CBSE Textbook Solutions: Alternative Dispute Resolution in India (ADR) | Legal Studies for Class 12 - Humanities/Arts PDF Download

Based on your understanding, answer the following questions: 

Q1. Ram and Sikander agreed in writing to resolve the disputes arising out of their contract by way of arbitration. A dispute arose between Ram and Sikander. Ram filed a case in the court. Will the court stay the legal proceedings filed by Ram? Discuss. 
Ans: In general, yes. Where parties have a valid written agreement to submit their disputes to arbitration, courts normally defer to that agreement and will stay court proceedings so that the dispute is decided by the agreed arbitral process.

• Legal basis: Indian law gives effect to arbitration agreements and requires courts to refer parties to arbitration when a valid arbitration clause exists.
• What the court does: On a proper application by the other party, the court will generally stay or refuse to continue the suit and refer the parties to arbitration, thereby enforcing the contractual choice of forum.
• Exceptions: A court may refuse to stay proceedings if the arbitration agreement is void, null, inoperative or incapable of being performed; if the dispute is not arbitrable under law; or if there are strong public-policy reasons or fraud that make arbitration inappropriate.
• Practical step: The party opposing the suit (here Sikander) must normally apply to the court to have the matter stayed and referred to arbitration.

Q2: Mr Hari and his friend, Mr Suresh entered into a partnership deed to carry on the business of creative designing. After a year of starting a successful partnership firm, creative differences arose between Mr Hari and Mr Suresh, which created a rift between them. 49 To help resolve the dispute, Mr Sharma, the secretary of a reputed firm, is facilitating them to help them achieve an acceptable agreement. Which dispute resolution method is Mr Sharma resorting to? Explain.
Ans: Mr Sharma is acting as a mediator.

• Definition: Mediation is a voluntary, non-binding process in which a neutral third party helps disputing parties communicate, identify issues and negotiate a mutually acceptable solution.
• Role of Mr Sharma: He facilitates discussion, encourages each partner to express concerns, and helps them explore options for settlement without imposing a decision.
• Why mediation suits this case: It preserves the business relationship, is informal and quicker than litigation, and allows the partners to craft creative solutions tailored to their business needs.
• Outcome: Any agreement reached is based on mutual consent and can be recorded as a settlement; if no agreement is reached, the parties remain free to pursue other remedies.

Q3: Sita and Reena are business partners. After sometime a dispute arose between them. Both of them agreed to submit the dispute between them to Mr Bajaj, a senior member of a law firm. Sita subsequently came to know that Reena and Mr Bajaj are related to each other. Can Sita challenge the authority of Mr Bajaj as an arbitrator? Discuss.
Ans: Yes. Sita can challenge Mr Bajaj's appointment as arbitrator on grounds of possible bias or conflict of interest.

• Impartiality and disclosure: An arbitrator must be impartial and independent. Where a relationship exists between the arbitrator and one party, there is a reasonable ground to suspect bias, particularly if the relationship was not disclosed before appointment.
• Right to challenge: Sita may apply to the appointing authority or to the court (as provided by law) to challenge the arbitrator's authority and seek his removal.
• Possible outcomes: If the relationship creates a reasonable apprehension of bias, the challenge may succeed and a substitute arbitrator will be appointed; if the relationship is remote or fully disclosed and accepted by both parties, the challenge may fail.

Q4: What is the meaning of Ombudsman? Identify equivalent institutions within India. Discuss their roles and limitations.
Ans: An ombudsman is an independent official appointed to receive and investigate complaints from the public about maladministration, poor service or misconduct by public or private bodies and to recommend corrective action. The word is of Swedish origin and broadly means a representative or agent who looks into grievances.
Equivalent institutions in India:

• Lokpal: A national ombudsman to enquire into corruption complaints against public servants at the central level.
• Lokayukta: State-level ombudsmen that investigate corruption and maladministration of state public servants.
• Banking Ombudsman: Appointed by the Reserve Bank of India to resolve customer complaints against banks under a specified scheme.
• Insurance Ombudsman: A forum to address grievances of policyholders against insurance companies.

Roles:

• Investigate complaints and mediate between complainant and the institution concerned.
• Recommend remedial measures and changes in administrative practices.
• Identify systemic problems and promote better public service standards.

Limitations:

• Recommendations are sometimes advisory rather than automatically binding; effective enforcement may require cooperation from the respondent body.
• Jurisdiction is limited: each ombudsman covers only specified sectors or categories of public servants.
• They do not usually conduct criminal prosecutions; their role is largely corrective and recommendatory.
• Resource or capacity constraints can delay resolution, and some citizens may be unaware of these remedies.

• Facilitation: He created space for the parties to communicate, ensured both sides were heard and helped clarify the issues.
• Proposing solutions: By suggesting potential remedies, he went beyond pure facilitation. Conciliation commonly involves the neutral proposing terms of settlement when parties seek such guidance.
• Neutrality and trust: As a neutral, he needed to remain impartial so that both Rakesh and the employer could consider his suggestions fairly.
• Advantage: This approach can lead to a faster, mutually acceptable settlement and help preserve employment relationships.

Q6: A Lokpal is an ombudsman in India while a Lokayukta is a similar anti-corruption ombudsman organization in the Indian States. 
(a) Elaborate on the scope of The Lokpal and Lokayukta Act, 2013. 
(b) Explain the composition of Lokpal under the Act.
Ans: Lokpal and Lokayukta Act, 2013
The Act establishes a mechanism to inquire into allegations of corruption against public servants at the central level (Lokpal) and requires states to set up Lokayuktas. Its scope includes receiving complaints, conducting inquiries or investigations into acts of corruption and recommending prosecution or disciplinary action. The Act seeks to make corruption redressal more accessible and to ensure that complaints against public servants are handled independently and expeditiously. It also provides for procedures to protect complainants and for coordination with investigative agencies where required.
Composition of Lokpal

• The Lokpal is headed by a Chairperson and may have up to eight members.
• At least half of the members must be judicial members (that is, persons who are, or have been, judges).
• Members are selected for their expertise and integrity; they are expected to have experience in public administration, anti-corruption work, finance or related fields.
• The Act also provides for a procedure of selection and for the involvement of a selection committee to ensure an independent and balanced composition.

• Accessibility and Affordability: No court fees are charged, and any fees paid in a pending case are refunded when the dispute is settled in Lok Adalat.
• Informal Procedure: Proceedings are flexible and not bound by strict procedural or evidence rules, which reduces formality and expense.
• Speedy Disposal: Lok Adalats resolve disputes quickly, helping to reduce the burden on regular courts and providing faster relief to parties.
• Binding Awards: Settlements accepted in Lok Adalat are final and binding on the parties and are executable like a court decree.
• Voluntary and Conciliatory Approach: Emphasis is on mutual agreement and reconciliation rather than adversarial litigation, preserving relationships between parties.
• Wide Jurisdiction: Lok Adalats can take up civil matters, including matrimonial and commercial disputes, and compoundable criminal cases; they can also settle pre-litigation disputes.
• Community Orientation: Their approach draws on traditional, community-based dispute resolution methods and fosters participation from local stakeholders.

Conclusion
These features-cost-effectiveness, informality, speed, finality of settlement and emphasis on reconciliation-make Lok Adalat a valuable and practical forum for resolving a wide range of disputes outside the formal court system.