WORLD BANK REPORT ON DOING BUSINESS :INDIA ENFORCING CONTRACTS- QUALITY OF JUDICIAL PROCESS INDEX Department of Justice, Ministry of Law & Justice
2 1. Legal Reforms
Legal Reforms 3 1. Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015. Commercial Divisions and Commercial Appellate Divisions have been constituted at the Delhi and Bombay High Court in terms of the Act Exclusive jurisdiction for all commercial disputes in which the value of the subject matter is INR 10 million or more. The Act has introduced following changes to the CPC for the purposes of disposing off to ensure expeditious disposal of cases. (i) case management hearings to fix timelines regarding the date of first hearing, fixing of issues, etc and (ii) detailed and stringent procedures for discovery, disclosure and inspection of documents. Court shall ensure that the arguments are closed within 6 months from the date of the first case management hearing. Provisions introduced to curb frivolous litigation summary judgement against the plaintiff or defendant if the court believes that there is no substance in the claim.
Legal Reforms...contd. 4 2. Amendments to the Arbitration and Conciliation Act, 1996 to streamline the arbitration process ensure that the arbitration proceedings are completed within a time bound period. Reduce the scope of judicial intervention. The scope of judicial interference on the grounds of public policy has been amended to limit it to only where the award: (i) was induced or affected by fraud or corruption; (ii) is found to be in contravention with the fundamental policy of Indian law; (iii) is against basic notions of morality and justice. The arbitral award should be made within 12 months from the date the arbitral tribunal enters upon the reference. The parties may by mutual consent agree to extend the term of the arbitral tribunal, for a term not exceeding 6 months. The arbitral tribunal is required to hold the oral hearings on a day to day basis and not grant any adjournments, unless there is sufficient cause. A fast track procedure of arbitration has also been introduced.
Legal Reforms...contd. 5 3. Constitution of the National Company Law Tribunal NCLT constituted on June 1, 2016 The NCLT consolidates the corporate jurisdiction of: i. Company Law Board, ii. Board of Industrial and Financial Reconstruction, iii. Appellate Authority for Industrial and Financial Reconstruction and iv. jurisdiction and powers relating to winding up, restructuring and other provisions as vested with the High Courts. Reduces the burden on courts and will help companies facing issues related to winding up, mismanagement and insolvency of businesses. Eliminates the overlap the conflicting rulings and will minimize the delays in the resolution of disputes
Legal Reforms...contd. 6 3. Constitution of the National Company Law Tribunal NCLT is initially located at ten places across India. It will prove out to be effective platform for adjudication of disputes on corporate law matters through disposal of such cases in a time bound and speedy manner. Increased transparency through the amendment in the Companies (Management and Administration) Rules, 2016. Any change in the shareholding position of promoters and top ten shareholders of the company representing increase or decrease by 2% or more of the paid-up share capital needs to be reported within 15 days of such changes. Provision introduced to facilitate members of Listed Company with 1000 or more members to exercise vote through electronic means. Rules dealing with amalgamation, compromise, arrangement, liquidation and winding up were introduced. These rules have provided the procedures relevant for corporate restructuring and also clarified the issues relating to implementation of the restructurings.
Legal Reforms: National Company Law Tribunal...contd. 7 Impact of reforms: Increased the shareholder rights with regard to voting and disclosure of a related- party transactions. Provides time to the members to be prepared on the transactions to be discussed in the members meeting and take informed decision. Helps the members to meet the management of the Company and understand the financial position and business transactions of the Company. NCLT will prove out to be effective platform for adjudication of disputes on corporate law matters through disposal of such cases in a time bound and speedy manner. Amendment in the rules will increase transparency and communication of the changes in the shareholding pattern within short period of time. Provision will lead to increase in number of member s participation in the decision making process of the company. Further, this will provide ease of voting from anywhere and it will benefit the companies in declaring the results of the voting in a short period of time. This provision will empower NCLT to assume the jurisdiction of the High Court as the sanctioning authority in relation to compromises, arrangements and amalgamations. This will speed up the time required for obtaining approval on restructuring schemes.
Legal Reforms : ecourts Mission Mode Project 8 4. The ecourts Integrated Mission Mode Project objective is to provide designated services to lawyers, litigants and judges Phase 1 of the ecourts project was approved in 2007 and was revised in 2010. The broad achievements of Phase 1 are: National ecourts portal has become operational- Computerisation of 14,249 courts by March 31, 2014. Establishment of the National Judicial Data Grid (NJDG) Process Re-engineering Phase II of the ecourts project approved by the Government of India in July 2015- project timeline of 4 years at the cost of Rs.1670 Crores. The broad objectives of Phase II are: Computerisation of approximately 5751 new courts, District Legal Services Authority and Taluk Legal Services Committee Centralised Case Filing Centres and information Kiosks in court complexes Enhanced availability of e-services to lawyers and litigants through e-filing, e- payment gateways and mobile applications Video-conferencing of all court rooms
Legal Reforms : Judicial Infrastructure and Manpower 9 5. Judicial Infrastructure Centrally Sponsored Scheme (CSS) for development of judicial infrastructure. Central Government augments the resources of the State Governments by releasing financial assistance Scheme has been in place since 1993-94 revised in 2010-11. Rs. 5,479 crore has been provided to the States and Union Territories since inception of the Scheme. Rs. 2,034 crore has been sanctioned since May, 2014. 16,513 court halls were available for Subordinate Judiciary as on 31.12.2015. 2,447 court halls are under construction.
