HARESH DAYARAM THAKUR versus STATE OF MAHARASHTRA AND ORS.

Citation: [2000] 3 S.C.R. 1140 · Decided: 05-05-2000 · Supreme Court of India · Bench: D.P. MOHAPATRA · Disposal: Appeal(s) allowed

Judgment (excerpt)

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HARESH DAYARAM THAKUR 
v. 
STATE OF MAHARASHTRA AND ORS. 
MAYS, 2000 
B 
[D.P. MOHAPATRA AND R.P. SETHI, JJ.] 
Arbitration and Conciliation Act, I996-Part III-Conciliation pro-
ceedings-When final-Held, successful conciliation pmceeding comes to an 
end only when the settlement agreement signed by the parties comes into 
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existence-And such agreement has the status and effect of legal sanctity of 
an arbitral award. 
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Pmt Ill-Conciliation Pmceedings-Without following the pmcedure 
prescribed under the Act-Whether correct-Held, No-If the statute pre-
scribes a procedure fer doing a thing, a thing has to be done according to that 
procedure. 
In a writ petition filed before High Court, conciliator was appointed 
with regard to the disputes between the parties. The conciliator, after 
holding meetings with the parties and hearing their submissions prepared 
settlement agreement, and directly sent his report to the High Court in a 
sealed cover, without disclosing the terms of the settlement to the parties 
and without disclosing the terms of the settlement to the parties and 
without obtaining their signatures thereon. 
The appellant filed an objection to the report of the conciliator. High 
Court summarily rejected the objection, confirmed the settlement agree-
ment and disposed of the writ petition holding that the report of the 
conciliator shall be treated as the order on the writ petition. Hence this 
appeal. 
Allowing the appeal, this Court . 
HELD : 1. On a perusal of the Arbitration and Conciliation Act, 
1996, the position is manifest that a clear distinction is maintained in 
the statute between arbitration proceedings and conciliation procee-
dings. (1146-B] 
H 
2 A successful conciliation proceeding comes to an end only when the 
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H.D. THAKUR v. STATE 
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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 7 4. It is menifest from the statutory pro:visions 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 untrammled by the 
procedural laws like the Code of Qvil 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 place only when the parties draw up the settlement 
agreement or request the conciliator to prepare the same and affix their 
signature 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. [1149-E; B-D] 
3. In the present case, no procedure as prescribed under part-III of 
the Act has been followed by the conciliator. The conciliator failed take "note 
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B 
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of the provisions of the Act and the clear distinction between an arbitration 
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proceeding and a conciliation proceeding. High Court in passing the im-
pugned order failed to notice the apparent illegalities committed by the con-
ciliator in drawing up the so called settlement agreement, keeping it secret 
from the parties and sending it to the Court without obtaining their signa-
ture on the same. H the statute prescribes a procedure for doing a thing it 
F 
has to be done according to that procedure. [1149-F-H; 1150-A-B] 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3247 of 2000. 
From the Judgment and Order dated 6.10.99 of the Bombay High Court 
in C.A. No. 7117 of 1999. 
K.T.S. Tulsi, Shri Narain, Sandeep Narain, Ms. Anjali for S. Narain 
& Co. (Chirag M. Shroff) for M.N. Shroff, H.L. Tiku, Ashok K. Mahajan 
and S. V. Deshpande for the appearing parties. 
The Judgment of the Court was delivered by 
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SUPREME COURT REPORTS 
D.P. MOHAPATRA, J. Leave granted. 
[2000] 3 S.C.R. 
Appellant Haresh Dayaram Thakur and respondent No. 3 Pitambar 
Dayaram Thakur

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