Inside India's Judiciary with CJ Shah, J Chandrachud
Welcome to this special Independence Day presentation of The Firm as we go ‘Inside India's Judiciary’. This show marks a rare, if not first, on-camera appearance of a Chief Justice, a sitting judge, India’s Attorney General and UK's Former Attorney General.
The Firm brings to you with Bombay High Court Chief Justice Mohit Shah, Bombay High Court Judge Dhananjaya Chandrachud, India’s Attorney General Goolam Vahanvati, UK’s Former Attorney General Lord Peter Goldsmith in conversation with Cyril Shroff, Managing Partner of Amarchand Mangaldas.
Over the next one hour, these very eminent people are going to give you a rare insight into the challenges & opportunities that face India’s judicial system – from pendency to modernising the judiciary to judicial activism.
Cyril Shroff: In the first theme, I am just going to put a proposition to the Chief Justice and following thereafter to the Attorney General on the most well documented and most frequently discussed theme of 'justice delayed is justice denied'.
All of us have experienced the brunt of that- not only in navigating our ways through the Indian dispute resolutions system but that's the top theme that is thrown against us every time the conversation about our judiciary comes up. Sir, could you share with us your perspectives on it and what really are the facts on this.
Justice Shah: As a lawyer, the first conference of International Bar Association that I attended was in Delhi which was organized in the year 1982. Second one organized in Bombay in 1984, so I am glad that I am back to this conference of International Bar Association and I have this opportunity to interact with all of you.
It gives me immense pleasure to be amongst you all at this prestigious conference on the Indian Story of Global Mergers and Acquisitions organized by the IBA Asia Pacific Regional Forum. I also feel so glad that I will be participating with you at this discussion on this important topic of the role of judiciary in India's growth story. It is well recognized that, particularly when we see all around us, the neighbouring counties and other countries in the developing world that how healthy Indian democracy is. Indian judiciary is one of the institutions which have made this possible. Apart from that, it is also well recognized that amongst institutions that most influenced economic performance of the country, the courts play a prominent role. The reason is no matter how effective, how good a country's legislation is, it cannot stand up on its own unless the laws are supported by well-functioning judiciary. Before I start my presentation, I would just request you to notice some of the constraints under which the Indian judges are working.
Our working strength is one-sixth or even one-eighth of the judge strength that you have in many of the developed countries like USA where you have 100 judges per million. We have in India about 13 to 14 judges. Fortunately in Maharashtra, we are comparatively better placed. We have 16.5 judges for a population of 1 million. I am very happy that we are having this interaction in the 150th year of the Bombay High Court. It's one of the Chartered High Courts which is celebrating its 150th year since last 14th August. If you look at the figures- the all India figures are 27.7 million cases pending in the courts in India- the trial courts and the district courts, but I would like to concentrate on performance of the Maharashtra Judiciary. I came here, as was mentioned, on 26th June and I found on 30th June, 2010 that there were 4.1 million cases. In the last 20 months, another 3.4 million cases came to be added. Fortunately, we have been able to dispose of 4.4 million cases in the last 20 months- that means that every month, judges in Maharashtra dispose of more than 200,000 cases. So the pendency has come down - last Monday it was 3.1 million. In last 20 months, we have reduced the pendency by 1 million. The usual question is that for how long do the cases remain pending? The popular perception is that cases remain pending for 10 or even 20 years. So I just want to give you a break-up of the cases which have remained pending in the courts in Maharashtra for 5 to 10 years and even above 10 years. So the last column gives you the total number of cases pending for five years or even longer. As I said around 30th June, 2010, the number of such old cases- I will call them old cases- was 1.3 million and in the last 20 months, we took care of 790,000 old cases. But in the meantime, in those last 20 months, another 192,000 cases became old. So as of now the number of old cases is 718,000. You might say that it's a huge number. It is, but just imagine, if in the last 20 months we could try and decide 790,000 cases; these 718,000 cases we will be able to decide in the next 20 months. We would be able to dispose them off in the next 20 months and during those 20 months; there will be only about another 200,000 cases. So we will be able to deal with them in another six months. So maybe, by December 2014, we won’t have any case which will be pending in any court in Maharashtra for more than five years. Very often people say that cases remain pending for so many years but I want you to look at the figures that how many cases have remained pending for how many years. You will notice that out of the total cases, 47% cases are hardly two years old or even less; 30% cases are between 2-5 years old. Its only 15% cases which are more than 5-10 years old and only 8% cases which are more than 10 years old. So it is this 20% cases which bring us the bad name and as I said, we will be able to deal with these more-than-five-year-old cases within two years. Now you will say that after all, this is a conference of business lawyers; so you would like to know more about what happens to the business cases in Maharashtra. On July 1, 2010 we had 327,000 cases- criminal cases- for dishonour of cheques. We had 30 judges, exclusively, trying cases for the dishonour of cheques. One court of the Magistrate- Court number 30 in Kurla- had 45,000 cases. I immediately dashed off a letter to the Chief Minister that you please give me at least 10 magistrates to deal with only these cases and there were many other bottlenecks, The result is for all you to see- from out of 327,000 cases plus another 200,000 cases, we could dispose of 387,000 cases in the last 20 months. So the pendency has now come down to 140,000 cases only. That court of the Metropolitan Magistrate in Kurla which had 45,000 cases now has only 4,600 cases and we are sure that with passage of time, in few months we will be able to control that pendency as well.