Legal Reforms : Judicial Infrastructure and Manpower 10 6. Judicial Manpower Sanctioned Strength of High Court judges has been increased from from 906 judges in March 2014 to 1079 judges in March 2016. 126 fresh appointment of Judges in High Courts and 131 Additional Judges were made permanent, which is the highest number of appointments made in the last 26 years. As per the Constitutional framework the selection and appointment of judges in subordinate courts is the responsibility of State Governments and High Courts. The sanctioned strength of judges in the District and Subordinate Courts has increased from 20,502 judges in December 2015 to 22,288 in December 2016 As per the direction of the Hon ble Supreme Court in its Order dated 02.01.2017 in the matter of Imtiyaz Ahmed Case, the Department of Justice has forwarded a copy of interim report of the NCMS (National Court Management System) Committee to all State Governments and High Courts to enable them to take follow up action to determine the required Judges Strength of district judiciary based on the NCMS report
Legal Reforms : Judicial Infrastructure and Manpower 11 7. National Litigation Policy; Govt of india is expediting to policy formulation More than 20 states already have their state Litigation Policy TIME STANDARDS as mentioned in Code of Civil procedure- The Supreme Court and all High Courts have been asked to follow time standards (more than 50% of cases) Supreme Court and all High Courts have been asked to limit adjournments to unforeseen and exceptional circumstances as per order 1 Rule VII of CPC. All the central ministries/ departments and state governments have been asked to take steps reduce government litigation on Mission Mode- Quarterly Monitoring will be done.
12 2. EVIDENCE OF REFORMS
Case management: Performance Measurement Mechanisms 13 National Judicial Data Grid (NJDG) is a comprehensive database of cases in the District Courts/District Judiciary of the country It works as a monitoring tool to identify, manage and reduce pendency of cases. Out of 4 reports 3 reports are made available this year (last year not available)- Efforts are being made by Supreme Court ecommitte to provide time to disposition report The following reports can be generated through the NJDG. 1. Clearance Rate Report (Status: not available last year- available this year) The report to measure the number of cases resolved the number of cases instituted/ incoming can be extracted from the NJDG dashboard available for public access.
Clearance Report 14
Performance Measurement Mechanisms...Contd 15 Age of pending cases report: (Status: not available last year- available this year) The number of cases which are pending court/ judge wise can be seen on the dashboard. The following can be seen on the NJDG dashboard i. number of pending cases, ii. iii. iv. age wise categorized on the basis of 10 year old cases, cases pending between 5 to 10 years old, cases pending between 2 to 5 years old and v. less than 2 years old cases, vi. bifurcated in the civil And criminal types, can be seen at Dashboard itself.
Age of Pending Case Report 16
Case management: Performance Measurement Report 17 Single case progress report: (Status: not available last year- available this year) Case status of each of the case, giving details of the Sections, Parties involved, details of each hearing, Purpose of next hearing etc., which are around 26 different fields
Single Case Progress Report 18
Electronic Case Management System 19 1. Electronic Case Management System for Judges (Status: not available last year- available this year) The following actions can be performed by judges electronically (minimum number to be made available is 4) i. Access cases laws, laws and regulations ii. Send notifications to lawyers iii. iv. Track Status of a case on a judge s docket View and manage case documents v. Semi-automatic generation of court orders vi. View court orders and judgments in a particular case. The information is available on the ecourts website at http://services.ecourts.gov.in/ecourtindia_v5/ Efforts will be made to make available 2 other, viz: To automatically generate a hearing schedule for all cases on their dockets and To semiautomatically generate court orders;
Electronic Case Management System 20 2. Electronic Case Management System for lawyers The following actions can be performed by lawyers electronically (minimum number is 4) i. Access laws, regulations and case-laws ii. Access forms to be submitted to courts iii. iv. Receive notifications Track the status of a given case v. Access Court orders and decisions on a given case The information is available on the ecourts website at://services.ecourts.gov.in/ecourtindia_v5/ The lawyer will have to feed in the case details/cnr number and get the details about the case. Efforts will be made to make available 2 other, viz: view and manage case documents & file briefs and documents with the court;
Electronic Case Management System- ecourts portal 21
Court Automation 22 Court fees is paid electronically within the competent court and facility of Publication of judgments al;ready available. E-filing- is under active consideration and is already permitted and provided for by various regulatory commissions and tribunals Status: not available last year- Supreme Court ecommittee has initiated work to provide adequate bandwith to implement this year Example: the Central Electricity Regulatory Commission. It may be implemented by the end of the year. Electronic Service of Process (Status: not available last year- available this year) Now- permitted in the Delhi District Court. Order V, Rule 9 permits service of summons through speed post, courier or by any other means of transmission (including fax or electronic mail). The Delhi High Court has framed the Delhi Courts, Service of Processes by Courier, Fax and Electronic Mail Service (Civil Proceedings) Rules, 2011. Service by E-mail is specifically provided for in the said rules. Witnesses may also be summoned via emails. Mumbai High court is considering the same reforms and may be implemented by 30 May 2017.
