Parliament returns ‘badly drafted’ commercial division bill

As promised, here is my outline of what transpired in yesterday’s Rajya Sabha debate on the Commercial Division of High Courts Bill, 2010. Before heading into the meat of the debate, you may be interested in knowing what the Bill is about. Prashant had blogged about the legislation about two years ago, which you can read here. PRS has its own set of documents on the Bill, which you can access here. (Image from here.)

About the Bill: The Bill proposes to fastrack these disputes by setting up dedicated Division Benches (i.e. two judges) in every High Court to hear ‘commercial disputes’ which are valued at Rs. 5 crores or higher. SpicyIP’s primary interest in the Bill lies in the fact that its definition of ‘commercial disputes’ includes disputes arising out of “intellectual property such as trademark, copyright, patent, design, domain names and brands”.

Timeline: The roots of the Bill lie in the 2003 Law Commission Report, which moots the creation of “hi-tech fast-track commercial divisions in High Courts”. The Law Commission report is available for download here. (In his 2009 post, Prashant had covered the Law Commission report as well.) The Bill, in its 2009 avatar, was passed by the Lok Sabha – without any debate, sadly – in its 2009 winter session. The Rajya Sabha – sensibly – sent the Bill to a Select Committee, which submitted its report in July 2010. You can download and read the report of the Committee here.

About the debate: After reading through nearly a 100 pages of the “uncorrected version” of the debate, which you can download and read here, I found the sharpest criticism of the Bill came from the Leader of the Opposition, Arun Jaitley. He accepted that the general motivation behind the Bill was that commercial cases should be transferred to higher courts so that they are heard better. But the Bill itself was “completely misconceived, badly drafted and it is going to take from years to decades now, and would cost ten times more”.

He raised the following issues, many of which are fairly obvious to observers of, and participants in, the Indian judicial system:

  1. Filing/disposal rate and Pendency: The number of cases filed and disposed per year in lower courts is approximately the same. In contrast, the number of cases filed in High Courts is much higher than those disposed, which leads to a growing rate of pendency in these courts. Jaitley argued that this bill would “[transfer] all commercial disputes to the slowest and the laziest layer of the Indian judicial system… where the pendency is extremely high.” The High Courts are also where “the appointment process [of judges] is the slowest… where 30 per cent posts are always vacant”, and which is also amongst the costliest places where cases are fought in India.
  2. The two-judge bench requirement: The bill requires that a division bench of two judges hear commercial disputes. This not only reveals the degree of trust that government has in the judiciary, it also may lead to further delays. Not only does this require establishing these 2-judge benches (in a situation where there is already a shortage of judges), it also needs to envisage a situation where the two judges may differ in their judgement – creating further delays until the matter is finally resolved.
  3. Matters of procedure: The bill attempts to define principles of civil procedure (of the submission of evidence; the transferability of plaints; etc.), but fails to offer any clarity.
  4. Jurisdiction: There are also several problems in defining the jurisdiction of the courts. Jaitley specifically referred to IPR matters, in this regard. The Bill transfers all IP disputes to this to-be-created commercial division. But the various IP acts all refer to the district court as a court of first instance, which will likely create confusion. The Bill does not anticipate amendments in laws that it will likely affect.

The political arguments against the Bill used the same arguments but to slightly different effect.

So, Ravi Shankar Prasad and others argued that this Bill was against Article 14 of the Constitution and the fundamental right to equality before law, and would effectively ignore the concerns of the poor common man, whose cases would continue to languish in courts.

Many other examples of overlapping legislations were cited and MPs used this debate as an opportunity to score some political brownie points (like reiterating the long-standing demand for benches of the Supreme Court across India; asking for High Courts in every state capital; pointing out that the judiciary was not equipped to handle matters of a super-technical nature, and so on.)

To all this, the Minister of Law, Salman Khursheed, had to hurriedly arrive at a defence. UPA2’s grand plans of providing social justice to all were reaffirmed: all courts will be computerised in the next three years, we were told, after which “we would be able to keep real time actual track of what cases are being filed and what cases are being disposed of. And… be in a much better situation to … analyse the impact of any legislation of what would happen.”

Ambitiously, the minister also suggested that he would return to the House with more amendments “next week possibly”, after which the Members could put its “final seal of approval”. What are the odds of that happening? I am, of course, ever the optimist. And as usual, we wait.

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