Alternative Dispute Resolution Mechanism – NCA, Lok Adalats, etc.
Foreign lawyers, firms can operate in India: Bar Council
From UPSC perspective, the following things are important :
Prelims level : Bar Council
Mains level : Foreign legal professionals in India
Central Idea: The Bar Council of India (BCI) has opened up law practice in India to foreign lawyers and law firms. It has framed the ‘Bar Council of India Rules for Registration of Foreign Lawyers and Foreign Law Firms in India, 2021’.
About Bar Council of India (BCI)
History
Functions The functions of the Bar Council are to:
Constitution
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Why such move?
- The BCI notification also stated that the Rules would help to address the concerns expressed about the flow of Foreign Direct Investment into the country.
- The Rules would also help make India a hub for international commercial arbitration.
Move to benefit Indian lawyers
- The rules enable foreign lawyers and law firms to “practice foreign law, diverse international law and international arbitration matters in India on the principle of reciprocity in a well-defined, regulated and controlled manner”.
- The BCI said that the move would benefit Indian lawyers, whose standards of proficiency in law are comparable with international standards.
- The legal fraternity in India is not likely to suffer any disadvantage since the move would be mutually beneficial for lawyers from India and abroad.
How foreign lawyers can begin operating in India?
- The Rules prescribe that foreign lawyers and firms would not be entitled to practice law in India without registration with the BCI.
- Foreign lawyers and law firms are not allowed to practice Indian law in any form or before any court of law, tribunal, board or any other authority legally entitled to record evidence on oath.
- However, the restriction does not apply to law practice by a foreign lawyer or foreign law firm on a ‘fly in and fly out basis’ for the purpose of giving legal advice to a client in India on foreign law or international legal issues.
- In such a case, the lawyer or firm cannot have an office in India, and their practice cannot exceed 60 days in any 12-month period.
Requirements for foreign lawyers and firms
A primary qualification required from foreign lawyers and firms is-
- Certificate from the competent authority of their country that they are entitled to practice law in that country.
- Undertaking that they shall not practice Indian law in any form or before any court of law, tribunal, board or any other authority legally entitled to record evidence on oath.
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Alternative Dispute Resolution Mechanism – NCA, Lok Adalats, etc.
The Mediation Bill, 2021
From UPSC perspective, the following things are important :
Prelims level : Section 498A
Mains level : Paper 2-Mediation Bill 2021
Context
The Mediation Bill, 2021 was introduced in Parliament in December 2021. It seeks to ‘promote mediation (including online), and provide for enforcement of settlement agreements resulting from mediation’.
Need to popularise mediation
- The Chief Justice of India (CJI), N.V. Ramana, had said that mediation should be made mandatory as a first step in dispute resolution and that a law should be framed in this regard.
- He emphasised the point that a movement needs to be launched to popularise mediation as it was a cheaper and faster dispute resolution mechanism.
- He said that courts should be the last resort for dispute resolution; therefore, one should explore the options of alternate dispute resolution.
- The Tamil Nadu Mediation and Conciliation Centre, an initiative of the Madras High Court and India’s first court-annexed facility with a mediation centre in every district, has significantly reduced the pendency of referred cases.
Which laws in India allow mediation?
- Mediation finds legitimacy in some specific laws such as:
- The Code of Civil Procedure, 1908, the Arbitration and Conciliation Act, 1996,
- The Companies Act, 2013,
- The Commercial Courts Act, 2015,
- The Consumer Protection Act, 2019,
- However, there is no standalone legislation as yet.
How the provisions of Mediation Bill 2021 will help in improving the law and order situation
- The bill seeks to promote mediation (including online), and provide for enforcement of settlement agreements resulting from mediation’.
- In case of civil or commercial disputes, a person must try to settle the dispute by mediation before approaching a court or tribunal.
- Improving the law and order situation: There are certain provisions in the Bill which may help in improving the law and order situation in a locality and/or encourage compounding of criminal offences.
- First, Section 7 of the Bill says that courts will be competent to refer any dispute to mediation relating to compoundable offences or matrimonial offences connected with or arising out of civil proceedings between the parties.
- Second, Section 44 of the Bill provides for ‘any dispute likely to affect peace, harmony and tranquillity amongst the residents or families of any area or locality, to be settled through community mediation.
