Supreme Court Appoints Justice L. Nageswara Rao To Mediate Kalyani Family Dispute

The Supreme Court on Monday appointed former Supreme Court judge Justice L. Nageswara Rao to explore the possibility of an amicable settlement in the long-running property dispute between industrialist Babasaheb Neelkanth Kalyani and his sister Sugandha Hiremath.

It also directed that proceedings on Babasaheb Kalyani's application seeking rejection of the suit before the Bombay High Court shall remain deferred until the mediation process concludes.

The order comes over two months after the Bombay High Court refused to refer the parties to mediation. It had held that mediation under the Mediation Act, 2023 is voluntary and cannot be imposed when one party is unwilling.

A bench of Chief Justice Surya Kant and Justices Joymalya Bagchi and V. Mohana persuaded the parties to make one final attempt at resolving the family dispute. The bench requested Justice L. Nageswara Rao conduct the mediation within two weeks.

The court observed that family disputes are often resolved even after several failed attempts at mediation. It urged the parties to move beyond litigation and attempt reconciliation.

"Mediation can succeed only many times later. We are putting a word of advice to them that this is the high time they should bury the hatchet. They should think of so many other prospective things in future. Instead of diverting their attention and energy, they should focus on resolving the dispute. This is the magic of mediation.", the court orally observed.

Senior Advocate Shyam Divan, appearing for the petitioners, supported a fresh attempt at mediation. He submitted that the possibility of settlement should not be ruled out merely because earlier efforts had failed.

"You can take the horse to the water, can you make it drink? You may not be able to, but that is the whole purpose of mediation.", he said.

Appearing for Babasaheb Neelkanth Kalyani, Senior Advocates Abhishek Manu Singhvi, Aryama Sundaram, Mukul Rohatgi and Kapil Sibal opposed another round of mediation. They submitted that three previous mediation attempts, including before the Supreme Court and a Pune district court, had failed.

They also argued that Babasaheb Kalyani's application under Order VII Rule 11 of the Code of Civil Procedure had already been substantially argued before the Bombay High Court. They urged that those proceedings should not be delayed because of another round of mediation.

"There are three failed mediations. The Order VII Rule 11 application has been argued substantially. My request is that the Order VII Rule 11 proceedings must go on," Singhvi submitted.

The bench, however, said no party could be compelled to settle. It observed that it was only making a sincere request considering the nature of the dispute between close family members.

"Nobody can compel you. What law can force you to go and mediate? But now, in Supreme Court, Court No. 1 is requesting you.", the court noted.

Recalling an earlier family dispute that was eventually resolved after several unsuccessful attempts at mediation, Chief Justice Surya Kant said parties should not lose hope merely because previous efforts had failed.

"After seven or eight rounds of mediation, the elder brother said, 'I don't want a single penny.' The younger brother touched his feet, both started crying and resolved the dispute. This is the miracle. This is the magic of mediation.", the court remarked.

After both sides agreed to make one final attempt, the court appointed Justice L. Nageswara Rao as mediator. It directed the parties to contact him within three days. The mediation process has been directed to be completed within two weeks. Proceedings on the pending Order VII Rule 11 application before the Bombay High Court will remain deferred during this period.

Background

The dispute arises from a family property dispute between industrialist Babasaheb Neelkanth Kalyani and his sister Sugandha Hiremath, who instituted a suit in 2023 before the Bombay High Court seeking specific performance of an alleged family arrangement dated 1994. During the hearing of an application filed by Babasaheb Kalyani under Order VII Rule 11 of the Code of Civil Procedure seeking rejection of the plaint, the High Court explored the possibility of resolving the dispute through mediation in view of the close familial relationship between the parties.

The plaintiffs urged the Court to refer the matter to mediation, contending that even a minimal possibility of settlement justified such a course. Babasaheb Kalyani, however, opposed mediation, pointing out that earlier mediation efforts before the Supreme Court in 2018-19 and the District Court, Pune had failed, and alleging that repeated settlement attempts were only delaying the proceedings. He also claimed that media reports concerning settlement discussions had caused embarrassment and affected investor confidence.

On 4 May 2026, the High Court declined to refer the parties to mediation. It held that mediation under the Mediation Act, 2023 is voluntary and consensual, and cannot be imposed where one party is unwilling.

Noting the failure of previous mediation attempts, the absence of any meaningful settlement proposal and the lack of any realistic possibility of compromise, the Court held that there were no grounds to compel mediation and rejected the plaintiffs' request.