On July 17, 2021, Delhi’s Karkardooma Court Complex (a district court) witnessed a dramatic re-enactment of the iconic “Tareekh pe Tareekh” (literally meaning dates after dates) dialogue from a famous Indian movie. The angry litigant allegedly vandalized the dais, furniture and computers inside a courtroom because the magistrate was only giving adjournments! While litigants may not have resorted to such extreme behaviour in the past, there certainly have been instances when they expressed anguish towards rising pendency in courts, especially the trend of seeking frivolous adjournments. This episode raises pertinent questions over the functioning of our justice system. India courts are infamous for protracted legal battles and handful effective hearings. The pandemic has worsened the situation since “regular/non-urgent matters” are being put in cold storage. Alternate dispute resolution mechanisms such as arbitration, mediation and conciliation provide solutions. Arbitration is a popular medium among government and private parties for settlement of disputes. In recent years, settlement through mediation has also gained traction and aggrieved parties are being encouraged to resolve conflicts through amicable discussion. However, unlike arbitration awards, mediation settlements are not legally binding.
This newsletter aims to analyze the current pendency of cases in India, impact of Covid-19 on functioning of judiciary, mediation as an alternate means of dispute resolution and its role in reducing the existing backlog.
2. Pendency of cases: statistics and reasons
At the India-Singapore mediation summit held recently, Chief Justice of India, N.V. Ramana, made some key observations about arrears of cases in India. He said,
“The often-quoted statistic that ‘pendency’ in Indian courts has reached 45 million cases, which is perceived as the inability of the Indian judiciary to cope with the caseload. This is an overstatement and an uncharitable analysis. The term pendency is used to refer to all cases which have not yet been disposed of, without any reference to how long the case has spent in the judicial system. This would mean that a case which was filed yesterday gets added to the pendency statistics. This is, therefore, not a useful indicator of how well, or poorly, a system is doing.”
This is a correct view of the CJI, to the extent that pendency estimates can often be misleading and a flawed representation of the judiciary. That said, we cannot deny that the present system is heavily burdened due to backlog, fresh cases and judicial/quasi-judicial vacancies. About 70,000 cases were pending before the Supreme Court of India as on September 4, 2021. On September 24, 2021, reportedly 5.62 million and 40.19 million cases were pending in High Courts (“HCs”) and district courts, respectively. Most of these cases are 1-3 years old (23.51% in HCs and 28.86% in district courts). Additionally, pendency rate of 5-10 years old cases is higher in HCs (19.9%) than subordinate courts (14.92%).
The National Company Law Tribunals (“NCLT”) have shown a decent performance in terms of backlog. As on May 31, 2021, 20,963 cases were pending, out of the 76,851 cases filed since June 1, 2016. Similarly, only 1,611 cases were pending in NCLT’s Appellate Tribunal as on May 31, 2021, out of a total 6,205 cases. The case disposal rate in National, State and District consumer disputes redressal commissions is quite promising at 89.88% (as on August 31, 2021).
A vacancy statement released by the Department of Justice shows that as on September 1, 2021, a total of 465 judicial posts were vacant in 25 HCs. Out of these, the HCs of Allahabad (68), Calcutta (36), Bombay (33), Delhi (30), Patna (34), Punjab & Haryana (40) and Telangana (31) have over 30 vacancies. As on July 29, 2021, only 19,259 judges have been appointed in districts courts against the sanctioned strength of 24,368. Additionally, there are about 240 vacancies of Chairpersons, judicial and technical members at 15 tribunals across India.
Over the years, committees have been constituted and reports commissioned to devise sustainable solutions to tackle the pendency issue. For instance, improvement in physical infrastructure, use of information technology and case management systems such as eCourts project and National Judicial Data Grid which is a national repository of data related to cases pending and disposed off in all district courts and HCs of India, appointment of additional judges at all levels of judiciary, filling up of vacant positions, emphasis on alternative means of dispute resolution, limiting number of adjournments allowed in court proceedings, special benches constituted for early disposal of older cases, fast track courts, e-courts and lok adalats are some of the key initiatives in this direction.
Still, the problem persists. While the reasons for the backlog and the delay can be several, but, predominantly, they fall under the following categories:
(a) Delay in service or non-service of process: A trial cannot commence without service of process, i.e. summons or notice to the opposite party. Often times, there are various reasons for such delay. For instance, address of the opposite party may be incorrect or they may have relocated from the address. In some cases, the party may refuse to take the summons or notice or is absconding. If the party resides outside the jurisdiction of the court, then the court may order investigation under Section 202 of Criminal Procedure Code to satisfy itself if process should be issued against such persons. In all these situations, , the case falls into a limbo even before the trial begins.
