IMPORTANT POINT
A successful conciliation proceeding comes to an end only when the settlement agreement signed by the parties comes into existence. It is such an agreement which has the status and effect of legal sanctity of an arbitral award under Section 74 of the Arbitration and Conciliation Act, 1986 and as such a settlement agreement prepared in secrecy and sent to count in sealed cover by Conciliator is not binding on parties.

Headnote:Arbitration and Conciliation Act, 1986-Sections 61 to 81-Conciliation proceedings settlement-Conditions precedent to make it binding on parties-Conciliation proceedings when come to an end-Settlement agreement must be signed by parties to be binding on them-Successful conciliation proceeding comes to an end only when settlement agreement is signed by parties-Conciliator drew up settlement agreement himself in secrecy and sent same to Court in sealed cover-Court refused even to entertain objection against said settlement agreement-Held, Conciliator committed illegality-High Court not correct in confirming settlement agreement received from Conciliator-Settlement agreement set aside.
       From the statutory provisions position is manifest that a conciliator is a person who is to assist the parties to settle the disputes between them amicably. For this purpose the conciliator is vested with wide powers to decide the procedure to be followed by him untrammeled by the procedural laws like the Code of Civil Procedure or the Indian Evidence Act, 1872. When the parties are able to resolve the dispute between them by mutual agreement and it appears to the conciliator that there exists an element of settlement which may be acceptable to the parties he is to proceed in accordance with the procedure laid down in Section 73, formulate the terms of a settlement and make it over to the parties for their observations; and the ultimate step to be taken by a conciliator is to draw up a settlement in the light of the observations made by the parties to the terms formulated by him. The settlement takes shape only when the parties draw up the settlement agreement or request the conciliator to prepare the same and affix their signatures to it. Under sub-section (3) of Section 73 the settlement agreement signed by the parties is final and binding on the parties and persons claiming under them. It follows therefore that a successful conciliation proceeding comes to an end only when the settlement agreement signed by the parties comes into existence. It is such an agreement which has the status and effect of legal sanctity of an arbitral award under Section 74. (Para 19)
       In the case in hand, as appears from the materials on record, no such procedure as prescribed under part-III of the Act has been followed by the conciliator. The conciliator appears to have held some meetings with the parties in which there was discussion and thereafter drew up the so called settlement agreement by himself in secrecy and sent the same to the court in a sealed cover. Naturally the so called settlement agreement drawn up by the conciliator does not bear the signatures of the parties. As the impugned order shows the said settlement has been given a status higher than an arbitral award in as much as the court has refused to even entertain any objection against the said settlement agreement reiterating the position that the settlement arrived at by the conciliator will be binding on the parties. The conciliator who is a former Judge of the High Court and the learned Judge who passed the impugned order failed to take note of the provisions of the Act and the clear distinction between an arbitration proceeding and a conciliation proceeding. The learned judge in passing the impugned order failed to notice the apparent illegalities committed by the conciliator in drawing up the so called settlement agreement, keeping it secret from the parties and sending it to the Court without obtaining their signature on the same. The position is well settled that if the statute prescribes a procedure for doing a thing, a thing has to be done according to that procedure. Thus the order passed by the High Court confirming the settlement agreement received from the conciliator is wholly unsupportable. (Para 20)

JUDGMENT

D.P. Mohapatra, J.-Leave granted.

2. Appellant Haresh Dayaram Thakur and respondent No. 3 Pitambar Dayaram Thakur are brothers. Raj Kumari Pitambar Thakur respondent No. 4 is wife of respondent No. 3. The dispute raised in the case centres round the flat bearing No. 16/199 at Ramakrishna Nagar, Khar (W), Mumbai, belonging to the Maharashtra Housing and Area Development Authority, Mumbai (for short MHADA ). The MHADA had granted lease of the said flat to one N.H. Krishanan, who transferred his right, title and interest thereunder to one Manmeet Singh Chadha under an agreement of transfer dated 7th April, 1986. By the agreement for transfer dated 21.11.1989 the right, title and interest of the flat was purchased by the appellant for a consideration of Rs. 3,45,000/-. The appellant also became a member of the society of flat owners of the building called Melody Cooperative Housing Society of which the flat in question is a part. The appellant had applied to MHADA for regularisation of allotment of the flat in his name. In December 1992 on a routine inspection of the premises the Estate Manager of MHADA reported that the property was in occupation of the appellant and his family members including respondent No. 3, though it stood in the name of N.H. Krishnan, and therefore, they were unauthorised occupants of the flat. On receipt of the report a proceeding was initiated under Section 66(1) of the Maharashtra Housing and Development Act, 1966 (for short the Act ). In pursuance of the order dated 23.4.1997 MHADA evicted all the unauthorised occupants from the flat and sealed the same. In the said order leave was given to the present appellant to establish his claim in respect of the property in light of the deed of transfer dated 21.11.1989 and other documents executed by the allottee in his favour. Subsequently, after examining the relevant documents MHADA regularised the allotment of the flat in favour of the appellant by an order under the Act.

3. On 19.9.1998 respondent No. 3 filed Writ Petition No. 5072/98 before the Bombay High Court challenging the order of eviction passed by MHADA under section 66(1) of the Act against him. It was the case of the respondent No. 3 (writ petitioner) that he had also contributed a sum of Rs. 1,25,000/- for the purpose of purchase of the flat alongwith his brother, the appellant herein, though the documents stood in the name of the latter. A Division Bench of the High Court disposed of the Writ Petition by the order dated 7.10.1998 directing, inter alia, that the competent authority of MHADA would re-examine the claims of the respondent No. 3 as well as the appellant herein and pass a speaking order in accordance with the law. In compliance with the directions of the High Court the competent authority of MHADA passed the order dated 18.12.1998 rejecting the claim of respondent No. 3 and confirming the allotment/regularisation of the flat in the name of the appellant.

4. The respondent Nos. 3 & 4 challenged the order dated 18.12.1998 of MHADA by filing a writ petition under Articles 226 and 227 of the Constitution, Writ Petition No. 510/99, asserting their title to the property. They prayed for a writ of certiorari or any other appropriate writ, direction or order under Article 226 of the Constitution of India quashing the order of the Appellate Authority dated 23.4.1997 and the eviction order dated 18.12.1998: for a writ of Mandamus or any appropriate writ, direction or order directing MHADA and its Estate Manager and the respondent No. 7 in the writ petition (appellant herein) to restore to them possession of the flat No. 16/199 at Ramakrishna Nagar, Khar (W), Mumbai and for issue of a writ of mandamus to MHADA to regularise allotment of the said flat in favour of the writ petitioners and for an interim direction restoring possession of the flat to them after obtaining possession thereof from respondent No. 7 (appellant herein). In the said writ petition the High Court by the order dated

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