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Economic Reforms With Judicial Reforms

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In the current focus on making India an attractive destination for investment, a lot of attention is being paid to economic policy. One key aspect, without which economic reforms alone will not help,is judicial reforms to ensure timely and effective delivery of justice in commercial cases.

The World Economic Reform, Global Economic Report 2008-09: Income Categorisation (World Bank) has indicated a co-relation between a nation's prosperity and its perceptions of judicial independence and the efficiency of its legal framework. Providing a fair, transparent and efficient dispute resolution mechanism based on a clear legal framework is key to encouraging investment of capital, thereby stimulating growth and development.

The World Bank's 2014 report on doing business, which compares business regulations for domestic firms in 189 Economies, ranks India on 134th position among 189 countries with respect to ease of doing business and ranks it on 186th position with respect to enforcement of contracts. This is based on factors such as time, cost and the procedural complexity of resolving a commercial dispute. If India desires to be recognized as a destination of choice for trade and commerce, it is imperative to focus on building an effective judicial system as an integral part of the economic reform agenda. Sadly, this is receiving little or no attention from decision makers. As a result the problem has aggravated over a period of time.

Accelerated justice will free up billions of dollars blocked in litigation against projects in several parts of the country and enable it to be put to productive use. Or else, potential investorswill look elsewhere for their investment. Investors want decision in reasonable time. So do millions of our countrymen who stand to gain in terms of jobs and opportunities at various levels, upstream and downstream. As per the Department of Justice (as quoted in a 2013 report of the Committee on Empowerment of Women, Lok Sabha) India has 18,000 judges at the subordinate level, which comes up to about 13 judges per million. This is against 50 judges per million in developed countries and 35-40 in some developing countries.

As per another report, prepared by IndiaSpend, in 2013, over 30 million cases are pending at various levels of judiciary across the country and while lower levels of judiciary have around 27 million pending cases, 21 high Courts across the country have over 4 million pending cases! In such a situation, it may be impossible toaccomplish any judicial productivity. Judicial productivity in India can also be analysed by the ratio of judges to cases disposed every year. The findings in a cross-jurisdictional study, Judicial Productivity in India: By Barry Walsh(an Australian justice sector development consultant who lived and worked in Delhi during 2004 and 2005),has shown that the disposal ratio in Delhi in 2005 was 701 disposals per year, whereas the comparable figure in Australian courts was almost double at 1,511.What is even more surprising is the fact that, as per a Report of Supreme Court of India of 2012, in spite of disposal of 1.7 million cases by the Indian High Courts, there was still an increase of 1.73 per cent in the pendency of cases in 2012.

Again, while in the US, the Supreme Court disposes of 55 cases per year,in India, each of the 13 benches in the Supreme Court has hundreds of  matters coming up before it on Mondays and Fridays! The year 2011 saw 77,000 cases being instituted in the Supreme Court. The Supreme Court 2012 report indicates that nearly 20 million new cases were instituted in 2011 across India and nearly the same number was disposed of but the number of pending cases - 30 million - remained the same. Not surprising given the 25-30 per cent vacancy of seats in the High Courts and 20 per cent in the district and subordinate courts. The ratio of 10.5 judges per 10 lakh of population is too low and needs to be raised at least to 50 judges.

Apart from the above, there are several reasons for this state of affairs - lack of adequate institutional infrastructure in terms of court buildings; the lack of a case management system; the quality of our procedural laws; the lack of specialisation and handling complex commercial disputes; the abuse of Public Interest Litigation; and the system of Special Leave Petitions that results in trivial matters being brought before the apex court when these can be  handled at various levels in the State judicial set-ups.

This will have to be accompanied by building the judicial infrastructure - hard and soft. We will need buildings, court rooms, hiring and training of judicial officers and staff and an IT infrastructure in order to increase efficiency, performance and accountability across the system. Having said that, the recommendation of the Working Group for the 12th Five Year Plan, to allocate a budget of Rs. 1670 crores for computerization of roughly 17,300 courts (i.e. approx. Rs. 9.65 lakh per court)seems inadequate given the task on hand.
Improving judicial productivity through systemic changes is very important. Nearly 70 per cent of civil cases in Australia, US and Canada are settled even before the trial begins. This is because both parties to the litigation are aware of the probable time period - 'outcome date certainty'. In India we gamble on delays and indecision so that this period is lengthened! The US has "discovery masters" to address pre-trial and post-trial matters that cannot be effectively addressed by the judge.

This is where a case management system comes in - specifying time limits for each step of litigation, with the requisite IT support and monitoring of the case load, and encouraging alternative dispute resolution mechanisms for which judges are suitably trained. Mandatory publishing of filing dates as well as disposal dates will make the system more accountable. Litigants need to be held accountable too. Deterrent cost should be imposed on parties for adopting dilatory tactics such as seeking frequent adjournments, etc. or for filing cases which are, on the face of it, frivolous.

Finally, in a globalized economic environment, we need specialized courts to deal with commercial matters. One of the Law Commission reports noted that the US and UK courts are increasingly admitting cases which ought to have been filed before Indian courts on the ground that in India almost all cases take 25 years for disposal. This, in a time when it is "business at the speed of thought", to use the title of a Bill Gates book.
Enactment of stricter or progressive laws alone cannot catapult India into being a significant player in a globalized market. Judicial reforms are the need of the hour to enable India to truly fulfil its Constitutional commitment to secure 'justice' to its citizens and to facilitate economic growth through effective and speedy enforcement of laws and contracts. But the approach must be systemic and not - piecemeal, with due emphasis given to prioritizing and sequencing judicial reform.

We today have a government committed to economic reforms but no economic reforms can succeed unless the judicial limb is strengthened. This must be given the highest priority to ensure the desired results out of the far-ranging and impactful reforms we are all looking forward to.

The views expressed by the author are personal

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