(b) Non-appearance of parties: Appearance of parties is typically required in criminal matters, both at the stage of admission of the complaint and recording of evidence. The magistrate may want to record the statement of the complainant before issuing process against the other side. Accused and witnesses can also be summoned to appear before the court to testify. Legal proceedings cannot continue if the parties disregard court procedure by not appearing when they are required to or filing applications to seek exemption from appearance. No case can proceed unless the litigants are willing to bring resolution of their disputes through court process and not use dilatory tactics to prolong.
(c) Case does not reach finality: Aggrieved parties choose to come before courts because they seek final determination of their rights with respect to the subject matter in dispute. . In many cases, the period from commencement till final determination of parties’ rights is quite long, with multiple chances of appealing against the judgments. If a party is dissatisfied with the decision of a lower court, it has a right to file an appeal against it before a higher court.. High courts may also stay or set aside the orders passed by subordinate courts if they find that orders are erroneous or remand matters back to the trial court for reconsideration. This may again delay closure by few years.
(d) Role of stakeholders: The conduct of parties and counsels assumes great significance in tackling the pendency. Each side must ensure that dilatory tactics such as seeking frivolous adjournments or non-availability of counsels do not obstruct delivery of justice. It is also imperative that the judiciary adopts a stern approach towards those who try to indefinitely delay court proceedings. Recently, the apex court came down heavily on a trial court which granted 78 adjournments in a cheating and fraud case which is pending since 2014!
The pandemic brought new challenges for the Indian bar and bench. Physical hearings were discouraged and even suspended intermittently due to safety protocols. This sudden crisis called for rapid transformation and systemic changes. Use of technology was encouraged which led to setting up of virtual courts. Due to limited functioning of courts and tribunals, only “extremely urgent” matters were heard such as ex-parte injunctions, bail and anticipatory bail matters, matrimonial cases, motor accident claims, stay on execution proceedings, remand matters, etc.
Meanwhile, “regular/non-urgent” matters (both pending and fresh) were kept in abeyance till normalcy restored. This added to the existing backlog. Additionally, legislative decisions such as a year-long suspension of corporate insolvency resolution process through insertion of Section 10A in the Insolvency and Bankruptcy Code also became problematic as a flurry of insolvency petitions were filed once the suspension expired.
Virtual courts became the primary mode of dispensation of justice, but with its own set of challenges. Some of the concerns were lack of awareness, technical incompetence among stakeholders, digital divide, poor infrastructure, etc. With 1.5+ years into the pandemic, the legal community and litigants have adjusted to the present system of hearings. But, are virtual courts a viable option? In my view, it depends on the stage of proceedings. Due to the pandemic, we have seen magistrates adjourning cases pending at the stage of evidence because VC hearings may allegedly distort non-verbal cues such as facial expressions and hand gestures which are considered necessary for assessing the demeanor of the accused/witness. Such cases are being kept in limbo till physical hearings properly resume. Interestingly, the law does not bar recording of evidence through video conferencing.
Without generalizing, my own experience with virtual courts has not been quite productive. One time, I waited in the webex meeting lobby for 4 hours and the matter was not heard due to paucity of time. In a different case, the matter kept getting adjourned day after day because the opposing counsel was “on his legs” in another hearing. This continued for a week!
Despite teething troubles, the Indian justice system has adapted well to the new normal so much so that about 11.45 million cases were heard through video conferencing between March 24, 2020 and June 30, 2021. We also hope that the recently adopted system of hybrid hearings, i.e. both physical and virtual, will give some respite to litigants as matters which require physical appearance of parties can finally proceed.
