Tag: #CodeofCivilProcedure

Case Number

Civil Appeal No. 230 of 1977.

Equivalent Citation

1957 AIR 540

Bench

The Supreme Court of India

Decided On

1st February 1957

Relevant Acts / Sections

The sections that are relevant in the case of Garikapatti Veeraya v N. Subbiah Choudhury are:

• Article 133 of the Constitution of India¹, deals with the jurisdiction of the Supreme Court and the appeals that can be filed before it.
• Order XLV of the Supreme Court Rules, 1966, which provides the procedure for filing Special Leave Petitions before the Supreme Court.
• Section 109 of the Code of Civil Procedure, 1908², allows for appeals to the Supreme Court in civil cases if certain conditions are fulfilled.
• Section 100 of the Code of Civil Procedure, 1908³, lays down the grounds on which a second appeal can be filed before a High Court.
• Section 2(2) of the Code of Civil Procedure, 1908⁴, which defines a “decree” is the official statement of a judgment that definitively settles the rights of the parties concerning one or more of the contested issues.
• According to Section 2(14) of the Code of Civil Procedure, 1908⁵, a “judgment” is defined as the pronouncement made by a judge based on a decree or order.

Brief Facts and Procedural History

OVERVIEW

This legal case concerns an application for special leave to appeal, which arises from a previous lawsuit that was filed on April 22, 1949, and had a value of Rs. 11,400. On February 10, 1955, the high court overruled the decision of the trial court, which had earlier dismissed the suit. However, when the applicant sought leave to appeal to the Supreme Court, the high court refused the application, arguing that the value of the lawsuit did not meet the minimum requirement of Rs. 20,000.

The applicant contended that they had a vested right of appeal to the Federal Court, which was the highest court in the land at the time the suit was instituted, and that this right of appeal had been transferred to the Supreme Court under Article 135 of the Constitution⁶. The applicant argued that they were therefore entitled to appeal to the Supreme Court as a matter of right.

The court held, with Chief Justice Das and Justices Bhagwati, B. P. Sinha, and S. K. Das concurring and Justice Venkatarama Ayyar dissenting, that the applicant’s contention was well-founded. 

The court held that the right to appeal was a significant right that could be utilized only in situations where the verdict was unfavourable. However, it stated that this right was subject to the laws applicable at the commencement of the legal action and included all subsequent appeals from one court to another, effectively forming a single proceeding. The court also held that such a right could be taken away only by a subsequent enactment either expressly or by necessary intendment.

The court cited the case of Colonial Sugar Refining Company Ltd. v. Irving (1905) A.C. 369⁷ and held that the vested right of appeal was a matter contemplated by Article 135 of the Constitution. The court ruled that Article 135 could not be limited to cases where the right of appeal had actually arisen in a concrete form and that the appeal was entertainable by the Supreme Court.

The court also held that Article 133 of the Constitution had no application to such cases. It was not intended to have a retrospective operation so as to take away this vested right, nor did it do so either in express terms or by necessary intendment. To summarize, the court ruled that the applicant had an inherent right to appeal to the Federal Court, and under Article 135 of the Constitution, he had the right to appeal to the Supreme Court. The court also held that Article 133 of the Constitution did not apply to such cases. Furthermore, the appellant’s vested right of appeal acquired under the old law fell under the appellate jurisdiction of the Supreme Court.

Appellant’s Argument: Acquisition of Vested Right to Appeal to the Federal Court

The appellant in this case argued that he had a vested right to appeal to the Federal Court from the time he filed the suit on April 22, 1949. He contended that the Indian Independence Act of 1947 expanded the jurisdiction of the Federal Court to allow it to hear appeals that previously went to the Privy Council. 

As per the Act, starting from the appointed day, i.e., February 1, 1948, any decision falling under the purview of the Act could be appealed to the Federal Court. The appellant argued that he was entitled to appeal to the Supreme Court as of right under Article 135 of the Constitution, and Article 133 of the Constitution did not apply to cases like his.

Respondent’s Argument: Inapplicability of Article 135 and Refusal of Special Leave

The respondent argued that the appellant’s reliance on Article 135 of the Constitution was misplaced, as Article 133 was the relevant provision. They claimed that there was no vested right to appeal to the Federal Court immediately before the Constitution came into effect, and therefore, Article 133 applied. The respondent contended that since the jurisdiction to hear appeals to the Federal Court ceased to exist, the appellant had no right to appeal to the Supreme Court. Consequently, they maintained that the application for special leave to appeal should be dismissed.

Issues before the Court

• Should the petition for special leave to appeal under Article 136 of the Constitution⁸ be granted or not, in relation to the judgment and decree dated March 4, 1955, of the Andhra High Court?

In this particular case, the main issue revolved around the petitioner’s entitlement to appeal to the Supreme Court. The petitioner claimed that he had a vested right to appeal to the Federal Court, which was replaced by the Supreme Court. This right, according to the petitioner, was acquired at the time of the suit’s institution, which occurred before the Constitution came into force. In contrast, the respondent argued that the case fell under the jurisdiction of Article 133 of the Constitution, and there was no vested right to appeal to the Federal Court. As per the respondent’s argument, the petitioner had no right to appeal since the Constitution had extinguished this right.

Therefore, the court was required to determine whether the petitioner had a valid claim to appeal under the previous law and whether Article 135 or Article 133 of the Constitution was applicable to the case. Ultimately, the correct interpretation of these articles was key to the final decision, and whether the petitioner’s right to appeal had been preserved despite the constitutional changes.

Decision of the Court

After considering the opinions of several courts, the final decision was reached in this case. The majority of the courts agreed that the appellant should be granted Special Leave to Appeal to the Court on usual terms. In its judgment, the Court clarified the interpretation of Article 133 and stated that it applies to all appeals against judgments, decrees, and final orders of the High Courts in India, regardless of whether the proceedings were initiated before or after the Constitution’s commencement in civil proceedings.

The Court’s decision provides a clear and consistent legal framework for all appeals against the High Courts’ judgments. This interpretation ensures that all appeals are treated uniformly, irrespective of the time the proceedings were instituted. It also provides clarity to litigants seeking to appeal a decision, as they can now have a clear understanding of the legal provisions applicable to their case.

The Court’s ruling is an essential milestone in Indian legal history, as it resolves the ambiguity surrounding the interpretation of Article 133 and provides much-needed clarity on the scope of appeals against the High Court’s decisions. This decision will have far-reaching implications for future cases, as it provides a standard framework for interpreting and applying Article 133 in all cases involving appeals against the High Court’s decisions.

Conclusion

The Supreme Court of India’s ruling in the case of Garikapatti Veeraya v N. Subbiah Choudhury, handed down in 1957, is a significant milestone in the legal history of India. This ruling provided valuable insights into the interpretation of Article 133 of the Indian Constitution, which applies to all appeals against judgments, decrees, and final orders of the High Courts in India, irrespective of when the proceedings were initiated in civil cases. As a result, this case established a uniform and unambiguous legal framework, ensuring fair and equitable treatment for all litigants.

The Garikapatti Veeraya case underscores the importance of having a clear and consistent legal system that provides clarity and consistency in the interpretation and application of the law. This landmark decision has far-reaching implications for future cases, emphasizing the need for uniformity and consistency in legal rulings. The Court’s decision, in this case, serves as a guiding light for Indian courts and legal practitioners, helping to establish a clear and uniform legal framework for the entire nation. Overall, the Garikapatti Veeraya case is a crucial milestone in India’s legal history, representing a significant step forward in ensuring the fair and equitable treatment of all litigants.

---

Endnotes:

1. INDIA CONST. art. 133.
2. Code of Civil Procedure, 1908, § 109.
3. Code of Civil Procedure, 1908, § 100.
4. Code of Civil Procedure, 1908, § 2(2).
5. Code of Civil Procedure, 1908, § 2(14).
6. INDIA CONST. art 135.
7. Colonial Sugar Refining Co. v. Irving, (1905) A.C. 369.
8. INDIA CONST. art. 136.

This case is analysed by Sohini Chakraborty, a first-year law student at RGNUL Patiala.

