legal reforms bill awaits nod

Advocate

The Commercial Division of High Courts Bill is set to change the face of the legal system for better and the infamous “slow justice delivery” may become a thing of the past, to an extent. The Bill was passed by the Lok Sabha in December 2009. It is now with the Select Committee of the Rajya Sabha under the chairmanship of P J Kurien.

The Bill seeks to create commercial divisions with high-tech facilities within the high courts to handle commercial cases of Rs 5 crore or higher amount as may be specified. It is possibly one of the few steps in legal reforms that have been undertaken post-1991.

The Doing Business in India Index rates the country poorly on parameters which are mostly related to the justice delivery system. Out of the 183 countries surveyed, India was ranked 133 in 2010 and 132 in 2009. The parameters included starting businesses, enforcing contracts and closing businesses which were heavily dependent on the over-burdened legal framework. The Index summarises the key indicators and benchmark against regional and high-income economy (OECD) averages.

In the recent past, the number of judges has been increased in some high courts to make the system fast. But the issue of filling up judges’ posts persists. With the new initiative, at least corporate cases are expected to see quick judgments.

Under the Bill, the proposed commercial divisions of high courts will pronounce judgments within 30 days of conclusion of arguments and issue copies through email. They will also entertain applications for setting aside of arbitral award or execution of it, and appeal under Arbitration and Conciliation Act, 1996, where the arbitration falls under the specified value.

Said Rajesh Khaitan of Kolkata-based law firm Rajesh Khaitan & Co, “The scheme is good. Right now, nothing is moving as far as justice delivery system is concerned. Many things need to be done before we see results of this novel Bill.” He went on to add: “The number of judges has to be increased. In Calcutta High Court, which I know closely, there is a huge vacancy. Also, we need judges competent to man the commercial divisions.” Rajesh Khaitan & Co specialises in arbitration and corporate law.

Abhirup Sarkar, an economist with the Indian Statistical Institute, Kolkata, said: “I welcome the Bill. The slow legal system is a major hindrance to business. Reforms in the system are long overdue. This is a good initiative, though belated.” Sarkar suggested that litigants should make efforts to settle cases below the threshold value of Rs 5 crore out of court.

C K Dhanuka, chairman of Dhunseri Tea and Industries and chairman, Ficci (Eastern Regional Council), too, praised the Bill. “This is the requirement of time and will be welcomed by India Inc. Judiciary is the base of democracy. Any case should be solved within two-three years. If cases are not disposed of rapidly, the system will fall apart. Now, out of a sanctioned strength of 58 judges in Calcutta High Court, 18 benches are vacant.”

Out of the 21 high courts in the country, almost all are short of judges and have huge number of pending cases. In Calcutta High Court alone, about 25 per cent of the corporate cases fall above the Rs 5 crore threshold, said Khaitan.

The Bill will improve India’s rank in the Doing Business in India Index and result in more FDI for the country, said Sarkar.

 
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