4. Mediation and its role as a sustainable solution to pendency
Mediation is a statutorily recognised informal process wherein parties voluntarily agree to settle their disputes through amicable discussion. Conflicts arising out of matrimonial and family differences, custody, employment, eviction, consumer complaints, commercial transactions, etc. are amenable to mediation. The settlement is facilitated by a neutral third party called the mediator. Mutual understanding, if any, arrived between the parties, is reduced into writing, in the form of a settlement agreement. For effective mediation, it is fundamental that the process is driven by parties’ willingness and intent to resolve their disputes, failing which, even a fair and well-trained mediator cannot navigate to reach a successful outcome. Parties should come to the negotiation table with an open, non-litigious and positive mindset to explore possibilities and opportunities which will benefit both sides. This effectively means they have to leave an adversarial mindset outside the door and be amenable to find middle ground. In recent years, mediation has grown as an alternate to litigation and arbitration. As per data published by the National Legal Services Authority, 575 mediation centers, including those affiliated with various HCs are running across India. In 2020, about 33,000 cases were settled through mediation.
The process can be initiated prior to and during the course of legal proceedings. Section 89 of the Code of Civil Procedure (“CPC”) empowers courts to refer civil matters amenable to out-of-court settlement to different forms of alternate dispute resolution including mediation. The Commercial Courts and Consumer Protection Act envisage mediation as a mandatory first step before initiation of litigation. Although some courts have ruled that pre-litigation mediation under Section 12A of the Commercial Courts Act is not mandatory and merely directory in nature because the provision is procedural and does not affect the substantive rights of the parties.
Mediation is cost effective and flexible, aims to reduce litigation and preserve inter-personal and business relationships. But, not all agreements arrived through mediation are legally binding on the parties. Settlement agreements drawn up in existing cases which are referred to mediation through court process can be binding if the settlement terms are recorded before the court and adopted by the parties as a final document determining their rights and obligations. Private mediations or pre-institution mediations which precede court process are still not binding in nature. If a party fails to honor its obligations under a settlement reach through pre-litigation mediation, the aggrieved party can take a legal recourse against the defaulting party for breach of contract under the Indian Contract Act. Criminal liability may also be affixed in certain cases. For instance, if the settlement involves payment of money through cheques and they get dishonored, complaint under Section 138 of Negotiable Instruments Act can be filed against the defaulter.
Yet, due to its non-binding nature, mediation settlements often re-agitate litigation. This renders the entire exercise infructuous and unproductive. Thus, to realize full potential of mediation in bringing down pendency, an amendment to the existing laws or a separate legal framework for mediation becomes necessary, which makes private and pre-litigation mediations also binding and enforceable.
Perhaps, the need of the hour is to equate mediation with conciliation. Section 67 of the Arbitration and Conciliation Act discusses the role of conciliator and stipulates that it is to “assist the parties in an independent and impartial manner in their attempt to reach an amicable settlement of their dispute”. This squarely fits for a mediator too. Settlement agreements arrived through a conciliatory process are final and binding on parties (section 73) and have the same status and effect of an arbitral award (section 74). Since both mediation and conciliation work on same principles and follow similar modus operandi, the act could be amended to provide that mediation and conciliation proceedings mean the same.
Given the backlog which was further aggravated during the pandemic, the courts are proactively advocating that parties should endeavour to explore settlement through mediation before taking the adversarial route and try to resolve matters amongst themselves. Where a possibility of settlement exists without interference of court, the parties should resort to mediation as a first step as it will eventually help in reducing burden on courts.
There are no two ways that a huge backlog of cases is choking Indian courts and tribunals. To address this, the government has undertaken several legislative, administrative and policy decisions, including a renewed focus on non-adversarial forms of dispute resolution like mediation. While mediation is an effective tool, to realize its full potential towards reducing pendency, mediation agreements must be enforced as a decree of court. Hence, there is an urgent need to enact a separate law governing mediation. The law minister recently announced that the government is planning to introduce legislation on mediation and the bill is likely to be tabled before the winter session of the Indian parliament. While the contours of the proposed law are yet to be revealed, it seems that mediation may be prescribed as a mandatory first step of resolution. Presently, it is mandatory for only commercial disputes covered under the Commercial Courts Act but can be bypassed if the aggrieved is seeking urgent relief. In addition to government initiatives to bring down pendency of cases, it is important that stakeholders do not abuse the current system for vested interests. Attempts to stall and delay proceedings must strongly be discouraged and high costs be imposed on those who prolong, as a matter of habit.
 This dialogue is from the movie Damini (1993) and enacted by actor Sunny Deol. During the course of a hearing in the movie, when the magistrate asks Deol if he should give another date, the actor, who plays an advocate, submits that the case is pending since a long time and the court has only been giving dates after dates. The character is also disgruntled at the behaviour of the opposing counsel who is seeking regular adjournments as a dilatory tactic
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