Now as far as the High Court is concerned, we all know that arbitration is an important mechanism for resolving disputes. There were 520 applications for appointment of arbitrator. But even for getting an arbitrator appointed, they had to stand in a queue for two-three years. So we took steps to see that such applications are immediately attended to with the result that as of now there are only 62 such applications which are pending for service of summons and other things. So as soon as an application is made for appointment of an arbitrator, within three-four months we decide that application and the arbitrator is appointed.
This chart gives you the pendency of cases on the original side of the High Court such as arbitration petitions, company scheme petitions because you are all concerned with merger and amalgamations; so hardly any cases go beyond two years. In fact, all the company scheme petitions are decided in less than two years. We will only find that there is one difficulty about suits which are pending on the original side of the High Court- that number is large and we have found out a solution; within a few months we will be able to address this problem. The solution is this that all other High Courts have their original side jurisdictions starting from 1 million-2 million-2.5 million; our court had original side jurisdiction starting from only Rs 50,000. So now it is proposed that we will have our pecuniary jurisdiction above Rs 10 million out of 41,000 law suits on the original side, 36,000 cases are less than 10 million. So those 36,000 cases will go to the city civil court where there are more judges and less cases. So once our judges will be free to decide these more contested cases, they will also be able to attend to the arbitration petitions and hopefully, we should be able to hear such petitions within a year or so.
All such pendency cannot be dealt with unless our lawyer friends appreciate that our courts should not be treated as only trial courtrooms. Professor Frank Sander said, as far back as in 1976, that ‘re-imagine the civil courts as collection of dispute resolution procedures, tailored to fit the variety of disputes that parties bring to the justice system’. I would request that you please also consider that Bombay High Court has been encouraging mediation and in the last about one year, we have been able to settle 4,400 cases with the help of our trained mediators. They have extensive training programs which are conducted by our judicial academy for training mediators and I am sure that you will find our mediators very well trained and fully qualified to deal with all the business disputes.
Shroff: Thank you sir, and it just reconfirmed what I believed, after the last time you did this presentation, that the reality is a lot better than the perception of how our system is being perceived and reviewed from outside.
Let me now turn to the Attorney General and request your thoughts in terms of what do you see as the sort of causes of this and any thoughts from a forward-looking perspective of how this would be addressed and any key messages that you would like the business community and the international community to carry as they look at complex cross-border transactions. How should they be looking at this entire topic as it certainly plagues every commercial transaction and what should I think about my governing law, what should I do about my dispute resolution system- should I choose arbitration or what should I do about it?
Vahanvati: The real concern of people who invest in this country is that they must have an effective dispute resolution mechanism. It’s a sad fact and we must accept that nobody invests in India to get entangled in the Indian legal system for dispute resolution. What they really want is to have an effective arbitration mechanism and they would want the Indian judiciary to leave arbitration alone. The biggest concern is that they find that somehow international arbitrations also get caught up in the Indian courts. Now we recognize this concern and there have been a few judgments, which have been given, which drag obvious foreign arbitrations into Indian courts. These judgments are being reconsidered by a Constitutional Bench of the Supreme Court and I think there is widespread recognition that if we want to have an effective commercial dispute resolution through arbitration, we must respect the integrity of the arbitration process. What happened in the last 10-15 years is that the more or less accepted challenges to arbitration awards as a first appeal and somehow made even international awards subject to Indian jurisdiction. Now this is your concern that you can have a very elaborate dispute resolution clause in the contract, but ultimately if the dispute resolution gets dragged into Indian courts is something which is unacceptable to you. We are alive to that and if we don’t do it through the judicial process, we are seriously considering amendments to the Arbitration Act of 1996, which will effectively insulate foreign arbitrations from such intervention. I think it’s a very important point. The second thing that we are trying to do and this is something which you will appreciate. We have come out with a Bill, which is pending in the Parliament, which is called the Commercial Courts Division Bill. Now as the Chief Justice pointed out that there are only four courts in this country- high courts, which have original jurisdiction; the rest of the courts-the jurisdiction is with the lower courts- the original jurisdiction. So, what this Bill seeks to do is to enable every High Court to have a specialist commercial court. This will be a fast track commercial dispute resolution system, which will, I think, inspire confidence and two judges will be hearing the matter in the first instance; one appeal to the Supreme Court. When this becomes a reality, you will also find that you have a method for settling your disputes without getting involved in the tangle delays of the Indian courts. So that will be a great respite to foreign investors.
