under any law.

3. Are divorce petitions excluded from Lok Adalats by the Act? No. That exclusion comes from the proviso to regulation 10(2) of the NALSA (Lok Adalats) Regulations 2009, which says matters relating to divorce and non-compoundable criminal cases shall not be referred.

4. Who sits on a Lok Adalat bench at the district level? Under regulation 6(c), a sitting or retired judicial officer, together with one or two of: a member of the legal profession; a social worker of the described kind or a person engaged in para-legal activities of the area, preferably a woman; a professional from the field related to the subject matter; or a mediator, professional, or serving or retired senior executive.

5. A party does not want his pending case sent to a Lok Adalat. What happens? Under the second proviso to regulation 5, the case may be considered on its merits by the court concerned. A Lok Adalat works only by consent, and regulation 7(3) forbids coercion of any kind.

Section 20(2): a pre-litigation matter, taken up by the Authority

Notwithstanding anything contained in any other law for the time being in force, the Authority or Committee organising the Lok Adalat under section 19(1) may, on receipt of an application from any one of the parties to a matter referred to in section 19(5)(ii), that such matter needs to be determined by a Lok Adalat, refer that matter to the Lok Adalat for determination.

The proviso again supplies the fairness: no matter shall be referred except after giving a reasonable opportunity of being heard to the other party.

Three points are worth drawing out.

One party is enough to start it. The application comes from "any one of the parties". That does not mean the other party can be dragged into a settlement, because nothing can be settled without them; it means one party can get the process going.

The other party must be heard first. Regulation 10(1A), inserted in 2018, repeats this in terms for pre-litigation matters.

Territorial jurisdiction still matters. Regulation 12(1) requires that in a pre-litigation matter it be ensured that the court for which the Lok Adalat is organised has territorial jurisdiction to adjudicate the matter. A Lok Adalat in Nashik cannot take up a dispute that no Nashik court could have tried.

Section 20(3) and (4): what the Lok Adalat then does

Section 20(3): where a case is referred under sub-section (1), or a reference is made under sub-section (2), the Lok Adalat shall proceed to dispose of the case or matter and arrive at a compromise or settlement between the parties.

Section 20(4): every Lok Adalat shall, while determining any reference before it, act with utmost expedition to arrive at a compromise or settlement, and shall be guided by the principles of justice, equity, fair play and other legal principles.

Section 20(4) is the sentence most often misused in answers. "Guided by the principles of justice, equity, fair play and other legal principles" describes how a Lok Adalat persuades, not a power to decide. State of Punjab v. Jalour Singh is explicit that when the Act speaks of "determination" and "award" it does not contemplate an adjudicatory judicial determination but a non-adjudicatory one based on the parties' own compromise. Chapter 120 works that case through.

Section 20(5) to (7): what happens when there is no settlement

This is the part students skip and examiners like, because it is where the two doors part company again.

Section 20(5): where no award is made because no compromise or settlement could be arrived at, the record of the case shall be returned by the Lok Adalat to the court from which the reference was received under sub-section (1), for disposal in accordance with law.

Section 20(6): where no award is made in a pre-litigation matter referred under sub-section (2), the Lok Adalat shall advise the parties to seek remedy in a court.

Section 20(7): where the record is returned under sub-section (5), the court shall proceed to deal with the case from the stage which was reached before the reference.

Section 20(7) is the guarantee that makes it safe to try. A party loses nothing by going to a Lok Adalat. The case does not restart, no step is undone, and nothing said in the attempt counts against them. If it fails, the file goes back and the suit picks up exactly where it left off.

Regulation 11(3) adds the practical rule about the file itself: judicial records called for by the Lok Adalat shall be returned within ten days of the Lok Adalat, whether or not the case settled, with an endorsement about the result, unless the court concerned permits them to be retained longer.

Distinctions worth keeping straight

A worked example, both doors

Door one. Anjali sued her builder in 2022 for possession of a flat and damages. The suit is at the stage of the builder's evidence. At a hearing, Anjali's advocate says she is willing to go to a Lok Adalat; the builder's advocate says nothing either way.

Only one party has applied, so this is section 20(1)(i)(b). The court must be prima facie satisfied that there are chances of settlement, and, because it is not a case of both parties agreeing, the proviso requires that the parties be given a reasonable opportunity of being heard. Regulation 10(2) requires the court not to refer mechanically.

Say the reference is made and the Lok Adalat sits, and the builder refuses every figure suggested. No award is made. Under section 20(5) the record goes back to the civil court, and under section 20(7) the suit resumes from the builder's evidence. Under regulation 11(3) the file must be back within ten days with an endorsement of the result.

Door two. Now change the facts. Anjali has not sued at all. She writes to the District Legal Services Authority asking that her dispute be placed before the Lok Adalat.

This is section 20(2), a pre-litigation matter under section 19(5)(ii). The Authority may refer it, but only after giving the builder a reasonable opportunity of being heard. Under regulation 12(1) the Authority must ensure that the court for which the Lok Adalat is organised would have territorial jurisdiction over the dispute.

If the builder engages and they settle, an award follows and section 21 applies. If he does not, or they cannot agree, section 20(6) applies: the Lok Adalat advises the parties to seek their remedy in a court. There is no record to send back, because no case was ever filed.

What beginners get wrong

A Lok Adalat cannot take up a pending case by itself. Regulation 10(1) is explicit: it gets jurisdiction only when a competent court orders the reference under section 20 or section 89 of the Code of Civil Procedure.

The "chances of settlement" condition belongs to clause (i), not to the whole of section 20(1).

The hearing proviso does not apply where both parties agree. It applies to a reference on one party's application or on the court's own motion.

Failure costs the parties nothing. Section 20(7) resumes the case from the stage reached before the reference.

Section 20(4) does not give a power to decide. Being guided by justice, equity and fair play is how the bench persuades; Jalour Singh holds that a Lok Adalat has no adjudicatory function at all.

Quick revision

• Section 20(1): the court shall refer a pending case where (i)(a) the parties agree, or (i)(b) one party applies and the court is prima facie satisfied there are chances of settlement, or (ii) the court is satisfied the matter is appropriate. Proviso: reasonable opportunity of being heard before a reference under (i)(b) or (ii).
• Section 20(2): for a pre-litigation matter, the organising Authority or Committee may refer it on an application by any one party, after hearing the other party.
• Section 20(3): the Lok Adalat shall proceed to dispose of the case and arrive at a compromise or settlement. Section 20(4): with utmost expedition, guided by justice, equity, fair play and other legal principles.
• Section 20(5): no settlement in a referred case, the record goes back to the referring court. Section 20(6): no settlement in a pre-litigation matter, the parties are advised to seek remedy in a court. Section 20(7): the court resumes from the stage reached before the reference.
• Regulation 10: no mechanical references; jurisdiction only on a court's order under section 20 or section 89 of the Code of Civil Procedure. Regulation 11(3): records back within ten days with an endorsement. Regulation 12(1): territorial jurisdiction must exist for a pre-litigation matter.

Test yourself

1. Can a Lok Adalat take cognizance of a pending suit on its own? No. Under section 20(1) the reference is made by the court, and regulation 10(1) confirms that a Lok Adalat gets jurisdiction over a case only when a court of competent jurisdiction orders it referred under section 20 of the Act or section 89 of the Code of Civil Procedure.

2. Both parties to a pending appeal jointly ask for a reference. Must the court hear them before referring? No. The proviso to section 20(1) requires a hearing only for a reference under clause (i)(b), on one party's application, or under clause (ii), on the court's own satisfaction. Where the parties agree under clause (i)(a) no hearing is needed.

3. What happens to a pending case that a Lok Adalat cannot settle? No award is made; under section 20(5) the record is returned to the referring court for disposal in accordance with law, and under section 20(7) the court deals with the case from the stage that had been reached before the reference. Under regulation 11(3) the record goes back within ten days with an endorsement of the result.

4. A dispute has never been filed in court. How can it reach a Lok Adalat? Under section 20(2), on the application of any one of the parties to the Authority or Committee organising the Lok Adalat, and only after the other party has been given a reasonable opportunity of being heard. Regulation 12(1) also requires that the court for which the Lok Adalat is organised would have territorial jurisdiction.

5. If a pre-litigation matter does not settle, what does the Lok Adalat do? Section 20(6): it advises the parties to seek their remedy in a court. There is no record to return, because no case was filed.

Section 21(2): finality, and no appeal

Every award made by a Lok Adalat shall be final and binding on all the parties to the dispute, and no appeal shall lie to any court against the award.

Two expressions repay attention.

"All the parties to the dispute" is wider than "the parties to the case". It binds anybody who was party to the dispute settled.

"No appeal shall lie to any court" is absolute in its terms, and it is the strongest finality clause in this whole book. Compare section 34 of the Arbitration and Conciliation Act 1996, where an award may at least be set aside: on the seven grounds in sub-section (2), and, for a domestic award, on patent illegality under sub-section (2A) as well. A Lok Adalat award has no equivalent.

The two leading cases, and they pull in opposite directions

This is the pair to learn together. Each is incomplete without the other, and an answer that has one and not the other has half the law.

P.T. Thomas: the deeming provision is real

P.T. Thomas v. Thomas Job, AIR 2005 SC 3575, (2005) 6 SCC 478, decided 4 August 2005, Ruma Pal and Dr. AR. Lakshmanan JJ.

Facts. Two brothers partitioned their father's property, and part of a theatre run by the elder brother stood on the land allotted to the younger. The younger brother sued and got a decree for possession. While the elder brother's appeal was pending in the District Court, the dispute went to a Lok Adalat, which on 5 October 1999 made an award on agreed terms: the property was to be sold to the younger brother or his nominee after one year and within two years, on payment of Rs. 9.5 lakhs, and if the elder brother did not execute the sale deed the younger could have it executed through court. If the younger brother defaulted instead, he was to give up the right and take Rs. 3.5 lakhs.

The elder brother did not execute the deed. A lawyer's notice was returned unclaimed; a telegram followed. The younger brother applied to execute the award. The executing court gave him three days to deposit Rs. 9.5 lakhs, and he deposited it a day early. The High Court, in revision, dismissed the execution petition.

Held. Restoring the executing court's order, the Supreme Court held that the award of a Lok Adalat is fictionally deemed to be a decree of court, and therefore the courts have all the powers in relation to it that they have in relation to a decree passed by themselves, which includes the power to extend time in an appropriate case. The award of a Lok Adalat is the decision of the court itself, though arrived at by the simpler method of conciliation instead of the process of arguments in court, and the effect is the same. The High Court's view would defeat the object and purposes of the Act and render the decision of the Lok Adalat meaningless.

Why it matters. It settles what "deemed to be a decree" actually gets you. Not a label: the whole apparatus a court has over its own decrees, including the discretion to extend time. That is what makes an award worth having.

State of Punjab v. Jalour Singh: what is not an award

State of Punjab v. Jalour Singh, AIR 2008 SC 1209, (2008) 2 SCC 660, decided 18 January 2008, K.G. Balakrishnan CJ.

Facts. Amarjit Kaur, about 32, died in a road accident in March 1997. The Claims Tribunal awarded her husband and minor son Rs. 1,44,000 with interest, and they appealed to the High Court for more. The appeal went to a Lok Adalat. On 3 August 2001 the Lok Adalat wrote a reasoned order: it held the Tribunal had fixed the deceased's earning capacity too low and used too small a multiplier, recalculated compensation at Rs. 1,70,200, and granted Rs. 62,200 over and above the Tribunal's award. It then added that if the parties objected to the proposed order, they could move the High Court within two months for disposal of the appeal on merits. Punjab Roadways had never consented. Its application to set the order aside was rejected, and so was a petition under article 227.

Held. Setting the order aside, the Supreme Court held that Lok Adalats have no adjudicatory or judicial functions; their functions relate purely to conciliation. A Lok Adalat determines a reference on the basis of a compromise or settlement arrived at by the parties and puts its seal of confirmation on it by making an award in those terms; where no settlement is reached, no award is made and the record goes back under section 20(5). No Lok Adalat has the power to hear parties and adjudicate as a court does. When the Act refers to "determination" and "award" it does not contemplate an adjudicatory judicial determination but a non-adjudicatory one based on a compromise, and the making of the award is merely the administrative act of incorporating the agreed terms into an executable order under the signature and seal of the Lok Adalat.

The order in that case had assumed a judicial role, heard the parties, ignored the absence of consensus, and arrogated to itself the appellate powers of the High Court. It was therefore not an award at all, and being contrary to law and beyond the power and jurisdiction of the Lok Adalat it was void in the eye of law.

The Court added a warning worth quoting in an answer: sitting and retired judges participating in Lok Adalats should resist the temptation to play the part of judges and should constantly strive to function as conciliators, guiding and persuading the parties by explaining the strengths and weaknesses of their respective claims.

Why it matters. It is the boundary of section 21. The finality in sub-section (2) attaches to a genuine award, meaning a record of what the parties actually agreed. An order a Lok Adalat imposes is not an award and gets none of section 21's protection. That is also the practical answer to the student's question "if no appeal lies, what if the Lok Adalat is wrong?" If it decided anything at all, it was not an award.

Govindan Kutty Menon: it works from criminal courts too

K.N. Govindan Kutty Menon v. C.D. Shaji, AIR 2012 SC 719, (2012) 2 SCC 51, decided 28 November 2011.

Facts. A complaint under section 138 of the Negotiable Instruments Act 1881, for dishonour of a cheque, was referred by the criminal court to a Lok Adalat and settled there. When the complainant tried to execute the award as a decree, the Principal Munsiff refused, and the Kerala High Court agreed: an award on a reference from a criminal court could only be an order of that criminal court, not a decree of a civil court.

Held. The Supreme Court held that interpretation erroneous and set both orders aside, laying down four propositions:

1. In view of the unambiguous language of section 21, every award of a Lok Adalat is deemed to be a decree of a civil court and is executable by that court.
2. The Act makes no distinction between a reference made by a civil court and one made by a criminal court.
3. There is no restriction on a Lok Adalat's power to make an award on a compromise in cases referred by any court, tribunal, family court, rent control court, consumer redressal forum, motor accidents claims tribunal or other forum of similar nature.
4. Even where the matter comes from a criminal court under section 138 of the Negotiable Instruments Act, the deeming provision makes the award a decree capable of execution by a civil court.

Why it matters. Cheque cases are the single largest category of matter settled in Lok Adalats in India, so this is the most practically consequential of the three. It is also a good illustration of how wide the definition of "court" in section 2(1)(aaa) really is.

The three cases in a table

A worked example

Nikhil sued Sameer for Rs. 4,00,000 in the City Civil Court at Bombay and paid court fee on that amount. The suit was referred to a Lok Adalat under section 20(1)(i)(a), both parties agreeing. At the Lok Adalat they settled at Rs. 3,20,000, payable in four instalments, and the bench recorded the terms and made an award.

Can Sameer appeal because he thinks he agreed to too much? No. Section 21(2) is absolute: the award is final and binding on all the parties to the dispute and no appeal lies to any court.

What does Nikhil get back? The court fee paid in the suit, under section 21(1) read with the Court Fees Act 1870, because this was a case referred under section 20(1).

Sameer pays two instalments and stops. What does Nikhil do? He executes. Section 21(1) makes the award a deemed decree of a civil court, so he applies to the executing court. He does not sue on the settlement.

Sameer asks the executing court for more time on the last instalment. That is P.T. Thomas exactly. Because the award is deemed a decree, the court has the powers it has over its own decrees, including the power to extend time in an appropriate case.

Now change the facts. Suppose Sameer had refused to agree to anything, and the bench, exasperated, wrote an order saying that having heard both sides it considered Rs. 3,20,000 just and reasonable and directed him to pay it. That is not an award. On Jalour Singh it is an adjudication the Lok Adalat had no power to make, it is void, and section 21 does not touch it. The correct course was for the Lok Adalat to make no award and return the record under section 20(5).

What beginners get wrong

"No appeal" does not mean no remedy at all in every circumstance. Where what happened was not an award, as in Jalour Singh, the order is void and can be challenged. And the Supreme Court in Bar Council of India v. Union of India pointed to articles 226 and 227 as the route against a Permanent Lok Adalat award, which is chapter 150.

The refund of court fee is not automatic in every Lok Adalat matter. Section 21(1) attaches it to a case referred under section 20(1). A pre-litigation matter has no court fee to refund.

An award is not a judgment and contains no findings. Jalour Singh calls the making of it an administrative act of recording agreed terms. A Lok Adalat award that reads like a judgment is a warning sign, not a good one.

A Lok Adalat award from a criminal reference is still executable as a civil decree, per Govindan Kutty Menon. Do not repeat the Kerala High Court's reasoning that this case overruled.

Quick revision

• Section 21(1): every award is deemed to be a decree of a civil court, or an order of any other court; and the court fee is refunded under the Court Fees Act 1870 where the case was referred under section 20(1).
• Section 21(2): every award is final and binding on all the parties, and no appeal lies to any court.
• P.T. Thomas (2005) 6 SCC 478: the deeming provision carries the court's full powers over its own decrees, including extension of time.
• Jalour Singh (2008) 2 SCC 660: no adjudicatory function; an imposed order is not an award and is void; making an award is an administrative act of recording the agreed terms.
• Govindan Kutty Menon (2012) 2 SCC 51: the same deeming provision applies to references from criminal courts, including section 138 cheque cases, and the award is executable by a civil court.

Test yourself

1. What are the two effects of section 21? Sub-section (1) deems every award to be a decree of a civil court, or an order of any other court, and provides for refund of court fee where the case was referred under section 20(1). Sub-section (2) makes every award final and binding on all the parties, with no appeal to any court.

2. A Lok Adalat hears both sides, finds one of them right and directs payment. Is that award final under section 21(2)? No. On State of Punjab v. Jalour Singh a Lok Adalat has no adjudicatory function, so what it made is not an award at all. Being beyond its power and jurisdiction, it is void, and section 21 does not apply to it.

3. Can an executing court extend the time fixed by a Lok Adalat award? Yes. P.T. Thomas holds that because the award is fictionally deemed to be a decree, the court has all the powers in relation to it that it has in relation to its own decrees, which includes the power to extend time in appropriate cases.

4. A cheque case under section 138 is settled in a Lok Adalat and the accused does not pay. Is the award executable as a civil decree? Yes. K.N. Govindan Kutty Menon holds that the Act draws no distinction between references from civil and criminal courts, and that by virtue of the deeming provision the award is a decree capable of execution by a civil court.

5. Does every Lok Adalat settlement carry a refund of court fee? No. Section 21(1) provides for the refund where a compromise has been arrived at in a case referred under section 20(1), that is, a pending case in which court fee was paid. In a pre-litigation matter under section 20(2) no fee was paid and none is refunded.

This is what frees a Lok Adalat from the Code of Civil Procedure's structure of pleadings, issues, evidence and arguments. There is no plaint, no written statement, no framing of issues, and no examination-in-chief. The bench talks to the parties.

Compare section 22D, which does the same job for a Permanent Lok Adalat but goes further: it says in terms that the Permanent Lok Adalat shall be guided by the principles of natural justice, objectivity, fair play and equity, and shall not be bound by the Code of Civil Procedure 1908 and the Indian Evidence Act 1872. Chapter 150 works that through. The reason for the extra words is that a Permanent Lok Adalat may decide, and a body that decides must be told which rules it is free from.

Section 22(3): judicial proceedings, and a civil court for two purposes

All proceedings before a Lok Adalat or Permanent Lok Adalat shall be deemed to be judicial proceedings within the meaning of sections 193, 219 and 228 of the Indian Penal Code 1860, and every such body shall be deemed to be a civil court for the purpose of section 195 and Chapter XXVI of the Code of Criminal Procedure 1973.

Unpack that, because a bare recital of section numbers is worth little.

Section 193 of the Penal Code punishes giving or fabricating false evidence in a judicial proceeding. So a person who lies on oath before a Lok Adalat commits perjury.

Section 219 punishes a public servant who corruptly makes an order or judgment he knows to be contrary to law. So a member of the bench is exposed to the same liability as a judge.

Section 228 punishes intentional insult or interruption to a public servant sitting in a judicial proceeding. So a party who abuses the bench is not beyond reach.

Section 195 of the Code of Criminal Procedure and Chapter XXVI together control how a prosecution for those offences may be launched: not on a private complaint, but on a complaint by the court concerned. Deeming the Lok Adalat a civil court for that purpose is what lets it set the process in motion.

The Acts named are the ones the section names, and both have since been replaced, by the Bharatiya Nyaya Sanhita 2023 and the Bharatiya Nagarik Suraksha Sanhita 2023. Section 22(3) has not been redrafted, so read it with the general rule that a reference to a repealed enactment is read as a reference to the corresponding provision of the new one. Cite the section as it stands, and note the successor legislation rather than substituting numbers you have not checked.

What section 22(3) does not do is turn a Lok Adalat into a court for all purposes. It is a limited deeming, for the offences and the procedure named, and State of Punjab v. Jalour Singh is the answer to anybody who reads it more widely.

The court fee refund, in section 21(1)

The refund is worth its own treatment, because it is the incentive that fills a Lok Adalat.

Section 21(1) provides that where a compromise or settlement has been arrived at by a Lok Adalat in a case referred to it under section 20(1), the court fee paid in such case shall be refunded in the manner provided under the Court Fees Act 1870.

Court fee is the sum a litigant pays to the State to file a case, usually calculated on the value of the claim, and in a substantial suit it is a large amount of money.

Three points follow.

It applies to a pending case only. Section 20(1) is the reference of a case already filed. In a pre-litigation matter under section 20(2), nothing was filed and no fee was paid, so nothing is refunded.

The whole fee comes back, not a part of it, and the mechanism is the Court Fees Act 1870.

It is a real inducement. A plaintiff who settles at a Lok Adalat recovers the fee he has already spent, which effectively reduces the cost of the settlement.

Note that section 89 of the Code of Civil Procedure has its own refund provision for cases it sends out to any of the alternative processes. Chapter 600 works through section 89.

A worked example

Ravindra sued a transport company for Rs. 12,00,000 for goods lost in transit and paid court fee on that amount. The suit was referred to a Lok Adalat under section 20(1). At the Lok Adalat the company says it will pay something once it sees the delivery records, which are with a third party godown keeper who has not been served.

Can the Lok Adalat get the records? Yes. Section 22(1)(b) gives it the civil court's power of discovery and production of documents, and section 22(1)(d) lets it requisition a public record or document from any court or office.

Can it compel the godown keeper to attend? Section 22(1)(a) gives it the power of summoning and enforcing the attendance of a witness and examining him on oath.

If the godown keeper lies on oath, what happens? Section 22(3) deems the proceeding a judicial proceeding within the meaning of section 193 of the Penal Code, so he can be prosecuted for false evidence, and the prosecution is launched through the section 195 route because the Lok Adalat is deemed a civil court for that purpose.

Suppose the records show the loss and the company still refuses to pay anything. The Lok Adalat cannot order it to pay. Regulation 9 forbids any direction or order, and Jalour Singh holds that an imposed order is void. No award is made, and under section 20(5) the record goes back to the civil court.

Suppose instead they settle at Rs. 9,00,000. The award is deemed a decree under section 21(1), and Ravindra's court fee on the Rs. 12,00,000 suit is refunded under the Court Fees Act 1870.

Distinctions worth keeping straight

What beginners get wrong

Section 22 does not give a Lok Adalat the powers of a civil court generally. It gives the civil court's powers in respect of five listed matters, all of them about getting witnesses and documents.

"Deemed to be judicial proceedings" is limited to three Penal Code sections. It does not make the Lok Adalat a court at large.

Having power to specify its own procedure is not power to decide. Read section 22(2) with regulation 9.

The refund of court fee is not available in every Lok Adalat matter. Only where the case was referred under section 20(1).

Quick revision

• Section 22(1): the powers of a civil court under the Code of Civil Procedure in respect of (a) summoning and enforcing attendance of a witness and examining him on oath, (b) discovery and production of documents, (c) reception of evidence on affidavits, (d) requisitioning public records, and (e) other prescribed matters.
• Section 22(2): power to specify its own procedure.
• Section 22(3): proceedings are judicial proceedings for sections 193, 219 and 228 of the Indian Penal Code, and the body is a civil court for section 195 and Chapter XXVI of the Code of Criminal Procedure. Both those Codes have since been replaced by the Bharatiya Nyaya Sanhita 2023 and the Bharatiya Nagarik Suraksha Sanhita 2023.
• The section applies to a Permanent Lok Adalat too, by the substitution made by Act 37 of 2002.
• Section 21(1): court fee is refunded under the Court Fees Act 1870 where a settlement is reached in a case referred under section 20(1).
• Regulation 9 of the NALSA (Lok Adalats) Regulations 2009: the power is only to help the parties to a compromise, and no direction or order may be issued.

Test yourself

1. Name the five matters in which a Lok Adalat has the powers of a civil court. Summoning and enforcing the attendance of a witness and examining him on oath; discovery and production of any document; reception of evidence on affidavits; requisitioning any public record or document or a copy from any court or office; and such other matters as may be prescribed.

2. A witness gives false evidence before a Lok Adalat. Can he be prosecuted? Yes. Section 22(3) deems the proceeding a judicial proceeding within the meaning of section 193 of the Indian Penal Code, and deems the Lok Adalat a civil court for section 195 and Chapter XXVI of the Code of Criminal Procedure, which govern how such a prosecution is launched.

3. Does the power to specify its own procedure let a Lok Adalat decide a dispute? No. Section 22(2) is about procedure. Regulation 9 of the NALSA (Lok Adalats) Regulations 2009 confines the power to helping the parties reach a compromise and forbids any direction or order, and State of Punjab v. Jalour Singh holds that a Lok Adalat has no adjudicatory function.

4. When is court fee refunded, and when is it not? It is refunded under section 21(1), in the manner provided by the Court Fees Act 1870, where a compromise or settlement is arrived at in a case referred under section 20(1), that is, a pending case. It does not arise in a pre-litigation matter under section 20(2), where no case was filed and no fee paid.

5. How does section 22D differ from section 22(2), and why? Section 22(2) gives both bodies power to specify their own procedure. Section 22D goes further for a Permanent Lok Adalat, requiring it to be guided by natural justice, objectivity, fair play, equity and other principles of justice, and providing that it is not bound by the Code of Civil Procedure 1908 or the Indian Evidence Act 1872. The extra provision is needed because a Permanent Lok Adalat may decide a dispute on merits, and a body that decides must be told which rules of procedure and evidence bind it.

Several things repay attention here.

Transport is by air, road or water. Rail is not named. Note the omission rather than assuming; and note that the closing words let a Government add services by notification, which is how the list is kept current.

"Postal, telegraph or telephone service" is the language of 2002. Telegraph services in India have ceased, and the way people communicate has changed completely, which is a fair thing to observe in an answer about whether the Chapter has kept pace.

"Supply of power, light or water to the public by any establishment" covers the electricity distribution companies, which in practice generate the largest share of Permanent Lok Adalat work.

"Insurance service" is there in terms. Insurance disputes are the other large category.

The list is closed except by notification. A dispute about a service that is not in clauses (i) to (vi) and has not been notified cannot go to a Permanent Lok Adalat, however deserving.