S.no	Contents
1.	Right to Suit
2.	Right to Appeal
3.	Scope of Right to Appeal in Statutory Law
4.	Historical Overview
5.	Legal Frameworks
6.	Conclusion

Right to Suit

An individual or organization has a legal entitlement known as the “right to sue” that enables them to initiate a lawsuit against another individual or organization in a court of law. This right is considered fundamental since it allows them to pursue legal action and seek remedy or recourse for any perceived harm or wrongdoing caused by the other party. Typically, the right to sue is granted to individuals or organizations who are capable of demonstrating that they have suffered legal harm or damages resulting from the actions or omissions of another party. Such circumstances may include but are not limited to a breach of contract, personal injury, property damage, or infringement of intellectual property rights, among others. It is essential to note that the right to sue is subject to legal constraints or limitations, and may not be an absolute right. Furthermore, the process of initiating legal proceedings can be intricate, requiring the guidance of legal experts to navigate it effectively.

It is crucial to acknowledge that the right to sue is not an unrestricted right, as there may be legal limitations or restrictions on the individuals or entities who can initiate legal proceedings and the situations in which they can do so. Moreover, the process of commencing a lawsuit can be intricate and costly and may necessitate the guidance of legal experts to navigate it competently.

Right to Appeal

The legal entitlement of a party to challenge a lower court or tribunal’s decision in a higher or appellate court is known as the right to appeal. This right permits parties to contest the factual or legal conclusions reached by a lower court or tribunal and seek a different outcome.

Under Article 21 of the Constitution of India^[1], which guarantees the right to life and personal liberty, the right to appeal is recognized in India. It is a fundamental component of the Indian legal system and is intended to ensure equitable and impartial administration of justice.

The procedure for filing an appeal in India is dependent on the type of case and the court or tribunal involved. Generally, a written petition outlining the grounds for the appeal must be submitted within a specified timeframe after the lower court’s decision. The higher court then assesses the evidence and legal arguments presented by both parties before reaching a decision. The right to appeal is accessible at various levels of the Indian judiciary system, from district courts to the Supreme Court of India. Both civil and criminal cases can be appealed, and the appellate court may either uphold, modify, or reverse the lower court’s decision.

Scope of Right to Appeal in Statutory Law

The right to appeal is not an inherent right and is only granted through specific statutes. It is considered a substantive right, rather than merely procedural. This right is conferred upon the litigant from the beginning of the case, although it is exercised only when an unfavourable judgment is pronounced. Consequently, the law that applies to the right to appeal is the one that was in force at the time the lawsuit was filed, not the law that applies at the time of decision or when the appeal is filed. These vested rights can only be taken away by a subsequent statute if it explicitly provides for it.

It is important to note that as this right is created by statute, the statute can impose conditions for its exercise. The forum of appeal may also be altered by the statute, and the litigant does not have the right to choose the forum for appeal. As Justice Khanna once stated, the right of appeal is a product of statute, and there is no reason why the legislature cannot impose conditions for exercising this right as long as those conditions are not excessively restrictive to the point of rendering the right almost meaningless.

Historical Overview

The Indian legal system has evolved to recognize two fundamental rights, namely the right to sue and the right to appeal. These rights have been shaped by diverse legal traditions and cultures, and their historical development in India is a topic of great significance.

The right to access justice, commonly referred to as the right to sue, has been an integral facet of the Indian legal system since ancient times. In ancient India, justice was founded upon the principle of dharma, which denotes righteousness, and it was the responsibility of the king to ensure that justice was dispensed impartially. During this period, individuals were granted the right to approach the king or local courts to seek redressal.

Subsequently, during British rule in India, a formal legal system was introduced, and the English legal system became prevalent. This system placed great emphasis on the right to sue and the right to a fair trial. Consequently, the Indian Civil Procedure Code (CPC) was enacted in 1908, which laid down the procedural framework for filing a civil suit in India. The code ensured that every individual was entitled to the right to sue, and could approach a court of law to seek justice.

The notion of the right to appeal gradually developed during the period of British governance in India. Under their rule, the appellate system was introduced, permitting litigants to challenge a lower court’s decision by appealing to a higher court. In 1898, the Criminal Procedure Code (CrPC) was passed, recognizing the right to appeal in criminal cases. This legislation allowed accused individuals to appeal their conviction or sentencing from a lower court to a higher court.

Following India’s independence in 1947, significant changes were made to the country’s legal system. In 1950, the Constitution of India was enacted, enshrining the right to access justice as a fundamental right. Furthermore, the Constitution established the Supreme Court as the highest court in the nation, providing the right to appeal to it. Additionally, the Constitution conferred the authority on high courts to hear appeals from subordinate courts.

Throughout the years, the Indian legal system has been subject to diverse influences from various legal traditions and cultures. The ancient Hindu legal system, which was predominant in India, prioritized the fundamental right to access justice and provided for the amicable resolution of conflicts through mediation and arbitration. Meanwhile, the Islamic legal system, which emerged during the Mughal era, accentuated the significance of a just and fair trial process and guaranteed the right to appeal. These legal traditions have left a profound impact on the Indian legal system and continue to shape its development to this day.

Legal Frameworks

1. Right to Suit

In India, individuals have the right to initiate legal action against another person or entity in a court of law, which is commonly known as the right to sue. This right is enshrined in the Indian Constitution, which ensures that every citizen has access to justice as per Article 39A^[2]. The Indian legal system provides for various types of civil suits, including breach of contract, recovery of money, specific performance, and injunctions, among others. The Code of Civil Procedure, 1908^[3] governs the process of initiating a civil suit.

• Initiating a Suit: Parties, Framing, and Institution

The process of initiating a civil case involves two parties, the plaintiff and the defendant, as per Order 1 which deals with Parties to suit. The plaintiff is responsible for bringing the case against the defendant, who is the other party that must provide a defence against the allegations made by the plaintiff in civil court.

Once the parties to the suit are recognized, the next step is to frame the suit as provided under Order 2. This involves the plaintiff approaching the civil court with their suit, which is referred to as the Frame of Suit. Framing of suit indicates that a legal action has been brought by one party against another. According to Rule 2 of Order 2, the plaintiff must include their entire claim in the suit, which serves as the cause of action against the defendant. The framed suit needs to be instituted before the civil court, but the question of who the institution is answered by Order 3 of the Code.

• Agents and Pleaders

Order 3 of the Code of 1908 deals with recognized agents and leaders, who are essential for the plaintiff to institute a suit framed before the civil court. The plaintiff requires the help of a legal professional or pleader who has expertise in the field of law to take the framed suit before the court on their behalf. Rule 2 and Rule 4 of Order 3 respectively provide guidelines for recognizing agents and pleaders. Once a recognized agent or pleader is hired, it becomes their responsibility to institute the suit before the civil court on behalf of the plaintiff. This brings us to Order 4 of the Code, which discusses the proper institution of suits. To institute a suit, the plaintiff needs to present a plaint before the court, the meaning of which is explained under Order 7 of the Code of Civil Procedure, 1908.

It is crucial to note that compliance with sub-rules (1) and (2) of Rule 1 of Order 4 is mandatory for the proper institution of the suit. Sub-rule (1) requires the presentation of a plaint to institute a suit before the court of law. Sub-rule (2) provides that no plaint as provided in the previous rule can escape the rules provided under Orders 6 and 7 of the Code.

2. Right to appeal

As per Section 96 of the CPC, an aggrieved party to any decree passed by a court while exercising its original jurisdiction has the right to appeal to a higher authority designated for this purpose, except in cases where any statute makes an exception. This grants the aggrieved party at least one right of appeal.

However, Sections 97, 98, and 102 of the CPC specify certain conditions under which no further appeal is allowed, therefore limiting the right of appeal to a single opportunity.

It is important to note that no person has the right to appeal against a decision unless they are a party to the suit, unless they have been granted special leave of the court. The question of whether a person is adversely affected by the decision or suit is a factual matter that needs to be determined on a case-by-case basis.

The case of Garikapati Veeraya v. Subbiah Chaudhary^[4] established that the right to appeal to the Federal Court that existed prior to the establishment of the Supreme Court still remained valid. The court recognized the shift in the judicial system from the Federal Court to the Supreme Court but emphasized the preservation of the right to appeal that was created under the old law. It should be noted, however, that the continuation of this right is subject to the provisions of the Constitution.

• Appeals and Conversions under CPC

The Code of Civil Procedure, 1908 provides for various types of appeals and their maintainability. Under Section 96 of the CPC^[5], a regular first appeal may or may not be maintainable against certain adjudications, as indicated by a combined reading of Sections 2(2), 2(9), and 96 of the CPC. A first appeal lies from a decree passed by any court exercising original jurisdiction to the authorized appellate courts, except where expressly prohibited.