Shroff: Lord Goldsmith can I get a cross-border perspective from you on how do you see matters from out to in and do you agree with the proposition that given the perceptions of the Indian system as they are that we are effectively exporting our dispute resolution system and is there actually an opportunity there for India to bring it back?
Goldsmith: You are definitely exporting your legal disputes. You only have to go to Singapore to see how many Indian disputes are being decided there and I think India is missing a huge opportunity. If you look at the English legal system, the practice is fantastically successful. I think 6 out of 8 of the top law firms are either English or sufficiently connected, but the reasons for that are partly because it’s got English law, which is predictable, which doesn’t have too many uncertainties and secondly the quality of the judges and the lawyers. But India has both of those two things as well. I have always been very impressed with the quality of Indian judges and lawyers and the system- the common law system, the commercial system is pretty much the same. So why are you missing out and I think the answer you are missing out, I am afraid, is the perception that Indian legal system is insular and the Attorney General has rightly identified the concerns about arbitration. I am very pleased to know that the Constitutional Bench is hearing the Bhatia case and may overturn some of the decisions, which have been very difficult, but there is also something that needs to be done very strongly in relation to the delay and the time it takes. So, I have been very interested to see Chief Justice Shah’s statistics, which I don’t think the world knows how much inroads are being made and that’s very good, but there is a lot more to be done in that respect. But as I said, I think, at the moment as India is on the crossroads of becoming such a huge economic super power, the Indian legal system is at the crossroads as well and this is an opportunity to be taken and that’s one reason Cyril, I am delighted that you asked me to be on this panel because I think this a very opportune moment to discuss these issues.
Shroff: Apart from a conference like this, any thoughts in terms of how we can improve the name of the Indian legal system internationally and spread the message?
Goldsmith: I think four things you can do- one is be less insular and that's critically in relation to the arbitration system. That's not the only area in which India appears to be protective and not open enough to the outside. Secondly you got to reach to the decision that the courts are run for the litigants and not for the lawyers. Thirdly modernization of the court process- we can talk about that - there a lot that can be done. And fourthly, this may be controversial; I think there is a liberalization of the legal profession that needs to be done because there is no incentive of competition at the moment in order to improve practices. I don't mean liberalization in terms of firms being able to open transactional offices that’s a big deal that may happen. But simply in terms of going even back to the state that India was at one stage of allowing suitably qualified foreign advocates to appear in cases. I appear in courts all over the world; not allowed to appear in the court in India. I think that helps increase the pool of senior advocates and qualified advocates but also adds this competitive element which enables the consumers of the legal system to get better value.
Shroff: Thank you very much for those comments. I think that's the perfect segue to go to the next topic. The next theme is of modernizing our judiciary. I am going to straight away request Justice Chandrachud to share his thoughts in terms of what could be really done in terms of modernizing our judiciary? What is already being done in terms of the various initiatives and you have been at the forefront of several of these initiatives. So any thoughts in terms of what we are doing about our infrastructure, how we plan to use technology, training and any idea that you can leave on the table for how really can the Bar cooperate with the Bench for making this more realistic and possible?