Interglobe Aviation Ltd v. N. Satchidanand, (2011) 7 SCC 463, is the case to know here, and it is worth being precise about what it decides. Air transport is already inside clause (i), so the case did not have to decide whether an airline provides a public utility service. What it decided was a jurisdiction point: an airline's standard condition of carriage providing that only the courts at Delhi would have jurisdiction was invalid, because parties cannot by agreement confer jurisdiction on a court that would not otherwise have it, and the clause applied irrespective of where the cause of action arose. Chapter 150 works it through with section 22C.

Section 22B: how one is established, and who sits on it

Section 22B(1): notwithstanding anything contained in section 19, the Central Authority or, as the case may be, every State Authority shall, by notification, establish Permanent Lok Adalats at such places and for exercising such jurisdiction in respect of one or more public utility services and for such areas as the notification specifies.

Three points.

The non obstante clause matters. "Notwithstanding anything contained in section 19" separates this body from the ordinary Lok Adalat entirely. Section 19 is not the source of its existence and its limits do not apply to it.

It is established by notification, so its existence, its seat, its territorial area and the services it covers are all matters of published record.

Only NALSA and the State Authorities can establish one. A District Authority or Taluk Committee, which may organise an ordinary Lok Adalat under section 19(1), cannot establish a Permanent Lok Adalat.

Section 22B(2): every Permanent Lok Adalat established for a notified area shall consist of:

• (a) a person who is, or has been, a district judge or additional district judge, or has held judicial office higher in rank than that of a district judge, who shall be the Chairman; and
• (b) two other persons having adequate experience in public utility service, nominated by the Central or State Government on the recommendation of the Central or State Authority.

They are appointed by the Authority establishing the Permanent Lok Adalat, and the other terms and conditions of appointment are prescribed by the Central Government.

The composition is the answer to the obvious objection to section 22C(8). If this body may decide a dispute, who is deciding? A judicial officer of at least district judge rank chairs it, and the two others bring knowledge of the service in question. That was precisely the reasoning the Supreme Court adopted in Bar Council of India v. Union of India, (2012) 8 SCC 243, in upholding the Chapter, and it is chapter 150.

Lok Adalat and Permanent Lok Adalat, side by side

This table is the single most examinable thing in Module I. Learn it.

A worked example

Sushma's electricity connection in Kalyan was disconnected and she was billed Rs. 46,000 in arrears she says she does not owe. She wants the bill corrected and the supply restored.

Is this a public utility service? Yes. Section 22A(b)(iii) covers the supply of power, light or water to the public by any establishment.

Can she go to a Permanent Lok Adalat? Yes, if one has been established by notification for that area and for that service under section 22B(1), and provided she has not already brought the dispute before a court, which is section 22C(1) and chapter 150.

Who will hear her? A Chairman who is or has been a district judge or additional district judge, or has held higher judicial office, and two persons with adequate experience of public utility services, under section 22B(2).

What if the distribution company simply does not engage? This is the whole point of Chapter VIA. Before an ordinary Lok Adalat, nothing would happen. Here, if conciliation fails and the dispute does not relate to an offence, the Permanent Lok Adalat may decide it, under section 22C(8).

Now change the service. Suppose instead her complaint is about a coaching class that took her fees and never held the classes. That is not a transport, postal, telegraph or telephone service, not a supply of power, light or water, not public conservancy or sanitation, not a hospital or dispensary, and not insurance. Unless a Government has notified coaching services as a public utility service, a Permanent Lok Adalat has no jurisdiction. Her remedies are a consumer complaint, a civil suit, or an ordinary Lok Adalat.

What beginners get wrong

A Permanent Lok Adalat is not a Lok Adalat that sits all the time. It is a different institution with different jurisdiction, different composition and, decisively, the power to decide.

Its jurisdiction is limited by subject matter, not by convenience. If the service is not within section 22A(b) or notified, the forum has no jurisdiction at all.

The Act names transport by air, road or water. Do not add categories to the definition when you recite it; note instead the power to notify further services.

It is established only by NALSA or a State Authority. A District Authority cannot establish one, although it may organise ordinary Lok Adalats.

The Chairman must be of district judge rank or higher. Do not describe the bench as a panel of laypersons.

Quick revision

• Chapter VIA, sections 22A to 22E, inserted by Act 37 of 2002 w.e.f. 11 June 2002, headed "Pre-litigation conciliation and settlement".
• Section 22A(b), public utility service: (i) transport of passengers or goods by air, road or water; (ii) postal, telegraph or telephone service; (iii) supply of power, light or water to the public by any establishment; (iv) public conservancy or sanitation; (v) service in hospital or dispensary; (vi) insurance service; plus any service notified by the Central or State Government in the public interest.
• Section 22B(1): notwithstanding section 19, the Central Authority or a State Authority shall, by notification, establish Permanent Lok Adalats for specified places, areas and services.
• Section 22B(2): a Chairman who is or has been a district judge or additional district judge or has held higher judicial office, and two persons with adequate experience in public utility service.

Test yourself

1. Which body may establish a Permanent Lok Adalat? Only the Central Authority or a State Authority, by notification, under section 22B(1). A District Authority or Taluk Legal Services Committee may organise ordinary Lok Adalats under section 19(1) but cannot establish a Permanent Lok Adalat.

2. List the six categories of public utility service in section 22A(b). Transport of passengers or goods by air, road or water; postal, telegraph or telephone service; supply of power, light or water to the public by any establishment; a system of public conservancy or sanitation; service in a hospital or dispensary; and insurance service. The Central or State Government may also notify further services in the public interest.

3. What is the composition of a Permanent Lok Adalat? Under section 22B(2), a Chairman who is or has been a district judge or additional district judge, or has held judicial office higher in rank than a district judge, and two other persons having adequate experience in public utility service, nominated by the Government on the recommendation of the Authority.

4. Why does section 22B(1) begin "notwithstanding anything contained in section 19"? Because a Permanent Lok Adalat is a distinct institution from the Lok Adalat organised under section 19. The non obstante clause makes clear that section 19 is neither the source of its existence nor a limit on it.

5. What did Interglobe Aviation Ltd v. N. Satchidanand actually decide? That an exclusive jurisdiction clause in a standard contract of carriage, purporting to confine disputes to the courts at Delhi irrespective of where the cause of action arose, was invalid, because parties cannot by agreement confer jurisdiction on a court that would not otherwise have it. It did not decide whether air transport is a public utility service, since section 22A(b)(i) already covers it.

So the safe and accurate answer is the layered one. The figure in the second proviso is ten lakh rupees; the third proviso empowers the Central Government, in consultation with the Central Authority, to increase it by notification; and NALSA states the present jurisdiction to be one crore rupees, although its own site is not consistent about it. Do not assert a single figure as settled without seeing the notification, and check the current limit before advising anybody. What is certainly wrong is to say the ceiling is fixed at ten lakh and cannot change, because the third proviso says otherwise.

Section 22C(2): after an application is made, no party to that application shall invoke the jurisdiction of any court in the same dispute.

This is a strong provision and it is the other half of the bargain. Approaching a Permanent Lok Adalat is not a free attempt that can be abandoned for court if it goes badly. The applicant is committed, and so is the other side.

Section 22C(3) to (6): the written stage, and the duty to cooperate

Section 22C(3): on an application being made, the Permanent Lok Adalat:

• (a) shall direct each party to file a written statement stating the facts and nature of the dispute, the points or issues in it, and the grounds relied on in support of or in opposition to those points, which a party may supplement with documents and other evidence; and shall send a copy of each statement and its documents to each of the other parties;
• (b) may require any party to file an additional statement at any stage of the conciliation proceedings; and
• (c) shall communicate any document or statement received from any party to the other party, to enable a reply.

Notice how much of the ordinary adversarial structure is here: statements of case, documents, and service on the other side. That is not an accident. A body that may eventually decide has to build a record it can decide on, and section 22C(3) is that record.

Section 22C(4): when the statements, additional statements and replies have been filed to its satisfaction, the Permanent Lok Adalat shall conduct conciliation proceedings between the parties in such manner as it thinks appropriate, taking into account the circumstances of the dispute.

Section 22C(5): during the conciliation proceedings, it shall assist the parties in their attempt to reach an amicable settlement of the dispute in an independent and impartial manner.

Section 22C(6): it is the duty of every party to cooperate in good faith with the Permanent Lok Adalat in the conciliation, and to comply with its direction to produce evidence and other related documents.

Section 22C(7): settlement, if it can be had

Where, in the conciliation proceedings, the Permanent Lok Adalat is of opinion that there exist elements of settlement which may be acceptable to the parties, it may formulate the terms of a possible settlement and give them to the parties for their observations. If the parties reach agreement, they shall sign the settlement agreement and the Permanent Lok Adalat shall pass an award in terms of it and furnish a copy to each party.

Compare this with conciliation under section 73 of the Arbitration and Conciliation Act 1996, which chapter 570 works through. The structure is almost identical: the neutral formulates terms, the parties observe on them, and a signed agreement follows. Chapter VIA is conciliation, right up to the point where it stops being conciliation.

Section 22C(8): the sentence that changes everything

Where the parties fail to reach an agreement under sub-section (7), the Permanent Lok Adalat shall, if the dispute does not relate to any offence, decide the dispute.

Read it slowly, because four things are packed into it.

"Fail to reach an agreement": the power arises only after conciliation has been tried and has failed. A Permanent Lok Adalat cannot decide first.

"Shall": it is a duty, not a discretion. Once conciliation fails, the forum must decide.

"If the dispute does not relate to any offence": the criminal exclusion is repeated. A Permanent Lok Adalat may settle a compoundable offence but may never decide a matter relating to an offence.

"Decide the dispute": an adjudication, on the merits, binding on a party who never agreed to anything.

Section 22D: the rules it decides by

The Permanent Lok Adalat, while conducting conciliation proceedings or deciding a dispute on merit, shall be guided by the principles of natural justice, objectivity, fair play, equity and other principles of justice, and shall not be bound by the Code of Civil Procedure 1908 and the Indian Evidence Act 1872.

Two halves, and both are necessary.

Natural justice means, at its core, that each side must be heard and the decision-maker must be impartial. Applying it here is what keeps section 22C(8) constitutional: a body that decides without agreement must at least hear both sides fairly.

Not bound by the Code and the Evidence Act is what keeps it quick. There is no framing of issues, no examination-in-chief and cross-examination, and no rules about admissibility. That freedom was one of the grounds on which Chapter VIA was attacked.

Section 22E: the award, and its finality

Section 22E(1): every award, whether made on merit or in terms of a settlement agreement, shall be final and binding on all the parties and on persons claiming under them.

Section 22E(2): every award shall be deemed to be a decree of a civil court.

Section 22E(3): the award shall be by a majority of the persons constituting the Permanent Lok Adalat.

Section 22E(4): every award shall be final and shall not be called in question in any original suit, application or execution proceeding.

Section 22E(5): the Permanent Lok Adalat may transmit any award to a civil court having local jurisdiction, and that court shall execute the order as if it were a decree made by that court.

Sub-section (3) is worth noticing because it only makes sense for a body that decides. A three-member forum that could only record agreements would never need a majority rule.

Bar Council of India v. Union of India: the challenge, and the answer

Bar Council of India v. Union of India, AIR 2012 SC 3246, (2012) 8 SCC 243, decided 3 August 2012, R.M. Lodha and Anil R. Dave JJ.

Facts. A petition under article 32 challenging sections 22A to 22E as arbitrary and violative of article 14. The grounds were the sharpest that can be put against Chapter VIA, and they are worth knowing because they are the criticism section of any answer on this topic:

• a service provider can move a Permanent Lok Adalat unilaterally under section 22C(1) and (2), and so pre-empt an aggrieved consumer from going to the consumer fora or any other judicial forum;
• the forum may then decide on merits under section 22C(8) without following the Code of Civil Procedure or the Evidence Act;
• under section 22E(1) and (4) the award is final, cannot be questioned in any forum, and carries no right of appeal; and
• public utility services engage the right to life under article 21, so an adverse decision on merits has serious consequences.

Held. The writ petition was dismissed. On the absence of an appeal, the Court gave two reasons. It is important that a dispute of this kind is brought to an end at the earliest and not prolonged unnecessarily. And, more importantly, a party aggrieved by an award can always approach the High Court under its supervisory and extraordinary jurisdiction under articles 226 and 227 of the Constitution. The Court rejected the submission that this would simply return the burden of litigation to the High Courts.

The Court also relied on the earlier three-judge decision in S.N. Pandey, which had found no constitutional infirmity in the same Chapter, observing that the legislature's effort is to decrease the workload of the courts by resorting to alternative dispute resolution, that Lok Adalats have been a fast means of dispensation of justice for over two decades, and that the composition of a Permanent Lok Adalat contemplates a judicial officer or retired judicial officer together with persons having adequate experience in public utility services.

Why it matters. It is the authority for the constitutionality of the only body in this subject that can impose a decision without consent, and it supplies the answer to the obvious objection that section 22E leaves an aggrieved party with no remedy. The remedy is articles 226 and 227. That single sentence is the most useful thing in the case for an examination.

A worked example

Prakash's insurer rejected his claim of Rs. 3,80,000 for a fire in his shop. He has not sued.

Can he go to a Permanent Lok Adalat? Yes. Insurance service is within section 22A(b)(vi); he has not brought the dispute before any court, so section 22C(1) is satisfied; and the amount is well within the ceiling.

What happens next? Under section 22C(3) both sides file written statements with documents, each served on the other. Under section 22C(4) and (5) the forum conducts conciliation, impartially. Under section 22C(6) both must cooperate in good faith and produce what is asked for.

The insurer offers Rs. 1,00,000 and Prakash refuses. Under section 22C(7), if the forum thinks there are elements of a settlement it may formulate terms and give them to the parties for observations. Suppose neither accepts them.

Then what? Section 22C(8): the parties having failed to agree, and the dispute not relating to an offence, the Permanent Lok Adalat shall decide the dispute. It does so guided by natural justice, objectivity, fair play and equity, and it is not bound by the Code of Civil Procedure or the Evidence Act, under section 22D.

It awards him Rs. 2,60,000, by two votes to one. That is valid under section 22E(3), which requires a majority. The award is final and binding under section 22E(1), deemed a decree of a civil court under section 22E(2), and cannot be questioned in any original suit, application or execution proceeding under section 22E(4). If the insurer does not pay, the award can be transmitted to a civil court with local jurisdiction, which executes it as its own decree under section 22E(5).

Can the insurer challenge it anywhere? Not by appeal; none lies. Its only route is the High Court under articles 226 and 227, as Bar Council of India v. Union of India holds.

Now change one fact. Suppose Prakash had already filed a consumer complaint before applying. Section 22C(1) requires the application to be made before the dispute is brought before any court, and section 2(1)(aaa) defines court to include a tribunal or quasi-judicial authority. The Permanent Lok Adalat would have no jurisdiction.

What beginners get wrong

A Permanent Lok Adalat does not decide first. Conciliation under section 22C(4) to (7) must be attempted, and only its failure triggers section 22C(8).

The pecuniary limit in the Act is not the current limit. Ten lakh rupees is in the second proviso; the third proviso allows an increase, and NALSA states the present jurisdiction is up to one crore.

Section 22C(2) is a real bar. Once an application is made, no party may invoke any court's jurisdiction in the same dispute.

"No appeal" is not "no remedy". Articles 226 and 227 remain, per Bar Council of India v. Union of India.

The award may be by majority. Section 22E(3), which distinguishes this forum from every other body in Module I.

Quick revision

• Section 22C(1): application by any party before the dispute is brought before any court. Provisos: no jurisdiction over a non-compoundable offence; no jurisdiction where the value of the property in dispute exceeds ten lakh rupees; and the Central Government may raise that limit by notification. NALSA states the present jurisdiction to be one crore rupees, though its own pages are inconsistent, so give the statutory figure, the power to raise it, and the current stated figure together.
• Section 22C(2): after the application, no party may invoke any court's jurisdiction in the same dispute.
• Section 22C(3) to (6): written statements, documents, service on the other side, additional statements; conciliation conducted independently and impartially; a duty on the parties to cooperate in good faith.
• Section 22C(7): the forum may formulate terms of a possible settlement; if the parties agree, they sign and the forum passes an award in those terms.
• Section 22C(8): on failure to agree, and if the dispute does not relate to any offence, the Permanent Lok Adalat shall decide the dispute.
• Section 22D: guided by natural justice, objectivity, fair play, equity and other principles of justice; not bound by the Code of Civil Procedure 1908 or the Indian Evidence Act 1872.
• Section 22E: the award, on merit or on settlement, is final and binding on the parties and those claiming under them; deemed a decree of a civil court; made by majority; not questionable in any original suit, application or execution proceeding; transmissible to a civil court for execution.
• Bar Council of India v. Union of India (2012) 8 SCC 243: Chapter VIA upheld; the remedy against an award is the High Court under articles 226 and 227.

Test yourself

1. When may a Permanent Lok Adalat decide a dispute, and when may it not? Under section 22C(8) it shall decide where the parties have failed to reach an agreement under sub-section (7), provided the dispute does not relate to any offence. It cannot decide before conciliation has been attempted and has failed, and it can never decide a matter relating to an offence.

2. A consumer files a complaint before a consumer commission and then applies to a Permanent Lok Adalat. Is the application maintainable? No. Section 22C(1) permits an application only before the dispute is brought before any court, and section 2(1)(aaa) defines court to include any tribunal or authority exercising judicial or quasi-judicial functions, which a consumer commission does.

3. What is the pecuniary limit on a Permanent Lok Adalat's jurisdiction? The second proviso to section 22C(1) sets it at ten lakh rupees, and the third proviso permits the Central Government, in consultation with the Central Authority, to increase that limit by notification. NALSA states the present jurisdiction to be up to one crore rupees, although its own website gives ten lakh on another page, so an answer should give the statutory figure, the power to raise it, and the currently stated figure rather than a single number.

4. There being no appeal against an award under section 22E, what remedy does an aggrieved party have? The supervisory and extraordinary jurisdiction of the High Court under articles 226 and 227 of the Constitution, as the Supreme Court held in Bar Council of India v. Union of India while upholding Chapter VIA.

5. State two differences between the procedure of a Lok Adalat and that of a Permanent Lok Adalat. First, a Permanent Lok Adalat requires written statements, documents and service on the other party under section 22C(3), which an ordinary Lok Adalat does not. Second, section 22D expressly frees it from the Code of Civil Procedure 1908 and the Indian Evidence Act 1872 and directs it to be guided by natural justice, objectivity, fair play and equity, because unlike an ordinary Lok Adalat it may decide the dispute on merits.

Section 4(g) covers research in the field of legal services, and section 4(m) the enlisting of voluntary social welfare institutions working at the grass-root level.

At the levels below, section 7(2)(c) lets a State Authority undertake preventive and strategic legal aid programmes, and sections 7(2)(b) and 10(2)(b) give the power to conduct and organise Lok Adalats, which is where a camp usually ends.

The detail is in regulations, made under section 29. Two matter here: the NALSA (Legal Services Clinics) Regulations 2011, amended in 2014, and the NALSA (Free and Competent Legal Services) Regulations 2010, which define a para-legal volunteer as one trained under the NALSA Scheme for Para Legal Volunteers and empanelled by a legal services institution.

The legal services clinic

What it is. Regulation 2(c) of the 2011 Regulations defines a legal services clinic as the facility established by the District Legal Services Authority to provide basic legal services to the people with the assistance of para-legal volunteers or lawyers, as the point of first contact for help and advice.

Point of first contact is the phrase to remember. A clinic is not a court and not a law office. It is the place where a problem is first recognised as a legal one.

Where they must be. Regulation 3 requires the District Legal Services Authority, subject to available financial resources, to establish clinics in:

• (a) all villages, or clusters of villages depending on their size, called the Village Legal Care and Support Centre; and
• (b) jails, educational institutions, community centres, protection homes, courts, juvenile justice boards and other areas, especially where people face geographical, social and other barriers to reaching the legal services institutions.

Who staffs them. Regulation 5 requires at least two para-legal volunteers available during working hours, and the legal services institution with territorial jurisdiction, or the District Authority, may depute trained volunteers.

Who may use them. Regulation 4: every person who fulfils the criteria in section 12 is eligible for free legal services in a clinic, which ties this back to chapter 70.

A related institution worth knowing. Regulation 2(b) defines a District ADR Centre as the District Alternative Dispute Resolution Centre established under the Thirteenth Finance Commission, including similar facilities such as Nyaya Seva Sadans, where facilities for counselling, mediation, Lok Adalat and legal services are provided under a single roof. That is the whole of this subject in one building, and it is a good illustration of how Modules I and III meet in practice.

Mobile Lok Adalats. Regulation 21 lets the lawyers or para-legal volunteers in a clinic request the District Authority to send the mobile Lok Adalat van, with members of the Lok Adalat bench, to the clinic for settlement of the disputes they have identified. The van, fitted for conducting proceedings, may also be used at a place near the clinic or even at village congregations such as melas and other festive occasions.

The part that is about you: law students

Regulations 22 to 26 of the 2011 Regulations are addressed to law colleges and law universities. They were read here from the scan itself.

Regulation 22: the regulations apply mutatis mutandis to student legal services clinics set up by law colleges and law universities. A proviso lets students of law colleges and universities make use of the clinics established under these regulations with the permission of the District Legal Services Authority.

Mutatis mutandis means with the necessary changes made: the same rules apply, adjusted for the different setting.

Regulation 23: law students may adopt a village for legal aid camps.

• (1) Law students of law colleges or universities may adopt a village, especially in remote rural areas, and organise legal aid camps in association with the legal services clinic or Village Legal Care and Support Centre.
• (2) They may, with the assistance of the para-legal volunteers engaged in the clinics, conduct surveys to identify the legal problems of local people.
• (3) Those surveys may include gathering information about existing litigation and unresolved pre-litigation disputes.
• (4) They may also focus on grievances that would enable NALSA to take steps by way of social justice litigation as provided in section 4(d).
• (5) Students conducting surveys shall send reports to the State Legal Services Authority, with copies to the legal services institution having territorial jurisdiction and to the District Legal Services Authority.

Regulation 24: clinics attached to law colleges and universities.

• (1) Law colleges, law universities and other institutions may set up legal services clinics, as envisaged in section 4(k), attached to their institutions as a part of clinical legal education.
• (2) They shall inform the State Legal Services Authority of the establishment of such a clinic.
• (3) The State Authority shall render the required technical assistance and take measures to promote the clinic's activities.
• (4) Law students in the final year classes may render legal services in such clinics under the supervision of a faculty member of their institution.
• (5) The State Authority may organise alternative dispute resolution camps, including Lok Adalats, to resolve the problems of people who seek legal aid in such clinics.
• (6) The District Legal Services Authority may issue certificates to students who complete their assignment in such clinics.

Regulation 25: trained para-legal volunteers may be deputed to clinics established under regulation 24, to assist people seeking free legal services and to interact with the students and members of the faculty.

Regulation 26: the State Legal Services Authority shall collect monthly reports from District Authorities, law colleges and law universities on the functioning of clinics, shall review their working at least once in three months, may issue directions for improvement, and shall send quarterly reports to NALSA.

Read regulation 24(4) and 24(6) together and the shape of a clinical course appears: a final-year student renders legal services under faculty supervision, and the District Authority may certify the completed assignment. That is what a Practical Training paper is for.

A worked example

A law college in Thane sets up a legal services clinic and four final-year students adopt a village forty kilometres away.

What must the college do first? Under regulation 24(2), inform the State Legal Services Authority that the clinic has been established. Under regulation 24(3) the State Authority is then to render technical assistance.

What can the students actually do? Under regulation 24(4) they may render legal services in the clinic under the supervision of a faculty member. Under regulation 23(1) they may adopt the village and organise legal aid camps in association with the Village Legal Care and Support Centre, and under regulation 23(2) they may conduct surveys with the help of para-legal volunteers.

They find nineteen households whose widow pension applications have been pending for two years. Under regulation 23(3) and (4) the survey may record unresolved pre-litigation disputes and grievances that would let NALSA consider social justice litigation under section 4(d). Under regulation 23(5) they send their report to the State Authority, with copies to the local legal services institution and the District Authority.

Eleven of the nineteen are willing to settle with the department if it will process the applications. Under regulation 21 the students or the clinic's volunteers may request the District Authority to send the mobile Lok Adalat van with a bench, to the clinic or nearby, and those matters can be taken up as pre-litigation matters under section 20(2). If they settle, section 21 gives each settlement the force of a decree.

And for the students? Under regulation 24(6), the District Legal Services Authority may issue certificates on completion of the assignment.

What beginners get wrong

A para-legal volunteer is not an unqualified lawyer. The role is to identify problems, inform people of their rights and bring them to the system. Representation is done by panel lawyers.

Legal literacy is not the same as legal aid. Aid helps with a case; literacy tells people that a case is possible. Section 4(l) is about the second.

Clinics are not only in law colleges. Regulation 3 requires the District Authority to establish them in villages, jails, educational institutions, community centres, protection homes, courts and juvenile justice boards. The college clinic under regulation 24 is one kind.

A student clinic is not informal. It must be reported to the State Authority, work is done under faculty supervision, and there are monthly and quarterly reporting duties under regulation 26.

Quick revision

• Section 4(l): legal literacy and legal awareness, and educating weaker sections about their rights under social welfare legislation. Section 4(e): legal aid camps in rural areas, slums and labour colonies. Section 4(k): clinical legal education and legal services clinics in universities and law colleges, in consultation with the Bar Council of India. Section 4(d): training social workers in legal skills.
• NALSA (Legal Services Clinics) Regulations 2011, made under section 29. Regulation 2(c): a clinic is the point of first contact established by the District Authority. Regulation 3: clinics in all villages as Village Legal Care and Support Centres, and in jails, educational institutions, community centres, protection homes, courts and juvenile justice boards. Regulation 5: at least two para-legal volunteers during working hours. Regulation 4: eligibility is section 12.
• Regulation 2(b): a District ADR Centre, including a Nyaya Seva Sadan, houses counselling, mediation, Lok Adalat and legal services under one roof.
• Regulation 21: the mobile Lok Adalat van may be requested for a clinic, or used at village congregations such as melas.
• Regulation 23: law students may adopt a village, run camps, conduct surveys of legal problems including pre-litigation disputes, and send reports to the State Authority.
• Regulation 24: colleges may set up clinics as part of clinical legal education; the State Authority must be informed and must give technical assistance; final year students may render legal services under faculty supervision; the District Authority may issue certificates.
• Regulation 26: monthly reports, review at least once in three months, quarterly reports to NALSA.

Test yourself

1. What is a legal services clinic, and who establishes one? Under regulation 2(c) of the NALSA (Legal Services Clinics) Regulations 2011, it is the facility established by the District Legal Services Authority to provide basic legal services with the assistance of para-legal volunteers or lawyers, as the point of first contact for help and advice. Regulation 24 additionally allows law colleges, law universities and other institutions to set up clinics attached to themselves.

2. Which provision of the Act supports clinical legal education? Section 4(k), which requires NALSA to develop programmes for clinical legal education in consultation with the Bar Council of India and to promote, guide and supervise the establishment and working of legal services clinics in universities, law colleges and other institutions. Regulation 24(1) refers to it in terms.

3. What may law students do under regulation 23? Adopt a village, especially in a remote rural area, and organise legal aid camps in association with a legal services clinic or Village Legal Care and Support Centre; conduct surveys with the assistance of para-legal volunteers to identify legal problems, including existing litigation and unresolved pre-litigation disputes; and send reports to the State Legal Services Authority with copies to the local legal services institution and the District Authority.