Furthermore, Section 100 of the CPC^[6] provides for a second appeal under this code. A decree passed in the first appeal by a subordinate court can be appealed to the High Court unless there are provisions indicating otherwise. However, the scope of exercise of jurisdiction under this section is limited to a substantial question of law framed at the time of admission of appeal or otherwise.

Regarding the conversion of an appeal into a revision, the court’s inherent powers allow it to pass orders that may be required to meet the ends of justice, as held in the case of Bahori v. Vidya Ram^[7]. In the absence of a specific provision in the CPC for converting an appeal to a revision or vice versa, Section 151^[8] governs the court’s exercise of power. The conversion is allowed, as long as the proper procedure was followed during the filing of the original appeal or revision. However, the only precondition to such conversion is that due procedure is adhered to during the filing of the original appeal/revision.

• Who has the right to appeal under Section 96 of the CPC?

Section 96 of the CPC provides that a regular first appeal can be preferred by any party to the suit who has been adversely affected by the decree. This includes the legal representatives of the deceased party under Section 146. Additionally, a transferee of the interest of such a party, whose name is entered on the record of the suit, may also appeal. In the event of an order in execution setting aside the sale on the basis of fraud, the purchaser at auction has the right to file an appeal.

However, no person other than a party to the suit is entitled to appeal under Section 96 unless special leave is granted by the appellate Court. This means that a person who is not a party to the suit can only prefer an appeal from a decree or order if they are bound, aggrieved or prejudicially affected by it and if special leave of the appellate Court is granted.

• Who is barred from appealing?

A party who has waived their right to appeal a judgment is precluded from filing an appeal at a later stage. The principles of estoppel may also apply where a party has accepted the provisions of a judgment and has acknowledged it as final and binding. The doctrine of estoppel prevents such a party from appealing the same judgment in a higher forum. Scrutton L.J. has expressed the view that a party cannot simultaneously accept the benefits of a judgment and then appeal against it as being unfavourable.

• Role and Standards of Review in Indian Appellate Courts

Appellate courts in the Indian legal system are higher courts that review and revise the decisions of lower courts, including district courts and tribunals. These courts include the High Courts, the highest courts in each state or union territory, and the Supreme Court of India, the highest court in the country.

Appellate courts use two standards of review when examining lower court decisions: one for questions of fact and one for questions of law. The standard of review on questions of fact is deferential to the lower court’s decision and will only be overturned if the findings of fact are clearly erroneous or not supported by evidence. The standard of review on questions of law, on the other hand, is less deferential and will closely examine the legal reasoning and interpretation used by the lower court, often applying its own interpretation of the law.

In criminal cases, the standard of review is higher due to the higher stakes and severe consequences of an erroneous decision. The decisions of appellate courts have significant implications for the parties involved and for the development of the law in India. Overall, the role of appellate courts in the Indian legal system is to ensure the fair administration of justice by reviewing and correcting lower court decisions.

Conclusion

To conclude, the right to sue and appeal in India represent fundamental pillars of the legal system, enabling access to justice for all citizens. These rights are duly recognized by the Indian Constitution, and the procedures for initiating legal action are regulated by the relevant statutes and rules. The Supreme Court of India has provided crucial interpretations of these rights, ensuring that they align with the principles of natural justice and the fundamental right to access justice. By having these rights in place, individuals in India can seek legal remedies in cases of disputes or breaches of the law, contributing to the promotion of a just and equitable society.

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Endnotes:

1. Article 21 of the Indian Constitution
2. Article 39A of the Indian Constitution
3. Code of Criminal Procedure (India), Act No. 2, 1974
4. Garikapati Veeraya v. Subbiah Chaudhary, (1979) 1 SCC 16.
5. Civil Procedure Code § 96 (India).
6. Code of Civil Procedure, Act No. 5, 1908, §100, India Code (2019)
7. Bahori v. Vidya Ram, (1978) 1 SCC 1.
8. Civil Procedure Code, § 151 (India).
9. Civil Procedure Code, § 146 (India).

This article was authored by Sohini Chakraborty, a first-year law student at RGNUL Patiala.

–Report by Umang Kanwat

Issues only arise when one party affirms and the other party disputes a crucial truth or legal premise. The legal or factual assertions are considered material propositions. Such essential claims must be made by the plaintiff to establish his legal standing. Similarly, the defendant must allege to support his defence. A distinct issue won’t arise unless each relevant statement is supported by the plaintiff and refuted by the defendant.

The Court may revise already-framed questions, frame new issues, recast matters as may be necessary to resolve a dispute before it, or strike out concerns that have been improperly brought or formed, according to Order XIV Rule 5 of the CPC. As a result, the Court has the power to alter or eliminate the concerns as necessary.

The case of PRIME TIME INDIA Vs. SOMNATH VIJ revolves around Order XIV Rule 5 of the CPC, wherein the court tries to evaluate if the contentions on which the applicant argues are satisfactory or not. The word “issue” has not been defined in the CPC, however, Order XIV Rule 1 of the CPC indicates that “issues arise when a material proposition of fact or law is affirmed by one party and denied by the other”.

Facts: 

The applicant in the present case filed an application requesting the Honourable Supreme Court of India to remove certain legal issues framed by the defendants in the case considering them to be baseless and motionless under Order XIV Rule 5 of CPC. The application is based on a previous case over a disputed property where the present applicant was the defendant and the case ended with a settlement between the parties.

Applicant’s Contentions:

The applicant has filled out this application regarding striking off certain issues that were framed in the case over a property dispute. According to the applicant they agreed on the settlement and hence these issues in the aforementioned suit consequently sabotaged the interest of the applicant. Based on the joint application filed dismissing the objections to the settlement terms, this was done with malice aforethought. 

Defendant’s Contentions:

The defendant argued that the applicant filed the case even though it is unauthorized to do so. The defendants acknowledged that their culpability for the applicant’s claim had been reduced, and they would not object if the settlement included a decision granting the applicant’s request for specific performance. The present application under Order XIV Rule 5 read with Section 151 CPC was not submitted with a board resolution and was not embossed with the company’s seal; as a result, it is subject to being rejected simply on this basis. The applicant also violated the court’s order by adding construction to the disputed property and so the defendant has a right to take legal action against the applicant. 

The court made no mistake in the framing of the issues the issues were framed by the applicant who was previously the defendant’s pleadings.

JUDGEMENT:

The application was rejected because it had no merit. 

This was because the court believed that the legal concerns or issues raised by the Defendants’ arguments, which were requested to be deleted through the present application, were relevant for the adjudication of the current lawsuit.

Furthermore, an issue is a topic of contention between the parties in a civil lawsuit. Additionally, when parties differ on “material propositions” of truth or law, a problem arises. An issue that can limit the scope of disagreement may be presented to identify the genuine dispute and resolve it. In this instance, it was clear that the Court’s prior bench had given proper consideration to all pertinent arguments, including the compromise decree while framing the problems.

READ FULL JUDGEMENT: https://bit.ly/3RuuHNb

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Gender diversity widens the range of skills and backgrounds available to handle specific legal difficulties in any professional situation. Diversity serves a greater function in the legal profession: it lends legitimacy to the impression that the law system is equal and just, and that everyone’s views are represented and acknowledged within it.

INTRODUCTION

Lawyers (also known as advocates, barristers, attorneys, solicitors, or legal counselors), paralegals, legal scholars (including feminist legal theorists), prosecutors (also known as Crown Prosecutors or District Attorneys), judges, law professors, and law school deans are among the women who work in the legal profession.

In recent years, the importance of women in professional fields has been emphasized in order for the economy and society to reach their full potential. Gender equality became a standard for development and prosperity around the world. Women have shown themselves and are leading the way in their drive for financial independence, equal rights, and opportunity in a variety of sectors.

In India, an increasing number of women are graduating with a law degree, despite the fact that few appear to pursue the field after a short – term at a law firm. Many women leave the field because of gender prejudice and seek work in fields that are more tolerant of women. Nonetheless, there are success stories in the country’s legal profession, where women have indeed been tenacious and stubborn in attaining their goals and becoming respected professionals despite all odds.

INDIA

In India, men have long dominated the legal profession. Women’s admittance into the courts was only possible after long and drawn-out legal fights, but even then, female participation in the courts was minor until the late twentieth century. However, in the twenty-first century, the concept of globalization has created greater chances for Indian women in law education and training. Modernism has also tempered the courtroom environment but has also put a stop to medieval masculine chauvinism in the field.

