Swamy claims the institute owes him about Rs. 70 lakh for the services rendered during his tenure there as an assistant professor between 1972 and 1991.
"You (Swamy) and the petitioner (IIT-Delhi) would be appearing before the mediation and conciliation centre at the High Court on September 19 at 3 PM to try to settle the issue,"Justice M L Mehta said.
The judge has fixed the matter for further hearing on October 31, when Swamy and the IIT will have to apprise the court about the outcome of the conciliation proceedings.
The court's direction came on the petition of Indian Institute of Technology, Delhi, (IIT-D), against an order of a lower court agreeing to hear Swamy's plea seeking recovery of the alleged dues of Rs 19 lakh along with interest of 18 per cent from February 1991.
The lower court, on February 26, agreed to hear Swamy's plea and dismissed IIT's application seeking dismissal of his civil suit on the ground that it was time barred and beyond the jurisdiction of the court.
The IIT had opposed Swamy's plea in the lower court saying that his total claim, including interest, would come to Rs 70.20 lakh which is beyond the pecuniary jurisdiction of the lower court.
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Swamy had filed the suit in the lower court to recover salary and allowances in revised grade from December 12, 1972 till May 21, 1991 along with interest at 18 per cent with effect from February 20, 1991 till the date of payment and gratuity, pension.
Opposing Swamy's civil suit, the IIT had said that his claim for alleged dues was constantly denied by it as he had failed to provide the details of the amount earned from his employment between December 11, 1972 to March 27, 1991.
Swamy had opposed the application by the IIT saying he came to know about his dues only in 2009 after filing RTI applications which revealed that the Director had "falsely" presented the case for his dues before the Board of Governors.
In his suit in the lower court, Swamy had said that in December, 1969 he was Assistant Professor, Department of Economics at Harvard University, and had an informal interview with Director of IIT who had asked him to start work immediately as a Professor.
He had said that he was appointed as Economics Professor, in October, 1972 on the unanimous recommendation of a nine- member selection committee headed by Manmohan Singh, who is at present the Prime Minister.
He had said that through an office memo dated December 11, 1972 his appointment was illegally and with mala fide motive terminated with effect from December 11, 1972.
After several rounds of litigation, his termination order was declared as null and void by a court here which had said that he was entitled to be treated as continued in the service of the IIT without interruption, he had said.
However, he had through a letter in March, 1991 requested the IIT to permit him to demit the office as a Professor which was accepted.