4. Under what conditions may a final year student render legal services in a college clinic? Under regulation 24(4), under the supervision of a faculty member of the institution. The clinic itself must have been notified to the State Legal Services Authority under regulation 24(2).

5. Where must a District Legal Services Authority establish legal services clinics? Under regulation 3, subject to available financial resources, in all villages or clusters of villages, called Village Legal Care and Support Centres, and in jails, educational institutions, community centres, protection homes, courts, juvenile justice boards and other areas, especially where people face geographical, social and other barriers to reaching legal services institutions.

Every level can hold one at once. Section 19(1) empowers five different bodies, and section 7(2)(b) expressly extends a State Authority's power to Lok Adalats for High Court cases.

Both pending and pre-litigation matters can be taken up. Section 19(5) covers both, and section 20 gives each its own route, which is chapter 110. Pre-litigation matters are what allow a bank or an electricity company to put thousands of unfiled claims on the list.

It is worth being honest about the criticism, because an examiner may want it. Disposing of very large numbers in a day creates a risk of pressure to settle, and regulation 7(3) is the answer the system gives: every bench shall make sincere efforts at a conciliated settlement without any kind of coercion, threat, undue influence, allurement or misrepresentation. State of Punjab v. Jalour Singh is the same warning from the Supreme Court, directed at judges who forget they are conciliators.

The other varieties

NALSA describes four kinds of regular Lok Adalat.

Continuous Lok Adalat. A bench sits continuously for a set number of days, deferring unsettled matters to the next date, so that parties have time to reflect on the terms before actually settling. Regulation 10(4), inserted in 2018, supports this in terms: need based continuous Lok Adalats may be constituted to facilitate regular reference and timely disposal.

Daily Lok Adalat. Organised on a daily basis.

Mega Lok Adalat. Organised in a State on a single day in all courts of the State. It is the State-level equivalent of a National Lok Adalat.

Mobile Lok Adalat. The Lok Adalat is set up in a multi-utility van and taken to different areas, both to resolve petty cases and to spread legal awareness. Regulation 21 of the Legal Services Clinics Regulations 2011 is the machinery: the lawyers or para-legal volunteers of a legal services clinic may request the District Legal Services Authority to send the mobile Lok Adalat van, with members of the bench, to the clinic for settlement of the disputes they have identified; and the van, fitted for conducting proceedings, may be used at the clinic, near it, or even at village congregations such as melas and other festive occasions.

Two things that are true of all of them

Whatever it is called, it is a Lok Adalat under section 19, and therefore:

• it has jurisdiction only under section 19(5), and no jurisdiction over a non-compoundable offence;
• it can only settle, never decide, per regulation 9 and Jalour Singh; and
• its award is deemed a decree under section 21(1), is final and binding, and carries no appeal under section 21(2).

And the cost position is the same too. NALSA states that no court fee is payable when a matter is filed in a Lok Adalat, and that where a matter pending in court is referred and then settled, the court fee originally paid is refunded, which is section 21(1) read with the Court Fees Act 1870.

A note on two loose statements, and why they matter

Even official material has to be read against the Act, and this is a good place to practise it, because a student who quotes a website against a section will lose the mark.

NALSA's own page cites "section 18(1)" for the jurisdiction of a Lok Adalat. The provision that confers that jurisdiction is section 19(5). Section 18 is accounts and audit.

The same page states the proviso as barring "matters relating to divorce or matters relating to an offence not compoundable under any law". The proviso to section 19(5) bars only the non-compoundable offence. The exclusion of divorce comes from the proviso to regulation 10(2) of the NALSA (Lok Adalats) Regulations 2009. Both are real, but they come from different instruments, and saying the Act excludes divorce is wrong.

And on the pecuniary limit for a Permanent Lok Adalat, NALSA's two pages disagree with each other, one saying ten lakh rupees and the other one crore, which chapter 150 works through.

The lesson is the one this whole book runs on: the Act and the regulations are the authority, and everything else is a description of them. Where a description and the text disagree, the text wins.

A worked example

The Maharashtra State Legal Services Authority announces a National Lok Adalat for a Saturday in December, covering motor accident claims, cheque dishonour cases, bank recovery matters and pre-litigation disputes.

Under what power? Section 19(1) for the organisation, section 7(2)(b) for a State Authority conducting Lok Adalats including for High Court cases, and section 10(2)(b) for the District Authorities organising within their districts. Regulation 8 permits a Saturday sitting and regulation 6A provides the allowance.

A bank wants 900 unfiled loan default matters listed. Those are pre-litigation matters under section 19(5)(ii). Each has to come in under section 20(2), on an application, and the other party must be given a reasonable opportunity of being heard before the reference. Regulation 12(1) requires that the court for which the Lok Adalat is organised would have territorial jurisdiction.

A borrower attends and agrees to a reduced repayment. The bench records the terms and makes an award. Under section 21(1) it is deemed a decree of a civil court; under section 21(2) it is final and no appeal lies. No court fee was paid, because nothing was filed, so nothing is refunded.

Another borrower attends and refuses everything. No award can be made against him. Under section 20(6) the Lok Adalat advises the parties to seek their remedy in a court. If a bench were instead to record what it thought fair and direct him to pay it, that would be void on Jalour Singh.

A third borrower says he felt pressured into signing. That is exactly what regulation 7(3) forbids, and it is the strongest reason for the rule that a Lok Adalat award records only what the parties actually agreed.

What beginners get wrong

A National Lok Adalat is not a separate institution. It is a Lok Adalat under section 19, organised on a national scale on one day.

The Act does not name any of these varieties. They come from the discretion in section 19(1) and NALSA's powers under section 4.

Large numbers are not proof of quality. The counter to the criticism is regulation 7(3) and Jalour Singh, not a disposal figure.

Court fee and Lok Adalats. There is no court fee to file in a Lok Adalat at all, and fee already paid in a pending case comes back on settlement under section 21(1).

Quick revision

• The varieties are administrative, not statutory: National, Mega (statewide, one day), Continuous (a bench sitting over several days, supported by regulation 10(4)), Daily, and Mobile (a multi-utility van, regulation 21 of the Legal Services Clinics Regulations 2011).
• Their statutory basis is the discretion in section 19(1) and NALSA's functions under sections 4(a) and 4(b).
• National Lok Adalats are held on a single day across all courts from the Supreme Court to the taluk level; NALSA says they have been held on a specific subject matter since February 2015, and publishes a disposal report for each sitting.
• Regulation 8 permits sittings on holidays; regulation 6A provides a Special Duty Allowance for holiday or after-hours sittings.
• Whatever the label, the award takes effect under section 21: deemed a decree, final and binding, no appeal. No court fee is payable to file in a Lok Adalat, and fee paid in a referred pending case is refunded.
• Read official descriptions against the Act. NALSA's page cites section 18(1) where the provision is section 19(5), and attributes the divorce exclusion to the Act when it comes from regulation 10(2).

Test yourself

1. Where does the National Lok Adalat get its legal authority, given that the Act never mentions it? From section 19(1), which lets an authority organise Lok Adalats at such intervals, places and areas as it thinks fit, together with NALSA's functions under section 4(a) and 4(b) to lay down policies and frame schemes. It is a Lok Adalat under section 19 in every legal respect.

2. Can a Lok Adalat be held on a Sunday? Yes. Regulation 8 of the NALSA (Lok Adalats) Regulations 2009 permits Lok Adalats on such days, including holidays, as the organiser deems appropriate, and regulation 6A provides a Special Duty Allowance for those who sit on a holiday or beyond court hours.

3. What is a Continuous Lok Adalat, and what supports it in the regulations? A bench that sits continuously for a set number of days, deferring unsettled matters to the next date so the parties can reflect before settling. Regulation 10(4), inserted in 2018, provides that need based continuous Lok Adalats may be constituted to facilitate regular reference and timely disposal.

4. How does a mobile Lok Adalat reach a village clinic? Under regulation 21 of the NALSA (Legal Services Clinics) Regulations 2011, the lawyers or para-legal volunteers of the clinic may request the District Legal Services Authority to send the mobile Lok Adalat van with members of the bench to the clinic. The van may also be used near the clinic or at village congregations such as melas.

5. NALSA's website says a Lok Adalat cannot take up divorce matters, citing the Act. Is that right? The exclusion is real but the source is wrong. The proviso to section 19(5) of the Act bars only a case or matter relating to an offence not compoundable under any law. The bar on divorce matters comes from the proviso to regulation 10(2) of the NALSA (Lok Adalats) Regulations 2009.

"Good faith" is the key. The protection is not a licence: an act done dishonestly, or with knowledge of its illegality, is not done in good faith and is not protected.

The provision exists for a practical reason. A body that decides whether a person qualifies for legal aid, and that refuses some of them, would be sued constantly without it.

Section 25: the Act overrides other laws

The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of law other than this Act.

This is the most consequential section in Chapter VII, and it should be in any answer about the force of a Lok Adalat award.

A non obstante clause is a provision that tells you what happens when two laws conflict: this one prevails. So where another statute says something inconsistent with this Act, the Legal Services Authorities Act wins.

"Or in any instrument having effect by virtue of law" extends it beyond statutes, to rules, orders and other instruments.

Two places in the Act rely on it. Section 20(2) itself opens with "Notwithstanding anything contained in any other law for the time being in force", for pre-litigation references. And section 22B(1) opens with "Notwithstanding anything contained in section 19", separating the Permanent Lok Adalat from the ordinary one. Section 25 is the general version of both.

Section 26: power to remove difficulties, and why it is spent

If any difficulty arises in giving effect to the Act, the Central Government may, by order published in the Official Gazette, make such provisions not inconsistent with the Act as appear necessary or expedient for removing the difficulty. Every such order shall be laid before each House of Parliament as soon as may be after it is made.

The proviso is the point: no such order shall be made after the expiry of two years from the date on which the Act receives the assent of the President.

Assent was 11 October 1987, so the power expired on 11 October 1989 and section 26 is spent. A clause of this kind is always time-limited, because it lets the executive alter the working of a statute and Parliament does not leave that open indefinitely.

Sections 27 and 28: rules

Section 27: the Central Government, in consultation with the Chief Justice of India, may by notification make rules to carry out the provisions of the Act. Sub-section (2) lists the matters, and three of them have been met earlier in this Module:

• clause (i): the upper limit of annual income entitling a person to legal services under section 12(h), if the case is before the Supreme Court. This is the provision under which the Supreme Court limit is prescribed, and it is why chapter 70 says the figure in the section is not the operative one.
• clause (k): the experience and qualifications of the other persons on Lok Adalats organised by the Supreme Court Legal Services Committee, under section 19(3).
• clause (la), inserted with Chapter VIA: the other terms and conditions of appointment of the Chairman and other persons of a Permanent Lok Adalat under section 22B(2).

Section 28: the State Government, in consultation with the Chief Justice of the High Court, may by notification make rules to carry out the provisions of the Act, including the corresponding matters at the State, district and taluk levels, and the upper limit of annual income entitling a person to legal services under section 12(h) where the case is before a court other than the Supreme Court.

Sections 27 and 28 together are the answer to the question chapter 70 raises. Two different Governments prescribe two different income limits, which is why the figure differs between the Supreme Court and everywhere else, and between States.

Sections 29 and 29A: regulations

Section 29: the Central Authority may, by notification, make regulations consistent with the Act and the rules, to carry out its purposes.

Section 29A: the State Authority may do the same for its own purposes. It was inserted by Act 59 of 1994.

These two short sections are the source of everything this Module has used beyond the Act itself. The NALSA (Lok Adalats) Regulations 2009, the NALSA (Free and Competent Legal Services) Regulations 2010 and the NALSA (Legal Services Clinics) Regulations 2011 are all made under section 29, and each recites it. Without section 29 there would be no front office, no panel lawyer scheme, no para-legal volunteers and no legal services clinics.

Rules and regulations are not the same thing, and the Act keeps them apart deliberately:

Section 30: laying before the legislature

Every rule made by the Central Government and every regulation made by the Central Authority shall be laid, as soon as may be after it is made, before each House of Parliament, and every rule made by a State Government and every regulation made by a State Authority before the State Legislature.

Laying is the mechanism by which delegated legislation is brought to the notice of the legislature that authorised it, and it is the counterpart of section 18(5) and (6), which do the same for accounts and audit reports. Between them, the Act's money and its subordinate law are both accounted for to the legislature.

A worked example

A State enacts a law providing that no proceeding relating to a particular class of land dispute shall be settled otherwise than by the tribunal it creates, and a party wants such a dispute taken up at a Lok Adalat as a pre-litigation matter.

Which law prevails? Section 25 gives the Legal Services Authorities Act effect notwithstanding anything inconsistent in any other law for the time being in force. Section 20(2) also carries its own non obstante clause for pre-litigation references. So the Act's provisions on Lok Adalats operate despite the State law's exclusivity clause.

Would that make the tribunal irrelevant? No. The Lok Adalat can still only record what the parties agree, so nothing is decided against anybody, and if there is no settlement the parties go to the tribunal as before.

Now suppose the Lok Adalat member who took the matter is later accused of having taken money from one side. Section 23 deems him a public servant within the meaning of section 21 of the Penal Code, so the offences applicable to a public servant are available, and section 24 does not protect him because what is alleged is not an act done in good faith.

What beginners get wrong

Section 25 is not a general power. It resolves inconsistency; it does not enlarge what the Act does.

Section 24 protects good faith only. It is not immunity from everything.

Section 26 is spent. The power to remove difficulties expired two years after assent, on 11 October 1989.

Rules and regulations are different instruments made by different bodies. "Prescribed" in the Act points to rules; the NALSA Regulations are made under section 29 by the Central Authority.

Quick revision

• Section 23: members, Member-Secretaries and Secretaries, officers, employees, members of Lok Adalats and persons constituting Permanent Lok Adalats are public servants within section 21 of the Indian Penal Code.
• Section 24: no suit, prosecution or other proceeding for anything done or intended to be done in good faith under the Act.
• Section 25: the Act has effect notwithstanding anything inconsistent in any other law in force, or any instrument having effect by virtue of law.
• Section 26: power to remove difficulties, exercisable by the Central Government, spent two years after assent on 11 October 1989; orders to be laid before Parliament.
• Sections 27 and 28: rules by the Central Government in consultation with the Chief Justice of India, and by a State Government in consultation with the Chief Justice of the High Court, including the income limits under section 12(h) for the Supreme Court and for other courts respectively.
• Sections 29 and 29A: regulations by the Central Authority and the State Authority. The NALSA Regulations of 2009, 2010 and 2011 are all made under section 29.
• Section 30: rules and regulations to be laid before Parliament or the State Legislature.

Test yourself

1. What does section 25 do, and where else in the Act is the same technique used? It gives the Act effect notwithstanding anything inconsistent in any other law in force or in any instrument having effect by virtue of law. The same technique appears in section 20(2), for pre-litigation references, and in section 22B(1), which establishes Permanent Lok Adalats notwithstanding section 19.

2. Is a member of a Lok Adalat a public servant? Yes. Section 23 deems the members of Lok Adalats and the persons constituting Permanent Lok Adalats, along with the members, officers and employees of the Authorities and Committees, to be public servants within the meaning of section 21 of the Indian Penal Code.

3. Can the Central Government still make an order under section 26 to remove a difficulty in working the Act? No. The proviso bars any such order after two years from the date the Act received the President's assent, which was 11 October 1987, so the power lapsed on 11 October 1989.

4. Under which provision are the NALSA (Lok Adalats) Regulations 2009 made, and what is the difference between a rule and a regulation under this Act? Under section 29, by the Central Authority. Rules are made by the Central Government under section 27 or a State Government under section 28, in consultation with the Chief Justice concerned, and are what the Act means when it says "prescribed"; regulations are made by the Central Authority under section 29 or a State Authority under section 29A.

5. Who prescribes the income limit for legal services, and does it differ between courts? It differs. Under section 27(2)(i) the Central Government prescribes the upper limit of annual income where the case is before the Supreme Court; under section 28 the State Government prescribes it for cases before other courts. That is why the figure can vary between the Supreme Court and the courts of a State, and between one State and another.

Two consequences follow, and both are examinable.

The Act is not original drafting. Large parts of Part I are the Model Law with the numbering changed, which is why its language sometimes reads oddly in an Indian statute. It is also why decisions of other Model Law countries are sometimes cited here.

India went further than the Model Law asked. The Model Law is about international commercial arbitration. India applied the same scheme to domestic arbitration as well, and added a complete code for conciliation in Part III. So the Act does more than the preamble's recitals strictly require.

How the Act is laid out

Part I itself divides into ten chapters, and knowing them makes the Act navigable: general provisions (3 to 6), the arbitration agreement (7 to 9), composition of the tribunal (10 to 15), jurisdiction (16 and 17), conduct of proceedings (18 to 27), the award and termination (28 to 33), recourse against an award (34), finality and enforcement (35 and 36), appeals (37), and miscellaneous (38 to 43).

There are eight Schedules, added or amended by the later amendment Acts, and chapter 450 works through them.

Dates, and the three amendment Acts

Assent: 16 August 1996. Commencement: 22 August 1996, by notification G.S.R. 375(E) of that date.

The Act was preceded by three Ordinances in 1996, which is why the Act's own repeal provisions in section 85 mention them. An Ordinance is temporary legislation made when Parliament is not sitting.

Three amendment Acts then rebuilt substantial parts of it, and a student will meet all three repeatedly in this Module.

The Arbitration and Conciliation (Amendment) Act 2015, Act 3 of 2016, largely with effect from 23 October 2015. The most far-reaching of the three. It added the Fifth, Sixth and Seventh Schedules on arbitrator independence; inserted section 29A's time limit and section 29B's fast track; rewrote section 34's public policy ground and added the Explanations; ended the automatic stay on enforcement in section 36; strengthened section 17; and added the costs regime in section 31A.

The Arbitration and Conciliation (Amendment) Act 2019, Act 33 of 2019. Inserted Part IA, the Arbitration Council of India, brought into force on 12 October 2023; amended section 11 to route appointments through arbitral institutions; rewrote section 29A's time limit to run from the completion of pleadings; inserted section 42A on confidentiality and 42B on good faith; and inserted the Eighth Schedule and section 87.

The Arbitration and Conciliation (Amendment) Act 2021, Act 3 of 2021. Added a proviso to section 36(3) for an unconditional stay where the arbitration agreement or the award is induced by fraud or corruption, and omitted the Eighth Schedule.

The trap: India Code now says two of those Acts were repealed

Look up the amendment Acts today and India Code lists them as:

The Arbitration and Conciliation (Amendment) Act, 2015 (Rep., Act 37 of 2025)

The Arbitration and Conciliation (Amendment) Act, 2021 (Rep., Act 37 of 2025)

That does not undo the amendments, and a student who thinks it does will state the law as it stood in 2014.

Act 37 of 2025 is the Repealing and Amending Act 2025, assented to on 20 December 2025, which repealed seventy-one spent enactments. An amending Act is spent once it has done its work: the words it inserted are now part of the principal Act and stay there. Section 4 of that Act says so expressly, saving the validity, effect and consequences of anything already done, and providing that the repeal shall not revive or restore anything not now existing or in force.

The consolidated print of the Arbitration Act settles it on its face. It is headed as the text as on the 1st June, 2026, six months after that repeal, and it still carries every 2015, 2019 and 2021 amendment in its text and its footnotes.

Section 1: title, extent and commencement

Section 1(1): the Act may be called the Arbitration and Conciliation Act, 1996.

Section 1(2): it extends to the whole of India. A proviso and Explanation that had applied the Act differently to Jammu and Kashmir were omitted in 2020, by the Jammu and Kashmir Reorganisation (Adaptation of Central Laws) Order 2020 and the corresponding Ladakh Order.

Section 1(3): it comes into force on such date as the Central Government appoints, which was 22 August 1996.

One State amendment is worth knowing because it belongs to this subject twice over. For Jammu and Kashmir and Ladakh, sections 8A and 8B have been inserted, allowing a court seized of a petition under section 9 or 11, or under section 34 or an appeal under section 37, to refer the parties with their consent to mediation or conciliation. A mediated settlement so recorded has the same status and effect as an arbitral award and is enforceable under section 36. It is the clearest statutory bridge in the Act between arbitration and the methods Module III teaches.

A worked example

Two companies sign a supply contract in Pune in 2026 containing a clause that disputes shall be referred to a sole arbitrator sitting in Mumbai.

Which statute governs? The Arbitration and Conciliation Act 1996. The 1940 Act was repealed by section 85 and has nothing to say.

Which Part? Part I, because section 2(2) applies Part I where the place of arbitration is in India.

Is it international commercial arbitration? Only if one of the parties answers the description in section 2(1)(f), which chapter 210 works through. Two Indian companies do not, so this is a domestic arbitration and the award will be a domestic award under section 2(7).

Which version of the Act? The Act as amended in 2015, 2019 and 2021. The catalogue entry saying the amendment Acts were repealed in 2025 changes nothing.

Where will the reader meet each amendment? Arbitrator independence and the Seventh Schedule in chapter 280; the twelve-month limit in chapter 360; the public policy ground in chapter 400; the end of the automatic stay in chapter 410.

What beginners get wrong

The 1996 Act did not only replace the 1940 Act. It replaced three statutes: the 1940 Act, the 1937 Act and the 1961 Act.

The Model Law governs international commercial arbitration; India applied its scheme to domestic arbitration too. Saying the Act "is" the Model Law is too strong.

The preamble is part of the Act and can be used to construe it, but it is not an operative provision and confers no rights.

There are three amendment Acts, not one, and they pull in different directions: 2019 partly undid what 2015 did, and 2021 partly undid what 2019 did. Chapter 410 works through the clearest instance.

The repeal of the amendment Acts in 2025 is housekeeping. Do not report it as a change in arbitration law.

Quick revision

• Act 26 of 1996, assented 16 August 1996, in force 22 August 1996 by G.S.R. 375(E).
• Repealed the Arbitration Act 1940, the Arbitration (Protocol and Convention) Act 1937 and the Foreign Awards (Recognition and Enforcement) Act 1961.
• Built on the UNCITRAL Model Law on International Commercial Arbitration 1985 and the UNCITRAL Conciliation Rules 1980, both recited in the preamble.
• Part I arbitration in India (ss.2 to 43); Part IA Arbitration Council (43A to 43M); Part II foreign awards (44 to 60); Part III conciliation (61 to 81); Part IV supplementary (82 to 87). Eight Schedules.
• Amended by Act 3 of 2016 (the 2015 Act, w.e.f. 23 October 2015), Act 33 of 2019 and Act 3 of 2021.
• The 2015 and 2021 amendment Acts were repealed as spent by the Repealing and Amending Act 2025; section 4 of that Act saves everything done, and the consolidated text of 1 June 2026 still carries every amendment.

Test yourself

1. Which three statutes did the 1996 Act replace, and where does it say so? The Arbitration Act 1940, the Arbitration (Protocol and Convention) Act 1937 and the Foreign Awards (Recognition and Enforcement) Act 1961, repealed by sections 85 and 86.

2. What does the preamble recite, and why does it matter? That UNCITRAL adopted the Model Law on International Commercial Arbitration in 1985 and the Conciliation Rules in 1980, that the General Assembly recommended both, and that they contribute to a unified legal framework for the fair and efficient settlement of international commercial disputes. It matters because it explains why Part I reads as it does and licenses reference to the Model Law in construing it.

3. India Code shows the 2015 and 2021 amendment Acts as repealed. Are those amendments still law? Yes. They were repealed as spent by the Repealing and Amending Act 2025, whose section 4 saves everything already done and provides that the repeal does not revive anything not now in force. The words those Acts inserted are part of the principal Act, and the consolidated print of 1 June 2026 still carries them.

4. Name one change each of the three amendment Acts made. The 2015 Act inserted section 29A's time limit for the award (among much else); the 2019 Act inserted Part IA establishing the Arbitration Council of India; the 2021 Act omitted the Eighth Schedule and added the unconditional stay proviso to section 36(3).

5. Does the Act still apply differently in Jammu and Kashmir? Section 1(2) now extends the Act to the whole of India, the earlier proviso and Explanation having been omitted in 2020. A State amendment for Jammu and Kashmir and Ladakh does insert sections 8A and 8B, letting a court refer parties to mediation or conciliation with their consent at the section 9, 11, 34 or 37 stage.

Three things to take from that. The district judge is the court for a domestic arbitration, not the junior civil judge. A High Court is the court for an international commercial arbitration, whatever the amount. And the phrase "had it been the subject matter of a suit" imports the ordinary rules of pecuniary and territorial jurisdiction.

(f) "International commercial arbitration" means an arbitration relating to disputes arising out of legal relationships, whether contractual or not, considered as commercial under the law in force in India, and where at least one of the parties is:

• (i) an individual who is a national of, or habitually resident in, any country other than India; or
• (ii) a body corporate incorporated in any country other than India; or
• (iii) an association or body of individuals whose central management and control is exercised in any country other than India; or
• (iv) the Government of a foreign country.

Two points that carry marks. The test is about the parties, not the place: an arbitration seated in Delhi between an Indian company and a French company is an international commercial arbitration. And clause (ii) turns on incorporation, not on control, so a company incorporated in India and wholly owned from abroad is not a foreign party under it. Words that had extended clause (iii) to a company have been omitted.

(g) "Legal representative" means a person who in law represents the estate of a deceased person, including an intermeddler, and where a party acts in a representative character, the person on whom the estate devolves.

(h) "Party" means a party to an arbitration agreement.

Section 2(2): the sub-section that produced a decade of litigation

"This Part shall apply where the place of arbitration is in India."

Ten words, and the whole question is what they leave out. The Model Law's equivalent said the law applies "if the place of arbitration is in the territory of this State"; India dropped the word "only".

In Bhatia International v. Bulk Trading S.A. the Supreme Court read that omission as deliberate and held that Part I applied even to arbitrations seated outside India, unless the parties expressly or impliedly excluded it. The practical effect was that a party to a foreign-seated arbitration could come to an Indian court under section 34 to set aside the award.

In Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc., always called BALCO, a five-judge bench overruled that reading and held that Part I applies only to arbitrations seated in India. The ruling was prospective: it applied to arbitration agreements executed after the date of that judgment, so older agreements continued under Bhatia.

Parliament then legislated a middle position. The 2015 amendment added a proviso to section 2(2): subject to an agreement to the contrary, sections 9, 27, 37(1)(a) and 37(3) shall also apply to international commercial arbitration even if the place of arbitration is outside India, and an award made in such a place is enforceable under Part II.

That proviso is the practical answer to a real problem. A party to a foreign-seated arbitration may still need to attach assets in India, or to compel an Indian witness. Section 9 and section 27 are exactly those powers, so they were let back in while the setting-aside power was kept out.

The verified case bank does not yet carry the facts and holdings of Bhatia International and BALCO; both are in the queue. State the propositions as this chapter does and do not attribute reasoning to either judgment that you have not read.

The rest of section 2

Section 2(3): this Part shall not affect any other law by virtue of which certain disputes may not be submitted to arbitration. This is the statutory hook for the whole of non-arbitrability, and chapter 250 works it through.

Section 2(4): Part I, except section 40(1) and sections 41 and 43, applies to every arbitration under any other enactment as if it were pursuant to an arbitration agreement, except so far as Part I is inconsistent with that other enactment or its rules. So a statutory arbitration is run under this Act unless its own statute says otherwise.

Section 2(5): subject to sub-section (4), and save as otherwise provided by any law or by an agreement between India and another country, Part I applies to all arbitrations and all proceedings relating thereto.