In independent India, the Indian Constitution guaranteed citizens the right to equality including protection from discrimination based on gender in getting an education or practicing whatever career of their choosing. Despite this privilege, the legal profession has not become a common choice for women, primarily because women must have a basic degree of education in order to be informed of these rights. And for a female population that was largely illiterate due to a variety of factors including poverty, restrictive social customs, strict caste restrictions, cultural practices prohibiting women from working outside their homes, and so on, higher education and pursuing a profession were dreams that the Independence era had managed to ignite, even if only in the shape of an awareness of being a downtrodden and suppressed part of the society largely contributing to the country’s development. Interestingly, in Western nations where the journey and naval enterprise had brought about tremendous change in housing conditions, in which feminism and modern feminist movements were started by educated women, and which nations had such a literate female population, at the very least, women entered the legal profession in 1917. By the 1860s, the British had created schools, colleges, even universities for women in India, but many women couldn’t even imagine going to school or graduating until the 1920s. Though a few fortunate educated women, including doctors and authors, earned notoriety in the feminist movements of the time, it is clear that they faced a new foe in the European and British feminists that opted to define and, by definition, silence them. It became critical for them (educated Indian women, that is) to understand how and where to empower themselves in order to prevent continued oppression.

PROGRESS

As a result, the women of India set out to cross a gulf that was bigger than that which their western counterparts had set out to cross. In such a diversified country like India, the arduous process of expanding literacy and raising awareness of women’s rights took a solid twenty years. Meanwhile, even the Indian judiciary was proactive in encouraging women to enter the legal profession, appointing the very first woman judge to the Kerala High Court, Hon’ble Justice Anna Chandy. Justice Anna Chandy began her legal career as an advocate in 1929 and was promoted to Munsiff in 1937, making her the very first woman judge in pre-independence India.

During these two decades, two distinguished lawyers, Hon’ble Justice Fathima Beevi Honble and Hon’ble Justice Leila Seth, joined the legal profession and went on to become Chief Justices of the Himachal Pradesh and Kerala High Courts, respectively. For more than 15 years, the first had been an active practicing lawyer in the Delhi, Kolkata, and Patna High Courts, while the latter had climbed from the post of Munsiff to eventually retire as a Supreme Court Judge. Surprisingly, women’s representation in the judiciary has not increased significantly compared to the original number of female judges. The situation has deteriorated to the point where a demand for a 33 percent reservation for women in the judicial system has been made in order to achieve parity in the number of male and female judges.

WOMEN IN LAW

Journalism, academia, and medicine were among the first occupations to be influenced by feminism. In later years, feminism began to have an impact on professions previously controlled by men, such as surgery, civil service, law, management, entrepreneurship, and politics.

In recent years, every family, especially those from the orthodox, backward, and traditional sectors, has been under severe economic strain. The battle is no longer focused on external challenges. In addition, public opinion is no longer antagonistic, and women now have a plethora of options. Psychological issues and the tussle between family and job, on the other hand, persist throughout their lives.

Women’s admittance into and increasing participation in the legal industry has become one of the most notable societal transformations in recent times, often referred to as “revolutionary. This inflow of women has sparked a lot of discussion among scholars and political activists concerning the changes that women will bring to the structure and management of substantive law, and also the manner law is practiced. India was a British colony until 1947, and the British modified the administrative structure and organizations as they saw fit. The Indian Penal Code (IPC), the Criminal Penal Code (Cr PC), and the Civil Procedure Code (CPC), as well as the foundation of the Rule of Law and the Indian Civil Services, are just a few examples.

For the first time in India, Dr. Hari Sigh Gaur, a pioneer in the struggle for women’s admittance into the legal profession, moved the following amendment to the Central Legislative Assembly of India’s resolution to abolish the sex disqualification against women.

REPRESENTATION NEEDED

Women are increasingly represented in the legal profession around the world, but their success varies greatly by culture and country.

Women began to flood into the legal industry globally in the 2000s, per a 2013 report of 86 countries (covering 80% of the world’s population). Women’s representation in the law is lowest in India and China, while it is highest in the former Soviet Bloc countries, Latin America, and Europe.

According to the survey, 52 countries had greater than 30% representation among employed lawyers, which is considered a significant societal shift. Venezuela and Uruguay were early adopters, exceeding the threshold in the early 1980s. Women made up at least 50% of lawyers in Bulgaria, Latvia, Poland, and Romania by the mid-to-late 2000s—some of the greatest participation in the world—while Denmark, Norway, the United States, and Germany, were latecomers, crossing the 30% threshold at the same time. Meanwhile, the world’s two biggest countries are among the slowest to incorporate women: India has a 5% female representation in the practice of law, while China has a 20% female representation.

In 2021, CJI Ramana confessed that the legal profession has yet to accept women into its fold, as the bulk of them struggle inside the profession, during a valedictory ceremony sorted by the Bar Council of India (BCI).
“Following 75 years of freedom, one would expect to see at least 50% female representation at any and all levels, but I’m afraid I have to say that we’ve only managed to get to 11% female representation on the Supreme Court bench. Because of the reserve policy, some states may have a higher representation. However, the reality is that the law must continue to embrace women into its ranks “The Chief Justice stated.

Many law companies are also biased against women for the same reasons: she may take time off to raise a family, she cannot be entrusted with “serious” briefs, and if she requires a while off to start families, she is perceived as less capable and devoted. When a woman re-enters the workforce, she is frequently at a disadvantage.

Increasing women judges don’t really inevitably contribute to better results for women’s causes, according to a feminist judgment study conducted in the United Kingdom in 2010. However, if the judge has been a feminist, the story would be different, and the outcome would be different in many circumstances. As a result, India requires not only more female judges but also more gender-sensitive judges.

Women are likewise pressured to do better than their male counterparts, and women lawyers or judges who struggle to get their views heard are frequently referred to as aggressive. However, in male legal practitioners, this feature is viewed as a strength. Then there’s the issue of workplace harassment, which is mostly unaddressed. Because of the opaque character of our higher judiciary, this type of intimidation and harassment is widely overlooked. While arguing cases, there have been countless incidents of women lawyers being verbally harassed by their male peers. There are some states, like Uttarakhand, Chhattisgarh, and Himachal Pradesh, that do not even have a single woman judge in the high courts. Only approximately 15% of the 1.7 million advocates registered with the bar councils are women.

CONCLUSION

The Indian legal system is indeed not the same as before a decade ago, and the numerous developments occurring inside it as a result of technological advancements and changes in working styles would necessitate a period of absorption before further advancements can be recognized. Developing e-courts in India would growth improve the justice delivery method, and the ease of being willing to debate online from the Advocate’s office may entice Indian women advocates to begin practicing or teaching over the internet. The desire to become a judge continues to entice Advocates and lawyers, however, the number of female Justices has not grown in comparison to male Judges throughout the years.

Women in the practice of law, on the other hand, must be more active. They should get together to address workplace challenges of gender discrimination. There are many female lawyers who may lead such organizations, and while numbers alone may not be enough to make a difference, there is power in numbers. Several gender-friendly adjustments to the law have been enacted in recent years by the courts. However, it must now look internally and embrace the gender disparities in the profession, as well as the fact that as a result, it’s really clearly losing the expertise of many outstanding women.

This article is written by Tingjin Marak, a BA/LLB student at Ajeenkya DY Patil University Pune.

Introduction

One of the primary players in India’s journey to prevailing in quick structure its economy has been the banking sector. Since our present legal framework for business exchanges has not stayed aware of developing strategic policies and monetary sector changes. This outcome in an extended recuperation of defaulted advances and an expansion in the number of nonperforming resources held by banks and monetary organizations. The Central Government laid out the first and second Narasimham Committees, as well as the Andhyarujina Committee, to look at banking sector changes. These committees surveyed the need for changes in the legal framework in these sectors. These committees, among others, have proposed new regulations for securitization that would permit banks and monetary organizations to take care of protections and sell them without the requirement for judicial activity.¹

In light of these suggestions, the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI) were passed by the Parliament on December 17, 2002. The motivation behind this act is to permit banks and financial organizations to expeditiously recover cash progress. The Act licenses banks and financial organizations to sell sold property to recover outstanding obligations that poor person been paid for quite a long time in spite of various updates. Non-performing assets (“NPA”) in the records of banks and financial foundations must be dealt with in much the same way. The property being referred to could be a private or business property that has been sold with a bank or financial establishment as security for the assets progressed. Before the execution of the SARFAESI Act, distressed parties, like banks or financial establishments, would record a common recuperation claim in common court, and the interaction would delay for quite a long time in light of the fact that the common suit was battled by the two sides. Considering this, the law-making body chose to enact regulation that would permit such nonperforming assets (NPAs) to be quickly settled, permitting the bank to reinvest the recuperated reserves. Banks and financial foundations will save time by not recording a claim in common court, which would regularly be an extensive strategy.² Unstable advances, credits under $100,000, and obligations that are under 20% of the underlying guideline are excluded from the resolution. This regulation allowed the arrangement of resource reconstruction organizations (ARCs) and the offer of non-performing assets by banks to ARCs. Without the assent of a court, banks are approved to take responsibility for the property and sell it.

