Jharkhand HC: Once you agree to a mediation settlement, you can’t simply back out
SUMAN K SHRIVASTAVA Ranchi, August 9: The Jharkhand High Court has held that a settlement reached through court-annexed mediation and subsequently filed…
SUMAN K SHRIVASTAVA
Ranchi, August 9: The Jharkhand High Court has held that a settlement reached through court-annexed mediation and subsequently filed as a joint compromise petition cannot ordinarily be unilaterally withdrawn by either party after the agreement has been acted upon.
A Division Bench comprising Justice Sujit Narayan Prasad and Justice Sanjay Prasad observed while disposing of a matrimonial appeal recently filed by Shashi Gurung against his wife, Shweta Gupta. The court directed both parties to strictly comply with the terms of their mediation settlement dated August 19, 2025.
The appeal arose from a judgment dated November 14, 2024, passed by the Principal Judge, Family Court, Dumka, which had dismissed Gurung’s petition seeking divorce on the grounds of cruelty and desertion under Section 13(1)(i-a) and (i-b) of the Hindu Marriage Act, 1955.
Gurung and Gupta had married in 2011 and have a son. Their matrimonial relationship subsequently deteriorated, with both sides making allegations against each other in the proceedings. The husband alleged cruelty and desertion, while the wife disputed the allegations and made counter-allegations of harassment, dowry demands and physical abuse.
During the pendency of the appeal, the matter was referred to the High Court Legal Services Committee’s Special Mediation Drive, “Mediation ‘For the Nation’”. The parties appeared before the mediator and, after deliberations, agreed to dissolve their marriage by mutual consent on specified terms.
₹80 lakh settlement reached through mediation
Under the settlement, Gurung agreed to pay ₹35 lakh to Gupta as permanent alimony, ₹40 lakh towards the education and other expenses of their son, and ₹5 lakh towards the child’s medical expenses, subject to the conditions recorded in the settlement.
The husband subsequently paid the first two instalments totalling ₹35 lakh through NEFT transactions. However, the wife did not comply with certain remaining terms, including steps relating to pending criminal proceedings and a criminal revision concerning enhancement of maintenance.
The wife later informed the court that, although the settlement had been reached during mediation, she was no longer agreeable to disposal of the appeal in accordance with its terms. This prompted the High Court to examine whether a party could unilaterally withdraw from a settlement after voluntarily entering into it and after the agreement had been partly acted upon.
High Court lays down key legal principles
The Bench held that a settlement reached through court-annexed mediation, formally signed by the parties and subsequently filed as a joint compromise petition, carries significant legal and contractual sanctity. Referring to the Mediation Act, 2023, the court noted that a mediated settlement is binding on the parties and enforceable in the same manner as a judgment or decree of a court.
The court further held that the right to withdraw from mediation exists while the mediation process is ongoing. However, once mediation concludes successfully and a formal settlement is signed by the parties and their counsels, the option of unilaterally walking away from the agreement is ordinarily extinguished, particularly where the parties have already acted upon its terms.
The Bench also invoked the principle of estoppel, observing that once a party has accepted benefits under or acted upon a settlement, it cannot subsequently deny, dispute or revoke the arrangement merely because of a change of mind or regret. The court said a unilateral breach or retraction from a signed and court-recorded settlement may amount to a breach of an undertaking given to the court, and that withdrawal would be permissible only under highly exceptional and strictly established circumstances.
Court directs compliance with settlement
In view of the non-compliance with the agreed terms, the High Court directed both parties to adhere to the mediation settlement dated August 19, 2025 in its entirety.
The Bench granted the parties six months to comply with all the settlement conditions. Thereafter, they were directed to file a joint petition for dissolution of their marriage by mutual consent before the competent Family Court. The Family Court was directed to consider the petition and pass appropriate orders in accordance with law.
The High Court accordingly disposed of the appeal in terms of the mediation settlement.
