ANURAG K AGARWAL

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Delay and DenialDelay and DenialDelay and DenialDelay and DenialDelay and Denial

There is no denying the fact that with a population of more than one billion, a huge middle-class with substantial purchasing power, fast growing economy, and a market of continental size, India, today, cannot be ignored. Along with these factors, democracy, rule of law and independence of the judiciary make India an attractive place to do business. The judicial system based on the English model, provides the much needed confidence to foreign investors and the business community. However, the delay associated with the judicial system, particularly at the level of the lower judiciary, has prompted many commentators to say that the judicial system in India has collapsed. The clichéd saying, “justice delayed is justice denied” has been quoted so often in India that it has lost its meaning. Denial of justice due to delay is not a recent phenomenon. In 1952 Motilal C Setalvad, the first attorney general of free India, wrote, “A burning problem which the citizens, lawyers and judges face alike is that of the congestion of courts of law and the consequent inordinate delays in the administration of justice…”2

Three and a half decades later, on November 26, 1985, in his Law Day (the day the Indian Constitution was adopted by the Constituent Assembly in 1949) speech, the then chief justice of India painted a very dismal picture. He said, “I am pained to observe that the judicial system in the country is almost on the verge of collapse. These are strong words I am using but it is with considerable anguish that I say so. Our judicial system is creeking under the weight of arrears.” This remark was also quoted by Ashok Desai, attorney general in 1996, when the situation, unfortunately, was no different from 1985.3

Things have not changed much since then. Delay has become almost synonymous with the judiciary in India. The courts are seen to be so preoccupied with procedural matters that trials only commence after long delays and, once begun, are conducted at a snail’s pace. Monetary claims and commercial litigation that does not involve interim relief can take many years to decide, and judges are reportedly reluctant to award costs or realistic interest.

Courts in India, particularly the higher courts, are usually perceived as impartial. Trial courts, however, are under great stress. The judicial officers (judges and magistrates) at this lowest judicial level are government servants of the province in which the court is situated. Hence, they do not have absolute financial (as compared to high court and Supreme Court judges) and other independence. They work often under the Damocles sword of the executive of the state, which has the power of transfer and controlling other service matters. Therefore, corruption, malpractice and abuse of power are not uncommon. Moreover, the workload (numberofcases per judge) is extremely high. This often results in poor quality of judgments, low morale of the judicial officers and absence of real system of justice at the district level. Decisions may be swayed by political, official or other pressures or because of the lure of lucre or threats to cause damage to the judge’s property or person. Adequate protection is not provided to the officers of the state judiciary. The situation is so bad that criminals have no fear of committing crimes even in court premises. On May 5, 2006 a gangster Har Dutt, who was to be produced before additional district and sessions judge, Gurgaon, R C Geodora in connection with a murder case, was killed in the court premises after three persons belonging to a rival gang opened fire at him.4

The disputants have no choice in filing the cases. According to section 15 of the Code of Civil Procedure, 1908, all matters should be filed in “the lowest court of competent jurisdiction”. This makes it mandatory for business disputes of even very high value to be filed in the court of the district judge or civil judge. For some metropolitan cities, the matters go directly to the high court.

ADR and ODRADR and ODRADR and ODRADR and ODRADR and ODR

This does not augur well for the business community in particular and the populace in general. Also, peaceful, speedy and efficacious settlement of business disputes is essential for any business to prosper. The business disputes may be business to business or business to customer. For

Economic and Political Weekly June 17, 2006 both type of disputes, litigation is the least favoured method of resolution for a variety of reasons – delay being the foremost. Alternative dispute resolution (ADR) methods provide a reasonable solution. Methods like negotiation, mediation, conciliation, besides arbitration, and a mix of these, have been used and are currently becoming more popular for resolution of business disputes.

History tells us that technology has provided the answer on most occasions of difficulty. The internet has emerged as one of the most significant and revolutionary inventions of our time. Dispute resolution is one of its many applications. With the increase in the globalisation of business, business disputes are also getting global in character. The traditional methods of resolving such business disputes have become very expensive and consume a lot of time. Litigation was never the method of choice for the resolution of international business disputes. ADR methods were favoured. With the use of internet, ODR has evolved. According to the American Bar Association Task Force on E-Commerce and ADR, “Online Dispute Resolution has only one overarching feature – it takes place online”. Further, “ODR encompasses many forms of ADR and court proceedings that incorporate the use of the internet, web sites, e-mail communications, streaming media and other information technology as part of the dispute resolution process”.

There are three current approaches to ODR: cyberspace, non-adjudicative ADR, and arbitration. The first centres on the internet and information technology. The principle underlying the cyberspace approach is to find better, faster and cheaper ways to resolve disputes with the aid of technology. The non-adjudicative ADR approach to ODR focuses mainly on negotiation and mediation, and how to improve both communications and relationships between parties. The arbitration approach emphasises rights and applications of law to resolve the dispute with an arbitrator’s decision. The impetus behind this approach is the success of traditional arbitration. If it works well offline, then it should be adapted online, the reasoning goes.6

The major players in ODR are: the business community, consumers, government and ADR institutions. The business community favours ODR because it is private, fast and inexpensive. It also encourages consumer trust. For consumer organisations, ODR enforces consumer rights. Governments see ODR as a tool to provide access to the justice that courts are not yet equipped to provide, decrease court congestion and further the e-commerce economy. ADR institutions see ODR as an opportunity to gain the competitive edge. The application of information communication technology (ICT) is evolving as an important means for the future resolution of certain types of conflict. ODR will become an increasingly important component of the infrastructure required if online business and other relationships are to realise their full potential.7

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The business community now understands that there is limited use in going to the court to get disputes resolved. With international disputes, there are issues of jurisdiction also. Hence, it is much more prudent to get some business disputes resolved through methods of ADR and also ODR. What is needed at this point of time is awareness about the importance of dispute resolution by ADR and ODR. India is particularly facing an acute shortage of trained personnel for managing the show. A concerted effort on the part of educational institutions, government, judiciary and the business community is the need of the hour. This shall go a long way in allaying the fears of foreign investors and business partners.

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Email: akagarwal@iimahd.ernet.in