Objective and Applicability

It’s a legal framework that governs securitization transactions. Security interests can be implemented without the support of a court. The Act encourages banks and financial institutions to manage their assets to successfully deal with NPAs, asset reconstruction, and asset securitization organizations are being established. This Act empowers banks and financial institutions to seize hypothecated or mortgaged assets to recover nonperforming assets (NPAs). Without the participation of the court, the SARFAESI Act enables the following recovery channels for NPAs: securitization, asset reconstruction, and security enforcement.

The following topics are covered under the Act:

• The Reserve Bank of India regulates and registers Asset Reconstruction Companies (ARCs). Facilitating the securitization of banks’ and financial institutions’ financial assets, with or without the use of underlying securities.
• The ARC supports the consistent transferability of financial assets by issuing bonds, debentures, or any other instrument as a debenture to buy financial assets from financial organizations and banks.
• By entrusting the Asset Reconstruction Companies with the task of raising cash through the sale of security receipts to eligible buyers, the Asset Reconstruction Companies will be able to obtain funds.
• Facilitating the reconstruction of financial assets obtained when exercising securities enforcement authorities, management change powers, or other powers intended to be placed on banks and financial organizations.
• The borrower’s account is classified as a non-performing asset following the Reserve Bank of India’s instructions or guidelines released from time to time.
• In this case, the officials authorized shall exercise the rights of a secured creditor in line with the Central Government’s laws.
• An appeal to the relevant Debts Recovery Tribunal and a second appeal to the Appellate Debts Recovery Tribunal against any bank or financial institution’s activity.
• The Central Government may establish or compel the establishment of a Central Registry to register securitization, asset reconstruction, and security interest formation transactions.
• Applicability of the proposed legislation to banks and financial institutions initially, with the Central Government empowered to expand the proposed legislation’s application to non-banking financial enterprises and other organizations.
• The proposed regulation does not apply to security interests in agricultural lands, loans under one lakh rupees, or circumstances where the borrower repays 80% of the loan.

Asset Reconstruction

Asset Construction is covered by RBI regulations and legislative provisions under the SARFAESI Act, 2002. It consists of the following:

• The fundamental definition of “asset reconstruction” is the process of transforming nonperforming assets (NPAs) into performing assets.
• It all starts with a specialist Asset Reconstruction Company purchasing defective assets, including hypothecated assets, and financing them by issuing Bonds, Securities, and cash.
• The Asset Reconstruction Company takes over or changes the management of the borrower’s business, sells or leases a part or all of the borrower’s firm, and reschedules the borrower’s debt payments using this approach.

Working of Security Enforcement

The SARFAESI Act gives banks and financial institutions the authority to enforce their securities. The procedure begins with the Debtor being given a 60-day notice period to pay the owing amount. If the outstanding dues are not paid within the required term, the Banks and FI’s have the authority to enforce their SECURITY INTEREST by taking the following steps:

• Banks and financial institutions have the legal right to take ownership of the secured property.
• Banks and financial institutions have the option of selling or leasing such property or assigning the right to security.
• Appointment of a “Manager” to oversee the aforementioned security.

It can approach the borrower’s debtors for payment of the borrower’s debts.

Landmark Cases

M/S Transcore vs Union of India & Anr³
The appellant is M/s Transco, while the respondent is Union of India and Anr. This case is of general interest since it brings up a public approach issue about whether the principal stipulation to Section 19(1) of the DRT Act, 1993 (added by the Amending Act No.30 of 2004) is a condition that should be met prior to utilizing the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The respondent (Indian Overseas Bank) recorded activity with the DRT in Chennai for the recuperation of duty from the appellant in Civil Appeal No. 3228 of 2006. In 2005, the Respondent gave a Possession Notice to the appellant under segment 13(4) of the Act, expecting him to reimburse his duty of Rs. 4.15 crores (around) in addition to premium inside sixty days, and expressing that the appellant had neglected to do as such and that the bank had claimed the undaunted properties recorded in the timetable to the Notice, which was then sold. In any case, a common allure has been recorded, and the sale deal has been deferred.

In this case, the Supreme Court reasoned that pulling out a case forthcoming before the DRT is definitely not essential for utilizing the SARFEASI Act. This choice has settled the lawful issue encompassing the send-off of simultaneous procedures under the SARFAESI Act. The allure/I.A. made by the appellant in this Court is excused, yet the allure/I.A. is presented by the banks/FIs. is allowed with no expense’s choice. Besides, the choice in the Transcore case permitted banks and monetary foundations to start systems under both the SARAESI Act and the DRT Act simultaneously. The court likewise held that segment 13(2) of the SARFAESI Act is a notification of interest expecting activity to be directed inside the time expressed and not a simple show-cause notice. At the point when a notice is given to the indebted person it is adequately evident, that borrower has neglected to put in his time and his record is classed as NPA. The obligation is distinguished and the record is delegated a nonperforming resource (NPA) under RBI rules. Prior to the bank/FI can summon Section 13(4) of the SARFAESI Act, the requirements of Section 13(2) of the SARFAESI Act should be met. Following the culmination of Section 13(2) conditions, the bank or FI would be qualified to assume responsibility for the borrower’s gotten resources or make different moves. For this situation, the possibility of the political race doesn’t matter in light of the fact that the Act is a beneficial solution for the DRT Act. They are joined to frame a solitary cure; henceforth the possibility of the political race doesn’t have any significant bearing. The SARFAESI Act gives an additional cure that isn’t in a struggle with DRT. The SARFAESI Act was intended to safeguard the bank/premium FI’s in monetary resources that it claims because of an agreement or the use of customary regulation standards. Segment 13 of the SARFAESI Act intends to recuperate reserves utilizing a non-adjudicatory way. Under the SARFAESI Act, a got resource is one in which the borrower makes revenue for the bank/FI and the SARFAESI is determined exclusively on that premise. The reason for adding the stipulation to Section 19(1) of the DRT Act is to bring the arrangements of the DRT Act, the SARFAESI Act, and Order XXIII CPC into the arrangement.⁴

Mardia Chemicals Ltd. vs Union of India⁵
Here, the protected authenticity of SARFAESI was addressed, especially Sections 13, 15, 17, and 34, on the grounds that they are erratic and outlandish. Whenever the Act became real, IDBI Bank gave a notification to Mardia. Mardia defaulted-spoke to the court, where a progression of comparable petitions was assembled and tended to as a solitary case. The appellant battled that section 13 of the SARFAESI Act gives full freedoms to banks and monetary establishments while overlooking the privileges of defaulters. Likewise, borrower interest was not thought about by any means in Section 13. Besides, the borrowers had no right of direction or response to an adjudicatory technique. Section 17(2) of the Act expressed that the defaulter should store 75% of the sum to like and allure the sum was inordinate and subsequently restricted admittance to the legal plan of action of allure maybe a suggested bar had been made/to this, respondent battled that few different regulations accommodated such preconditions/Pet contended that those were for the claim and not for the use of first occurrence/respondent attempted to invalidate that by expressing that The strategy for assuming control over the business and the board of an element, especially a firm, was canvassed in Section 15 of the 15. The appellant likewise fought that section 34 was indistinguishable from Section 34 of the RDB Act, which announced that DRTs have selective locale, i.e., no respectful court will give any request or order against a bank practicing privileges under the Act. SARFAESI was pointless on the grounds that there was at that point a regulation managing this subject issue, and a few regulations were not expected to deal with a similar topic. It was additionally brought up that the most inconvenient obligation section somewhere in the range of 25,000 and 1 lakh dollars-didn’t require separate regulations.