Section 2(6): where Part I, except section 28, leaves the parties free to determine an issue, that freedom includes the right to authorise any person, including an institution, to determine it. This is what makes institutional rules workable: agreeing to a set of rules is agreeing that the institution decides those questions. The exception of section 28 matters, because the law governing the substance is not something the parties can delegate.

Section 2(7): an arbitral award made under Part I shall be considered as a domestic award. Short, and it does real work: an award made in India between an Indian and a foreign party is a domestic award even though the arbitration is an international commercial arbitration, so it is challenged under section 34 rather than resisted under section 48.

Section 2(8): where the Part refers to the parties having agreed, or to an agreement of the parties, that includes any arbitration rules referred to in the agreement.

Section 2(9): where the Part refers to a claim it also applies to a counterclaim, and where it refers to a defence it applies to a defence to a counterclaim, except in section 25(a) and section 32(2)(a).

Distinctions worth keeping straight

A worked example

A Singapore company and an Indian company agree that disputes will be arbitrated in Singapore. The Indian company's assets are in Chennai. A dispute arises and the Singapore company fears the assets will be sold.

Does Part I apply? Not generally. Section 2(2) applies Part I where the place of arbitration is in India, and BALCO holds that to be exhaustive for agreements after that judgment.

Can it still get an attachment in India? Yes, unless the parties agreed otherwise. This is an international commercial arbitration under section 2(1)(f)(ii), because one party is a body corporate incorporated outside India, and the proviso to section 2(2) applies section 9 to such an arbitration even where the place is outside India.

Which court? A High Court, because section 2(1)(e)(ii) makes the High Court the court for international commercial arbitration.

And the award? Made in Singapore, so it is a foreign award enforced under Part II, not a domestic award. It cannot be set aside under section 34.

Change one fact. Make the place of arbitration Chennai. Now Part I applies in full under section 2(2); the award is a domestic award under section 2(7) even though the arbitration remains an international commercial arbitration; it is challenged under section 34; but patent illegality is not available against it, because the proviso to section 34(2A) excludes that ground in an international commercial arbitration.

What beginners get wrong

"International commercial arbitration" is not about where the arbitration sits. It is about the parties, under section 2(1)(f).

An international commercial arbitration seated in India produces a domestic award. Section 2(7) says so, and it decides how the award is attacked.

"Court" is not the same for both. District court for domestic, High Court for international commercial.

Bhatia International is not good law for agreements after BALCO, and BALCO's overruling was prospective. Say both.

Section 2(2)'s proviso does not bring back section 34. It brings back sections 9, 27 and parts of 37 only.

Quick revision

• 2(1)(a) arbitration includes ad hoc and institutional; (c) award includes an interim award; (d) tribunal means a sole arbitrator or a panel.
• 2(1)(e) "Court": principal Civil Court of original jurisdiction in a district for domestic; High Court for international commercial. Not a court inferior to the principal civil court, and not a Court of Small Causes.
• 2(1)(f): international commercial arbitration turns on a party being a foreign national or habitual resident, a body corporate incorporated abroad, an association whose central management and control is abroad, or a foreign Government.
• 2(2): Part I applies where the place of arbitration is in India. Bhatia International read it as non-exclusive; BALCO overruled that prospectively; the 2015 proviso applies ss.9, 27, 37(1)(a) and 37(3) to a foreign-seated international commercial arbitration unless otherwise agreed.
• 2(3) preserves other laws making disputes non-arbitrable; 2(4) applies Part I to statutory arbitrations; 2(6) lets the parties delegate any issue except under section 28; 2(7) an award under Part I is a domestic award; 2(9) claim includes counterclaim.

Test yourself

1. Two Indian companies arbitrate in Mumbai. Which court hears a section 34 application? The principal Civil Court of original jurisdiction in the district, or the High Court in exercise of its ordinary original civil jurisdiction where it has one, under section 2(1)(e)(i). Not a court inferior to the principal civil court and not a Court of Small Causes.

2. An Indian company and a German company arbitrate in Delhi. Is the award domestic or foreign? Domestic. Section 2(7) provides that an award made under Part I is a domestic award, and Part I applies because the place of arbitration is in India. It is nonetheless an international commercial arbitration under section 2(1)(f), so the court is a High Court and patent illegality is not available against the award.

3. What did the 2015 proviso to section 2(2) do? It applied sections 9, 27, 37(1)(a) and 37(3) to international commercial arbitration even where the place of arbitration is outside India, subject to an agreement to the contrary, so that interim measures and court assistance in taking evidence remain available in India while the setting-aside power does not.

4. A company incorporated in India whose entire shareholding is held from Dubai is a party. Is the arbitration an international commercial arbitration on that ground? Not under section 2(1)(f)(ii), which turns on the place of incorporation, and the company is incorporated in India. Foreign ownership alone does not answer the definition.

5. What does section 2(6) permit, and what does it except? Where Part I leaves the parties free to determine an issue, they may authorise any person, including an institution, to determine it. Section 28 is excepted, so the rules applicable to the substance of the dispute cannot be delegated in that way.

Take the elements one at a time, because each is a condition and the section fails without all of them.

"Knows." Actual knowledge. A party who could not have known has not waived.

"From which the parties may derogate." A derogable provision is one the parties are free to contract out of. Much of Part I is default machinery of that kind. The converse is the important half: a mandatory provision cannot be waived under section 4. A party cannot lose, by silence, the right to complain that the tribunal was never properly constituted in a way the Act forbids, or that he was denied the opportunity to present his case under section 18.

"Proceeds with the arbitration." Continuing to take part is the conduct that waives.

"Without undue delay." Not immediately, but promptly. Where the agreement or the rules fix a period, that period governs.

Section 4 works together with section 16(2), which requires a plea that the tribunal lacks jurisdiction to be raised not later than the submission of the statement of defence, and with section 12(5), where the ineligibility of an arbitrator can be waived only by an express agreement in writing after the dispute has arisen. Where the Act prescribes its own timing or its own form of waiver, that provision governs and section 4 does not soften it.

Section 5: the extent of judicial intervention

"Notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part."

This is the most quoted sentence in the Act and it deserves to be. Read it in three parts.

"Notwithstanding anything contained in any other law." A non obstante clause: where another statute would give a court a power over these matters, this section displaces it.

"In matters governed by this Part." The limit is real. Section 5 does not oust the courts from everything; it applies to matters Part I governs.

"No judicial authority shall intervene except where so provided in this Part." The Act is a complete code for court involvement in arbitration. A court has the powers Part I gives it and no others.

The correct way to use section 5 in an answer is not to say that courts have no role. They have a substantial one, and the Act is careful about it: referring the parties under section 8, interim measures under section 9, appointment under section 11, terminating a mandate under section 14, assistance in taking evidence under section 27, setting aside under section 34, enforcement under section 36 and appeals under section 37. What section 5 does is make that list exhaustive.

One qualification a good answer makes. Section 5 is a provision of a statute and cannot cut down the constitutional jurisdiction of the High Courts under articles 226 and 227 or of the Supreme Court under article 136. What the courts have done instead is hold that those powers should be exercised only in exceptional cases in arbitration matters, precisely because of the policy in section 5. The judgment usually cited for that restraint is in the queue and is not stated here as a holding.

Section 6: administrative assistance

In order to facilitate the conduct of the arbitral proceedings, the parties, or the arbitral tribunal with the consent of the parties, may arrange for administrative assistance by a suitable institution or person.

Short, permissive and easy to overlook, and it does one useful thing: it lets an ad hoc arbitration borrow an institution's machinery, a registry, a hearing room, a secretary, without becoming an institutional arbitration. Note who may arrange it: the parties may do so themselves, and the tribunal may do so only with the parties' consent.

A worked example

Rakesh and a construction company have a contract with an arbitration clause requiring that any arbitrator be a chartered engineer. A dispute arises. The company appoints an arbitrator who is a retired banker. Rakesh receives the notice at his shop, attends four hearings, files a statement of claim and cross-examines a witness. After the award goes against him, he applies under section 34 saying the arbitrator was not a chartered engineer.

Was the notice received? Yes. Section 3(1)(a) deems a written communication received if delivered to the addressee personally or at his place of business, and it was received on the day of delivery under section 3(2).

Is the qualification point still open to him? Almost certainly not. The requirement is one under the arbitration agreement, so it falls squarely within section 4(b). He knew of the breach, he proceeded with the arbitration through four hearings and a statement of claim, and he did not object without undue delay. He is deemed to have waived the right to object.

Would it be different if his complaint were that he was never given a chance to lead evidence? Yes, and this is the distinction the section turns on. Section 18's guarantee that each party shall be given a full opportunity to present his case is not a provision the parties may derogate from, so section 4 does not apply to it, and the complaint survives to be argued under section 34.

Could he have gone to the civil court mid-arbitration for an injunction restraining the arbitrator? Section 5 is the answer: no judicial authority shall intervene in matters governed by Part I except where the Part provides. The Act gives him section 12 and 13 to challenge the arbitrator, and section 34 afterwards. It does not give him a civil suit.

What beginners get wrong

Section 4 does not waive everything. It reaches derogable provisions and requirements of the agreement, not mandatory ones.

Section 5 does not abolish the courts' role. It makes the Act's own list of court powers exhaustive.

Section 3 is not a rule about serving court papers. Sub-section (3) takes judicial proceedings out of it.

Section 6 does not let a tribunal appoint an administrator on its own. The parties' consent is required.

Quick revision

• Section 3: a written communication is deemed received if delivered personally or at the place of business, habitual residence or mailing address; failing those, after reasonable inquiry, at the last known address by registered letter or a means giving a record of the attempt. Received on the day delivered. Does not apply to judicial proceedings. Subject to contrary agreement.
• Section 4: knowing of non-compliance with a derogable provision or a requirement of the agreement, and proceeding without objecting without undue delay or within the time fixed, waives the objection.
• Section 5: notwithstanding any other law, in matters governed by Part I no judicial authority shall intervene except where so provided. The Act is a complete code for court involvement.
• Section 6: the parties, or the tribunal with the parties' consent, may arrange administrative assistance by a suitable institution or person.

Test yourself

1. A respondent has vanished. Can the arbitration proceed? Yes, if section 3(1)(b) is satisfied: after a reasonable inquiry fails to find his place of business, habitual residence or mailing address, a communication sent to his last known such address by registered letter, or by another means providing a record of the attempt to deliver, is deemed received.

2. What exactly does section 4 waive, and what does it not? It waives an objection to non-compliance with a provision of Part I from which the parties may derogate, or with a requirement under the arbitration agreement, where the party knew and proceeded without objecting without undue delay. It does not waive non-compliance with a mandatory provision, and where the Act fixes its own timing or form of waiver, as sections 16(2) and 12(5) do, those govern.

3. State section 5 and explain its limit. Notwithstanding anything in any other law, in matters governed by Part I no judicial authority shall intervene except where so provided in the Part. Its limit is in its own words: it applies to matters governed by Part I, and it is a statutory provision, so it cannot by itself cut down the constitutional jurisdiction of the High Courts or the Supreme Court, although courts exercise those powers sparingly in arbitration matters because of it.

4. May an arbitral tribunal engage an institution to administer the reference? Only with the parties' consent. Section 6 permits the parties to arrange administrative assistance, or the tribunal to do so with the consent of the parties.

5. Does section 3 govern the service of a section 34 petition? No. Section 3(3) provides that the section does not apply to written communications in respect of proceedings of any judicial authority, so service in court is governed by the ordinary procedural law.

Three points that carry marks.

Signature is required only in clause (a). Under clause (b) there is no signature at all; what is needed is a record of the agreement in an exchange.

"Including communication through electronic means" was inserted by the 2015 amendment. Before it, an arbitration agreement concluded by an exchange of emails rested on reading "other means of telecommunication" widely. Now it is in the section.

Clause (c) is a striking provision, and students often misread it. If one party pleads in its statement of claim that there is an arbitration agreement and the other does not deny it in the statement of defence, the pleadings themselves constitute the written agreement. Silence in a pleading creates the agreement.

Section 7(5): incorporation by reference

The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement if the contract is in writing and the reference is such as to make that arbitration clause part of the contract.

This is how a short purchase order picks up a long set of standard terms. Two conditions:

• the contract must be in writing; and
• the reference must be such as to make that arbitration clause part of the contract.

The second condition is the whole of the litigation on this sub-section. A general reference to another document is usually not enough by itself to import an arbitration clause; the reference must show that the clause was intended to become part of this contract. A specific reference to the arbitration clause, or a reference to the whole of a standard form on which the parties habitually deal, is a different matter.

The stamping question, and the seven-judge answer

This is the part of section 7 that changed most recently, and a student writing from a 2022 set of notes will state the law as it no longer is.

The problem. Under the Indian Stamp Act 1899 an instrument that is unstamped or insufficiently stamped is inadmissible in evidence under section 35 of that Act. Contracts containing arbitration clauses are often unstamped. So the question arose: if the contract cannot be looked at, can the arbitration clause inside it be acted on, and who decides, the court at the section 8 or section 11 stage, or the tribunal?

The answer, and it took three attempts. The Supreme Court held one way in SMS Tea Estates, another in Garware Wall Ropes, and a five-judge bench held in N.N. Global (the second decision of that name) that an unstamped agreement could not be acted upon. That produced a reference to a larger bench.

In Re: Interplay Between Arbitration Agreements under the Arbitration and Conciliation Act 1996 and the Indian Stamp Act 1899, decided 13 December 2023 by a bench of seven judges (Chandrachud CJI, Kaul, Gavai, Surya Kant, Pardiwala and Misra JJ among them), settled it. The Court's own summary of its conclusions is worth learning in its own words:

• Agreements which are not stamped or are inadequately stamped are inadmissible in evidence under section 35 of the Stamp Act. Such agreements are not rendered void or void ab initio or unenforceable.
• Non-stamping or inadequate stamping is a curable defect.
• An objection as to stamping does not fall for determination under sections 8 or 11 of the Arbitration Act. The concerned court must examine whether the arbitration agreement prima facie exists.
• Any objections in relation to the stamping of the agreement fall within the ambit of the arbitral tribunal.
• N.N. Global (2) and SMS Tea Estates are overruled; paragraphs 22 and 29 of Garware Wall Ropes are overruled to that extent.

The distinction to carry away is between inadmissible and void. An unstamped agreement is not a nullity. It cannot be received in evidence until the stamp duty and penalty are paid, and that can be cured. So the arbitration goes ahead and the tribunal deals with the stamping.

Who can be bound: parties, and non-signatories

Section 2(1)(h) defines a party as a party to an arbitration agreement, which suggests only signatories are bound. Commercial reality is less tidy: a group of companies may perform one transaction through several entities, only one of which signed.

The Supreme Court considered this in Cox and Kings Ltd v. SAP India Pvt Ltd, where a Constitution Bench delivered judgment on 6 December 2023 on the so-called group of companies doctrine and the position of non-signatories under the Act.

That judgment is in the queue in authorities/cases.json and has not been read for facts and holding, so this book does not state what it decided. Know that the question exists, know where it was decided, and read the judgment before asserting its ratio.

A worked example

Kavita's firm sends a purchase order to a supplier. The order is a one page document signed by both. It says "subject to our standard terms of supply, clause 14 of which governs disputes". Clause 14 of those standard terms is an arbitration clause. The standard terms are not attached and nobody stamped anything.

Is there an arbitration agreement? Work through section 7.

Sub-section (3) and (4)(a): the purchase order is a document signed by the parties, so the writing requirement is satisfied.

Sub-section (5): the arbitration clause is not in the signed document but in another document referred to. The contract is in writing, and the reference is not a vague one: it names clause 14 as the clause that governs disputes. That is a reference such as to make the arbitration clause part of the contract.

Sub-section (1): is there a defined legal relationship? Yes, the supply contract. Do the disputes fall inside the clause? That depends on its words.

And the stamping? On Interplay, an unstamped instrument is inadmissible in evidence but not void, the defect is curable, the objection does not fall for determination at the section 8 or 11 stage, and it is for the arbitral tribunal to deal with. The court at the reference stage asks only whether an arbitration agreement prima facie exists.

Now change the facts. Suppose there was no purchase order at all, only a series of emails in which Kavita wrote "as usual, disputes to arbitration in Mumbai" and the supplier replied "agreed, please ship". Section 7(4)(b) covers it: an exchange of communications through electronic means providing a record of the agreement. No signature is needed.

And if there were nothing in writing at all, only a conversation? Then there is no arbitration agreement. Section 7(3) is mandatory.

What beginners get wrong

An arbitration agreement need not be signed. Only clause (a) of section 7(4) requires signature; clauses (b) and (c) do not.

It need not be contained in a contract. Section 7(1) says the defined legal relationship may be contractual "or not", and section 7(2) allows a separate agreement.

An unstamped agreement is not void. After Interplay it is inadmissible until cured, the tribunal deals with the objection, and the court at the reference stage looks only for prima facie existence.

A general reference to another document does not automatically import its arbitration clause. Section 7(5) requires a reference such as to make that clause part of the contract.

Not denying an alleged arbitration agreement in a statement of defence can create one, under section 7(4)(c).

Quick revision

• 7(1): an agreement to submit all or certain disputes, arisen or which may arise, in respect of a defined legal relationship, whether contractual or not.
• 7(2): may be an arbitration clause in a contract or a separate agreement.
• 7(3): must be in writing.
• 7(4): writing means (a) a document signed by the parties; (b) an exchange of letters, telex, telegrams or other telecommunication including electronic means providing a record; (c) an exchange of statements of claim and defence where existence is alleged and not denied.
• 7(5): incorporation by reference works if the contract is in writing and the reference is such as to make the arbitration clause part of the contract.
• Interplay (13 December 2023, seven judges): unstamped agreements are inadmissible, not void; the defect is curable; stamping is not for determination under sections 8 or 11, where the court looks for prima facie existence; stamping is for the tribunal; N.N. Global (2) and SMS Tea Estates overruled.
• Cox and Kings (6 December 2023, Constitution Bench) considered non-signatories and the group of companies doctrine. Read it before stating its ratio.

Test yourself

1. Must an arbitration agreement be signed? No. Section 7(3) requires writing, and section 7(4) offers three ways of satisfying it. Only clause (a) speaks of a signed document. An exchange of communications providing a record under clause (b), or an allegation not denied in pleadings under clause (c), also suffices.

2. A one page order refers generally to "our standard terms". Those terms contain an arbitration clause. Is there an arbitration agreement? Section 7(5) requires the contract to be in writing and the reference to be such as to make that arbitration clause part of the contract. A bare general reference will often not satisfy the second condition; a reference identifying the arbitration clause, or to a standard form the parties habitually use, is far stronger.

3. What is the position of an unstamped contract containing an arbitration clause? On In Re: Interplay, it is inadmissible in evidence under section 35 of the Stamp Act but not void, void ab initio or unenforceable; non-stamping is a curable defect; the objection does not fall for determination under section 8 or 11, where the court examines only whether an arbitration agreement prima facie exists; and the objection is for the arbitral tribunal.

4. Can there be an arbitration agreement about a relationship that is not a contract? Yes. Section 7(1) requires a defined legal relationship "whether contractual or not".

5. A claimant pleads an arbitration agreement in its statement of claim and the respondent's defence says nothing about it. What follows? Under section 7(4)(c), an exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other is itself an arbitration agreement in writing.

"Refer the parties to arbitration unless it finds that prima facie no valid arbitration agreement exists."

This is the heart of the modern section and the words to quote. The court does not decide whether there is a valid arbitration agreement. It refers unless it finds that prima facie none exists. The enquiry is deliberately shallow, and the default is referral: if the court is unsure, it refers, and the tribunal decides under section 16.

Section 8(2): the document requirement

The application shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy.

A proviso added in 2015 solves the obvious problem: where the original or a certified copy is retained by the other party, the applicant may file the application with a copy of the agreement together with a petition praying the court to call upon the other party to produce the original or a certified copy. Without that proviso, a party could defeat a reference simply by keeping the only signed original.

Section 8(3): the arbitration need not wait

Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made.

This stops the section 8 application itself becoming the delay. The arbitration can run in parallel, and an award can be made, while the court decides whether to refer.

How much may the court examine? Vidya Drolia

The recurring question is what "prima facie no valid arbitration agreement exists" lets a court look at, and how it interacts with non-arbitrability.

The leading authority is Vidya Drolia v. Durga Trading Corporation, decided 14 December 2020, which lays down when a court at the reference stage may refuse to refer, and sets out a fourfold test for when a subject matter is not arbitrable.

That judgment is in the queue in authorities/cases.json and has not been read for facts and holding, so this book does not state its reasoning or quote it. Chapter 250 sets out the arbitrability question on the statute and on Booz Allen; read Vidya Drolia before attributing propositions to it.

What can be said on the text alone is the direction of travel. The pre-2015 section required the court to be satisfied of a valid agreement; the present section requires it to refer unless prima facie none exists. Parliament moved the enquiry from the court to the tribunal, and section 16 is where the tribunal takes it up.

Section 8 and section 45 side by side

Part II has its own version of this section for foreign-seated arbitrations, and the difference is a fair examination question. Chapter 510 works through section 45.

A worked example

Farida's company has a distribution agreement with an arbitration clause. She sues the distributor in the City Civil Court for unpaid invoices. The distributor's advocate appears, takes two adjournments to file a written statement, and then files an application under section 8 with a photocopy of the agreement, the signed original being with Farida.

Is the application in time? Yes. The deadline is the date of submitting the first statement on the substance of the dispute. Appearing and taking adjournments is not such a statement; the written statement has not been filed.

Is a photocopy enough? Under section 8(2) the application must be accompanied by the original or a duly certified copy. But the proviso covers exactly this case: the original is retained by the other party, so the distributor may file the copy together with a petition asking the court to call upon Farida to produce the original.

What must the court decide? Not whether the agreement is valid. It refers the parties unless it finds that prima facie no valid arbitration agreement exists. If Farida says the agreement was never signed by an authorised person, that is an issue for the tribunal under section 16 unless the absence of an agreement is apparent on a prima facie view.

Can the arbitration start meanwhile? Yes. Section 8(3) allows an arbitration to be commenced or continued and an award made even while the section 8 application is pending.

Change one fact. Suppose the distributor had filed a full written statement on the merits three months ago and only now applied under section 8. The application fails: the right is lost once the first statement on the substance has been submitted. He may also be met by section 4, having proceeded without objection.

What beginners get wrong

A court cannot refer on its own motion. Section 8 requires an application by a party or a person claiming through or under him.

The court does not decide validity. It refers unless prima facie no valid agreement exists; validity goes to the tribunal under section 16.

The deadline is the first statement on the substance, not the first appearance.

Section 8(3) means the arbitration is not stayed by a pending section 8 application.

"Judicial authority" is wider than "court", so the section can bite on forums that are not civil courts.

Quick revision

• Section 8(1): a judicial authority before which an action is brought in a matter that is the subject of an arbitration agreement shall refer the parties to arbitration on the application of a party or a person claiming through or under him, made not later than the date of submitting his first statement on the substance of the dispute, notwithstanding any judgment, decree or order of the Supreme Court or any Court, unless it finds that prima facie no valid arbitration agreement exists.
• Section 8(2): the application must be accompanied by the original agreement or a duly certified copy; by the 2015 proviso, where the other party retains it, a copy plus a petition to call for production suffices.
• Section 8(3): an arbitration may be commenced or continued and an award made while the application is pending.
• The 2015 amendment added "claiming through or under him", the non obstante clause, the prima facie test and the proviso to sub-section (2).
• Vidya Drolia (14 December 2020) governs the scope of the reference-stage enquiry and non-arbitrability. It is in the queue and unread; do not attribute reasoning to it.

Test yourself

1. What exactly must a court find before refusing to refer under section 8? That prima facie no valid arbitration agreement exists. It does not decide validity; if it cannot say that on a prima facie view, it must refer, and the tribunal takes the question under section 16.

2. By when must the application be made? Not later than the date of submitting the applicant's first statement on the substance of the dispute. An appearance, or an application for time, is not such a statement.

3. The signed original agreement is with the plaintiff. Can the defendant still apply? Yes. The proviso to section 8(2), inserted in 2015, lets him file the application with a copy of the agreement together with a petition praying the court to call upon the other party to produce the original or a duly certified copy.

4. Does a pending section 8 application stop the arbitration? No. Section 8(3) expressly allows an arbitration to be commenced or continued, and an award to be made, notwithstanding that the application is pending before the judicial authority.

5. What is the difference between the tests in section 8 and section 45? Section 8 requires referral unless the court finds prima facie no valid arbitration agreement exists. Section 45, for a New York Convention agreement, requires referral unless the agreement is null and void, inoperative or incapable of being performed.

• (i) disputes relating to rights and liabilities which give rise to or arise out of criminal offences;
• (ii) matrimonial disputes relating to divorce, judicial separation, restitution of conjugal rights and child custody;
• (iii) guardianship matters;
• (iv) insolvency and winding up matters;
• (v) testamentary matters, meaning the grant of probate, letters of administration and succession certificates; and
• (vi) eviction or tenancy matters governed by special statutes where the tenant enjoys statutory protection against eviction and only specified courts have jurisdiction to grant eviction or decide the disputes.

The reasoning underneath the list is what an examiner is really testing, and it is worth learning in the Court's own terms.

A right in rem is a right exercisable against the world at large. A right in personam is an interest protected solely against specific individuals. An action in personam determines the rights and interests of the parties themselves in the subject matter; an action in rem determines title to property and the rights of the parties not merely among themselves but against all persons at any time claiming an interest in that property.

From that the Court drew the general rule: disputes relating to rights in personam are considered amenable to arbitration, and disputes relating to rights in rem are required to be adjudicated by courts and public tribunals, being unsuited for private arbitration.

And then the qualification that students leave out, which is where most of the marks are: this is not a rigid or inflexible rule. Disputes relating to subordinate rights in personam arising from rights in rem have always been considered to be arbitrable.

That last sentence is what makes the doctrine workable. A dispute about who owns a property is in rem and is for a court. A dispute about whether one party performed a contract concerning that property is a subordinate right in personam arising out of it, and can be arbitrated.

The later law: Vidya Drolia

The categories in Booz Allen were examples, not a test, and the Supreme Court returned to the subject in Vidya Drolia v. Durga Trading Corporation, decided 14 December 2020, which is generally cited for a fourfold test of non-arbitrability and for what a court may examine at the reference stage.

That judgment is in the queue in authorities/cases.json and has not been read for facts and holding. This book therefore does not state its test or its treatment of Booz Allen. Do not repeat a summary of it from a coaching note; read the judgment. What you can safely say is that the leading modern authority on arbitrability is Vidya Drolia, and that it revisited the tenancy category that Booz Allen had listed.

A worked example

A partnership deed between three partners contains an arbitration clause. The partnership breaks down and four things are in dispute.

One: whether one partner took Rs. 40 lakhs out of the firm's account in breach of the deed. Arbitrable. This is a right in personam between the partners arising out of their contract.

Two: whether the firm should be wound up as insolvent. Not arbitrable. Insolvency and winding up are in Booz Allen's category (iv), and the reason is structural: winding up affects creditors and the world at large, not only these three.

Three: whether one partner forged a signature, and should be prosecuted. Not arbitrable. Category (i): rights and liabilities arising out of criminal offences. Note the boundary carefully. The prosecution is not arbitrable. A civil claim for the money lost, arising out of the same facts, is a right in personam and may well be.