- Third, the provisions of the Act shall not have the overriding effect, inter alia, on the Maintenance and Welfare of Parents and Senior Citizen Act, 2007 and the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
- Promote friendliness: Section 320 in the Code Of Criminal Procedure (CrPC) provides for the compounding of certain criminal offences which shall have the effect of acquittal of the accused.
- Here, the policy of the law is to promote friendliness between the parties so that peace between them is restored.
- Relieving the pressure on the police: Many criminal offences are a result of the fact that civil or commercial disputes could not be resolved amicably and in time.
- The police at times take minor cases lightly or reduce the seriousness of crime by converting a cognisable offence into a non-cognisable one.
- Therefore, the proposed law of mediation, that has the mechanism of not only preventing the breakdown of law and order through community intervention but also the competence to smoothen the route to compounding of certain criminal offences, may ultimately relieve some of the pressure on the police also.
Some laws are left out of the scope of Mediation Bill 2021
- Law to prevent sexual harassment of women at workplace: The law to prevent the sexual harassment of women at the workplace has probably been kept out of its scope so that an internal or local complaint committee is able to take up conciliation and close the case locally without involving a third party and detailed procedure.
- Law on welfare of parents and senior citizens: The law on the maintenance and the welfare of parents and senior citizens has also been kept out of its scope as offences under it are cognisable offences.
Way forward
- The Supreme Court’s view: The Supreme Court of India has held that if there is a composition of an offence during investigation, the parties can either approach the court or the police.
- Increasing the compoundable offences: The number of offences that can be compounded may also be increased — particularly property offences.
- Keeping in view the recommendations of the Law Commission in its 243rd report, Section 498A of the Indian Penal Code, relating to cruelty by the husband or his relatives, can also be made compoundable.
- It may have far-reaching consequences in resolving matrimonial disputes.
Consider the question “What are the provisions of the Mediation Bill 2021 that could help relieve some of the pressure on law enforcement agencies?”
Conclusion
Though the proposed law primarily intends to resolve civil and commercial disputes through mediation, it has ample scope to relieve some of the pressure on law enforcement agencies.
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Back2Basics: What is a Compoundable and Non Compoundable offence in India
- Compoundable offences are those offences where, the complainant (one who has filed the case, i.e. the victim), enter into a compromise, and agrees to have the charges dropped against the accused.
- However, such a compromise should be a “Bonafide,” and not for any consideration to which the complainant is not entitled to.
- Compoundable offences are less serious criminal offences and are of two different types mentioned in tables in Section 320 of the Criminal Procedure Code, as follows:
- Court permission is not required: These are the offences, compounding of which do not require prior permission of the court.
- Court permission is required: These are the offences, compounding of which require prior permission of the court.
Alternative Dispute Resolution Mechanism – NCA, Lok Adalats, etc.
Arbitration in India: Issues
From UPSC perspective, the following things are important :
Prelims level : Not much
Mains level : Paper 2- Arbitrations and issues with it in India
Context
Plagued by delays and rising costs, arbitration in India needs urgent attention. The pandemic has only worsened the situation.
Issues with arbitrations process in India
- Arbitrations in India suffers from rising costs and sluggish proceedings.
- Arbitration proceedings are often dragged on by lawyers on either side filing misconceived applications at various stages of the proceedings.
- Litigants, too, at times contribute to this delay with their stubbornness in not conceding a loss or defeat.
- The courts have narrowed down the scope of judicial interference under Section 34 of the Arbitration and Conciliation Act.
- The very limited recourse for setting aside an arbitral award under the Act invariably means that it will be upheld, even if it appears unfair or illogical.
- The aggrieved party may well be stuck with the award and precluded forever from challenging it.
- Arbitration hearings are generally held in camera, and decisions are usually not publicly accessible, giving rise to doubts about impartiality and fairness.
- Arbitration proceedings have become more complex with time.
- The Supreme Court, in Guru Nanak Foundation v. Rattan Singh and Sons, had expressed disappointment against the procedural delays and tardiness in the resolution of disputes through arbitration.
- Even the clauses providing for fees of the arbitrators and fixed timelines for disposal are often disregarded by the players
- The inevitable consequence of these drawbacks is a slow departure of the biggest litigant, the government, from the arbitration spectrum.