For this situation, the Supreme Court held that the Parliament’s prevalence in concluding the requirement for regulation is underlined. The association between the RDB Act and SARFAESI was dismissed since the last option manages the exceptionally specific issue of nonperforming resources (NPAs) (among different contrasts, for example, the last option managing got leasers). Accordingly, it really depends on Parliament to conclude regardless of whether regulation is required. Section 13 was viewed as intrinsically authentic by the Court. The got bank is just practicing his privilege on the grounds that the default that prompted the sec 13 measure may be viewed as a “second default”- NPA + 60 days additional chance to reimburse following notification. Prior to the 2016 Amendment, Section 13 recognized the Right of Redemption it might be said. Rule 8 and 9 of the SI Rules expressed that the bank should serve a notification affirming the offer of gotten property and that the borrower might take care of the commitment and recover ownership any time before the genuine deal. While the Supreme Court affirmed the section’s legality, it pushed it difficult for borrowers to reserve the privilege to the portrayal. The Supreme Court decided Section 17(2) to be inconsistent and requested that the heading be modified from “claim” to “application.”⁶

Pandurang Ganpati Chaugale v. Vishwasrao Patil Murgud Sahakari Bank Ltd⁷
“‘Banking’ relating to cooperatives can be included within the purview of Entry 45 of List I, and it cannot be said to be over inclusion to cover provisions of recovery by cooperative banks in the SARFAESI Act,” a five-judge bench of Justices Arun Mishra, Indira Banerjee, Vineet Saran, MR Shah, and Aniruddha Bose, has held in this case. The ruling of the Court came in a reference made in light of contradictory decisions in Greater Bombay Coop. Bank Ltd. v. United Yarn Tex (P) Ltd.⁸, Delhi Cloth & General Mills Co. Ltd. v. Union of India⁹, T. Velayudhan Achari v. Union of India¹⁰, and Union of India v. Delhi High Court Bar Association¹¹.

The seat held that the whole situation and banking action of helpful banks is represented by a regulation authorized under Entry 45 of List I, i.e., the BR Act, 1949, and the RBI Act ordered under Entry 38 of List I, saying that “recuperation of duty would be a fundamental capacity of any banking foundation, and the Parliament can sanction a regulation under Entry 45 of List I as the action of banking done by agreeable banks is inside the domain of Entry 45 of List I.” Obviously, under Section 13 of the SARFAESI Act, Parliament has the position to endorse the solution for recuperation.” The Court likewise clarified that the principal part of the matter of the agreeable bank connecting with banking was covered by the BR Act, 1949, and the Reserve Bank of India Act, such regulations are connected with Entries 45 and 38 of List I of the Seventh Schedule. The parts of ‘joining, regulation and twisting up’ are covered by Entry 32 of List II of the Seventh Schedule. “As we would see it, such bankers’ banking movement is covered by Entry 45 of List I, which considers the Doctrine of Pith and Substance, as well as the passability of accidental infringement on the field held for the State.” The court reasoned that disturbing ‘banking,’ the regulation connecting with Entry 45 of List I of the Seventh Schedule of the Constitution of India administers cooperative banks enrolled under State regulation and multi-State level cooperative social orders enlisted under the Multi-State Cooperative Societies Act, 2002 (MSCS Act, 2002). The cooperative banks run by cooperative social orders enrolled under State regulation for ‘joining, regulation, and ending up,’ specifically, to issues that are outside the domain of Entry 45 of List I of the Constitution of India, are administered by the said regulation connected with Entry 32 of List II of the Constitution of India. The significance of ‘Banking Company’ is characterized under Section 5(c) read with Section 56(a) of the Banking Regulation Act, 1949, which is a regulation associated with Entry 45 of List I. It manages the ‘banking’ part of co-employable social orders’ banks. The Banking Regulation Act, 1949, and some other regulation appropriate to helpful banks interesting in ‘Banking’ in Entry 45 of List I, and the RBI Act appealing to Entry 38 of List I of the Seventh Schedule of the Constitution of India, deny agreeable banks from participating in any movement except if they conform to the arrangements of the Banking Regulation Act, 1949, and some other regulation relevant to such banks engaging to ‘Banking’ in Entry 45 of List I. Under section 2(1)(c) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, state-contracted helpful banks and multi-state agreeable banks are alluded to as “banks.” The recuperation component laid out under section 13 of the SARFAESI Act, regulation connected with Entry 45 List I of the Seventh Schedule to the Constitution of India is pertinent on the grounds that recuperation is a significant part of banking.¹²

Amendment to the SARFAESI Act

The Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Bill, 2016, was introduced in Parliament to amend four laws: the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI), the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (RDDBFI), the Indian Stamp Act, 1899, and the Depositories Act, 1996. When secured creditor defaults on a loan, the SARFAESI Act permits secured creditors to seize the collateral used to finance the transaction. This procedure is carried out with the help of the District Magistrate and does not necessitate the involvement of courts or tribunals. The District Magistrate must finish this process within 30 days, according to the Bill. Furthermore, the Bill authorizes the District Magistrate to assist banks in assuming management of a company if it is unable to repay loans. This will be done if the banks convert their outstanding loans into equity shares and hold a 51 percent or greater ownership in the company as a result.

The Act establishes a single registry to keep track of secured asset transactions. The bill establishes a consolidated database that will allow property records from diverse registration systems to be integrated into one central registry. This contains registrations made under the Companies Act of 2013, the Registration Act of 1908, and the Motor Vehicles Act of 1988. Secured creditors will not be able to take possession of collateral unless it is registered with the central registration, according to the bill. Furthermore, after the registration of a security interest, these creditors will have priority over others in the repayment of their debts.¹³

Conclusion

With the recent judgment made by the Supreme Court of India, all state and multi-state cooperative banks will now be subject to the SARFAESI Act of 2002. Banks can now sell and seize defaulters’ properties to recover their debts, because of the Supreme Court’s crucial decision. The court bench also recognized a 2003 notification that cooperative banks are covered by the SARFAESI Act and are entitled to seek redress. Cooperative banks had to go to court to recover their dues before this notification was written. The Supreme Court went on to say that this decision was made to eliminate delays in collecting dues because cooperative banks are required to resort to civil courts under the Cooperative Societies Act to do so. The court also held that co-operative banks that engage in banking activities are subject to Sections 5 (c) and 56 (a) of the Banking Regulation Act of 1949, which are laws related to List I Entry 45. (Union List).¹⁴ After the judgment made by the Court regarding this issue, experts hope that it would bring the much-needed reforms in the cooperative banks sector, which has been subjected to bankruptcy and corruption. They also believe that it would bring large-scale implications.

References:

1. SARFAESI ACT, 2002- Applicability, Objectives, Process, Documentation, cleartax.in https://cleartax.in/s/sarfaesi-act-2002 
2. An overview of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI), Arun Bapat, iPleaders https://blog.ipleaders.in/overview-securitisation-reconstruction-financial-assets-enforcement-security-interest-act/
3. 2006(5) CTC 753(SC)
4. M/S Transcore vs Union of India & Anr, Darshika Rughani, Pro Bono India https://probono-india.in/research-paper-detail.php?id=415 
5. Case No.: Transfer Case (civil) 92-95 of 2002
6. Constitutional Validity of SARFAESI Act of 2002 tested under ‘Mardia Chemicals vs. UOI’, Shubham Phophalia, taxguru  https://taxguru.in/finance/constitutional-validity-sarfaesi-act-2002-tested-mardia-chemicals-vs-uoi.html
7. 2020 SC 431
8. (2007) 6 SCC 236
9. (1993) 2 SCC 582
10. (1983) 4 SCC 166
11. (2007) 6 SCC 236
12. SARFAESI Act applicable to Cooperative Banks: Constitution Bench, Prachi Bharadwaj, SCC Online https://www.scconline.com/blog/post/2020/05/05/sarfaesi-act-applicable-to-cooperative-banks-constitution-bench/ 
13. The Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Bill, 2016, PRS India https://prsindia.org/billtrack/the-enforcement-of-security-interest-and-recovery-of-debts-laws-and-miscellaneous-provisions-amendment-bill-2016#:~:text=Amendments%20to%20the%20SARFAESI%20Act,intervention%20of%20courts%20or%20tribunals.
14. What is SARFAESI Act? Jagran Josh https://www.jagranjosh.com/general-knowledge/sarfaesi-act-1588850144-1

This article is written by Arryan Mohanty, a student of Symbiosis Law School.

Bench

Justice Indu Malhotra, Justice L. Nageswara Rao

Date of Judgment

9th July 2020

Provisions

Order VII Rule 11(a) & 11(d), CPC, Section 73AA of Land Revenue Code, The Limitation Act, 1963

Cases Referred

Vidyadhar v. Manikrao [(1999) 3 SCC 573], Chandrashankar Manishankar vs. Abhla Mathur and others [AIR (39) 1952 Bombay 56]

Introduction

In Dahiben v. Arvindbhai Kalyanji Bhanusali & Ors., the Supreme Court of India stated that mere non-payment of the full amount of consideration cannot be held as a ground for cancellation of sale deed.