Four: who owns the shop the firm traded from, the firm or one partner personally. This needs the in rem test. A declaration of title binding the world is in rem and is for a court. But if the real question is whether, as between these partners, one is contractually bound to transfer his interest, that is a subordinate right in personam arising from the right in rem, and Booz Allen says such disputes have always been considered arbitrable.

Where is the objection taken? If a suit is filed and a section 8 application made, the court will refuse to refer an inarbitrable dispute. If it goes to arbitration anyway and an award is made, section 34(2)(b)(i) lets the court set it aside on the ground that the subject matter was not capable of settlement by arbitration, and it may do so of its own motion.

What beginners get wrong

The Act contains no list of non-arbitrable disputes. Section 2(3) defers to other laws; the categories come from the case law.

"In rem is never arbitrable" is too strong. Booz Allen says the rule is not rigid, and subordinate rights in personam arising from rights in rem have always been arbitrable.

Criminal facts do not make a civil claim inarbitrable. What is inarbitrable is the criminal liability, not every claim arising from the same events.

Non-arbitrability is not waived by agreeing to arbitrate. That is the point of it, and section 34(2)(b)(i) lets the court act on its own.

Booz Allen's list is of examples, not a closed code, and Vidya Drolia is the modern authority.

Quick revision

• Arbitrability asks whether a subject matter is capable of settlement by arbitration.
• Section 2(3) preserves other laws that forbid submission to arbitration; section 34(2)(b)(i) makes non-arbitrability a ground for setting aside, which the court may take on its own; section 48(2)(a) is its counterpart for foreign awards.
• Booz Allen (15 April 2011), six examples: criminal; matrimonial (divorce, judicial separation, restitution of conjugal rights, child custody); guardianship; insolvency and winding up; testamentary (probate, letters of administration, succession certificate); and eviction or tenancy under special statutes with protected tenants and designated courts.
• The reason: rights in rem bind the world and belong to courts; rights in personam bind only the parties and are arbitrable. Not a rigid rule: subordinate rights in personam arising from rights in rem are arbitrable.
• Vidya Drolia (14 December 2020) is the modern authority. Unread here; do not state its test from memory.

Test yourself

1. Does the Arbitration and Conciliation Act list the disputes that cannot be arbitrated? No. Section 2(3) provides only that Part I shall not affect any other law by virtue of which certain disputes may not be submitted to arbitration. The categories are judge-made.

2. State Booz Allen's six examples of non-arbitrable disputes. Disputes arising out of criminal offences; matrimonial disputes as to divorce, judicial separation, restitution of conjugal rights and child custody; guardianship matters; insolvency and winding up; testamentary matters, that is probate, letters of administration and succession certificates; and eviction or tenancy matters governed by special statutes protecting the tenant where only specified courts have jurisdiction.

3. What is the difference between a right in rem and a right in personam, and why does it matter here? A right in rem is exercisable against the world at large; a right in personam is protected solely against specific persons. Generally, disputes about rights in personam are arbitrable and those about rights in rem are for the courts, because a private award binds only the parties. Booz Allen adds that the rule is not rigid and that subordinate rights in personam arising from rights in rem are arbitrable.

4. An award is made on a dispute that was never arbitrable, and neither party raised the point. Can it stand? No. Section 34(2)(b)(i) allows the court to set aside an award where it finds that the subject matter is not capable of settlement by arbitration under the law for the time being in force, and that ground does not depend on a party proving it.

5. Two partners dispute whether one must transfer his share in a shop to the other under their deed. Arbitrable? Very likely yes. A declaration of title binding the world would be in rem and for a court, but a claim that one partner is contractually bound as against the other is a subordinate right in personam arising from the right in rem, which Booz Allen says has always been considered arbitrable.

Two observations. Clause (e) is a wide residual power, so the list is not really exhaustive. And the closing words import the court's ordinary powers, which is why the principles a court applies on a section 9 application resemble those it applies to an interim injunction in a suit: a prima facie case, the balance of convenience and irreparable injury.

Clause (b), securing the amount in dispute, is the workhorse of section 9 and is the closest thing in arbitration to attachment before judgment.

Section 9(2) and (3): what the 2015 amendment changed

Both sub-sections were inserted by the 2015 amendment, and each answers an abuse.

Section 9(2): where, before the commencement of the arbitral proceedings, a court passes an order for an interim measure under sub-section (1), the arbitral proceedings shall be commenced within ninety days from the date of that order, or within such further time as the court may determine.

The abuse it stops is obvious once stated. A party could obtain an injunction "in aid of arbitration" and then never start the arbitration, so that a temporary order became a permanent one without anybody ever deciding the merits. Ninety days ends that.

Note what "commenced" means here: section 21 defines the commencement of arbitral proceedings as the date on which a request for the dispute to be referred is received by the respondent, unless otherwise agreed. Chapter 320 works through section 21.

Section 9(3): once the arbitral tribunal has been constituted, the Court shall not entertain an application under sub-section (1), unless the Court finds that circumstances exist which may not render the remedy provided under section 17 efficacious.

This is the sub-section that changed practice. Before it, parties went to court throughout the arbitration. Now, once there is a tribunal, the tribunal is the forum, and a court will take an application only if it finds that the section 17 remedy may not be efficacious. That is a real test, not a formality, and it is what makes section 17 worth having.

The interaction with section 17

Emergency arbitrators, and where the Supreme Court met them

Institutional rules increasingly allow a party to obtain relief from an emergency arbitrator appointed within days, before the tribunal proper is constituted. The Act does not use the expression, and the question whether such an order is enforceable in India arose in Amazon.com NV Investment Holdings LLC v. Future Retail Ltd, decided 6 August 2021, in which the Supreme Court considered emergency arbitration under institutional rules against sections 17 and 9.

That judgment is in the queue in authorities/cases.json and has not been read for facts and holding, so this book does not state what it decided. Know the question and the case; read it before asserting the ratio.

A worked example

Nachiket's company has an arbitration clause with a supplier. He learns the supplier is about to sell the only two machines that could satisfy his claim, and that its bank balance is being moved out. No arbitrator has been appointed.

Can he apply now? Yes. Section 9(1) allows an application before arbitral proceedings.

Which court? The Court as defined in section 2(1)(e): the principal Civil Court of original jurisdiction in the district, or a High Court with ordinary original civil jurisdiction; a High Court if this were an international commercial arbitration.

What can he ask for? Preservation or interim custody of the machines under clause (ii)(a); an order securing the amount in dispute under clause (ii)(b); an injunction restraining the sale, or a receiver, under clause (ii)(d).

What must he then do? Commence the arbitration within ninety days of the order, or within such further time as the court allows, under section 9(2). If he does not, the foundation of the order goes.

Three months later the tribunal is constituted and he wants a further order. Now section 9(3) applies: the court shall not entertain the application unless it finds that circumstances exist which may not render the section 17 remedy efficacious. The ordinary course is to go to the tribunal.

The award is made in his favour and the supplier starts selling assets before he can execute. Section 9(1) is still available: it runs until the award is enforced in accordance with section 36.

What beginners get wrong

Section 9 is not confined to the period before the arbitration. It runs before, during, and after the award until enforcement.

The ninety day rule applies only to a pre-commencement order. An order made during the arbitration is not subject to section 9(2).

Section 9(3) is not an absolute bar. It is a test: the court may still entertain the application if the section 17 remedy may not be efficacious.

The court is not the same court in every case. It is whichever court answers section 2(1)(e), and for an international commercial arbitration that is a High Court.

A section 9 application does not require the arbitration to have begun, but it does require an arbitration agreement, because only a "party" may apply.

Quick revision

• Section 9(1): a party may apply before or during arbitral proceedings, or after the award but before enforcement under section 36, for a guardian, or for interim protection as to (a) preservation, interim custody or sale of goods, (b) securing the amount in dispute, (c) detention, preservation or inspection of property, with powers of entry, sampling and experiment, (d) interim injunction or a receiver, (e) any other measure just and convenient. The court has the same powers as in proceedings before it.
• Section 9(2), inserted 2015: where the order was made before commencement, the arbitration must be commenced within ninety days of the order or such further time as the court determines.
• Section 9(3), inserted 2015: once the tribunal is constituted, the court shall not entertain a section 9 application unless it finds circumstances that may render the section 17 remedy inefficacious.
• Amazon v. Future Retail (6 August 2021) concerns emergency arbitrators and sections 9 and 17. Unread here; do not state its ratio.

Test yourself

1. Name the three periods in which a section 9 application may be made. Before the arbitral proceedings, during them, and at any time after the making of the arbitral award but before it is enforced in accordance with section 36.

2. A party obtains an injunction under section 9 and then does nothing. What follows? Section 9(2) requires the arbitral proceedings to be commenced within ninety days from the date of the order, or within such further time as the court may determine. The rule exists to stop a pre-arbitration interim order becoming permanent.

3. The tribunal has been constituted. Can a party still go to court under section 9? Only if the court finds that circumstances exist which may not render the remedy under section 17 efficacious, under section 9(3). Otherwise the tribunal is the forum.

4. Which clause of section 9 is used to stop a respondent dissipating assets? Clause (ii)(b), securing the amount in dispute in the arbitration, often together with an injunction or receiver under clause (ii)(d).

5. Does section 9 give the court a closed list of powers? Not in substance. Clause (ii)(e) allows such other interim measure of protection as may appear to the court to be just and convenient, and the closing words give the court the same power to make orders as it has in proceedings before it.

Section 11(6): where under an agreed procedure (a) a party fails to act as required, or (b) the parties or the two appointed arbitrators fail to reach an agreement expected of them, or (c) a person or institution fails to perform a function entrusted to it, a party may request the Court or its designate to take the necessary measure, unless the agreement provides other means of securing the appointment.

Note the difference between sub-sections (4) and (5) on one hand and (6) on the other. The thirty day periods belong to the default procedure. Where the parties have agreed their own procedure, sub-section (6) applies and there is no statutory thirty days; what matters is a failure to act as the agreed procedure required.

Section 11(6A) and (6B): confining the court's enquiry

Section 11(6A), inserted in 2015: the Court, while considering an application under sub-sections (4), (5) or (6), shall, notwithstanding any judgment, decree or order of any Court, confine to the examination of the existence of an arbitration agreement.

This is the most important sentence in the section. Before 2015, the practice that had grown up under S.B.P. & Co v. Patel Engineering Ltd treated the appointment stage as judicial and allowed a wide enquiry into preliminary questions. Sub-section (6A) cuts it down to one question: does an arbitration agreement exist? Everything else goes to the tribunal under section 16.

S.B.P. & Co v. Patel Engineering Ltd, decided 26 October 2005, is in the queue in authorities/cases.json and has not been read for facts and holding. Do not state its reasoning; know that the 2015 amendment was directed at the position it produced.

And on stamping, chapter 230 has the current answer: In Re: Interplay holds that an objection as to stamping does not fall for determination under section 8 or section 11, and that the concerned court examines whether the arbitration agreement prima facie exists.

Section 11(6B): designating a person or institution is not to be regarded as a delegation of judicial power by the Supreme Court or the High Court.

Section 11(7) to (14): the rest of the machinery

Section 11(7): a decision on a matter entrusted by sub-sections (4), (5) or (6) is final, and no appeal, including a Letters Patent Appeal, lies against it.

Section 11(8): before appointing, the Court or its designate shall seek a disclosure in writing from the prospective arbitrator under section 12(1), and shall have due regard to (a) any qualifications required by the parties' agreement, and (b) the contents of the disclosure and other considerations likely to secure the appointment of an independent and impartial arbitrator. Chapter 280 works through the disclosure.

Section 11(9): in the appointment of a sole or third arbitrator in an international commercial arbitration, the Supreme Court or its designate may appoint an arbitrator of a nationality other than the nationalities of the parties where the parties are of different nationalities.

Section 11(10): the Court may make a scheme for dealing with these matters.

Section 11(11): where more than one request has been made to different High Courts or their designates, the one to whom the request was first made alone is competent to decide.

Section 11(12): the forum split. In an international commercial arbitration, the references to "the Supreme Court or, as the case may be, the High Court" mean the Supreme Court. In any other arbitration they mean the High Court within whose local limits the principal Civil Court under section 2(1)(e) is situated, or that High Court itself where it is the court under that clause.

Section 11(13): an application is to be disposed of as expeditiously as possible, with an endeavour to dispose of it within sixty days from service of notice on the opposite party.

Section 11(14): for determining the fees of the tribunal and the manner of payment, the High Court may frame rules after taking into consideration the rates specified in the Fourth Schedule. The Explanation is important: sub-section (14) does not apply to international commercial arbitration, nor to other arbitrations where the parties have agreed that fees be determined by the rules of an arbitral institution.

Section 11A: the Central Government may by notification amend the Fourth Schedule; a draft of every such notification must be laid before each House of Parliament for thirty days, and both Houses may disapprove it or agree on modifications.

What the 2019 amendment tried to do

The 2019 amendment rewrote parts of section 11 to route appointments through arbitral institutions graded by the Arbitration Council of India, rather than through the courts, with the Supreme Court and High Courts designating institutions for the purpose.

Read that against chapter 440. Part IA is in force from 12 October 2023, but the Government told the Lok Sabha on 6 February 2026 that the Arbitration Council of India "has not been constituted as yet." A scheme that depends on graded institutions cannot operate until there is a body to grade them, so appointments continue to be made by the courts and their designates as the text set out above provides. State both halves.

A worked example

A contract says: "Disputes shall be referred to arbitration by three arbitrators, one appointed by each party and the third by the two so appointed." A dispute arises between two Indian companies. Sunanda's company appoints its arbitrator and asks the other side to appoint theirs. Forty days pass and nothing happens.

Which sub-section? The parties have agreed a procedure, so this is section 11(6)(a): a party has failed to act as required under the agreed procedure. Note it is not section 11(4), because that applies where there is no agreement and the default in sub-section (3) governs, although the agreed procedure here happens to mirror the default.

Which court? This is not an international commercial arbitration, so under section 11(12)(b) the reference is to the High Court within whose local limits the principal Civil Court under section 2(1)(e) sits.

What will the court examine? Under section 11(6A), it confines itself to the existence of an arbitration agreement, and on Interplay it looks for prima facie existence. Arguments about whether the claim is time-barred, or whether the contract was validly terminated, are for the tribunal under section 16.

What must the court do before appointing? Under section 11(8), seek a written disclosure from the prospective arbitrator under section 12(1), and have regard to any qualifications the parties required and to whatever will secure an independent and impartial appointment.

How soon? Section 11(13): as expeditiously as possible, with an endeavour to dispose of the matter within sixty days of service.

Can the other side appeal? No. Section 11(7) makes the decision final and excludes any appeal including a Letters Patent Appeal.

What beginners get wrong

The default is a sole arbitrator, not three. Section 10(2).

The thirty day periods are in the default procedure, sub-sections (4) and (5), not in sub-section (6).

The court does not examine the merits at the appointment stage. Section 11(6A) confines it to the existence of an arbitration agreement.

The forum depends on the kind of arbitration. Supreme Court for international commercial arbitration; the relevant High Court otherwise, under section 11(12).

The Fourth Schedule fee rules do not apply to international commercial arbitration, nor where the parties have chosen an institution's fee rules.

Quick revision

• Section 10: the parties fix the number, never an even number; failing agreement, a sole arbitrator.
• Section 11(2): parties free to agree a procedure. 11(3): default for three arbitrators, one each and the two appoint the presiding arbitrator. 11(4) and (5): thirty days, then the Court or its designate appoints. 11(6): failure under an agreed procedure.
• 11(6A): the Court confines itself to the existence of an arbitration agreement. 11(6B): designation is not a delegation of judicial power.
• 11(7): decision final, no appeal including Letters Patent Appeal. 11(8): written disclosure under section 12(1) and regard to qualifications and to independence and impartiality. 11(9): a neutral nationality sole or third arbitrator may be appointed in an international commercial arbitration.
• 11(12): Supreme Court for international commercial arbitration; the relevant High Court otherwise. 11(13): endeavour to dispose of within sixty days. 11(14): High Court may frame fee rules having regard to the Fourth Schedule, but not for international commercial arbitration or where institutional fee rules are agreed.
• Section 11A: the Central Government may amend the Fourth Schedule, subject to laying the draft before Parliament.

Test yourself

1. A clause is silent on the number of arbitrators. How many are there? One. Section 10(2) provides that failing determination by the parties the tribunal shall consist of a sole arbitrator.

2. What may a court examine on a section 11 application? Under section 11(6A) it confines itself, notwithstanding any judgment, decree or order of any court, to the examination of the existence of an arbitration agreement. On In Re: Interplay the court looks for prima facie existence, and objections such as stamping are for the tribunal.

3. Which court appoints in an international commercial arbitration seated in India? The Supreme Court, under section 11(12)(a), which construes the references in sub-sections (4) to (8) and (10) as references to the Supreme Court in an international commercial arbitration.

4. What must the court do before it appoints an arbitrator? Under section 11(8), seek a disclosure in writing from the prospective arbitrator in terms of section 12(1), and have due regard to any qualifications required by the parties' agreement and to the contents of the disclosure and other considerations likely to secure an independent and impartial appointment.

5. Is an order appointing an arbitrator under section 11 appealable? No. Section 11(7) makes a decision on a matter entrusted by sub-sections (4), (5) or (6) final, and provides that no appeal, including a Letters Patent Appeal, shall lie against it.

Explanation 2: the disclosure shall be made in the form specified in the Sixth Schedule.

Section 12(2): the duty continues

An arbitrator, from the time of his appointment and throughout the arbitral proceedings, shall without delay disclose to the parties in writing any circumstances referred to in sub-section (1), unless they have already been informed by him.

The duty is therefore continuing, not a one-off form at the start. If the arbitrator's firm takes on the party's work in month eight, that must be disclosed then.

Section 12(3): the two grounds of challenge

An arbitrator may be challenged only if:

• (a) circumstances exist that give rise to justifiable doubts as to his independence or impartiality; or
• (b) he does not possess the qualifications agreed to by the parties.

"Only" is doing work. These are the two grounds, and a party who dislikes an arbitrator for some other reason has no challenge.

"Justifiable doubts" is an objective standard. The question is not whether a party in fact suspects bias, but whether the circumstances would give rise to doubts a reasonable person could justify.

"Independence" and "impartiality" are not the same. Independence looks at relationships and interests, which are facts. Impartiality looks at the arbitrator's attitude to the parties and the issues, which is a state of mind. The Act requires both.

Section 12(4): challenging your own appointee

A party may challenge an arbitrator appointed by him, or in whose appointment he has participated, only for reasons of which he becomes aware after the appointment has been made.

Fair and obvious: you cannot appoint somebody knowing of a defect and then complain of it when the case turns against you. Compare section 4's general waiver rule in chapter 220.

Section 12(5): ineligibility, and it is different in kind

Notwithstanding any prior agreement to the contrary, any person whose relationship with the parties or counsel or the subject matter of the dispute falls under any of the categories specified in the Seventh Schedule shall be ineligible to be appointed as an arbitrator.

Proviso: the parties may, subsequent to disputes having arisen between them, waive the applicability of the sub-section by an express agreement in writing.

Four things follow, and each of them matters.

"Notwithstanding any prior agreement to the contrary." A clause in the contract naming an employee of one party as arbitrator cannot survive this. That is the point of the words.

"Ineligible to be appointed." Not challengeable, ineligible. The person cannot hold the office at all.

The waiver is narrow. It must be after the dispute has arisen and by express agreement in writing. A clause in the original contract is exactly what the sub-section overrides, so it cannot operate as a waiver.

The Seventh Schedule categories cover, among others, relationships in which the arbitrator is an employee, consultant, adviser or has a past or present business relationship with a party; has a controlling influence in an affiliate involved in the dispute; is a manager, director or part of the management of a party; or has a significant financial interest in the outcome. Chapter 450 sets the Schedules out.

TRF: an ineligible person cannot appoint

TRF Ltd v. Energo Engineering Projects Ltd, decided 3 July 2017.

Facts. The contract provided that disputes would be referred to the Managing Director of the respondent, or his nominee. The Managing Director nominated a former Judge of the Supreme Court as sole arbitrator. The appellant applied under section 11 saying the appointment was bad.

Held. The Managing Director, being an employee of a party, was ineligible under section 12(5) read with the Seventh Schedule. The question was whether an ineligible person could nonetheless nominate somebody else. The Court held he could not, in words worth quoting:

once the arbitrator has become ineligible by operation of law, he cannot nominate another as an arbitrator ... It is inconceivable in law that a person who is statutorily ineligible can nominate a person ... once the identity of the Managing Director as the sole arbitrator is lost, the power to nominate someone else as an arbitrator is obliterated.

Why it matters. It is the case that stops the obvious workaround. A party cannot cure the ineligibility of its own officer by having him name a distinguished outsider instead.

Perkins Eastman: and a party cannot appoint at all

Perkins Eastman Architects DPC v. HSCC (India) Ltd, decided 26 November 2019, U.U. Lalit J with Indu Malhotra J.

Facts. The clause did not make an officer of the respondent the arbitrator. It empowered the Chairman and Managing Director of the respondent to appoint a sole arbitrator. The applicants said the appointment was bad and applied under section 11(6).

Held. The Court identified two categories of case. In the first, as in TRF, the Managing Director is himself named as arbitrator with an additional power to appoint another. In the second, he is not to act as arbitrator but is authorised to appoint a person of his choice. The Court reasoned that if in the first category the Managing Director was incompetent, it was because of the interest he would be said to have in the outcome or result of the dispute, so that the element of invalidity is directly relatable to that interest; and if that is the test, a similar invalidity arises in the second category too, because the interest in the outcome is present whichever category the clause falls into.

The Court accepted the logical consequence: a party, or an official or authority having an interest in the dispute, is disentitled to make the appointment of an arbitrator on its own. It annulled the appointment and itself appointed a former Judge of the Supreme Court under section 11(6).

Why it matters. TRF closed the workaround; Perkins closed the category TRF did not cover. Together they mean that in ordinary two-party arbitration, a person interested in the outcome cannot unilaterally appoint the arbitrator.

Where the law went next, and what this book will not assert

The next question was inevitable: what about clauses under which one party maintains a panel and the other must choose from it, common in public sector contracts? That question reached a Constitution Bench in Central Organisation for Railway Electrification v. ECI-SPIC-SMO-MCML (JV).

This book does not state what that Constitution Bench decided. Its judgment could not be located in the reports available to this build, so it has not been read, and the house rule is that nothing is stated from memory. The 2019 decision of a two-judge bench in the same litigation is in the queue and is also unread. Know that the panel question was referred to and decided by a larger bench, and read that judgment before writing anything about its outcome.

Distinctions worth keeping straight

A worked example

A State corporation's standard contract says: "Any dispute shall be referred to the Chief Engineer of the corporation, or to a person nominated by him." A contractor invokes arbitration and the Chief Engineer nominates a retired District Judge.

Is the Chief Engineer eligible? No. He is an employee of a party, which falls within the Seventh Schedule, so section 12(5) makes him ineligible notwithstanding the clause.

Can he nominate the retired judge? No, on TRF: once ineligible by operation of law he cannot nominate another; the power to nominate is obliterated with the loss of his own eligibility.

Suppose the clause had said only that the Chief Engineer shall appoint an arbitrator, not that he shall be one. That is Perkins' second category, and the answer is the same: the invalidity arises from his interest in the outcome, which is present either way.

What should the contractor do? Apply under section 11(6), and the court, confining itself under section 11(6A) to the existence of an arbitration agreement, will make the appointment, seeking a written disclosure under section 11(8) and having regard to independence and impartiality.

Could the parties agree to keep the Chief Engineer after all? Only under the proviso to section 12(5): an express agreement in writing, made after the dispute has arisen. The clause in the contract cannot do it.

What beginners get wrong

The Fifth and Seventh Schedules do different things. One guides a challenge; the other bars appointment.

Section 12(5) is not a challenge ground; it is ineligibility, and it overrides a prior agreement.

The waiver in the proviso cannot be given in advance. It must follow the dispute and be express and in writing.

Disclosure is continuing, under section 12(2), not a form filled in once.

TRF and Perkins are not the same case. TRF is the named-arbitrator-who-nominates situation; Perkins is the party-official-who-appoints situation.

Do not state the outcome of the panel-clause litigation from memory. Read the Constitution Bench judgment.

Quick revision

• 12(1): written disclosure of any past or present relationship or interest, direct or indirect, financial, business, professional or other, likely to give rise to justifiable doubts; and of anything likely to affect the ability to devote sufficient time, in particular to finish within twelve months. Fifth Schedule guides; Sixth Schedule is the form.
• 12(2): the duty is continuing throughout the proceedings.
• 12(3): challenge only for justifiable doubts as to independence or impartiality, or want of agreed qualifications.
• 12(4): a party may challenge its own appointee only for reasons learned after the appointment.
• 12(5): notwithstanding any prior agreement, a Seventh Schedule relationship makes a person ineligible; waiver only by express written agreement after the dispute has arisen.
• TRF (3 July 2017): an arbitrator ineligible by operation of law cannot nominate another.
• Perkins Eastman (26 November 2019): the invalidity arises from the interest in the outcome, so a party or interested official is disentitled to appoint on its own.

Test yourself

1. What is the difference between the Fifth and the Seventh Schedule? The Fifth Schedule guides whether circumstances give rise to justifiable doubts as to independence or impartiality, and so supports a challenge under section 12(3)(a). The Seventh Schedule, through section 12(5), makes a person ineligible to be appointed at all, notwithstanding any prior agreement to the contrary.

2. Can parties agree in their contract that the Managing Director of one of them will be the arbitrator? No. Section 12(5) operates notwithstanding any prior agreement to the contrary, and such a person falls within the Seventh Schedule. The only escape is an express agreement in writing made after the dispute has arisen.

3. What did TRF Ltd v. Energo Engineering decide? That where an arbitrator has become ineligible by operation of law under section 12(5), he cannot nominate another person as arbitrator: once the identity of the Managing Director as sole arbitrator is lost, the power to nominate someone else is obliterated.

4. A clause lets one party's Chairman appoint the sole arbitrator, but does not make him the arbitrator. Is that valid after Perkins? No. Perkins Eastman held that the element of invalidity arises from the interest the official has in the outcome, which is present whether he is named as arbitrator or merely empowered to appoint, so a party or an interested official is disentitled to make the appointment on its own.

5. What must a prospective arbitrator disclose besides relationships and interests? Under section 12(1)(b), any circumstances likely to affect his ability to devote sufficient time to the arbitration, and in particular his ability to complete the entire arbitration within a period of twelve months.

Section 14: failure or impossibility to act

Section 14(1): the mandate of an arbitrator shall terminate and he shall be substituted by another arbitrator if:

• (a) he becomes de jure or de facto unable to perform his functions, or for other reasons fails to act without undue delay; and
• (b) he withdraws from his office or the parties agree to the termination of his mandate.

De jure inability means inability in law, for instance where the arbitrator has become ineligible. De facto inability means inability in fact, such as serious illness. And "fails to act without undue delay" covers the arbitrator who simply does not get on with it.

Section 14(2): if a controversy remains concerning any of the grounds in clause (a), a party may, unless otherwise agreed, apply to the Court to decide on the termination of the mandate.

This is the important escape valve. Where the arbitrator will not go and the parties do not agree, the court decides, not the tribunal. Contrast section 13(3), where the tribunal decides a challenge. That contrast is a fair examination question.

