The need of the hour

The current initiative to set up commercial courts is laudable

The government needs to be compli­mented for granting approval for a new law to set up courts, exclusively mandated to deal with commercial disputes. A bill to this effect is proposed to be intro­duced in the current session of Parliament.

This initiative is in line with Modi’s assur­ances made to global investors to ensure ease of doing business in India. One of the major irritants faced by foreign investors was the undue delay in getting justice.

Justice A.P. Shah, chairman, Law Com­mission, had in his letter to the law minis­ter, dated 29 January 2015, pointed out that the establishment of commercial courts is widely seen as a stepping stone to bringing out reforms in the civil justice systems in India. The 253rd report, presented by Shah, with years of experience as a judge in Mum­bai and later as chief justice of Delhi High Court, should hopefully see The Commercial Division and Commercial Appellate Divi­sion of High Courts and Commercial Courts Bill 2015, getting speedy approval in both the houses.

Two discussion papers were also presented to seek the opinions of experts prior to the finalisation of the bill in the current form. The main objective of the bill is to speedily dispose off high value commercial civil suits. One of the concerns raised in an earlier bill in 2009 was that “the bill reflected elitist concerns by reserving a bench for high value commercial cases and catering to the corporate sector at the cost of the ordinary litigant”.

Nevertheless, the need to establish com­mercial courts to speedily resolve claims was reinforced by the World Bank in its annual report ‘Doing business’, where India was placed 186 amongst 189 nations in relation to the ease or difficulty of enforcing con­tracts in a given nation. The Law Commis­sion points that, on an average, contract enforcement takes 1,420 days (four years), resulting in enforcement cost amounting to nearly 40 per cent of the value of the claim.

The new courts will deal with cases with disputed value of 11 crore and above. Where the courts have original jurisdiction but no high courts, as in larger cities like Pune, the government may set up commercial courts to deal with cases over ?1 crore. The territorial
jurisdiction of these courts can be defined by the government and high courts.

The functioning of these commercial courts will also lefid to judicial specialisa­tion and help in creating, over a period of time, specialist judges who will be able to speedily dispose commercial cases. The UK, US and Singapore have long established commercial courts.

The commission has recommended that the commercial courts should take into account the experience of digitisation and computerisation practices followed by the Supreme Court and some other courts. It has suggested that the commercial court should be e-courts, so as to minimise the need for voluminous paper records and improve its functioning. With a view to ensure full jus­tice, the report recommends the setting up of appellate commercial courts by the Central government. Of course, final recourse will always be at the Supreme Court. The num­ber of judges also needs to be increased along with the infrastructure.

The report is, however, practical insofar as it also lists some of the difficulties which are likely to be encountered in the implemen­tation of the proposed bill. These include non-uniformity in the minimum limit of pecuniary jurisdiction of the High Courts. Delhi, for instance, has a pecuniary jurisdic­tion of ?20 lakh, while Madras has ?25 lakh. These require to be enhanced suitably to ensure against concurrence of cases in high courts and commercial courts. Moreover, a few years ago, the Mumbai High Court had transferred the original jurisdiction to the city civil courts. There is also a need to estab­lish uniformity in the treatment of appeals and petitions as civil suits.

While some of the difficulties are techni­cal in nature and can be rectified by amend­ing the necessary laws and rules, the more important ones listed concerns the proce­dure under which litigation is conducted, which are enshrined in the Civil Procedure Code, 1908. That is, however, matter for more detailed discussion at a later date. For the present, the current initiative is indeed laudable and the early implementation of enacting the same is the need of the hour. ♦

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