LS passes bill for speedy disposal of commercial disputes


File Photo: Lok Sabha speaker Sumitra Mahajan.

File Photo: Lok Sabha speaker Sumitra Mahajan.

A bill to amend the law for speedy disposal of commercial disputes and seeking to reduce the pecuniary jurisdiction of commercial courts from Rs 1 crore to Rs 3 lakh was passed by the Lok Sabha on Wednesday.

Replying to the debate on the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment) Bill, 2018, Law Minister Ravi Shankar Prasad said “this bill is a larger narrative pursuance to ensuring India’s performance in the ease of doing business.”

“We want to provide option of using commercial dispute resolution to smaller traders also,” he said replying to opposition concerns regarding already over-burdened courts. The bill, which was passed by a voice vote in the Lok Sabha, also allows state governments to establish commercial courts at the district level, even in territories where high courts have ordinary original civil jurisdiction.

In areas where high courts do not have original jurisdiction, state governments may set up commercial appellate courts at the district level to consider appeals from commercial courts below the level of a district judge, as per the bill which replaces an ordinance.

Opposition members protested the government’s move to bring in an ordinance on the issue, though most of them said they had no objection to the bill as such. Some members also raised concern that the new law would “choke” the courts as it would bring more cases to the already over-burdened courts.

Responding to opposition concerns, the Minister said there are currently 18,446 judges in subordinate judiciary and the government has provided residential facilities to 15853 subordinate judges.

Courts and residential facilties for judges have increased by leaps and bound, he added.

Prasad said the government has created 173 new judges post in high courts and since Supreme Court had stayed appointments in 2014-15, so less appointments were made during that period.

“This is not our fault, SC had stayed the appointments,” he said.

During the debate, Deputy Speaker M Thambi Durai wondered “who is supreme — Parliament or Supreme Court? We are lawmakers. We have to find the solution. Judges are interpreters of law, we are the lawmakers.”

Replying to him, Prasad said “we have accepted the judgement (on National Judicial Appoinments Commission), but, as a law student, we have serious reservations about the judgement.”

On opposition protests over the government taking the ordinance route, he said bringing an ordinance “is not a sin”.

Prasad said that he was more than willing to discuss the state of the Indian judiciary in the House.

He also informed that in 2017, the government appointed 115 judges and this year, “we appointed in 34 judges in the higher judiciary.”

Prasad also said that there should be higher representation of those belonging to the SC, ST, OBC and minority communities in the higher judiciary.

“It is not a sin if judges come from one state, but many high courts get unrepresented,” the Minister said.

Observing that ease of doing business was a ranking by the World Bank, Prasad said “when we came to power, we were at 142 and now we have jumped 42 points. India today is at 100 as far as ease of doing business is concerned.”

“India today is becoming one of the topmost economies of the world…Largest number of FDI has come in India…Good governance is also important component of economy,” he said.

Maintaining that speedy resolution of disputes was part of good governance, Prasad said for a good governance there sould be a mechanism for speedy resolution of disputes.

He also urged upon the Supreme Court and the High Courts to ensure that 5,000 vacancies in subordinate judiciary were filled at the earliest.

“If we need to have access to justice we must have competent judges, well trained judges .. My government is equally committed to deprived section of India the SC, the ST, the OBC, the minority also must also get proper exposure in the judiciary,” Prasad added.

The bill provides for establishment of commercial courts at the district-judge level for territories over which the high courts of Chennai, Delhi, Kolkata, Mumbai and Himachal Pradesh have ordinary original civil jurisdiction.

The introduction of the pre-institution mediation process in cases where no urgent interim relief is contemplated, will provide an opportunity to the parties to resolve commercial disputes outside the ambit of courts through authorities constituted under the Legal Services Authorities Act.

The law will be given prospective effect so that the authority of the judicial forum at present adjudicating the commercial disputes is not affected.

Participating in the debate, many lawmakers questioned the logic behind lowering the threshold of disputes to Rs 3 lakh saying this would put further stress on the already over-burdened judiciary.

BJD MP Pinaki Misra said the new law will “choke” the courts completely as it would bring in more cases. Raising the issue of vacancy in higher judiciary, he said it was also a fact that not many names were coming from the Supreme Court Collegium to fill the posts as there was a “discord within the Collegium.”

However, it was also the fact that the government was sitting on the names proposed by the Collegium, Misra said referring to the difference between the executive and the judiciary over names of high court judges to be promoted to the Surpeme Court.

“This is an unedifying situation. The judiciary is not flourishing, but becoming moribund,” he said.

Asauddin Owasi (AIMIM) said looking at the existing backlog of the cases and the current infrastructure in the judiciary, it will take 365 years to clear it.

Flinging a dart, he said the government “may have a leader with a 56 inches chest”, but the legislation will not stand the test of law.

Shrikant Shinde (Shiv Sena) questioned whether there was necessary infrastructure to take care of the new cases that this legislation would lead to.

Members like N K Premachandran (RSP), S P Muddahanumegowda and Misra expressed displeasure over the government using the ordinance route to bring the legislation.

“Not opposing thre bill in toto, but I have reservation regarding the spirit of the legislation,” Premachandran said.

Expelled RJD member Rajesh Ranjan wondered whether members of SC and ST communities will become judges in the higher judiciary.