Section 14(3): if an arbitrator withdraws, or a party agrees to termination of the mandate, under this section or under section 13(3), that does not imply acceptance of the validity of any ground referred to in this section or in section 12(3).

A useful protection. An arbitrator may withdraw to save time without conceding that he was biased, and a party may agree to termination without admitting the ground.

Section 15: the other ways a mandate ends, and the substitute

Section 15(1): in addition to the circumstances in sections 13 and 14, a mandate terminates:

• (a) where the arbitrator withdraws from office for any reason; or
• (b) by or pursuant to agreement of the parties.

Section 15(2): where a mandate terminates, a substitute arbitrator shall be appointed according to the rules that were applicable to the appointment of the arbitrator being replaced.

Simple and sensible: the replacement comes in by the same route as the original. If the original was appointed by the court under section 11, the substitute is appointed the same way; if under an institutional rule, by that rule.

Section 15(3): unless otherwise agreed, where an arbitrator is replaced, any hearings previously held may be repeated at the discretion of the arbitral tribunal.

Note the words: may be repeated, at the tribunal's discretion. There is no automatic rehearing, which matters where a replacement happens late in a long reference.

The four routes out, side by side

A worked example

Three months into a reference, Priyanka's advocate discovers that the sole arbitrator's firm has been advising the respondent on an unrelated matter throughout. She learns this on 2 March.

What must she do, and by when? If the parties agreed a challenge procedure, that governs. Otherwise section 13(2): within fifteen days of becoming aware of the circumstance, send a written statement of the reasons for the challenge to the arbitral tribunal.

Who decides it? Under section 13(3), unless the arbitrator withdraws or the respondent agrees to the challenge, the arbitrator himself decides, this being a sole arbitrator tribunal.

He rejects the challenge. What now? Section 13(4): he continues and makes an award. There is no appeal at this stage. Under section 13(5), once the award is made, Priyanka may apply to set it aside under section 34.

If the award is set aside on that ground? Under section 13(6), the Court may decide whether the challenged arbitrator is entitled to any fees.

Suppose instead the arbitrator falls seriously ill and holds no hearing for a year. That is section 14(1)(a): de facto inability, or failure to act without undue delay. If he will not withdraw and the parties do not agree, a party may apply to the Court under section 14(2) to decide on termination of the mandate.

And the replacement? Section 15(2): appointed according to the rules that applied to the arbitrator being replaced. Under section 15(3) the new tribunal may, at its discretion, repeat hearings already held.

What beginners get wrong

A challenge goes to the tribunal, not to a court. Section 13(2) and (3).

An unsuccessful challenge does not stop the arbitration, and there is no immediate appeal. Section 13(4) and (5).

Section 14(2) does go to the court, which is the difference between a challenge and a claim of inability to act.

Withdrawal is not an admission. Section 14(3).

Hearings are not automatically repeated after a substitution. Section 15(3) leaves it to the tribunal's discretion.

Ineligibility under section 12(5) is not a section 13 challenge. It is a bar operating by law.

Quick revision

• 13(1) parties may agree a procedure; 13(2) failing that, a written statement of reasons to the tribunal within fifteen days of awareness; 13(3) the tribunal decides unless the arbitrator withdraws or the other party agrees; 13(4) if unsuccessful the tribunal continues and makes an award; 13(5) the remedy is section 34; 13(6) on setting aside, the Court may decide the arbitrator's fees.
• 14(1) mandate terminates on de jure or de facto inability or failure to act without undue delay, and withdrawal or agreement; 14(2) where a controversy remains, a party may apply to the Court; 14(3) withdrawal or agreement implies no admission.
• 15(1) mandate also ends on withdrawal for any reason or by agreement; 15(2) a substitute is appointed by the same rules; 15(3) previous hearings may be repeated at the tribunal's discretion.

Test yourself

1. Who decides a challenge to a sole arbitrator? The arbitrator himself, under section 13(3), unless he withdraws from office or the other party agrees to the challenge. The Act accepts that oddity to prevent challenges being used to delay, and defers the real remedy to section 34.

2. What is the time limit for a challenge, and when does it start? Fifteen days under section 13(2), running from when the party became aware of the constitution of the tribunal, or from when it became aware of a circumstance referred to in section 12(3), whichever applies. An agreed procedure displaces this.

3. A challenge fails. What are the party's options? None immediately. Under section 13(4) the tribunal continues and makes an award, and under section 13(5) the challenging party may then apply to set the award aside under section 34. If it succeeds, section 13(6) lets the Court decide whether the arbitrator is entitled to any fees.

4. An arbitrator has done nothing for a year and will not resign. Which provision helps? Section 14(1)(a), failure to act without undue delay or de facto inability. If a controversy remains, section 14(2) allows a party, unless otherwise agreed, to apply to the Court to decide on the termination of his mandate.

5. Must the new arbitrator rehear everything? No. Under section 15(3), unless otherwise agreed by the parties, hearings previously held may be repeated at the discretion of the arbitral tribunal.

Two halves and both are examinable. The deadline is the statement of defence, which is earlier than most students expect. And the saving is important: taking part in appointing an arbitrator is not a submission to jurisdiction.

Section 16(3): a plea that the tribunal is exceeding the scope of its authority shall be raised as soon as the matter alleged to be beyond the scope is raised during the proceedings.

The distinction between the two pleas is worth stating. Sub-section (2) says the tribunal should never have been hearing this at all. Sub-section (3) says the tribunal has jurisdiction but is straying outside it, which can only be known when the straying happens, so the timing rule is different.

Section 16(4): the tribunal may admit a later plea in either case if it considers the delay justified.

Section 16(5) and (6): what happens next, and the asymmetry

Section 16(5): the tribunal shall decide on a plea under sub-section (2) or (3), and where it rejects the plea, continue with the arbitral proceedings and make an arbitral award.

Section 16(6): a party aggrieved by such an award may apply to set it aside under section 34.

Here is the asymmetry, and it is the single most examinable feature of section 16. Compare what happens depending on which way the tribunal rules:

Why the asymmetry? Because the two situations threaten different things. If the tribunal wrongly says it has jurisdiction, the only cost of waiting is that an arbitration proceeds which may later be undone, and letting the objector run to court immediately would reward delay. If the tribunal wrongly says it has no jurisdiction, the arbitration is dead and the parties' agreement is defeated with no award to attack later, so an immediate appeal is the only remedy that works.

Note the consequence for section 13 too. Chapter 290 shows the same structure: an unsuccessful challenge to an arbitrator produces no immediate remedy either, and the award is attacked under section 34. The Act is consistent about not letting preliminary objections stop an arbitration.

A worked example

Ganesh's company is taken to arbitration by a supplier. It wants to say three things: the contract was never validly executed because the signatory had no authority; even if it was, the claim is outside the arbitration clause because the clause covers only "disputes as to quality"; and in any event the supplier is now claiming damages for defamation, which the clause plainly does not cover.

Where are these raised? All before the tribunal, not in court. Section 16(1) lets the tribunal rule on its own jurisdiction including objections to the existence or validity of the arbitration agreement.

When? The first two are pleas that the tribunal lacks jurisdiction and must be raised not later than the statement of defence, under section 16(2). The third is a plea that the tribunal is exceeding the scope of its authority and must be raised as soon as the defamation claim is raised, under section 16(3).

Does it matter that Ganesh's company appointed its own arbitrator? No. Section 16(2) expressly saves the plea: a party is not precluded merely because it appointed or participated in appointing an arbitrator.

The tribunal rejects all three. Can the company go to court now? No. Under section 16(5) the tribunal continues and makes an award, and under section 16(6) the remedy is an application to set aside under section 34.

Suppose instead the tribunal accepts the first plea and holds there is no arbitration agreement. Now the supplier has an immediate remedy: an appeal under section 37(2)(a), because the tribunal has accepted a plea referred to in section 16(2).

And the argument that the contract is void for want of authority? Even if the tribunal accepted it, section 16(1)(b) means the arbitration clause does not automatically fall with the contract. The clause is treated as an independent agreement under section 16(1)(a).

What beginners get wrong

Separability does not make the arbitration clause invulnerable. It means the clause is treated as a separate agreement, so it survives the contract's invalidity. If the attack goes to the clause itself, for example that it was never agreed at all, that is a different argument, and section 16 lets the tribunal decide it.

The deadline for a jurisdictional plea is the statement of defence, not the first hearing or the end of evidence.

Appointing an arbitrator is not submission to jurisdiction. Section 16(2) says so expressly.

There is no immediate remedy against a rejection, only against acceptance. Getting this the wrong way round is the commonest error on this section.

Section 16 is not a court's power. It is the tribunal's. Section 11(6A) is the parallel limit on the court.

Quick revision

• 16(1): the tribunal may rule on its own jurisdiction, including on the existence or validity of the arbitration agreement. (a) an arbitration clause in a contract is an agreement independent of the other terms; (b) a decision that the contract is null and void does not ipso jure invalidate the arbitration clause.
• 16(2): a plea of no jurisdiction not later than the statement of defence; participation in the appointment does not preclude it.
• 16(3): a plea of exceeding the scope as soon as the matter arises. 16(4): a later plea may be admitted if the delay is justified.
• 16(5): on rejecting a plea, the tribunal continues and makes an award. 16(6): the remedy is section 34.
• The asymmetry: rejection gives no immediate remedy; acceptance is appealable at once under section 37(2)(a).

Test yourself

1. What are kompetenz-kompetenz and separability, and where are they in the Act? Kompetenz-kompetenz is the tribunal's power to rule on its own jurisdiction, in the opening words of section 16(1). Separability is the treatment of an arbitration clause as an agreement independent of the contract containing it, in section 16(1)(a), reinforced by section 16(1)(b), under which a holding that the contract is null and void does not ipso jure invalidate the clause.

2. By when must a plea that the tribunal has no jurisdiction be raised? Not later than the submission of the statement of defence, under section 16(2), although the tribunal may admit a later plea under section 16(4) if it considers the delay justified.

3. A party appointed its own arbitrator and now says there was never a valid arbitration agreement. Is it too late? Not on that ground alone. Section 16(2) provides that a party shall not be precluded from raising the plea merely because he has appointed, or participated in the appointment of, an arbitrator. The statement-of-defence deadline still applies.

4. The tribunal rejects a jurisdictional objection. What can the objector do immediately? Nothing. Under section 16(5) the tribunal continues and makes an award, and under section 16(6) the objector may then apply to set the award aside under section 34.

5. The tribunal accepts the objection and holds it has no jurisdiction. What follows? The claimant has an immediate right of appeal under section 37(2)(a), because there is no award to attack later and the arbitration would otherwise simply end.

The window, and what the 2019 amendment removed

This is a small change with real consequences and it is easy to miss.

The 2015 version let a party apply "during the arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with section 36". Those closing words were omitted by Act 33 of 2019 with effect from 30 August 2019.

So the position now is:

• Section 17 runs during the arbitral proceedings only.
• Section 9 runs before, during, and after the award until enforcement.

That makes sense once stated: after the award the tribunal is functus officio, meaning it has discharged its office and has no further authority, so asking it for orders is asking a body that no longer exists. The post-award window belongs to the court, and section 9 keeps it.

Section 17(2): the enforcement provision

Subject to any orders passed in an appeal under section 37, any order issued by the arbitral tribunal under this section shall be deemed to be an order of the Court for all purposes and shall be enforceable under the Code of Civil Procedure 1908, in the same manner as if it were an order of the Court.

Take it apart.

"Deemed to be an order of the Court for all purposes." Not merely enforceable: deemed to be a court's order. So the machinery for disobeying a court order becomes available.

"Enforceable under the Code of Civil Procedure 1908 in the same manner as if it were an order of the Court." So an injunction granted by a tribunal is enforced the way a court's injunction is, including under the provisions of the Code dealing with disobedience.

"Subject to any orders passed in an appeal under section 37." An order under section 17 is appealable, under section 37(2)(b), which chapter 420 works through. So the deemed status is subject to what the appellate court does.

What section 17 changed in practice, with section 9(3)

Read section 17(2) together with section 9(3), also inserted in 2015: once the tribunal is constituted, the Court shall not entertain a section 9 application unless it finds that circumstances exist which may not render the remedy under section 17 efficacious.

The two provisions are one reform. Section 17(2) makes the tribunal's order effective; section 9(3) then directs parties to the tribunal because that remedy is now efficacious. Take away section 17(2) and section 9(3) would be sending parties to a forum whose orders nobody need obey.

Emergency arbitrators

An emergency arbitrator is appointed under institutional rules, within days of a request, to grant urgent relief before the tribunal proper is constituted. The Act does not use the expression, which raises the question whether an emergency arbitrator's order is an order "of the arbitral tribunal" under section 17 and so carries sub-section (2)'s enforceability.

That question came before the Supreme Court in Amazon.com NV Investment Holdings LLC v. Future Retail Ltd, decided 6 August 2021.

That judgment is in the queue in authorities/cases.json and has not been read for facts and holding. This book does not state what it decided. Know the question, know the case, and read it before writing its ratio.

A worked example

An arbitration between two logistics companies is under way; the tribunal of three was constituted two months ago. The claimant learns that the respondent is about to transfer its only warehouse to a related company.

Where does it apply? To the tribunal, under section 17. Section 9(3) means a court will not entertain a section 9 application now unless satisfied that the section 17 remedy may not be efficacious, and here it plainly is: the tribunal exists and can sit at short notice.

What can it ask for? An injunction restraining the transfer under section 17(1)(ii)(d), or an order securing the amount in dispute under clause (b), or a receiver under clause (d).

The tribunal grants an injunction and the respondent transfers the warehouse anyway. What now? Section 17(2). The order is deemed to be an order of the Court for all purposes and is enforceable under the Code of Civil Procedure as if a court had made it, so the claimant proceeds against the respondent for disobedience of a court order rather than being left with a paper victory.

Can the respondent appeal? Yes, under section 37(2)(b), which allows an appeal from an order of the tribunal granting or refusing an interim measure under section 17. Section 17(2) is expressly subject to orders in such an appeal.

The award is later made, and the respondent starts selling other assets before execution. Section 17 is no longer available: the closing words allowing a post-award application were omitted in 2019, and the tribunal is functus officio. The claimant goes to court under section 9, which runs until the award is enforced under section 36.

What beginners get wrong

Section 17 is not available after the award. Those words were omitted in 2019. Section 9 covers that period.

Section 17(2) is not merely a statement that the order is binding. It deems the order to be an order of the Court for all purposes and makes it enforceable under the Code of Civil Procedure.

Section 9 is not simply cut off once the tribunal exists. Section 9(3) is a test, not an absolute bar.

The tribunal's list of powers is not narrower than the court's. Since 2015 it is the same list.

A section 17 order is appealable, under section 37(2)(b).

Quick revision

• 17(1): during the arbitral proceedings, a party may apply to the tribunal for a guardian, or for interim protection as to (a) preservation, interim custody or sale of goods, (b) securing the amount in dispute, (c) detention, preservation or inspection with powers of entry, sampling and experiment, (d) injunction or receiver, (e) any other measure just and convenient. The tribunal has the same power as the court.
• The post-award window was omitted by Act 33 of 2019 w.e.f. 30 August 2019, so section 17 now runs during the proceedings only.
• 17(2): an order is deemed an order of the Court for all purposes and is enforceable under the Code of Civil Procedure 1908, subject to any orders in an appeal under section 37(2)(b).
• Read with section 9(3): once the tribunal is constituted, the court will not entertain a section 9 application unless the section 17 remedy may not be efficacious.
• Amazon v. Future Retail (6 August 2021) concerns emergency arbitrators. Unread here; do not state its ratio.

Test yourself

1. Can a party apply to the tribunal for interim measures after the award has been made? No. The words permitting an application after the award and before enforcement were omitted by Act 33 of 2019 with effect from 30 August 2019, and the tribunal is functus officio once the award is made. Section 9 covers that period instead.

2. What makes a section 17 order worth having? Section 17(2), which deems any order issued under the section to be an order of the Court for all purposes and makes it enforceable under the Code of Civil Procedure 1908 in the same manner as an order of the Court, subject to any orders in an appeal under section 37.

3. How do sections 9(3) and 17(2) work together? They are one reform. Section 17(2) makes the tribunal's interim orders effective, and section 9(3) then bars a court from entertaining a section 9 application once the tribunal is constituted unless the section 17 remedy may not be efficacious.

4. Are the tribunal's powers under section 17 narrower than the court's under section 9? No. Since the 2015 amendment the list is identical, and the closing words give the tribunal the same power to make orders as the court has in proceedings before it. The differences are in timing and in enforcement, not in the measures available.

5. Is an order under section 17 appealable? Yes, under section 37(2)(b), which provides an appeal from an order of the arbitral tribunal granting or refusing an interim measure under section 17, and section 17(2) is expressly subject to any orders passed in such an appeal.

But read section 19 with section 18, and note the words "subject to this Part" in sub-sections (2) and (3). Freedom from the Code is not freedom from the Act. A tribunal that refuses to let a party answer the other side's evidence has not exercised section 19(4); it has broken section 18.

And note what section 19 does not say. It does not free the tribunal from the substantive law. Section 28 requires a domestic tribunal to decide according to the substantive law for the time being in force in India, and chapter 350 works through it.

Section 20: the place of arbitration

Section 20(1): the parties are free to agree on the place of arbitration.

Section 20(2): failing agreement, the place is determined by the arbitral tribunal having regard to the circumstances of the case, including the convenience of the parties.

Section 20(3): notwithstanding sub-sections (1) and (2), the tribunal may, unless otherwise agreed, meet at any place it considers appropriate for consultation among its members, for hearing witnesses, experts or the parties, or for inspection of documents, goods or other property.

Sub-section (3) is the key to the section and to a distinction that runs through modern arbitration law: the difference between the seat and the venue.

The seat is the legal home of the arbitration. It decides which country's arbitration law governs the process and which courts supervise it. That is what sub-sections (1) and (2) are about, and it is what section 2(2) means by "the place of arbitration is in India".

The venue is simply where a hearing physically happens, which sub-section (3) allows to be anywhere convenient.

The Act uses the single word "place" for both, which is the source of a great deal of litigation. A clause saying "arbitration shall be held in Mumbai" is usually read as fixing the seat; a clause saying "hearings may be held in Pune for convenience" is fixing a venue and changes nothing about which courts supervise.

Why it matters. The seat decides whether Part I applies at all, which is chapter 210 and the BALCO line, and it decides which court is "the Court" for sections 9, 11, 34 and 37.

Section 21: when the arbitration begins

Unless otherwise agreed by the parties, the arbitral proceedings in respect of a particular dispute commence on the date on which a request for that dispute to be referred to arbitration is received by the respondent.

Short and heavily used. Note three things.

It is receipt, not despatch. Section 3 tells you when a communication is deemed received.

It is per dispute, not per contract. The words are "in respect of a particular dispute".

It is a default rule, displaceable by agreement or by institutional rules that fix commencement at the filing of a request with the institution.

Section 21 is the trigger for several other provisions: section 9(2)'s ninety day rule speaks of the arbitral proceedings being commenced; section 43 applies the Limitation Act 1963 to arbitrations, and section 21 supplies the date on which time stops running for that purpose. Chapter 430 works through section 43.

Section 22: the language

Section 22(1): the parties are free to agree upon the language or languages to be used.

Section 22(2): failing agreement, the tribunal shall determine it.

Section 22(3): the agreement or determination, unless otherwise specified, applies to any written statement by a party, any hearing, and any award, decision or other communication by the tribunal.

Section 22(4): the tribunal may order that any documentary evidence be accompanied by a translation into the agreed or determined language.

In a country with this many languages the section is not a formality. It lets an arbitration be conducted in the language the parties and their witnesses actually use, which is one of arbitration's real practical advantages over a court whose language is fixed.

A worked example

A contract between a Nagpur company and a Kochi company says: "Disputes shall be referred to arbitration. The arbitration shall be held at Mumbai." Nothing is said about procedure or language. On 4 March the Nagpur company posts a notice calling on the other to concur in the appointment of an arbitrator; it is received on 9 March.

When did the arbitration commence? On 9 March, under section 21: the date the request for that dispute to be referred is received by the respondent. Not the date of posting.

Where is the seat? Mumbai, under section 20(1), the parties having agreed. That decides that Part I applies under section 2(2) and which court is "the Court" for sections 9, 11 and 34.

The witnesses are all in Kochi. May the tribunal sit there? Yes. Section 20(3) lets the tribunal meet at any place it considers appropriate for hearing witnesses, unless otherwise agreed. Sitting in Kochi is a venue; the seat remains Mumbai and nothing about the supervising court changes.

In what language? Failing agreement, the tribunal determines it under section 22(2), and under section 22(3) that governs the pleadings, the hearings and the award. Under section 22(4) it may require documents to be translated.

Can the tribunal admit a photocopy that nobody proves? Yes. Section 19(1) frees it from the Evidence Act and section 19(4) lets it decide admissibility, relevance, materiality and weight.

Can it decide the case on that photocopy without letting the other side comment on it? No. That is section 18, and section 24(3) reinforces it by requiring that everything supplied to the tribunal by one party be communicated to the other.

What beginners get wrong

Section 18 is not subject to party agreement. Its absence of an "unless otherwise agreed" is deliberate.

Freedom from the Evidence Act is not freedom from fairness. Sections 19(2) and (3) are expressly subject to the rest of Part I, and section 18 is part of it.

"Place" in section 20 means two different things, seat in sub-sections (1) and (2), venue in sub-section (3).

Arbitration commences on receipt of the request, not on the appointment of the arbitrator. Section 21.

Section 19 does not free the tribunal from the substantive law. That is section 28.

Quick revision

• Section 18: parties treated with equality; each given a full opportunity to present his case. Mandatory, and the foundation of section 34(2)(a)(iii).
• Section 19: tribunal not bound by the Code of Civil Procedure or the Evidence Act; parties may agree the procedure; failing that the tribunal conducts proceedings as it considers appropriate, including determining admissibility, relevance, materiality and weight of evidence. All subject to this Part.
• Section 20: parties agree the place; failing that the tribunal determines it having regard to convenience; and the tribunal may meet anywhere for consultation, witnesses, experts or inspection. Seat against venue.
• Section 21: proceedings commence, unless otherwise agreed, on the date the request for that dispute to be referred is received by the respondent.
• Section 22: parties agree the language; failing that the tribunal determines it; it applies to statements, hearings and the award; and translations may be ordered.

Test yourself

1. Why is section 18 different from the other sections in this chapter? Because it carries no "unless otherwise agreed by the parties". It is mandatory, cannot be contracted out of, and is not a provision from which the parties may derogate for the purposes of section 4's waiver rule. It is also the basis of the setting-aside ground in section 34(2)(a)(iii).

2. The tribunal admits a document that would be inadmissible in a civil court. Is the award vulnerable? Not on that ground alone. Section 19(1) frees the tribunal from the Indian Evidence Act and section 19(4) empowers it to determine admissibility, relevance, materiality and weight. It becomes vulnerable if the other party was not allowed to deal with the document, which offends section 18.

3. What is the difference between the seat and the venue of an arbitration? The seat is the legal place of the arbitration, fixed under section 20(1) or (2), which determines the applicable arbitration law and the supervising courts. The venue is where hearings physically take place, which section 20(3) allows the tribunal to choose for convenience without changing the seat.

4. When do arbitral proceedings commence? Unless otherwise agreed, on the date on which a request for that particular dispute to be referred to arbitration is received by the respondent, under section 21. Receipt is governed by section 3.

5. In what language is the award written? In the language agreed by the parties or, failing agreement, determined by the tribunal under section 22(2). By section 22(3) that language applies, unless otherwise specified, to written statements, hearings, and any award, decision or other communication of the tribunal.

First proviso: the tribunal shall hold oral hearings, at an appropriate stage, on a request by a party, unless the parties have agreed that no oral hearing shall be held.

Read the two together. The tribunal chooses, but a party can force an oral hearing by asking for one, unless the parties have agreed there will be none. So a documents-only arbitration happens either because nobody asks for a hearing or because everybody agreed there would not be one.

Second proviso, inserted by the 2015 amendment: the tribunal shall, as far as possible, hold oral hearings on a day-to-day basis, and not grant any adjournments unless sufficient cause is made out, and may impose costs including exemplary costs on the party seeking adjournment without sufficient cause.

This is the Act legislating against the habit that made arbitration in India as slow as litigation: hearings once a month, adjourned on request. Note the sanction: exemplary costs against the party seeking an adjournment without sufficient cause.

Section 24(2): the parties shall be given sufficient advance notice of any hearing and of any meeting of the tribunal for inspection of documents, goods or property.

Section 24(3): all statements, documents or other information supplied to, or applications made to, the tribunal by one party shall be communicated to the other party, and any expert report or evidentiary document on which the tribunal may rely in making its decision shall be communicated to the parties.

Section 24(3) is section 18 in operational form, and it is the provision that catches the most common real complaint: the tribunal relied on something one side never saw. Note that it covers not only what a party supplies but any expert report or evidentiary document the tribunal may rely on, whatever its source.

Section 25: default of a party

Unless otherwise agreed, where without showing sufficient cause:

• (a) the claimant fails to communicate his statement of claim under section 23(1), the tribunal shall terminate the proceedings;
• (b) the respondent fails to communicate his statement of defence under section 23(1), the tribunal shall continue the proceedings without treating that failure in itself as an admission of the allegations by the claimant, and shall have the discretion to treat the right of the respondent to file such statement of defence as having been forfeited;
• (c) a party fails to appear at an oral hearing or to produce documentary evidence, the tribunal may continue the proceedings and make the arbitral award on the evidence before it.

Clause (b) is the cleanest contrast in this Module between arbitration and a civil suit, and it is a favourite question.

In a civil court, a defendant who does not file a written statement can have the suit decreed against him. In arbitration, he cannot. The tribunal continues, but the failure is not in itself an admission of anything. The claimant still has to prove its case on evidence.

The words "and shall have the discretion to treat the right of the respondent to file such statement of defence as having been forfeited" were added by the 2019 amendment. They do not change the no-admission rule; they let the tribunal shut the door on a late defence so the case can move.

And note the asymmetry between (a) and (b). A defaulting claimant loses the arbitration outright, because there is nothing to decide. A defaulting respondent does not, because there is still a claim to prove.

"Without showing sufficient cause" governs all three clauses. A party with a good reason for the failure is not in default at all.

A worked example

An arbitration begins. The tribunal of three receives written notice of appointment on 10 January. The claimant files its statement of claim on 20 February. The respondent files nothing, ignores two hearing notices, and then, at the fourth hearing in October, sends an advocate asking to file a defence and for an adjournment.

When should pleadings have been complete? By 10 July, six months from the date all the arbitrators received written notice of appointment, under section 23(4).

What could the tribunal have done in the meantime? Under section 25(b), continued the proceedings, not treating the failure as an admission of the claimant's allegations, and it may exercise the discretion added in 2019 to treat the respondent's right to file a defence as forfeited.

Was the claimant entitled to an award simply because nobody answered? No. That is the whole point of section 25(b). It must still prove its claim on the evidence, and under section 25(c) the tribunal may continue and make the award on the evidence before it.

Must the tribunal now allow the late defence and the adjournment? It has a discretion. Section 23(3) lets a party amend or supplement unless the tribunal considers it inappropriate having regard to the delay, and the second proviso to section 24(1) tells the tribunal not to grant adjournments without sufficient cause and permits exemplary costs against a party seeking one without it.

