A view of the Parliament House in New Delhi. File | Photo Credit: Sandeep Saxena
A bill seeks to make it easier to resolve commercial disputes
The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment) Bill of 2018 is pending in Parliament. The Bill intends to jump-start India as a sought-out business destination in the world. Its objective is to set India at the top of the ‘Ease of Doing Business’ index of the World Bank. It aims to create a conducive regulatory environment for investors to set up and operate businesses.
India recently jumped 30 positions and reached the 100th rank in terms of ‘Ease of Doing Business’ among 190 countries. The urgency is apparent, with the government also promulgating an ordinance.
The Bill proposes to lower the specified value of a commercial dispute to ₹3 lakh from the present ₹1 crore so that commercial disputes of a reasonable value can be decided by commercial courts. This would bring down the time taken (at present, 1,445 days) in resolving commercial disputes of less value, and further improve India’s ranking in the index.
The Bill provides for the establishment of commercial courts at the district judge level for the territories over which the respective High Courts have ordinary original civil jurisdiction, as in Chennai, Delhi, Kolkata, Mumbai and Himachal Pradesh. The State governments in such territories may by notification specify such pecuniary value of commercial disputes to be adjudicated at the district level. In the jurisdiction of High Courts other than those exercising ordinary original jurisdiction, a forum of appeal in commercial disputes decided by commercial courts below the level of district judge is being provided, in the form of Commercial Appellate Courts to be at the district judge level.
The introduction of the Pre-Institution Mediation (PIM) process in cases where no urgent or interim relief is contemplated would provide an opportunity to the parties to resolve commercial disputes outside the ambit of the courts through the authorities constituted under the Legal Services Authorities Act, 1987. The Bill proposes a new Section, 21A, which enables the Centre to make rules and procedures for PIM.
The Cabinet note for the Bill says that with rapid economic development, there has been a considerable increase in commercial activities and a consequent steep rise in the number of commercial disputes at the domestic and international levels. Increase in foreign direct investment and overseas commercial transactions have further contributed to a significant rise in commercial disputes.