Justice Chandrachud: In the last 12 years that I have been a judge, there are two things which really stand out- one is that the subjects of litigation have changed drastically in India. Second, the content of the existing subjects has changed completely. So judges have to keep abreast of developments in the law and we set up this academy and just to give you an idea- in the last three years, we have trained close to 1200 judges in the 2000 judges that are part of our system. We have training across the career- so judges who join the system typically at the age between 25 and 30 would come into our academy for a one year training program which is spread over three or four modules in between which they would go back to the courts and learn, have some practical experience of what it is like actually in the court. So we have training across the career for young judges who are in the system at age 25, for judges at the middle level, district judges, we have training for the High Court judges as well. So what we are doing in our academy is to give our young judges, our senior judges some vision about finance, notions about economics, notion about psychology, notion about contemporary politics. We also train judges in specialized areas of law, for instance securities law, intellectual property. Even in the intellectual property, we try and give them as broad an understanding of not just who are really pro IP protection but the conflicting view point which judges must have to have a balanced perspective. So the whole the effort really is to have training for judges and training not just in law, not just in terms of what they really need to be good at, the regular tools that they need to handle in their day-to-day work as judges but to give them a sense of vision. The second aspect of what Cyril said how do you modernize? One of the things which we did and the Chief Justice mentioned about these say 4 million cases which were pending when the Chief Justice assumed office. In our State, every one of those 4 million cases, every proceeding in those 4 million cases is part of our case information software. so that if you ask me today, how many women under trials in the district of Pune are above the age of 60 and are awaiting trial on a charge of murder and who have been denied bail and I can give you an answer straight away to that, so that if those cases have to be fast-tracked, we can fast-track those cases. So that's one area and at our academy, we train our judges on being very conversant with computers. In fact we have a computer lab in our judicial academy and we get judges across and they spend 15 days being trained in the use of information technology.
Justice Shah: I would like to mention, add to what Dr. Chandrachud has said. So committed are our judges, especially the young judges and the lady judges that those with infants of 6 months or 12 months, they want to take training, but how do they even look after their children. So we allowed them to bring their mothers or mother-in-law to stay with them, to share the room so that they can look after their children.
Justice Chandrachud: Almost 60% of our young recruits now into the judiciary in the State are women and it’s just amazing. We had young graduates who are going to become judges in the State and they would tell us that I don’t want to miss this training program, but we have several young judges who said “but I have a 3-month old baby, can I come with my 3-month old baby?” The Chief Justice was very gracious; we said we will have a crèche in the Institute because if you are a woman and you want to get a 3-month old baby and undergo a training program for a year, we have a very dedicated judicial officer in the wings. So, we are trying to get these young people who are very dedicated, young people who are very active into the judicial training module and possibly get things going.
Shroff: I have always believed that the quality of thought and the sense of fairness that underlies our legal system are better if not at par with the best in the world. The next time I am in a commercial negotiation, I want to truly represent an Indian party when there is a sort of argument as to which legal system effectively to choose. Say with pride that the Indian system not only works, but it is capable of delivering a sophisticated outcome in relation to any kind of contractual construct that is there in such complex cross-border transactions. Now in order to get to that point where I can say that with confidence and win that argument at a negotiating table – question for Mr. Vahanvati is what is it that you would recommend that we need to do on a broader basis in terms of modernizing our judiciary and getting us to that point where we can say that and win that argument with ease?
Vahanvati: One of the first things we have to do with regard to the judiciary is to allow the judges to be judges. What we are doing today is to burden the judges with so much administrative work that they don’t have time to do legal work. Let me give you an example, The Chief Justice of High Court spends so much time on administrative work that it is impossible for him to even concentrate on his own legal work. So the first thing we’ll have to do to modernize the judiciary is to accept that judges are good judges but bad administrators. I am sorry, I am putting it very bluntly but this is how it is. Let the judges do what they are supposed to do in the first place and don’t be hesitant in getting modern management techniques to assist the court. We were discussing this outside and Lord Goldsmith very rightly said there is always a fear that you will impinge on the independence of the judiciary; I accept that. The ultimate decision will be then of the Chief Justice and his judges, but the inputs that you will get- modern management techniques is something which we have to accept now. Three years ago, we had a conference in Delhi where we had presented a vision document and one of the important aspects of the vision document is to associate institutes of management all over the country with judicial management. A Chief Justice cannot possibly know which his own resource is. He doesn’t know which judge is good in a particular area. He depends on second-hand information from his colleagues or probably from the Bar. Bar is always unreliable when giving such information. Today a point which every speaker has made is that we must have specialization among judges. How will you recognize the ability of judges unless you get proper inputs? Therefore you associate management institutions with various High Courts. Every High Court in our country has different problems. Some High Courts have completely different problems. For instance, in Gujarat, I am told there major problem are prohibition cases- the amount of prohibition cases which they have because they are the only State in the country which still practices prohibition in reality. If it’s not so, that’s not the matter. So every court, every State has a different problem. So we don’t have a uniform answer for this. You bring in outsiders. You bring in trained management people from the management institutes and help the courts to modernize themselves. We are, as far as the government is concerned, committed to spending any amount of money to provide the judges with the best technology. Justice Chandrachud is right when he said that they had no money three years ago in Maharashtra. The central government has sanctioned crores of rupees now for modernization, for giving computers, for providing laptops, for providing con