Court Automation...Contd 23
Pre-Trial Conference 24 Express provisions in Code of Civil Procedure are relevant in the context of pre-trial hearing/pre-trial conference. (Available last year) Order X- examination of the parties by the trial judge before the issues are framed. The purpose of the examination under Order X is to ascertain precisely the matters which are in dispute between the parties. Order XI- discovery of facts by the examination of opposite party by delivering the interrogatories in writing. The rules also provide for the discovery and inspection of documents by party to a suit. Order XII- Contains rules and process of admission or denial of documents Section 18 of the Commercial Court Act, 2015 empowers the High Court to issue practice directions ( includes pre-trial conference) to supplement the provisions of Chapter II of the Commercial Court Act or the CPC insofar as such the provisions apply to the hearing of a Commercial Dispute. (Made available this year)
25 3. Issues and Concerns
Issues and Concerns: Alternative Dispute Resolution 26 Under Section 89 of the Code of Civil Procedure, 1908, if it appears to the court that there exists elements of a settlement which may be acceptable to the parties, the court may refer the matter for (a) arbitration; (b) conciliation; (c) judicial settlement; and (d) mediation. The Supreme Court had in the case of Afcons Infrastructure Ltd & Anr v Cherian Varkey Construction held that the Court is bound to refer the case for an alternative mode of resolution if it finds that the case is fit to be referred to any of the ADR processes.
Issues and Concerns : Alternative Dispute Resolution...contd 27 Voluntary Mediation/Conciliation is available in Delhi through Delhi Dispute Resolution Society constituted under Department of Law, Justice & Legislative Affairs. The centers established in various districts in Delhi provides prelitigation as well as post-litigation mediation/conciliation services. Presently there are 9 Mediation Centers and 1 Mediation Clinic and that disputes of Commercial, civil and criminal nature are being dealt with. Till date 47,000 cases have been received in the Mediation/Conciliation centers out of which 17,000 have been settled. Court Fee is refunded as per the Court Fees Act, 1870. It was amended for the State of Delhi by the Court Fees Amendment Act, 2010 which provides that the court fee shall be refunded on settlement before hearing.
Issues and Concerns 28 Points for the following need to be given. We were not given any points for the same last year. 6 out of the 8 electronic case management tools for the judges are available. 5 out of the 7 electronic case management tools for lawyers are available 4 out of the 5 performance measurement mechanism reports can be generated via the NJDG electronic service of summons is permitted in Delhi and is being carried out in the district courts. All Commercial Disputes are amenable to arbitration. The Arbitration and Conciliation (Amendment) Act has amended/reduced the grounds for judicial interference on the basis of public policy. As per the Amendment Act judicial interference on the grounds of public policy has been amended to limit it to only: (i) only where making of award was induced or affected by fraud or corruption; (ii) where the award is found to be in contravention with the fundamental policy of Indian law; (iii) or basic notions of morality and justice.
Issues and Concerns 29 Points for the following need to be given. We were not given any points for the same last year. The only other matters which cannot be referred to arbitration include (as per the Supreme Court decision in Booze Allen& Hamilton v SBI Home Finance Limited). i. matrimonial matters, criminal proceedings, ii. matters relating to guardianship of a minor or other person under disability, insolvency matters, iii. testamentary matters and eviction or tenancy matters The Court Fee Act provides for a refund that in case the court refers the dispute to any of the modes of settlement provided under Section 89 of the CPC, the plaintiff shall be entitled to the refund of the full amount of the court fee. The fee will be refunded once the matter is settled through any of the alternate modes of settlement. Amendment to the Court-Fees Act, 1870 in its application to Delhi has been affected. The relevant act is titled as The Court-Fees (Delhi Amendment) Act, 2010. Through this act Section 16A has been inserted which relates to the Refund of Court fees on settlement before hearing. http://delhi.gov.in/doit/revenue/pdf/notification/2011/2011_4.pdf
THANK YOU 30