Factual Background

• The Supreme Court was considering an appeal from a Division Bench of the Gujarat High Court, which had upheld the Trial Court’s judgment admitting an O7R11 application and ruling that the Appellants’ complaint was prohibited by limitation. In the recent case, the plaintiff owned a piece of agricultural property in the hamlet of Mota Varachha, Surat Sub-District. According to Section 73AA of the Land Revenue Code, the land was subject to restricted tenure. The Plaintiffs applied to the collector of the district for permission to sell the property to Respondent 1. The collector allowed the property to be sold and set the sale price according to the jantri issued by the State Government. The purchaser was required to pay via cheque, with a reference to the payment in the Sale Deed. The plaintiffs sold the property to respondent 1 after obtaining all necessary permissions. Respondent 1 issued 36 cheques for the payment of Rs.1,74,02,000 towards the sale considerations in the favour of Plaintiff.
• Later, Respondent No. 1 got the Land from Plaintiff and sold it to a group of third parties, comprising Respondents Nos. 2 and 3, in a transaction dated April 1, 2013, for Rs.2,01,00,000.
• The Plaintiff filed a suit before the Principal Civil Judge of Surat in December 2014, more than five years after the Sale Deed was executed, alleging that the sale consideration for the Land had not been paid in full by Respondent No.1 and praying, inter alia (among other things), that the Sale Deed is declared void, illegal, and ineffective. Respondents No. 2 and 3 were impleaded in the complaint since the Land had already been sold to them and was in their possession at the time the suit was filed.
• The Plaintiffs claimed that they were completely illiterate, unable to read or write, and could only make a thumb imprint on the Sale Deed dated 02.07.2009. The Sale Deed was gotten without full consideration being paid. Just Rs. 40,000 had been paid through six checks by Respondent No. 1, and the rest 30 checks adding up to Rs. 1,73,62,000 were false checks.
• On the grounds that the Suit was precluded by limitation and that no cause of action had been disclosed in the plaint, the Respondent filed an Application for Rejection of the Plaint under O7R11 (Application for Rejection).
• The Trial Court determined that the time restriction for filing the lawsuit was three years from the date of the sale deed’s execution on July 2, 2009. The Trial Court further highlighted that the lawsuit was filed on December 15, 2014, and so was time-barred. The Trial Court dismissed the lawsuit and granted the Application for rejection. The Appellants sought an appeal with the Gujarat High Court after being aggrieved by the Trial Court’s decision, which in turn upheld the decision. As a result, Plaintiff petitioned the Supreme Court to set aside the High Court’s decision.

Issues Raised

1. Whether non-payment of the part of sale consideration is a ground for cancellation of registered sale deed?
2. Whether the case filed by Plaintiff is barred by the Limitation Act?

SC Analysis and Judgment

The Supreme Court outlined the law that applies while determining an application under Order VII Rule 11 CPC. The court cited Vidyadhar v. Manikrao¹ and Section 54 of the Transfer of Property Act, 1882, saying that the words “price paid or promised or part paid and part promised” indicate that actual payment of the entire price at the time of the execution of the Sale Deed is not a sine qua non for the sale to be completed. The Court stated that in the Plaint, the Plaintiffs established a case of claimed non-payment of a portion of the selling consideration and requested relief of cancellation of the Sale Deed on this basis. Even in case, the whole purchase price is not paid, as long as the paperwork is registered and signed, the sale is done, and the title transfers to the transferee under the transaction. If a portion of the sale price is not paid, the transaction’s validity is unaffected. The parties must intend to transfer ownership of the property in exchange for a price that can be paid now or in the future to be regarded as a sale. The Plaintiffs might have other remedies in law for recovery of the equity consideration but could not be allowed the relief of cancellation of the registered Sale Deed.

Further, the SC held that Plaintiff’s claim that it first learned of the alleged fraud in 2014 after receiving the index of the Sale Deed was completely false because receiving the index would not be a cause of action for initiating the complaint. It was also noted that Plaintiff had omitted the date of execution and registration of the Sale Deed on purpose. As a result, it determined that the present case was a classic situation in which the Plaintiffs tried to build up an artificial cause of action to bring the claim within limitation by skillful writing of the plaint and that it should be dismissed at the threshold.

In Chandrashankar Manishankar vs. Abhla Mathur and Ors.², it was held that the document’s recital indicating payment of the consideration may be false, but it doesn’t make the document invalid. The entire amount does not have to be paid for the sale to be effective, since Section 54 of the Transfer of Property Act stipulates that the price may be paid or pledged in whole or in part. The Court further concluded that if the consideration was not paid but the document demonstrates that there was an intention to pay, the document is not declared invalid because the consideration was not paid. If, on the other hand, there was no intention of paying any consideration, the document is null and void.

The bench so on held that the Plaintiffs’ current lawsuit is a misuse of the court’s procedure and devoid of any merit. In light of the foregoing discussion, the instant Civil Appeal is rejected, with costs of Rs. 1,00,000/- payable by the Appellant to Respondents Nos. 2 and 3 within twelve weeks of this Judgment’s date.

Conclusion

In the recent case, the court determined the fact that the parties should not waste the time of the court as already there is a huge number of cases pending before the court and the lawyers of the parties should reject the plaint at the threshold if it does not disclose any cause of action. Plaintiff should be diligent in safeguarding its legal rights and making sure that legal actions are started before the statute of limitations runs out. In addition, the plaintiff should make certain that the plaint is well constructed in order to highlight important problems. If the ownership of the property has been transferred to the other party, even if the money has not been paid in whole or in half, the party has no right to launch a lawsuit against the other, claiming that the contract is void or illegitimate. If the plaint is submitted beyond the deadline if the averments do not reveal a valid cause of action, the Courts will not hesitate to dismiss the case.

Citations

1. (1999) 3 SCC 573
2. AIR (39) 1952 Bombay 56

Analysis by Hemant Bohra student at School of Law, Lovely Professional University, Punjab.

INTRODUCTION

Any claim made in the suit flows from the cause of action, and claims made must be with respect to the cause of action from which they derive. In Om Prakash Srivastava v. Union of India and Anr., the Supreme Court stated that “Cause of Action” refers to the conditions that constitute a violation of a right or an urgent cause for a reaction in a limited sense. Due to the facts or circumstances, several causes of action may arise in some situations. Contractual actions, statutory causes of action, and torts including assault, battery, invasion of privacy, and defamation are only a few examples.

CAUSE OF ACTION, SECTION 20, CPC

“Cause of Action” as defined by section 20 of the Civil Procedure Code of 1908, is any fact that must be proven in support of the right to obtain a judgment. The term Cause of Action is mentioned in the CPC in various places. Under the Civil Procedure Code, 1908, Order II Rule 2, it is stated that a plaint must mention the cause of action if it is to be instituted as a suit. Order VII Rule 1 reaffirms the same. Further, Order I Rule 8 states in the explanation that the parties represented in the litigation do not have to have the same cause of action as the person representing them and Order II Rule 7 explains in detail whether an objection to misjoinder of the cause of action should be submitted before the matter appears in the suit if such a complaint is valued at that time.

As stated at the outset, a Cause of Action is not only an important part of a Civil Action, but it is also the cause for the civil suit’s existence. It establishes the disputed topic or the genuine nature of the parties’ relationship. If there is no cause of action, there will be no litigation. Although, inside the CPC, the cause of action has yet to be defined.

PURPOSE OF ORDER 7 RULE 11 OF CPC

Order 7 Rule 11 of CPC provides litigants with the option of seeking an independent and special remedy, allowing courts to dismiss a suit at the preliminary stage without recording evidence and proceeding to trial based on the evidence presented if they are satisfied that the action should be dismissed on any of the grounds outlined in this provision.

In the case of Dahiben v. Arvindbhai Kalyanji Bhanusali¹, the SC reviewed several precedents on the underlying goal of O7 R 11 while dealing with the appeal before it. The court would not allow protraction of the proceedings if no cause of action is disclosed in the plaint or if the suit is precluded by limitation. In this instance, it would be important to put an end to the phony litigation to avoid wasting more judicial time. It opined, citing Azhar Hussain v. Rajiv Gandhi², that the main aim of conferring such powers under O7 R 11 is to ensure that useless and bound to prove futile litigation should not be allowed to consume the time of the courts and exercise the mind of the respondent.

