Sources said the parties have sought settlement under the provisions of The Places of Worship Act, 1991 which provides that no dispute with regard to any mosque or other religious places, which have been constructed after demolition of temples and are existing as in 1947, would be raised in a court of law.
The lawyers said the mediation panel's report was leaked to the media and they do not approve the procedures adopted in the process and the suggested compromise formula of withdrawal of the lawsuit.
The apex court had on July 11 sought a report on the mediation process and said that a day-to-day hearing might commence from July 25 if the court decides to conclude the mediation proceedings.
"I am supporting the Hindu side," lawyer M C Dhingra, appearing for Shia Wakf Board, told the bench.
The Supreme Court constituted three-member mediation committee, tasked with exploring the possibility of an amicable settlement in the decades-old, politically sensitive, Ayodhya's Ram Janmabhoomi-Babri Masjid land dispute case, has submitted its interim report in a sealed cover.
The apex court requested the committee to inform it by August 1 about the outcome of the proceedings held till July 31.
The Akhara counsel told the apex court that their suit was basically for belongings, possession and management rights.
The counsel appearing for both the Hindu and Muslim parties expressed confidence over the ongoing mediation proceedings and said they are fully cooperating with the process.
The SC also said that if parties to the case want to amicably resolve the matter through mediation, they can still go ahead with it.
The bench said after perusing the report, if it came to a conclusion that an amicable solution through mediation was not possible, then the apex court would commence day-to-day hearing in the matter from July 25.
The bench directed that the mediation will be held at Faizabad in Uttar Pradesh and the process should start within a week from Friday.
The judgment in the matter is to be pronounced by November 17, the day the CJI will retire.
The apex court said the parties in the matter should be ready to start the hearing on the appeals which are before it.