- A sector that is dominated by approvals, protocols and scrutiny, uncertainty about the budget outlay towards arbitrations and unexpected delays in disposal does not inspire confidence and detracts from the sanctity of the process.
Way forward
- Arbitrators have endeavoured to simplify the proceedings by limiting the pleadings, insisting on written arguments, reducing the number of sittings and laying down a schedule for various milestones.
- Some restraint is needed from all quarters to bring its wheels back on the tracks. These are:
- A small check on the arbitral fees and timelines.
- Careful drafting of arbitration clauses.
- Stringent procedural safeguards to curb delays.
- Expeditious disposal of the court proceedings and legislative intent towards all of the above.
Consider the question “What are the issues faced by the arbitration in India? Suggest the measures to deal with these issues.”
Conclusion
Arbitration still has the inherent potential and characteristics to outperform other modes of dispute resolution, but for that to happen, some changes are a must.
Alternative Dispute Resolution Mechanism – NCA, Lok Adalats, etc.
It is time to set up a National Tribunals Commission
From UPSC perspective, the following things are important :
Prelims level : Tribunals
Mains level : Paper 2- Need for the National Tribunals Commissions
Context
- The Centre has abolished several appellate tribunals and authorities and transferred their jurisdiction to other existing judicial bodies through the Tribunals Reforms (Rationalisation and Conditions of Service) Ordinance 2021.
Issues with the abolitions of tribunals
- The Ordinance has met with sharp criticism for not bypassing the usual legislative process.
- Several tribunals such as the Film Certification Appellate Tribunal were abolished without any stakeholder consultation.
- Despite the Supreme Court’s direction in Rojer Mathew v. South Indian Bank (2019), no judicial impact assessment was conducted prior to abolishing the tribunals through this Ordinance.
- While the Ordinance has incorporated the suggestions made in Madras Bar Association v. Union of India (2020) on the composition of a search-cum-selection committee.
- But it has disregarded the court’s direction in Madras Bar Association v. Union of India (2020) for fixing a five-year term.
No NCT constituted
- Further, the Centre is yet to constitute a National Tribunals Commission (NTC), an independent umbrella body to supervise the functioning of tribunals, appointment of and disciplinary proceedings against members, and to take care of administrative and infrastructural needs of the tribunals.
- The idea of an NTC was first mooted in L. Chandra Kumar v. Union of India (1997).
- Developing an independent oversight body for accountable governance requires a legal framework that protects its independence and impartiality.
- Therefore, the NTC must be established vide a constitutional amendment or be backed by a statute that guarantees it functional, operational and financial independence.
- As the Finance Ministry has been vested with the responsibility for tribunals until the NTC is constituted, it should come up with a transition plan.
Advantages of NTC
- The NTC would ideally take on some duties relating to administration and oversight.
- It could set performance standards for the efficiency of tribunals and their own administrative processes.
- It could function as an independent recruitment body to develop and operationalise the procedure for disciplinary proceedings and appointment of tribunal members.
- Giving the NTC the authority to set members’ salaries, allowances, and other service conditions, subject to regulations, would help maintain tribunals’ independence.
Consider the question “What are the issues with Tribunals Reforms (Rationalisation and Conditions of Service) Ordinance 2021? How the constitution of the National Tribunals Commission would help to improve the role played by tribunals?”
Conclusion
The way to reform the tribunal system is to look at solutions from a systemic perspective supported by evidence. Establishing the NTC will definitely entail a radical restructuring of the present tribunals system.
Alternative Dispute Resolution Mechanism – NCA, Lok Adalats, etc.
Lok Adalats
From UPSC perspective, the following things are important :
Prelims level : Lok Adalat and their role
Mains level : Paper 2- Importance of Lok Adalats and concerns over speed undermining idea of justice
The article highlights the important role played by the Lok Adalats in dispute resolution and raises concerns over underminig of justice for the sake of speedy disposal.
Background of Lok Adalat
- The Constitution (42nd Amendment) Act, 1976, inserted Article 39A to ensure “equal justice and free legal aid”.
- To this end, the Legal Services Authorities Act, 1987, was enacted by Parliament and it came into force in 1995.
