How The Government Used A Flawed Ordinance To Expedite Cases Dealing With Rs 1 Crore Or More While Other Cases Remain Pending

06 November 2015
Arun Jaitley who, as the leader of the opposition in 2011, vehemently opposed transferring commercial disputes to the high courts, introduced the new version of the Commercial Courts Bill recommended by the Law Commission in the Rajya Sabha earlier this year.
FREDERIC FLORIN/AFP/Getty Images
Arun Jaitley who, as the leader of the opposition in 2011, vehemently opposed transferring commercial disputes to the high courts, introduced the new version of the Commercial Courts Bill recommended by the Law Commission in the Rajya Sabha earlier this year.
FREDERIC FLORIN/AFP/Getty Images

There is an old saying that politics is all about perception. A good policy, is therefore, not necessarily one that is perfect in the technocratic sense but one which complements the larger political agenda. For a government defending allegations of being a suit-boot ki sarkar—a government serving the interests of the rich—a good policy would be one which appears inclusive of all sections of society and not just the “suits and boots.” Paying little heed to this prescription, on 21 October 2015, the Modi sarkar advised President Pranab Mukherjee to promulgate an ordinance that put into effect the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Bill, 2015.

This ordinance, which was promulgated by the President of India on 23 October, aims to fast-track the resolution of disputes valued at upwards of Rs 1 crore. It aims to do so by creating special commercial bench divisions at the level of the high courts, special commercial courts at the district level and a special appellate commercial division in high courts. These courts will be required to follow a special, abridged procedure, and appeals against the orders of these courts will be curtailed to only final judgments and not all interim orders. In other words, the ordinance would hasten the speed of crorepati litigation—litigation with a net worth higher than one crore.

In a statement to Outlook magazine, the commerce minister Nirmala Sitharaman said, “We see no hurdle in getting approval for the draft legislation, as like fast-track courts, these dedicated courts will take care of all commercial issues. This is to make doing business easy for big and small companies.” However, Sitharaman might be highly mistaken in thinking that there will be “no hurdle” in getting the approval of Parliament for this law. The last time this law was in Parliament, members of parliament (MP) cutting across party lines objected to the very purpose of the bill: to prioritise high-value commercial litigation over other forms of litigation. To understand the opposition and objection to this law, it is necessary to first start with the manner in which this law evolved through the legal system.

Prashant Reddy Thikkavarapu studied law at the National Law School of India University and Stanford Law School, and is currently a research associate at the school of law at Singapore Management University. He tweets as @preddy85.

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