Change the facts. Suppose it was the claimant who never filed a statement of claim. Then section 25(a) applies and the tribunal shall terminate the proceedings. There is no equivalent of continuing, because there is no claim.

And suppose the tribunal, deciding the case, relies on a technical report it obtained itself and never showed anybody. That breaches section 24(3), which requires any expert report or evidentiary document the tribunal may rely on to be communicated to the parties, and it breaches section 18.

What beginners get wrong

A respondent's silence is not an admission. Section 25(b) says so in terms, and this is the commonest error in this Module.

A defaulting claimant is treated quite differently from a defaulting respondent. Termination under (a); continuation under (b).

A party can insist on an oral hearing, under the first proviso to section 24(1), unless the parties agreed there would be none.

Section 23(4)'s six months is for pleadings, not for the award. The award period is section 29A.

Set-off and counterclaim are different things, though section 23(2A) covers both.

Quick revision

• 23(1): claim states the facts, the points at issue and the relief sought; the defence answers them. 23(2): documents may be filed or referred to. 23(2A): a counterclaim or set-off is adjudicated if within the scope of the arbitration agreement. 23(3): amendment allowed unless inappropriate having regard to the delay. 23(4): pleadings complete within six months of all arbitrators receiving written notice of appointment.
• 24(1): the tribunal decides on oral hearings, but must hold one if a party asks, unless the parties agreed otherwise; hearings day to day as far as possible, no adjournments without sufficient cause, and exemplary costs may be imposed. 24(2): sufficient advance notice. 24(3): everything supplied by a party, and any expert report or evidentiary document the tribunal may rely on, must be communicated to the parties.
• 25: without sufficient cause, (a) claimant's failure to file the claim, proceedings terminated; (b) respondent's failure to file the defence, proceedings continue, not an admission, and the tribunal may treat the right to file as forfeited; (c) failure to appear or produce documents, the tribunal may continue and make the award on the evidence before it.

Test yourself

1. A respondent files no defence at all. Can the claimant get an award without proving its case? No. Section 25(b) requires the tribunal to continue the proceedings without treating the failure in itself as an admission of the claimant's allegations. The claimant must still prove its claim, and under section 25(c) the tribunal makes the award on the evidence before it.

2. What happens if the claimant files no statement of claim? Under section 25(a), where the claimant fails without showing sufficient cause to communicate his statement of claim in accordance with section 23(1), the tribunal shall terminate the proceedings.

3. Can a tribunal decide an arbitration without any oral hearing? Yes, under section 24(1), if it so decides and no party requests a hearing, or if the parties have agreed that no oral hearing shall be held. But the first proviso requires the tribunal to hold oral hearings at an appropriate stage on a party's request, unless there is such an agreement.

4. May a respondent bring a counterclaim in the same arbitration? Yes. Section 23(2A) permits a counterclaim or a plea of set-off, to be adjudicated by the tribunal, provided it falls within the scope of the arbitration agreement.

5. By when must pleadings be complete, and why does it matter? Within six months from the date the arbitrator or all the arbitrators received written notice of their appointment, under section 23(4). It matters because section 29A's twelve month period for making the award runs from the date of completion of pleadings.

Note who may apply: the tribunal itself, or a party with the tribunal's approval. A party cannot go to court on its own.

Section 27(2): the application shall specify:

• (a) the names and addresses of the parties and the arbitrators;
• (b) the general nature of the claim and the relief sought;
• (c) the evidence to be obtained, in particular (i) the name and address of any person to be heard as a witness or expert witness and a statement of the subject matter of the testimony required, and (ii) a description of any document to be produced or property to be inspected.

That list is exactly the sort of thing a clinical paper can ask a student to draft, so learn it as a checklist.

Section 27(3): the Court may, within its competence and according to its rules on taking evidence, execute the request by ordering that the evidence be provided directly to the arbitral tribunal.

Note "directly to the arbitral tribunal". The court does not take the evidence and then relay it; it directs that the evidence go straight to the tribunal. The court is lending its coercive power, not taking over the case.

Section 27(4): the Court may issue the same processes to witnesses as it may issue in suits tried before it. By section 27(6), "processes" includes summonses and commissions for the examination of witnesses and summonses to produce documents.

Section 27(5): persons failing to attend in accordance with such process, or making any other default, or refusing to give their evidence, or guilty of any contempt to the arbitral tribunal during the conduct of the proceedings, shall be subject to the like disadvantages, penalties and punishments by order of the Court, on the representation of the arbitral tribunal, as they would incur for the like offences in suits tried before the Court.

Sub-section (5) is the one to notice, and it is wider than its heading suggests. It is not confined to witnesses who ignore a summons. It reaches a person guilty of any contempt to the arbitral tribunal during the proceedings, and it makes the court the enforcer, acting on the representation of the arbitral tribunal.

So the answer to "can an arbitrator punish for contempt?" is: no, but the court can, on his representation, under section 27(5).

A worked example

An arbitration concerns a fire at a warehouse. The tribunal wants three things: an independent view of what caused the fire; the fire brigade's incident file, which is with a public office that is not a party; and evidence from a former employee of the respondent who has since left and will not co-operate.

The cause of the fire. Section 26(1)(a): the tribunal may appoint its own expert to report on that specific issue, and under clause (b) require the parties to give him information and access to the site.

Can the claimant question that expert? Yes. Under section 26(2), on a party's request the expert must take part in an oral hearing where the parties may put questions to him and present their own expert witnesses. Under section 26(3) the claimant may also require the expert to make available the documents he was given.

The fire brigade's file. The tribunal has no power over a public office. Section 27 is the route: the tribunal, or a party with the tribunal's approval, applies to the Court, specifying under section 27(2)(c)(ii) a description of the document to be produced. The Court may issue a summons to produce documents, which section 27(6) confirms is a "process", and may order that the evidence be provided directly to the tribunal under section 27(3).

The former employee. Same route, under section 27(2)(c)(i): his name and address and a statement of the subject matter of the testimony required. The Court may issue the same process it would in a suit.

He is summoned and does not come. Section 27(5): he is subject to the like disadvantages, penalties and punishments by order of the Court, on the representation of the arbitral tribunal, as he would incur for the like default in a suit tried before that Court.

And if he attends but abuses the arbitrator? Also section 27(5), which covers a person guilty of any contempt to the arbitral tribunal during the conduct of the proceedings.

What beginners get wrong

A tribunal cannot summon a stranger. Its authority comes from the arbitration agreement, which binds only the parties. Section 27 exists because of that.

A party cannot apply under section 27 on its own. The tribunal must approve.

The court does not take over the evidence. Under section 27(3) it orders that the evidence be provided directly to the tribunal.

Section 27(5) is not limited to absent witnesses. It covers any other default, refusal to give evidence, and contempt to the tribunal.

A tribunal-appointed expert is not the tribunal's private adviser. Sections 26(2) and (3) and section 24(3) make his report and his materials open to the parties.

Quick revision

• 26(1): the tribunal may appoint experts on specific issues and require a party to give information or provide access to documents, goods or property.
• 26(2): on a party's request or if the tribunal thinks it necessary, the expert takes part in an oral hearing and the parties may question him and call their own experts.
• 26(3): on request, the expert makes his materials available to a party.
• 27(1): the tribunal, or a party with the tribunal's approval, may apply to the Court for assistance in taking evidence.
• 27(2): the application specifies parties and arbitrators; the nature of the claim and relief; and the evidence, with names, addresses and the subject matter of testimony, or a description of the document or property.
• 27(3): the Court may order the evidence be provided directly to the tribunal. 27(4) and (6): the same processes as in suits, including summonses and commissions.
• 27(5): default, refusal to give evidence, or contempt to the arbitral tribunal, attracts the like penalties by order of the Court on the tribunal's representation.

Test yourself

1. Can an arbitral tribunal summon a witness who is not a party? No. Its authority derives from the arbitration agreement and binds only the parties. It must use section 27, applying to the Court, or approving a party's application, for assistance in taking evidence.

2. What must a section 27 application contain? The names and addresses of the parties and the arbitrators; the general nature of the claim and the relief sought; and the evidence to be obtained, in particular the name and address of any person to be heard as a witness or expert witness with a statement of the subject matter of the testimony required, and a description of any document to be produced or property to be inspected.

3. Who punishes a witness who ignores the summons? The Court, under section 27(5), on the representation of the arbitral tribunal, imposing the like disadvantages, penalties and punishments as the person would incur for a like default in a suit tried before that Court.

4. The tribunal appoints its own expert. What rights does a party have? Under section 26(2) it may request that the expert participate in an oral hearing where the parties may put questions to him and present their own expert witnesses; under section 26(3) it may require the expert to make available the documents, goods or property he was provided with; and under section 24(3) any expert report the tribunal may rely on must be communicated to the parties.

5. Can a party apply to court under section 27 without telling the tribunal? No. Section 27(1) permits an application by the arbitral tribunal, or by a party with the approval of the arbitral tribunal.

A drafting oddity worth noticing: clause (iii) refers to "failing any designation of the law under clause (a) by the parties", although the designation provision is clause (b)(i). Read it as intended.

Section 28(2): deciding by fairness, only if authorised

The arbitral tribunal shall decide ex aequo et bono or as amiable compositeur only if the parties have expressly authorised it to do so.

Ex aequo et bono means according to what is equitable and good, that is, by broad fairness rather than by strict law. An amiable compositeur is an arbitrator empowered to decide in that way.

The rule is: not unless expressly authorised. So the student's assumption that arbitrators decide by fairness is exactly backwards; they decide by law unless the parties have expressly said otherwise.

Section 28(3): the contract and trade usages

While deciding and making an award, the arbitral tribunal shall, in all cases, take into account the terms of the contract and trade usages applicable to the transaction.

This sub-section was substituted by the 2015 amendment. Before it, the text said the tribunal "shall decide in accordance with the terms of the contract", and that phrasing had been used to attack awards on the footing that the tribunal had misread a clause. The present words, "shall take into account", are deliberately softer.

Section 28(3) is the provision that matters most at the setting aside stage, and chapter 400 returns to it. The short version: an award that ignores the terms of the contract or the trade usages is vulnerable, because that failure is the commonest form of what section 34(2A) calls patent illegality. But a tribunal that has taken the contract into account and read a clause in a way a court might not is exercising its function, and the 2015 wording is meant to protect that.

"Trade usages applicable to the transaction" are the settled practices of the trade concerned. They matter in commodity, shipping and construction disputes, where much is understood between people in the business and never written down.

Section 29: decision making by a panel

Section 29(1): unless otherwise agreed, in proceedings with more than one arbitrator, any decision shall be made by a majority of all its members.

Two points. It is a majority of all the members, not of those present. And it applies to any decision, not only the final award, which is why section 10(1) forbids an even number: a two-member tribunal cannot produce a majority.

Section 29(2): notwithstanding sub-section (1), if authorised by the parties or all the members of the arbitral tribunal, questions of procedure may be decided by the presiding arbitrator.

A sensible practical provision. It would be absurd to convene all three arbitrators to decide whether to grant a week's extension for filing a document, so procedure can be delegated to the presiding arbitrator, either by the parties or by the tribunal itself.

Note the limit: questions of procedure only. The presiding arbitrator cannot decide the substance alone.

What of a dissent? The Act does not require unanimity, and a minority arbitrator may write a dissenting opinion. The award is the majority's; the dissent is not an award and cannot be enforced. Section 31(2) requires the signatures of the majority and a statement of the reason for any omitted signature, which chapter 380 works through.

A worked example

A tribunal of three sits in Hyderabad in a dispute between an Indian buyer and an Indian seller of cotton. The contract says it is governed by English law and that the arbitrators may decide "as they think just".

Can the tribunal apply English law? No. This is not an international commercial arbitration, because both parties are Indian, so section 28(1)(a) applies: the tribunal shall decide in accordance with the substantive law for the time being in force in India. The choice of English law cannot displace that.

Can it decide by what it thinks just? Only if the parties have expressly authorised it to decide ex aequo et bono or as amiable compositeur under section 28(2). A loose phrase like "as they think just" is unlikely to be the express authorisation the section requires; and even then the tribunal would still be subject to section 28(1)(a) in a domestic arbitration, so the safer view is that the clause changes nothing.

Must it follow the contract? Under section 28(3) it shall in all cases take into account the terms of the contract and trade usages applicable to the transaction, and in a cotton dispute the trade usages may be substantial.

Two arbitrators agree, one dissents. Section 29(1): the decision is that of the majority of all its members, so the award stands. The dissent is not an award.

The presiding arbitrator alone extends time for filing evidence. Valid if the parties or all the members authorised it, under section 29(2), because that is a question of procedure.

Change the parties. Make the buyer a company incorporated in Dubai. Now it is an international commercial arbitration under section 2(1)(f)(ii), and section 28(1)(b)(i) applies: the tribunal decides in accordance with the rules of law designated by the parties, so English law governs the substance, and under clause (ii) that means English substantive law, not English conflict rules.

What beginners get wrong

Arbitrators do not decide by fairness. Section 28(2) requires express authorisation to decide ex aequo et bono.

Parties to a purely domestic arbitration cannot choose a foreign substantive law under section 28(1)(a).

Section 19 and section 28 are different. Freedom from the Code and the Evidence Act is procedural; the substantive law still binds.

Section 28(3) says "take into account", not "decide in accordance with". The change was made in 2015 and matters at the section 34 stage.

Section 29(1) requires a majority of all members, not of those present, and it applies to any decision.

Quick revision

• 28(1)(a): place in India, not international commercial arbitration, the tribunal shall decide in accordance with the substantive law for the time being in force in India.
• 28(1)(b): international commercial arbitration, (i) the rules of law designated by the parties; (ii) a designation of a country's law means its substantive law, not its conflict of laws rules; (iii) failing designation, the rules of law the tribunal considers appropriate.
• 28(2): ex aequo et bono or as amiable compositeur only if the parties have expressly authorised it.
• 28(3): the tribunal shall in all cases take into account the terms of the contract and trade usages applicable to the transaction. Substituted in 2015.
• 29(1): with more than one arbitrator, any decision is by a majority of all its members, unless otherwise agreed. 29(2): questions of procedure may be decided by the presiding arbitrator if authorised by the parties or all the members.

Test yourself

1. Two Indian companies choose Singapore law in their contract and arbitrate in Delhi. Which law governs the substance? Indian law. Section 28(1)(a) requires a tribunal, where the place of arbitration is in India and the arbitration is not an international commercial arbitration, to decide in accordance with the substantive law for the time being in force in India.

2. What does section 28(1)(b)(ii) prevent? It prevents a choice of a country's law being read as a choice of that country's conflict of laws rules. Unless otherwise expressed, a designation of the law or legal system of a given country refers directly to its substantive law.

3. May an arbitrator decide simply by what seems fair? Only if the parties have expressly authorised the tribunal to decide ex aequo et bono or as amiable compositeur, under section 28(2). Otherwise it decides by law.

4. What is the significance of the 2015 change to section 28(3)? The sub-section now requires the tribunal to "take into account" the terms of the contract and trade usages, rather than to decide "in accordance with" the contract. The change was made to stop awards being set aside merely because a court would have read a clause differently, while leaving an award that ignores the contract vulnerable as patently illegal.

5. One of three arbitrators refuses to agree. Is there an award? Yes. Under section 29(1) any decision of a tribunal with more than one arbitrator is made by a majority of all its members, unless the parties have agreed otherwise. The dissenting opinion is not an award and cannot be enforced.

The rest of section 29A

29A(2), the carrot: if the award is made within six months from the date the tribunal enters upon the reference, the tribunal is entitled to such additional fees as the parties may agree.

Note that sub-section (2) still runs from entering upon the reference, while sub-section (1) now runs from completion of pleadings. Two different starting points in the same section; do not merge them.

29A(3), extension by consent: the parties may, by consent, extend the period for a further period not exceeding six months.

29A(4), the sanction: if the award is not made within the period in sub-section (1) or the extended period under sub-section (3), the mandate of the arbitrator or arbitrators shall terminate unless the Court has, either prior to or after the expiry of the period, extended it.

That is a severe consequence: the tribunal simply ceases to have authority. Note the words "either prior to or after the expiry", which allow the court to revive a mandate that has already lapsed.

Three provisos to sub-section (4):

• while extending, if the Court finds that the proceedings have been delayed for reasons attributable to the arbitral tribunal, it may order reduction of the fees of the arbitrators by not exceeding five per cent for each month of such delay;
• where an application under sub-section (5) is pending, the mandate of the arbitrator shall continue till the disposal of that application; and
• the arbitrator shall be given an opportunity of being heard before the fees is reduced.

The second and third provisos were added by the 2019 amendment and both matter. The second cures a real problem: before it, a mandate could expire while the extension application sat in a queue. The third is elementary fairness to the arbitrator.

29A(5): an extension may be on the application of any of the parties and may be granted only for sufficient cause and on such terms and conditions as the Court may impose.

29A(6): while extending, it is open to the Court to substitute one or all of the arbitrators, and where it does, the proceedings continue from the stage already reached and on the basis of the evidence and material already on record, and the new arbitrators are deemed to have received that evidence and material.

A practical and slightly ruthless provision: the parties do not start again, and the substituted arbitrator inherits the record rather than rehearing it. Contrast section 15(3), where a substitute tribunal may repeat hearings at its discretion.

29A(7): a tribunal reconstituted under this section is deemed to be in continuation of the previous one.

29A(8): it is open to the Court to impose actual or exemplary costs upon any of the parties.

29A(9): an application under sub-section (5) shall be disposed of as expeditiously as possible, with an endeavour to dispose of it within sixty days from service of notice on the opposite party.

Section 29B: the fast track procedure

29B(1): notwithstanding anything in the Act, the parties may, at any stage before or at the time of appointment of the tribunal, agree in writing to have their dispute resolved by the fast track procedure.

29B(2): while so agreeing, they may agree that the tribunal shall consist of a sole arbitrator chosen by the parties.

29B(3): the procedure is:

• (a) the tribunal shall decide the dispute on the basis of written pleadings, documents and submissions filed by the parties without any oral hearing;
• (b) the tribunal may call for further information or clarification;
• (c) an oral hearing may be held only if all the parties make a request, or if the tribunal considers it necessary to clarify certain issues;
• (d) if an oral hearing is held, the tribunal may dispense with technical formalities and adopt such procedure as it deems appropriate for expeditious disposal.

29B(4): the award shall be made within six months from the date the arbitral tribunal enters upon the reference.

29B(5): if it is not, sub-sections (3) to (9) of section 29A apply.

29B(6): the fees payable to the arbitrator and the manner of payment shall be as agreed between the arbitrator and the parties.

Compare section 29B(3)(c) with the first proviso to section 24(1). In an ordinary arbitration one party can insist on an oral hearing; in a fast track arbitration all the parties must request it, or the tribunal must think it necessary. That is the trade-off the parties accept when they choose the procedure.

Note also the starting point: section 29B(4) runs from entering upon the reference, not from completion of pleadings.

The three periods, side by side

A worked example

A domestic arbitration. All three arbitrators receive written notice of appointment on 1 February. Pleadings close on 15 June. The tribunal is still hearing evidence the following September.

When must the award be made? Within twelve months of 15 June, the date of completion of pleadings, under section 29A(1) as substituted in 2019. So by 15 June the following year.

Were the pleadings in time? Section 23(4) required them to be completed within six months of 1 February, that is by 1 August. They closed on 15 June, so yes.

Could the tribunal have earned more? Under section 29A(2), if the award had been made within six months of the tribunal entering upon the reference, it would have been entitled to such additional fees as the parties agreed.

The twelve months is running out and the parties want more time. Under section 29A(3) they may extend by consent by a further period not exceeding six months.

That is not enough either. Now only the Court can extend, under section 29A(4) and (5), on the application of any party, for sufficient cause and on such terms as it imposes. It may extend before or after expiry.

The delay was the tribunal's fault. Under the first proviso to section 29A(4), the Court may reduce the arbitrators' fees by up to five per cent for each month of delay, after giving the arbitrator an opportunity of being heard.

Nobody applies and the period expires. The mandate terminates under section 29A(4). If an application under sub-section (5) had been pending, the second proviso would have kept the mandate alive until it was disposed of.

The Court extends but replaces the presiding arbitrator. Section 29A(6) allows it, and the proceedings continue from the stage already reached on the existing evidence and material, which the new arbitrator is deemed to have received.

What beginners get wrong

The twelve months no longer runs from entering upon the reference. Since 2019 it runs from completion of pleadings, except in Jammu and Kashmir and Ladakh.

The mandate for twelve months does not apply to international commercial arbitration, where the proviso makes it an endeavour.

Section 29A(2) and section 29B(4) do run from entering upon the reference, so the section contains two different starting points.

Only the parties can grant the first six month extension, by consent under section 29A(3); after that only the Court.

Fast track needs agreement in writing, at or before the appointment of the tribunal, and it removes a single party's right to insist on an oral hearing.

Quick revision

• 29A(1): domestic award within twelve months of completion of pleadings under section 23(4). Proviso: international commercial arbitration, twelve months as an endeavour.
• 29A(2): additional fees if the award is made within six months of entering upon the reference.
• 29A(3): parties may extend by consent by up to six months.
• 29A(4): otherwise the mandate terminates unless the Court extends, before or after expiry. Provisos: fee reduction up to five per cent per month of delay attributable to the tribunal; mandate continues while a sub-section (5) application is pending; arbitrator to be heard before fees are reduced.
• 29A(5) to (9): extension only for sufficient cause; the Court may substitute arbitrators and the proceedings continue on the existing record; the reconstituted tribunal is a continuation; actual or exemplary costs may be imposed; endeavour to decide the application within sixty days.
• 29B: written agreement before or at appointment; may be a sole arbitrator; decided on documents without oral hearing; oral hearing only if all parties request or the tribunal considers it necessary; award within six months of entering upon the reference; then section 29A(3) to (9) apply; fees as agreed.

Test yourself

1. From what date does the twelve month period run in a domestic arbitration? From the date of completion of pleadings under section 23(4), following the substitution of section 29A(1) by the 2019 amendment. It previously ran from the date the tribunal entered upon the reference, and it still does under the Jammu and Kashmir and Ladakh State amendment.

2. Does the twelve month limit apply to an international commercial arbitration? Not as a mandate. The proviso to section 29A(1) provides that such an award may be made as expeditiously as possible and that an endeavour may be made to dispose of the matter within twelve months of completion of pleadings.

3. What happens if the award is not made in time and nobody has applied for an extension? The mandate of the arbitrator or arbitrators terminates under section 29A(4). The Court may extend the period either before or after its expiry, and if an application under sub-section (5) is pending the mandate continues until it is disposed of.

4. Can a court punish a tribunal for delay? It may reduce the arbitrators' fees by not exceeding five per cent for each month of delay, where it finds the proceedings were delayed for reasons attributable to the tribunal, and only after giving the arbitrator an opportunity of being heard.

5. In a fast track arbitration, can one party insist on an oral hearing? No. Under section 29B(3)(c) an oral hearing may be held only if all the parties request it, or if the tribunal considers it necessary to clarify certain issues. That is narrower than the first proviso to section 24(1), under which a single party's request suffices in an ordinary arbitration.

A practical caution that the section does not spell out. Where the tribunal itself acts as mediator or conciliator and the settlement fails, the objection this chapter opened with returns in full force. Compare sections 80 and 81 of the same Act, in chapter 580, which bar a conciliator from acting as arbitrator in the same dispute and keep what was said in conciliation out of later proceedings. Those sections apply to Part III conciliations, and they show what the drafters thought the risk was. In practice parties who want a mediation during an arbitration often ask somebody other than the tribunal to conduct it.

Section 30(2): what happens when they settle

If, during arbitral proceedings, the parties settle the dispute, the arbitral tribunal shall terminate the proceedings and, if requested by the parties and not objected to by the arbitral tribunal, record the settlement in the form of an arbitral award on agreed terms.

Two limbs, and the difference is important.

Termination is mandatory. If the parties settle, the tribunal shall terminate the proceedings. There is nothing left to decide.

Recording it as an award is not automatic. It happens only if the parties request it and the tribunal does not object.

Why would a tribunal object? Because an award on agreed terms is enforceable as a decree, and a tribunal should not lend that force to terms it can see are unlawful, or that appear to be a device, or that go beyond the dispute referred to it. The Act gives it a veto for that reason.

Section 30(3): the form, and the effect

An arbitral award on agreed terms shall be made in accordance with section 31 and shall state that it is an arbitral award.

Section 30(4): an arbitral award on agreed terms shall have the same status and effect as any other arbitral award on the substance of the dispute.

Sub-section (4) is the payoff and the sentence to quote. A settlement recorded under section 30 is not a mere agreement. It has the same status and effect as an award made after a full contest, which means:

• it is final and binding under section 35;
• it is enforceable as a decree of the court under section 36; and
• it can be set aside only on the section 34 grounds.

Section 31 must still be complied with, so the award on agreed terms must be in writing, signed by the members of the tribunal, and dated, with the place of arbitration stated. But note the exception in section 31(3): an award need not state reasons where it is an award on agreed terms under section 30. That is obvious once seen, since the reason is that the parties agreed.

Compared with the other settlement routes in this book

Look at the third row. Section 74 defines the effect of a conciliation settlement by reference to section 30. So section 30 is not only a provision about arbitration; it is the yardstick the Act uses for settlements generally. Chapter 570 works through section 74.

A worked example

An arbitration over a delayed construction project has run for eight months. After the claimant's evidence, both sides can see roughly where the case is going. At a hearing the presiding arbitrator suggests that this might be a case for settlement.

May he say that? Yes. Section 30(1) makes it not incompatible with the arbitration agreement for the tribunal to encourage settlement.

The parties ask the tribunal to conduct a mediation. It may do so, because section 30(1) permits the use of mediation, conciliation or other procedures with the agreement of the parties. Both sides should think about what happens if it fails, since the tribunal will then decide the case having heard their settlement positions.

They agree on Rs. 2.1 crore payable in four instalments. Under section 30(2) the tribunal shall terminate the proceedings. If the parties request it and the tribunal does not object, it records the settlement as an arbitral award on agreed terms.

What does that award have to contain? It must comply with section 31: in writing, signed, dated, with the place of arbitration stated, and by section 30(3) it must state that it is an arbitral award. Under section 31(3) it need not give reasons.

The respondent pays two instalments and stops. The claimant executes. Under section 30(4) the award has the same status and effect as any other award, so section 36 applies and it is enforced as a decree of the court.

Could the respondent argue it was only a settlement agreement and must be sued upon? No. That is exactly what section 30(4) prevents.

Suppose the settlement had included a term releasing a director from a criminal complaint. The tribunal would be entitled to object under section 30(2), because the settlement would go beyond the dispute referred and would purport to compromise a matter that is not arbitrable at all. Chapter 250 explains why.

What beginners get wrong

An arbitrator encouraging settlement is not exceeding his function. Section 30(1) says it is not incompatible with the arbitration agreement.

The tribunal cannot mediate without the parties' agreement. The condition attaches to the use of mediation, conciliation or other procedures.

Recording the settlement as an award is not automatic. The parties must request it and the tribunal must not object.

An award on agreed terms is a real award. Section 30(4): the same status and effect as any other award on the substance.

It does not need reasons. Section 31(3) excepts an award on agreed terms.