- The Act seeks “to provide free and competent legal services to weaker sections of the society” and to “organise Lok Adalats to secure that the operation of the legal system promotes justice on a basis of equal opportunity”.
- As an alternative dispute resolution tool, Lok Adalats are regularly organised to help parties reach a compromise.
- Motor-accident claims, disputes related to public-utility services, cases related to dishonour of cheques, and land, labour and matrimonial disputes (except divorce) are usually taken up by Lok Adalats.
Significance of Lok Adalats
- As per the National Judicial Data Grid, 16.9% of all cases in district and taluka courts are three to five years old.
- For High Courts, 20.4% of all cases are five to 10 years old, and over 17% are 10-20 years old.
- Furthermore, over 66,000 cases are pending before the Supreme Court, over 57 lakh cases before various HCs, and over 3 crore cases are pending before various district and subordinate courts.
- Moreover, Lok Adalats are economically affordable, as there are no court fees for placing matters before the Lok Adalat; finality of awards, as no further appeal is allowed.
- As a result, litigants are forced to approach Lok Adalats mainly because it is a party-driven process, allowing them to reach an amicable settlement.
Why Lok Adalats are fast
- When compared to litigation, and even other dispute resolution devices, such as arbitration and mediation, Lok Adalats offer parties speed of settlement.
- Cases are disposed of in a single day.
- The speed is due to procedural flexibility, as there is no strict application of procedural laws such as the Code of Civil Procedure, 1908, and the Indian Evidence Act, 1872.
- More importantly, the award issued by a Lok Adalat, after the filing of a joint compromise petition, has the status of a civil court decree.
Some figures about cases disposed
- In 2015 and 2016, ten National Lok Adalats (NLAs) were held each year that disposed of 1,83,09,401 and 1,04,98,453 cases respectively.
- In 2017 and 2018, the number of NLAs dropped to five, with 54,05,867 and 58,79,691 cases settled respectively.
- In 2019, four NLAs were organised, and they disposed of 52,93,273 cases.
- In 2015, the average number of cases settled per NLA was 18,30,940, which came down to 10,81,174 in 2017, but rose to 11,75,939 in 2018, and 13,23,319 cases in 2019.
- This throws up questions about the efficiency of NLAs.
- The data show that the average number of cases disposed of per NLA since 2017 has gone up even when the number of NLAs organised each year has reduced.
- This proves that on average, the system is certainly efficient.
Concerns
- The Supreme Court, in State of Punjab vs Jalour Singh (2008), held that a Lok Adalat is purely conciliatory and it has no adjudicatory or judicial function.
- As compromise is its central idea, there is a concern that in the endeavour for speedy disposal of cases, it undermines the idea of justice.
- In a majority of cases, litigants are pitted against entities with deep pockets, such as insurance companies, banks, electricity boards, among others.
- In many cases, compromises are imposed on the poor who often have no choice but to accept them.
- Similarly, poor women under the so-called ‘harmony ideology’ of the state are virtually dictated by family courts to compromise matrimonial disputes under a romanticised view of marriage.
- Even a disaster like the Bhopal gas tragedy was coercively settled for a paltry sum, with real justice still eluding thousands of victims.
Consider the question “Examine the significance of Lok Adalats as an alternative dispute resolution tool. What are the concerns with speedy disposal of cases by Lok Adalats?”
Conclusion
A just outcome of a legal process is far more important than expeditious disposal, so what we need is concrete and innovative steps in improving the quality of justice rendered by National Lok Adalats.
Do we really need a National Court of Appeal?
The Supreme Court recently admitted an SLP (Special Leave Petition) under Article 136 of the Constitution on the setting up of a National Court of Appeal (NCA) with regional benches which will act as final courts of appeal in civil, criminal, revenue and labour matters <Can you tell us, what is SLP in comments>.
In 1987, in the case of Bihar Legal Support Society v. the Chief Justice of India, the proposal to set up the National Court of Appeal was mooted and welcome by the then Chief Justice P N Bhagwati. The current petition by Chennai based lawyer has once, again brought the issue to the fore.
The Supreme Court will set up a Constitution Bench to decide on the proposed NCA as primarily, it raises the following question related to the interpretation of the Constitution
As of now, the Supreme Court is the final court of appeal in all cases. With the NCA, the role of the Apex Court would be restricted to hearing only constitutional and public law cases. Would this amount to tinkering with the ‘basic structure’ of the Constitution?
