Commercial courts: Little progress on speedy case disposal seven years on

Experts say taking a leaf out of the book of foreign justice systems may help address the problems these courts are facing

The commercial courts in India were established with a promise of making India a business haven, but the delay bug has claimed yet another victim seven years on.

Experts say taking a leaf out of the book of foreign justice systems may help address the problems with these courts.

The Delhi High Court, taking note of a large number of such cases, recently directed its Registrar General, the Government of NCT of Delhi and others to set up 42 commercial courts within six months for the speedy disposal of business cases.

Thee courts were set up in three tiers to hear matters of commercial nature in 2015, to improve India's image as a business-friendly place. The first tier was at the district level, the second, the High Court level for original jurisdiction matters. The third tier was the appellate commercial division at the High Court level. Before 2018, the threshold for commercial cases was Rs one crore.

In 2018, an ordinance, and later a Bill, were brought to empower states to have commercial courts below the district level and commercial appellate courts at the district level. The threshold was accordingly reduced to Rs 3 lakh. “This was done to improve the ease of doing business so that more commercial cases could be disposed of,” said Sanjeev Sharma, partner at Saraf and Partners.

However, this diluted the earlier objective of speedy disposal of cases. “Without specific infrastructure, efficiency cannot be achieved,” he said.

According to Vidhi Centre for Legal Research data till 2018, Vadodara had the least number of pending cases, where 32 of the 150 cases (21 per cent) were ongoing. Meanwhile, the Delhi High Court saw 45 of its 144 cases (31 per cent) pending and the Bombay HC saw the largest number of pending cases with 95 of its 144 cases (66 per cent) ongoing. All of these cases neared or exceeded two and a half years from their date of filing, the data said.

“Higher disposal may also indicate that a lot of cases were withdrawn by the parties. Judges need to be sensitised and trained for commercial matters for speedy disposal of cases," Sharma said.  

According to the old data, both Delhi High Court and Vadodara’s Commercial Court manifested a more successful disposal time frame for commercial cases than the Bombay High Court. Most of the cases in Delhi High Court were intellectual property issues.

Compared to this data, out of 27,535 pending cases till May 2022 in Delhi High Court, 1,974 cases were disposed of within the month. It is to be noted that 1,875 fresh cases were instituted in the same month.

Bharat Chugh, former judge and Supreme Court advocate, feels meritless cases can be thrown out at the beginning to avoid delay. “Many legal practitioners themselves are still unaware of summary dismissal in such cases,” he said.

Another problem he talks about is the compulsory pre-mediation stage before coming to commercial courts. “It is a bit of an overkill. Cases with merits may get filtered out this way,” he said.

So what should be the road ahead for these courts? Chugh says experts on commercial matters can be roped in on an ad-hoc basis for two or three years where there are no judges to hear such cases. “This type of practice has been seen in the UK,” he said.

Vidhi’s 2018 data also showed that in Assam for example, courts had been designated in almost every one of the 27 districts, but on average only 12 cases were pending across the whole state. Chugh says this may not mean that the State does not have sufficient commercial cases. “Parties may not be aware of such courts or the courts may be far away from where they live,” he says.

In such cases, he says the remote filing of the cases may just be the solution. “All courts should encourage e-Filing of suits to ensure more people can approach them,” he says.