Format Of Judgements Incorporating Terms Of Settlement Cannot Be Prescribed Through Judicial Orders: Kerala HC

The Kerala High Court has held that a specific format of judgements incorporating terms of settlement cannot be prescribed through judicial order in absence of statutory provision.

The Court was considering a suo motu petition initiated by the Registry to establish a uniform practice and procedure for preparing judgments, decrees, and orders in cases settled by compromise, whether through mediation or otherwise.

The division-bench of Chief Justice Nitin Jamdar and Justice S. Manu observed, "While incorporating settlement terms in judgments may benefit certain litigants, such a requirement would need statutory backing. The question arises whether the format of judgments can be prescribed through judicial orders. Since no statutory provision mandates a specific format, issuing judicial directions on this matter may not be feasible."

Senior Government Pleader V. Tekchand appeared in the matter.

A representation was received by the Director of the Alternative Dispute Resolution (ADR) Centre, High Court, requesting that the terms of a mediation settlement be incorporated into the judgment as a self-contained document. The request aimed to address practical difficulties faced by litigants working abroad due to the non-inclusion of mediation settlement terms in judgments. The representation was placed before the Board of Governors of the Kerala State Mediation and Conciliation Centre (KSMCC), which passed a resolution on 22 August 2024, directing that the matter be referred to the Registrar General of the High Court. The resolution recommended that the Chief Justice consider evolving a uniform practice for incorporating the terms of compromise into judgments, decrees, and orders. Consequently, the resolution was forwarded to the Registrar General and was placed on the judicial side under the roster "Judicial Practice and Procedure (JPP)" for registering suo motu proceedings.

The Court noted that Rule 25(b) allows the court to pass a decree in accordance with the recorded settlement. However, neither Section 89 of the CPC nor the Rules of 2008 mandate that consent terms be included within the judicial order.

The Registry has observed that the prevailing practice in the High Court and District Judiciary is to pass judgments, decrees, and orders recording the compromise reached through mediation with a statement that the written agreement signed by the parties forms part of the judgment, decree, or order. However, the terms of the agreement are not incorporated within the body of the judgment and orders.

The Court stated that the representation highlights the challenges faced by litigants abroad in explaining and proving that the settlement deed referred to in the judicial order is the same document. It agreed that incorporating settlement terms in judgments may benefit certain litigants, however it pointed out that such a requirement would need statutory backing and even a specific format cannot be prescribed in absence of a statute addressing the same.

"Undoubtedly, incorporating settlement terms in judicial orders offers various advantages. For instance, attaching a scanned copy of the signed settlement agreement can prevent disputes over the authenticity of the signatories. A single, comprehensive judicial order incorporating settlement terms would also reduce future litigation and aid litigants, particularly those residing abroad. However, there are potential disadvantages, such as privacy concerns. In some cases, parties may not wish to disclose the terms of their settlement in a judicial order for privacy reasons. Further, once settlement terms are incorporated into a judicial order, any modifications may require fresh judicial orders," the Court observed.

The Court was of the view that the nature of the case may determine whether settlement terms should be incorporated into the judicial order and each judge must decide, with the consent of the parties, whether to include the settlement terms in the judgment or order.

"The nature of the case may determine whether settlement terms should be incorporated into the judicial order. For example, commercial and business disputes may require different considerations compared to family or personal relationship matters, where confidentiality could be more important. Therefore, each judge must decide, with the consent of the parties, whether to include the settlement terms in the judgment or order. If the parties oppose inclusion, it would be appropriate not to include the terms of settlement, particularly when there is no mandate governing the matter. Conversely, if the parties consent to inclusion and there is no legal impediment, the judges may incorporate the terms at their discretion," the Court observed.

It was thus of the view that in the absence of a statutory mandate, the inclusion of settlement terms in judicial orders will depend on the nature of the case and the consent of the parties.

"It is not possible to issue an omnibus judicial order that the terms of settlement must be included in all cases, regardless of subject matter and opposition of parties. However, if the parties do not object and no legal impediment exists, it would be preferable to incorporate the settlement terms, ideally in a scanned copy with signatures, as it will aid the litigants, especially those living abroad, to produce and rely upon only one document," the Court observed.

The suo-moto proceedings were accordingly closed.

Cause Title: Suo-moto JPP Initiated By High Court Of Kerala (2025:KER:9755)

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