REASONS WHY NCA COULD BE A WELCOME PROPOSITION?
Given the never-ending and ever –increasing case-load on the Apex Court, the NCA could be a welcome change on the following grounds:
(a) Clearing the massive backlog: With the huge pendency of cases in all three levels of Judiciary, the National Court of Appeal with its regional benches may prove to be crucial in clearing the massive backlog of cases. About 98% of the Apex Court’s time is wasted on routine matters like bail pleas, dishonor of cheques, traffic violations, correcting errors in HC judgments.
With the NCA hearing matters pertaining to civil, criminal, labour and revenue laws, Supreme Court would be able to concentrate on the more important public law concerns.
(b) Restoring the Apex position of the Apex Court: With the Supreme Court getting an opportunity to hear exclusively on constitutional and public law matters, its position as the final arbiter on constitutional cases and on developing the law will be further strengthened.
This is in tune with the scenario in England, UK and Wales where the Supreme Court only rules on matters of constitutional importance or sets a new legal precedent.
(c) Greater access to justice: Access to justice is a fundamental right for all
WHY SHOULD THE STATUS QUO BE MAINTAINED?
The Centre has been challenging the move to set up the NCA on the following grounds:
(a) Dilution of the powers of Apex Court: Currently, many citizens resort to Article 136 of the Constitution in any sort of matter. With the subject matter of disputes being divided amongst NCA and the Supreme Court, Supreme Court’s exclusive power to entertain appeals under Article 136 will be significantly diluted.
(b) Compromise the unified structure of the Judiciary: Currently, there is one Apex Court with the High Court in states followed by subordinate courts. This integrated structure will suffer a backseat with NCA somewhere in the middle between High Courts and Supreme Court
Moreover, earlier proposals to set up Regional Benches of the Supreme Court with one bench in each region have been rejected by the Supreme Court on the ground that it will affect the unitary character of the Judiciary and that there can be only one Supreme Court.
For providing greater access to citizens from far-flung areas, it has been proposed that there could be dedicated courtrooms with video conferencing facilities for litigants and lawyers from far-flung areas. This will avoid the need of setting up regional benches and even NCA to a great extent.
(c) Large-scale Constitutional amendments required: For bringing the NCA into existence, several provisions of the Constitution related to independence of Judiciary, hierarchy of Courts, powers of Supreme Court etc. will have to be amended. Moreover, Article 136 of the Constitution is a part of the basic structure and in view of the decision in Keshvananda Bharati case, limiting the powers of Supreme Court through NCA will be extremely difficult.
The solution does not lie with creating courts of appeal because it would not bring down litigation. The Supreme Court has to exercise restraint on the manner of interference under its constitutional power. Today people take chances and come to Supreme Court on every issue, including challenging an adjournment order – Attorney General
Law Commission Recommendation
- Law Commission in its 229th report submitted to the government in 2009 recommended setting up of four regional benches at Delhi, Chennai/Hyderabad, Kolkata and Mumbai to deal with appeals arising out of high courts. Earlier 125th report had recommended setting up of NCA
Answer in comments>. - It said, if necessary Article 130
may be amended to implement its suggestion that Cassation Benches may be set up in four regions, while the Constitution Bench sits in Delhi . < Is Law commission a constitutional or statutory or executive body? Answer in comments>
But the Supreme Court rejected it in 2010, saying dividing the Supreme Court would affect the country’s unitary character. A Full Court comprising all SC judges reiterated its earlier resolutions passed in 1999, 2001, 2004 and 2006 in this regard.
CONCLUSION: The burgeoning backlog of cases plaguing all the three levels of judiciary demand more resources and institutional reforms to deal with the problem. However, any proposals to set up institutions like the NCA will require Constitutional amendments and major Legislative will to go through. This at present is not forthcoming. The idea of a National Court of Appeal requires consideration, but in a manner that would not undermine the undoubted authority of the Supreme Court of India. The next hearing for the matter is slated up for April 4.
P.S. This article is published with inputs from a CD user Joyousjojo (name changed on request).
P.P.S. If you want to write explainers for CD, mail us your explainer at hello@civilsadily.com
