GITA MITTAL, J.

1. The legal permissibility of referring a complaint cases under Section 138 of the NI Act for amicable settlement through mediation; procedure to be followed upon settlement and the legal implications of breach of the mediation settlement is the subject matter of this judgment. Shri Bharat Chugh, as the concerned Metropolitan Magistrate (NI Act) – Central - 01/THC/Delhi, when seized of Complaint Case Nos. 519662/2016 and 519664/2016 (Old Complaint Case Nos. 2429/2015 and 2430/2015) under Section 138 of the Negotiable Instruments Act (“NI Act” hereafter) passed an order dated 13th January, 2016, the following questions under Section 395 of the Code of Criminal Procedure (“Cr.P.C” hereafter) to this court for consideration :

“1. What is the legality of referral of a criminal compoundable case (such as one u/s 138 of the NI Act) to mediation?

2. Can the Mediation and Conciliation Rules, 2004 formulated in exercise of powers under the CPC, be imported and applied in criminal cases? If not, how to fill the legal vacuum? Is there a need for separate rules framed in this regard (possibly u/s 477 of the CrPC)?

3. In cases where the dispute has already been referred to mediation – What is the procedure to be followed thereafter? Is the matter to be disposed of taking the very mediated settlement agreement to be evidence of compounding of the case and dispose of the case, or the same is to be kept pending, awaiting compliance thereof (for example, when the payments are spread over a long period of time, as is usually the case in such settlement agreements)?

4. If the settlement in Mediation is not complied with – is the court required to proceed with the case for a trial on merits, or hold such a settlement agreement to be executable as a decree?

5. If the Mediated Settlement Agreement, by itself, is taken to be tantamount to a decree, then, how the same is to be executed? Is the complainant to be relegated to file an application for execution in a civil court? If yes, what should be the appropriate orders with respect to the criminal complaint case at hand. What would be the effect of such a mediated settlement vis-à-vis the complaint case?” (Emphasis by us)

The reference has been registered as Crl.Ref.No.1/2016.

2. Given the importance of the questions raised in criminal law, by an order dated 15th March, 2016, we had appointed Mr. Siddharth Aggarwal, Advocate as amicus curiae in the matter. On the 20th of July 2016, having regard to the nature of the above issues which had been crystallized by the ld. Metropolitan Magistrate and in view of their extensive experience on all aspects of mediation, we had also appointed Mr. J.P. Sengh, Sr. Advocate as well as Ms. Veena Ralli, Advocate (currently Member and Organizing Secretary respectively of the Organizing Committee of Samadhan - Delhi High Court Mediation and Conciliation Centre), both senior and experienced mediators, as amici curiae in the matter.

3. Court notice was also issued to the counsel for the parties in both CC Nos.2429/2015 & 2430/2015, Dayawati v. Yogesh Kumar Gosain pending in the court of the Metropolitan Magistrate for appearance before us and they stand represented through counsel before us.

4. Written submissions stand filed by learned amici curiae to assist this court. We have had the benefit of hearing Mr. J.P. Sengh, Senior Advocate, Ms. Veena Ralli, Advocate and Mr. Siddharth Aggarwal, Advocate as amici curiae as well as Mr. Gautam Pal, ld. counsel for the complainant and Mr. Ajay Digpaul, ld. counsel for the respondent in the complaints under Section 138 of the NI Act.

5. We set down hereunder the headings under which we have considered the matter :

I. Factual matrix (paras 6 to 16)

II. Alternate dispute resolution mechanisms statutorily recognized (paras 17 to 20)

III. Statutory provisions (paras 21 to 31)

IV. Scope of Section 89 of the Code of Civil Procedure, 1908 (paras 32 to 41)

V. Statutory power to refer matters for dispute resolution and effect