Quick revision

• 30(1): encouraging settlement is not incompatible with an arbitration agreement; with the agreement of the parties the tribunal may use mediation, conciliation or other procedures at any time during the proceedings.
• 30(2): on settlement the tribunal shall terminate the proceedings, and if the parties request and the tribunal does not object, record the settlement as an arbitral award on agreed terms.
• 30(3): such an award is made in accordance with section 31 and shall state that it is an arbitral award.
• 30(4): it has the same status and effect as any other arbitral award on the substance of the dispute, so section 35 finality, section 36 enforcement and section 34 challenge all apply.
• Section 31(3) excuses reasons for an award on agreed terms. Section 74 defines the effect of a conciliation settlement by reference to section 30.

Test yourself

1. May an arbitrator try to get the parties to settle? Yes. Section 30(1) provides that it is not incompatible with an arbitration agreement for the tribunal to encourage settlement, and, with the agreement of the parties, to use mediation, conciliation or other procedures at any time during the proceedings.

2. The parties settle. Must the tribunal record the settlement as an award? No. It must terminate the proceedings, but it records the settlement as an arbitral award on agreed terms only if the parties request it and the tribunal does not object.

3. What is the effect of an award on agreed terms? Under section 30(4) it has the same status and effect as any other arbitral award on the substance of the dispute, so it is final and binding under section 35, enforceable as a decree under section 36, and challengeable only under section 34.

4. Must such an award give reasons? No. Section 31(3) requires an award to state the reasons on which it is based unless the parties have agreed that no reasons are to be given or it is an award on agreed terms under section 30.

5. Why might a tribunal object to recording a settlement as an award? Because the award carries the force of a decree. A tribunal may properly object where the terms are unlawful, go beyond the dispute referred to it, or purport to compromise a matter that is not arbitrable.

Section 31(6): interim awards

The arbitral tribunal may, at any time during the arbitral proceedings, make an interim arbitral award on any matter with respect to which it may make a final arbitral award.

Read with section 2(1)(c), under which "arbitral award" includes an interim award. So an interim award is an award for all purposes: it must comply with section 31, it can be challenged under section 34, and it can be enforced under section 36.

Do not confuse an interim award under section 31(6) with an interim measure under section 17. An interim award finally decides some part of the dispute; an interim measure is protective and provisional, and decides nothing.

Section 31(7): interest, in two periods

Clause (a), pre-award interest: unless otherwise agreed, where and in so far as an award is for the payment of money, the tribunal may include interest, at such rate as it deems reasonable, on the whole or any part of the money, for the whole or any part of the period between the date on which the cause of action arose and the date on which the award is made.

Clause (b), post-award interest: a sum directed to be paid by an award shall, unless the award otherwise directs, carry interest at the rate of two per cent higher than the current rate of interest prevalent on the date of award, from the date of award to the date of payment.

Clause (b) was substituted by the 2015 amendment and the change is one students get wrong. The earlier provision fixed a flat eighteen per cent per annum. The present rule is current rate plus two per cent, and the Explanation takes "current rate of interest" from section 2(b) of the Interest Act 1978.

Three points to hold together. Pre-award interest is a discretion, at a rate the tribunal thinks reasonable, over a period it chooses. Post-award interest is a default that runs automatically unless the award directs otherwise. And both yield to the parties' agreement, since clause (a) opens with "unless otherwise agreed" and clause (b) with "unless the award otherwise directs".

Section 31(8) and 31A: the costs regime

Section 31(8), as substituted in 2015: the costs of an arbitration shall be fixed by the arbitral tribunal in accordance with section 31A.

Section 31A is a complete costs code, and it was one of the more ambitious parts of the 2015 amendment.

31A(1): in relation to any arbitration proceeding, or a proceeding under any provision of the Act pertaining to the arbitration, the Court or arbitral tribunal, notwithstanding anything contained in the Code of Civil Procedure 1908, shall have the discretion to determine (a) whether costs are payable by one party to another, (b) the amount, and (c) when they are to be paid.

The Explanation defines costs as reasonable costs relating to (i) the fees and expenses of the arbitrators, Courts and witnesses, (ii) legal fees and expenses, (iii) any administration fees of the institution supervising the arbitration, and (iv) any other expenses incurred in connection with the arbitral or Court proceedings and the award.

31A(2), the general rule: (a) the unsuccessful party shall be ordered to pay the costs of the successful party; or (b) the Court or tribunal may make a different order for reasons to be recorded in writing.

This is loser pays, stated as a general rule, with any departure requiring written reasons. Indian civil litigation had never really achieved that, and section 31A is the Act trying to change the economics of bringing a hopeless claim or defence.

31A(3), what is taken into account: all the circumstances, including (a) the conduct of all the parties; (b) whether a party has succeeded partly; (c) whether a party made a frivolous counterclaim leading to delay; and (d) whether any reasonable offer to settle was made by a party and refused by the other.

Clause (d) is worth noticing. A party who refuses a reasonable settlement offer and then does no better at the award can be penalised in costs. That is a direct incentive towards the settlement Module III is about, written into the arbitration Part.

31A(4): the order may include that a party pay (a) a proportion of another's costs; (b) a stated amount; (c) costs from or until a certain date only; (d) costs incurred before proceedings began; (e) costs relating to particular steps; (f) costs relating only to a distinct part of the proceedings; and (g) interest on costs.

31A(5): an agreement that a party is to pay the whole or part of the costs of the arbitration in any event shall be valid only if made after the dispute has arisen.

Compare the proviso to section 12(5) in chapter 280. The Act uses the same technique twice: a clause imposed in the original contract is void, but the parties may agree the same thing once a dispute exists and they can see what they are giving up. The mischief is the stronger party's standard form.

A worked example

A three-member tribunal decides that a contractor must pay Rs. 90 lakhs. One arbitrator disagrees and refuses to sign. The award is signed by the other two on 8 April at a hearing held in Pune, the seat being Mumbai. A copy reaches the contractor's advocate on 12 April and the contractor himself on 25 April. The award says nothing about interest.

Is the award valid without three signatures? Yes, under section 31(2), the signatures of the majority of all the members suffice, so long as the reason for the omitted signature is stated in the award.

Where was it made? At Mumbai. Section 31(4) requires the award to state the place of arbitration as determined under section 20 and deems the award made at that place, whatever the physical venue of signing.

When does the section 34 period start? From the receipt of the award by the party, so the 25 April date is the one to examine, not the advocate's receipt on 12 April. Chapter 400 works through section 34(3).

What interest runs? The award is silent, so no pre-award interest was awarded, that being a discretion under section 31(7)(a). But post-award interest runs automatically under clause (b), at two per cent above the current rate of interest prevalent on the date of the award, from the date of the award to payment, because the award has not directed otherwise.

Who pays the costs? Under section 31(8) the tribunal fixes them in accordance with section 31A, and under section 31A(2)(a) the general rule is that the unsuccessful party pays the successful party's costs, any different order requiring written reasons.

The contractor had offered Rs. 85 lakhs six months ago and it was refused. That is expressly relevant under section 31A(3)(d), and it may reduce or reverse the costs order even though the contractor lost.

What beginners get wrong

A reasoned award is the default, not the exception, under section 31(3).

Post-award interest is not eighteen per cent. Since 2015 it is the current rate of interest plus two per cent, taking the meaning from section 2(b) of the Interest Act 1978.

The place stated under section 31(4) is the seat, and the award is deemed made there wherever it was signed.

Delivery under section 31(5) is to the party. Limitation under sections 33 and 34 runs from that receipt.

An interim award is not an interim measure. Section 31(6) against section 17.

A costs clause imposed in the original contract is not valid. Section 31A(5) requires it to be made after the dispute has arisen.

Quick revision

• 31(1) and (2): in writing, signed by the members; a majority's signatures suffice if the reason for an omitted signature is stated.
• 31(3): reasons required unless the parties agreed otherwise or it is an award on agreed terms under section 30.
• 31(4): state the date and the place of arbitration under section 20; the award is deemed made at that place.
• 31(5): a signed copy delivered to each party. 31(6): an interim award may be made on any matter on which a final award could be made.
• 31(7)(a): pre-award interest at a reasonable rate, on the whole or part, for the whole or part of the period from the cause of action to the award, unless otherwise agreed. (b): post-award interest at two per cent above the current rate from award to payment unless the award directs otherwise; Interest Act 1978 section 2(b) supplies the meaning.
• 31A: loser pays as the general rule, departure needing written reasons; regard to conduct, partial success, frivolous counterclaims and a refused reasonable settlement offer; a wide menu of costs orders; and a costs-in-any-event agreement is valid only if made after the dispute arose.

Test yourself

1. Two of three arbitrators sign the award. Is it valid? Yes, under section 31(2), provided the reason for the omitted signature is stated in the award. The signatures of the majority of all the members are sufficient.

2. Must an award give reasons? Yes, under section 31(3), unless the parties have agreed that no reasons are to be given or the award is an arbitral award on agreed terms under section 30.

3. The award is silent about interest. Does any interest run after it? Yes. Section 31(7)(b) provides that a sum directed to be paid shall, unless the award otherwise directs, carry interest at two per cent above the current rate of interest prevalent on the date of the award, from the date of the award to the date of payment.

4. What is the general rule on costs, and can it be departed from? Under section 31A(2)(a) the unsuccessful party shall be ordered to pay the costs of the successful party. The Court or tribunal may make a different order under clause (b), but must record its reasons in writing.

5. A standard form contract says the contractor bears all arbitration costs whatever the outcome. Is that clause effective? No. Section 31A(5) makes an agreement that a party is to pay the whole or part of the costs in any event valid only if it was made after the dispute in question had arisen.

Correction of errors, section 33(1)(a) and (3)

Within thirty days from the receipt of the arbitral award, unless another period has been agreed, a party with notice to the other party may request the tribunal to correct any computation errors, any clerical or typographical errors, or any other errors of a similar nature occurring in the award.

Section 33(3): the tribunal may correct any such error on its own initiative, within thirty days from the date of the arbitral award.

Note the two different starting points, which is a fine point students miss. A party's request runs from receipt of the award; the tribunal's own correction runs from the date of the award.

And note the limit of the power. It reaches computation, clerical and typographical errors and errors of a similar nature. It is not a power to reconsider the merits. A tribunal that used section 33 to change its mind about liability would be acting without jurisdiction, being functus officio under section 32(3).

Interpretation, section 33(1)(b)

If so agreed by the parties, a party with notice to the other may, within the same thirty days, request the tribunal to give an interpretation of a specific point or part of the award.

This one is available only if the parties have agreed to it, unlike correction. That is a real limitation and it is easy to overlook.

Section 33(2): if the tribunal considers a request under sub-section (1) justified, it shall make the correction or give the interpretation within thirty days from the receipt of the request, and the interpretation shall form part of the arbitral award.

"Shall form part of the arbitral award" matters: the interpretation is not a separate document but is absorbed into the award itself.

Additional award, section 33(4) and (5)

Unless otherwise agreed, a party with notice to the other may, within thirty days from receipt of the award, request the tribunal to make an additional arbitral award as to claims presented in the arbitral proceedings but omitted from the arbitral award.

Section 33(5): if the tribunal considers the request justified, it shall make the additional award within sixty days from receipt of the request.

Note the difference in the deadline: thirty days for a correction or interpretation, sixty days for an additional award, which is fair because an additional award may require the tribunal to decide something for the first time.

And note the limit: claims presented in the proceedings but omitted from the award. A party cannot use section 33(4) to introduce a claim it never made.

Section 33(6): the tribunal may extend, if necessary, the period within which it shall make a correction, give an interpretation or make an additional award under sub-sections (2) or (5).

Section 33(7): section 31 applies to a correction, an interpretation or an additional award. So each must be in writing, signed, dated, and state the place, and a signed copy must be delivered to each party.

Why section 33 matters for limitation

This is the practical reason the chapter exists, and it is worth an examination answer on its own.

Section 34(3) requires an application to set aside an award to be made within three months from the date on which the party received the award; and, crucially, if a request has been made under section 33, from the date on which that request has been disposed of by the tribunal.

So a section 33 request restarts the section 34 clock. A party that is close to the three month limit and makes a section 33 request buys time; a party that ignores a pending section 33 request and files under section 34 on the original date may find the application premature or the calculation disputed.

The corollary is a trap. The clock restarts on the disposal of the request, not on the making of it, and a request that is frivolous is still disposed of. Work the dates carefully in any problem question.

A worked example

An award is dated 3 May and received by both parties on 10 May. It awards Rs. 62 lakhs, but the tribunal has added up the six heads of claim wrongly, the total of the individual figures being Rs. 64 lakhs; it has also failed to deal at all with the claimant's separate claim for storage charges, which was pleaded and argued.

The arithmetic. A computation error under section 33(1)(a). Either party may request a correction within thirty days of 10 May, that is by 9 June, with notice to the other. The tribunal could also have corrected it on its own initiative, but only within thirty days of 3 May, the date of the award.

The omitted claim. Not a correction; it is a claim presented in the proceedings but omitted from the award, so it is an additional award under section 33(4). The request must be made within thirty days of receipt, and if the tribunal considers it justified it must make the additional award within sixty days of the request under section 33(5).

The respondent wants the tribunal to explain what "net of retention" means in paragraph 41. That is an interpretation under section 33(1)(b), and it is available only if the parties agreed to that remedy. If they did not, the tribunal cannot give it.

Can the tribunal reconsider its finding on delay while it is at it? No. Under section 32(3) its mandate terminated with the proceedings, and section 33 does not reopen the merits. It is functus officio except for the specific powers in section 33 and for section 34(4).

What does this do to the setting aside period? The three months under section 34(3) will run from the date the section 33 request is disposed of, not from 10 May.

What beginners get wrong

Section 33 is not an appeal to the tribunal. It covers computation, clerical and typographical errors and similar, interpretation where agreed, and claims omitted from the award.

Interpretation requires the parties' agreement; correction and an additional award do not.

The tribunal's own correction runs from the date of the award, a party's request from receipt.

An additional award has sixty days, not thirty, from receipt of the request.

The tribunal is functus officio after termination, subject only to section 33 and section 34(4).

A section 33 request moves the section 34 limitation start date to the disposal of the request.

Quick revision

• 32(1): proceedings end by the final award or by an order under sub-section (2). 32(2): order where the claimant withdraws (unless the respondent objects and the tribunal recognises a legitimate interest in a final settlement), the parties agree, or continuation has become unnecessary or impossible.
• 32(3): the mandate terminates with the proceedings, subject to section 33 and section 34(4).
• 33(1)(a): correction of computation, clerical, typographical and similar errors, on a party's request within thirty days of receipt, with notice. 33(3): on the tribunal's own initiative within thirty days of the date of the award.
• 33(1)(b): interpretation of a specific point or part, only if the parties so agreed, within the same period. 33(2): correction or interpretation within thirty days of the request; the interpretation forms part of the award.
• 33(4): additional award for claims presented but omitted, requested within thirty days of receipt. 33(5): made within sixty days of the request. 33(6): the tribunal may extend. 33(7): section 31 applies to all three.
• Section 34(3) runs from receipt of the award, or from the disposal of a section 33 request.

Test yourself

1. When does an arbitral tribunal become functus officio? On the termination of the arbitral proceedings, under section 32(3), which occurs on the final award or on an order under section 32(2). The mandate terminates subject only to section 33 and section 34(4).

2. A claimant withdraws its claim. Must the tribunal terminate the proceedings? Usually yes, under section 32(2)(a). But not where the respondent objects to the order and the tribunal recognises a legitimate interest on his part in obtaining a final settlement of the dispute.

3. What is the difference between a correction and an additional award? A correction under section 33(1)(a) deals with computation, clerical or typographical errors or errors of a similar nature already in the award. An additional award under section 33(4) decides a claim that was presented in the proceedings but omitted from the award, and the tribunal has sixty days from the request rather than thirty.

4. Can a party ask the tribunal to explain an ambiguous paragraph? Only if the parties have agreed to that remedy. Section 33(1)(b) makes a request for an interpretation of a specific point or part of the award available "if so agreed by the parties", unlike correction, which needs no such agreement.

5. How does section 33 affect the time for a setting aside application? Section 34(3) runs the three month period from the date on which the party received the award, or, if a request has been made under section 33, from the date on which that request has been disposed of by the arbitral tribunal.

Ground (iv) is the excess of jurisdiction ground, and its proviso is the Act's severability rule for awards: the good part survives if it can be separated.

Ground (v) protects the parties' agreed process, but only so far as that agreement was itself lawful. An agreement conflicting with a mandatory provision is not protected, which is where section 12(5) and section 18 come back in.

"On the basis of the record of the arbitral tribunal" was inserted by the 2019 amendment, replacing "furnishes proof that". The change is significant: a section 34 application is not an occasion for fresh evidence. The court looks at the record the tribunal had.

Section 34(2)(b): the two grounds the Court may find

• (i) the subject matter of the dispute is not capable of settlement by arbitration under the law for the time being in force. This is arbitrability, chapter 250.
• (ii) the award is in conflict with the public policy of India.

What public policy means, since 2015

Public policy was the ground that swallowed the section, and Parliament closed it in 2015 by adding two Explanations.

Explanation 1: an award is in conflict with the public policy of India only if:

• (i) the making of the award was induced or affected by fraud or corruption, or was in violation of section 75 or section 81;
• (ii) it is in contravention with the fundamental policy of Indian law; or
• (iii) it is in conflict with the most basic notions of morality or justice.

Explanation 2: the test of contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute.

Read Explanation 1's opening word: only. Three categories, closed. And note the reference to sections 75 and 81, which are the confidentiality and admissibility provisions of the conciliation Part, chapter 580; they appear here because an award induced by breaching the confidence of a conciliation is treated as offending public policy.

Section 34(2A): patent illegality, and it is domestic only

An arbitral award arising out of arbitrations other than international commercial arbitrations may also be set aside by the Court if the Court finds that the award is vitiated by patent illegality appearing on the face of the award.

Proviso: an award shall not be set aside merely on the ground of an erroneous application of the law or by reappreciation of evidence.

Two things must be said together, and most notes say only the first.

Patent illegality is a ground, and it was created by the courts before Parliament wrote it into the Act. The three cases below trace it.

And it is available only in a domestic arbitration. Sub-section (2A) says "arising out of arbitrations other than international commercial arbitrations". So an award in an international commercial arbitration seated in India, which is still a domestic award under section 2(7), cannot be attacked as patently illegal.

And the proviso is half the ground. An error of law is not enough. Reappreciating evidence is not permitted. What is caught is illegality appearing on the face of the award, of which the clearest example is an award that ignores the terms of the contract, contrary to section 28(3), chapter 350.

The three cases, in order

Saw Pipes: where patent illegality came from

Oil and Natural Gas Corporation Ltd v. Saw Pipes Ltd, (2003) 5 SCC 705, decided 17 April 2003.

Facts. A challenge to an arbitral award in which the Court had to decide whether an award contrary to the terms of the contract, or to the provisions of the Act, could be set aside as being in conflict with the public policy of India, that being the only ground on which such a complaint could then be brought.

Held. The Court read "public policy" in section 34 widely enough to include an award that is patently illegal, covering an award contrary to the substantive provisions of law, to the provisions of the Act, or to the terms of the contract, so that such an award could be set aside.

Why it matters. It is the origin of the ground now in section 34(2A). It also shows why the ground had to be moved: reading patent illegality into "public policy" meant that the wider concept travelled into Part II as well, where a much narrower test is right for a foreign award. Chapter 520 works that through.

Associate Builders: the picture just before the amendment

Associate Builders v. Delhi Development Authority, (2015) 3 SCC 49, decided 25 November 2014, R.F. Nariman J with Ranjan Gogoi J.

Facts. A challenge to an arbitral award decided shortly before the 2015 amendment, which gave the Court occasion to set out systematically what the public policy ground had come to contain.

Held. The Court analysed the heads of public policy then recognised, listing the fundamental policy of Indian law, the interest of India, and justice or morality, together with patent illegality, and explained the content of each.

Why it matters. Compare that list with Explanation 1 as enacted in 2015 and the change is visible: "the interest of India" is gone, and "justice or morality" has become "the most basic notions of morality or justice", which is deliberately narrower. Associate Builders remains valuable for its analysis of what the surviving heads mean; it is not a statement of the current list.

Ssangyong: the position after 2015

Ssangyong Engineering and Construction Co Ltd v. National Highways Authority of India, AIR 2019 SC 5041, decided 8 May 2019, R.F. Nariman J with Vineet Saran J.

Facts. A challenge to an arbitral award which required the Court to consider what the 2015 amendment had done to the grounds for setting aside, and in particular to the public policy ground, and to decide to which applications the amended section 34 applies.

Held. The Court described the effect of the amendment in terms worth learning:

There is no doubt that in the present case, fundamental changes have been made in the law. The expansion of "public policy of India" in ONGC Ltd. v. Saw Pipes Ltd. and ONGC Ltd. v. Western Geco International Ltd. has been done away with, and a new ground of "patent illegality", with inbuilt exceptions, has been introduced.

And on the temporal question it declared that section 34 as amended applies only to section 34 applications made to the Court on or after 23 October 2015, irrespective of when the arbitration proceedings commenced.

Why it matters. It is the authoritative statement of the position after 2015, and its declaration is the practical rule for dating a problem: look at when the section 34 application was made, not when the arbitration began.

Section 34(3): the time limit, and how strict it is

An application may not be made after three months have elapsed from the date on which the party making it received the arbitral award, or, if a request had been made under section 33, from the date on which that request had been disposed of by the tribunal.

Proviso: if the Court is satisfied that the applicant was prevented by sufficient cause from applying within three months, it may entertain the application within a further period of thirty days, but not thereafter.

"But not thereafter" is the whole point. This is not the ordinary law of limitation, where delay can be condoned on sufficient cause without an outer limit. Here there is an absolute ceiling of three months plus thirty days, and a court has no power to go beyond it.

Two dates matter and students confuse them: the party's receipt of the award, under section 31(5), and the disposal of a section 33 request, chapter 390.

The Jammu and Kashmir and Ladakh State amendment doubles both periods, substituting six months for three months and sixty days for thirty days, and inserts its own sub-section (2A) on patent illegality without the international commercial arbitration carve-out.

Section 34(4) to (6): the remaining machinery

Section 34(4): on receipt of an application, the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period it determines, in order to give the tribunal an opportunity to resume the arbitral proceedings or take such other action as in the opinion of the tribunal will eliminate the grounds for setting aside.

This is the Act's repair mechanism, and it is why section 32(3) makes the termination of the mandate subject to section 34(4). Rather than destroying an award for a curable defect, the court can send it back. Note the two conditions: it must be appropriate, and a party must request it.

Section 34(5), inserted in 2015: an application shall be filed only after issuing a prior notice to the other party, and shall be accompanied by an affidavit endorsing compliance with that requirement.

Section 34(6), inserted in 2015: an application shall be disposed of expeditiously, and in any event within one year from the date on which the notice under sub-section (5) is served.

A worked example

A domestic award for Rs. 3 crore is received by the losing party on 1 March. It reads the contract's price escalation clause in a way the party says is impossible, ignores a clause capping liability, and decides a counterclaim for defamation that was never referred.

What is the only remedy? An application to set aside under section 34(1). There is no appeal on the merits.

The defamation counterclaim. Ground (2)(a)(iv): the award contains decisions on matters beyond the scope of the submission. And by the proviso, if that part can be separated, only that part is set aside and the rest survives.

The ignored liability cap. This is the classic patent illegality argument under section 34(2A), because section 28(3) requires the tribunal to take the terms of the contract into account. It is available here because this is a domestic arbitration. It would not be available if one party were foreign.

The escalation clause. Here the party must be careful. If its complaint is really that the tribunal read the clause wrongly, the proviso to section 34(2A) defeats it: an award is not to be set aside merely for an erroneous application of the law or by reappreciation of evidence.

By when must it apply? Within three months of 1 March. If it was prevented by sufficient cause, the Court may allow a further thirty days, but not thereafter. If it had made a section 33 request, the three months would run from the disposal of that request.

What must it do before filing? Issue prior notice to the other party and file an affidavit endorsing compliance, under section 34(5).

Could the court save the award instead of setting it aside? Yes. If a party requests it and the court thinks it appropriate, section 34(4) lets the court adjourn and give the tribunal a chance to resume and eliminate the ground.

Change the parties. Make the claimant a company incorporated in Singapore. It remains a domestic award under section 2(7), so section 34 still applies, but patent illegality is no longer available, because section 34(2A) excludes international commercial arbitration.

What beginners get wrong

There is no appeal against an award. Section 34 is the only recourse, and it sets aside rather than varies.

Patent illegality is not available in an international commercial arbitration, even one seated in India.

"Public policy" is now a closed list of three, under Explanation 1, and "the interest of India" is no longer one of them.

The thirty day extension is an absolute ceiling. "But not thereafter" excludes any further condonation.

An error of law is not a ground. The proviso to section 34(2A) says so.

Section 34 is not a rehearing. Since 2019 the applicant must establish clause (a) grounds on the record of the arbitral tribunal, and Explanation 2 forbids a review on the merits.

Quick revision

• 34(1): recourse only by an application to set aside.
• 34(2)(a), the applicant establishes on the record: (i) incapacity; (ii) invalid arbitration agreement; (iii) no proper notice or otherwise unable to present his case; (iv) beyond the scope of the submission, with a severability proviso; (v) composition or procedure contrary to the parties' agreement, unless that agreement conflicted with a non-derogable provision.
• 34(2)(b), the Court finds: (i) not arbitrable; (ii) conflict with public policy of India. Explanation 1: only fraud or corruption or violation of sections 75 or 81; contravention of the fundamental policy of Indian law; or conflict with the most basic notions of morality or justice. Explanation 2: no review on the merits.
• 34(2A): patent illegality on the face of the award, domestic arbitrations only; not for an erroneous application of law or reappreciation of evidence.
• 34(3): three months from receipt of the award, or from disposal of a section 33 request; plus thirty days for sufficient cause, but not thereafter. Jammu and Kashmir and Ladakh: six months and sixty days.
• 34(4): the Court may adjourn to let the tribunal eliminate the grounds. 34(5): prior notice and an affidavit. 34(6): dispose of within one year of that notice.
• Ssangyong (8 May 2019): the Saw Pipes and Western Geco expansion of public policy is done away with; patent illegality is a new ground with inbuilt exceptions; amended section 34 applies to applications made on or after 23 October 2015.

Test yourself

1. Can a court correct an arithmetical mistake in an award under section 34? No. Section 34 permits only setting aside, wholly or in part. A computation error is corrected by the tribunal under section 33(1)(a), within thirty days of receipt of the award.

2. Is patent illegality available against an award made in an international commercial arbitration seated in Mumbai? No. Section 34(2A) applies only to awards arising out of arbitrations other than international commercial arbitrations, even though such an award is a domestic award under section 2(7).

3. State the three limbs of public policy after 2015. Under Explanation 1 to section 34(2)(b)(ii), an award conflicts with the public policy of India only if the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81; or it contravenes the fundamental policy of Indian law; or it conflicts with the most basic notions of morality or justice.

4. An award is received on 1 June. The party applies on 20 October. Can the court hear it? No. Three months expired on 1 September, and the proviso to section 34(3) allows a further thirty days on sufficient cause "but not thereafter". 20 October is beyond that absolute outer limit, and no further condonation is possible.

5. The tribunal decided one claim that was outside the reference. Must the whole award go? No, if it can be separated. The proviso to section 34(2)(a)(iv) provides that where the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part containing decisions on matters not submitted may be set aside.