Provision for settlement of dispute outside Court has been provided under Section 89 of Civil Procedure Code
Section 89 of the Civil Procedure Code was incorporated through the Code of Civil Procedure (Amendment) Act, 1999 (Act No. 46 of 1999) (w.e.f. 1-7 2002). Section 89 of the Civil Procedure Code, 1908 provides that where il appears to the Court that there exist elements of a settlement which may be acceptable to the parties, the Court shall formulate the terms of settlement and give them to the parties for their observations and after receiving the observations of the parties, the Court may reformulate the terms of a possible settlement and refer the same for(a) arbitration, (b) conciliation, (c) judicial settlement including settlement through Lok Adalat; or (d) mediation.