The Supreme Court went on to say that while considering a motion to dismiss a plaint, courts should look at the plaint’s averments in light of the documents relied on to determine if they reveal a cause of action. In this regard, it was also stated that courts would have to disregard the defendant’s pleadings in the written statement and application for dismissal of the plaint on merit when making such a conclusion. As a result, the Supreme Court stated that when deciding any application submitted under O 7 R11, the courts should limit themselves to the plaint and not delve into the specific facts outlined in the written statement or even the O7 R 11 application.

CASE LAWS

Subodh Kumar Gupta v. Srikant Gupta and Ors.³
In this case, an agreement was composed in Bhilai for the dissolution of the partnership and distribution of partnership assets. The Supreme Court held that the agreement was void and had to be ignored at the threshold to save the time of the court and to safeguard the parties from any harm. Further, it held that Chandigarh Court had no jurisdiction to hear the suit as part of the cause of action that arose at Mandsaur.

Bloom Dekor Ltd. v. Subhash Himatlal Desai and Ors.⁴
According to the Supreme Court, the cause of action encompasses those circumstances that, if present, would enable the plaintiff to provide support for his entitlement to a court judgment. That is, a set of facts that the plaintiff will use to substantiate his or her case.

M/S South East Asia Shipping Co. Ltd. vs M/S Nav Bharat Enterprises Pvt.⁵
The Supreme Court ruled that a cause of action is made up of a group of circumstances that constitute grounds for bringing a civil action for redress in a court of law. In other words, it’s a series of circumstances that gives the plaintiff the right to sue the defendant under the legislation that applies to them. The court further stated that a cause of action must include any conduct committed by the defendant because, without one, no cause of action will likely develop.

Raghwendra Sharan Singh vs Ram Prasanna Singh⁶
In this case, the cause of action arose when the injured party disputed the gift deed after approximately 22 years from the date of the equivalent’s execution. The offended party in the situation has contested the gift deed, claiming that it is a garish one that is therefore not authoritative. After hearing both sides’ perspectives on the facts of the case, the Hon’ble Supreme Court ruled that the Statute of Limitations indisputably bars this lawsuit. Furthermore, the plaint should be dismissed according to CPC Order VII Rule 11.

Rajasthan High Court Advocates Association vs Union of India & Ors.⁷
In this case, the court held that every fact that must be proved, as opposed to any piece of evidence needed to prove each fact, must have been mentioned the essential element of ’cause of action’ according to the Rajasthan High Court. In each circumstance, the location of the cause of action must be determined.

As a result, the court will only be justified in dismissing the plaint for failure to disclose a cause of action if it considers the claims in the plaint and decides that they do not reveal any cause of action, assuming the allegations are true. However, if the court finds that there is no cause of action for the suit after reviewing all evidence and materials after the trial, the suit is dismissed rather than the plaint rejected.

OBSERVATIONS

The plaintiff’s lawsuit may be dismissed at the outset if the cause of action is not adequately established just like in the recent case. In such a case, no court proceedings will be continued in the first place to save the time of the court and to prevent such malice. Further, the claims must be backed up by facts, law, and a conclusion drawn from the law’s application to the facts.

A statement of facts in a battery case, for example, might be “While walking through XYZ Store, the plaintiff was tackled by the defendant, a store security guard, who knocked him to the ground and held him there by kneeling on her back and holding his arms behind him, while screaming in his ear to open his bag. The plaintiff suffered injuries to her head, chest, shoulders, neck, and back as a result of these actions.”

However, the facts or circumstances that lead to a person seeking judicial redress may give rise to multiple causes of action. In the previous case, the plaintiff could allege assault, battery, intentional infliction of emotional distress, and violation of Civil Rights.

CONCLUSION

As for this regulation, the term “cause of action” refers to the key facts that make up the right and its infringement, which authorizes a person to sue the wrongdoer, defaulter, or anyone else who is liable for it.

However, Rule 6 of Order II of CPC states that the court may order separate trials if it appears to the court that joining causes of action in one complaint will embarrass or delay the trial or be otherwise inconvenient. It can be analyzed from the above-stated matter that a lawsuit can be dismissed if the cause of action is missing from the complaint. It is not enough to just assert that specific events or facts occurred that entitle the plaintiff to relief; the complaint must also include all of the elements of each cause of action in detail. However, if an offended party excludes any relief to which he is entitled to suit except when approved by the Court, he will not be granted such assistance later. The Court may award aid on reasons other than those specified in the plaint in exceptional situations. The aid requested by the injured party or the defendant might be broad or narrow.

Citations:

1. 2020 SCCOnline SC 562
2. 1986 AIR 1253, 1986 SCR (2) 782
3. (1993) 104 PLR 621
4. 1994 SCC (6) 322, JT 1994 (6) 89
5. 1996 SCC (3) 443, JT 1996 (3) 656
6. AIR 2019 SC 1430
7. AIR 2001 SC 416

Written by Hemant Bohra student at School of Law, Lovely Professional University, Punjab.

ABSTRACT

The Specific Relief Act 1963 chalks out an array of reliefs that can be sought under the tutelage of the civil courts in addition to the other available civil remedies enshrined under CPC 1908 for aiding the enforcement and due fulfillment of the contractual obligations besides providing a host of other civil reliefs.

INTRODUCTION

The Specific Relief Act was enacted on 13th December 1963 on the recommendations of the 9th report of the law commission and it seeks to effectively replace and widen the scope of the Specific Relief Act 1877. The Act expands the horizon of the civil court by arming it with a greater number of reliefs in addition to the existing reliefs available under civil courts.

The act is not only limited to the remedies for the performance of contracts but also provides relief in a variety of fields. Generally, the branches of substantiative laws lay down the rights and duties as per their purpose and thereby provide for the remedies for the violation of those rights. However, the Specific Relief Act per se does not afford any legal rights, but on the other hand, provides a comprehensive scheme of specific remedies in specific terms for the violation of the legal rights.

It is to be noted that the Specific Relief Act does not provide a remedy for the enforcement of the penal laws but only provides for the enforcement of individual civil rights. The Specific Relief Act broadly provides reliefs under the following heads.

• Recovery for peaceful possession of the property
• Specific performance of the contracts
• Rectification and Cancellation of instruments
• Recession of Contracts
• Preventive Relief i.e. Injunction
• Declaratory Relief

1. PEACEFUL POSSESSION OF A PROPERTY

Peaceful possession of a property is quite essential for the maintenance of law and order in society since the failure to observe the same has the potential to create disturbance and disequilibrium in society. Civil Laws primarily CPC 1908, do provide relief per se in this matter. The addition of the reliefs under specific relief act further widen the ambit of the relief available to the public and add to their cause and rescue. Henceforth, the first chapter of the said act provides relief to those who have been unlawfully dispossessed of their property which could be both immovable or movable.

Section 5 of the Act deals with the recovery of legal possession of specific immovable property based on the title. The title may be acquired on the basis of either ownership or possession. The one having the better title is entitled to possession of the property. A suit under Section 5 is an ordinary suit under CPC 1908.

Section 6 of the Act provides the remedy of filing a suit if any person is dispossessed of his immovable property without his consent and the due course of law. The plaintiff need not prove better title for the purposes of the suit under this section but has to prove wrongful dispossession.

In Puthukkattil Parangodan v. Parameswaran¹, it was held that this section seeks to prevent the violation of law and order by restraining a person from using force to dispossess another of his property without the due course of law.
Section 7 deals with the recovery of possession of specific movable property or money value thereof in alternative through an ordinary suit under CPC 1908. A person is entitled to possession if he has either special (bailment, pawn, etc.) or temporary rights. Under this section, the suit can be brought against the actual owner.

Section 8 deals with the liability of the person in possession of the specific movable property to return it back to the person entitled to immediate possession. Under this section, a suit cannot be brought against the actual owner. Relief under this section is sought for only the return of a specific article and not for monetary compensation unlike section 7.

Ganga Bishan v. Jai Narain²: Relief under this section is claimed when monetary compensation cannot afford necessary relief to the plaintiff for the loss of property or when it is very difficult to ascertain the actual value of the property.

2. SPECIFIC PERFORMANCE OF THE CONTRACTS

Today’s contemporary modern world thrives on the intricacy and nuances of contracts. Due to their utmost significance in the economic hemisphere, contracts can be rightly characterized as modern wealth. They form the base of all economic transactions ranging from all sorts of employments/ professional employments to monetary transactions of the bank. Enforcement of the contracts forms the centerpiece in the execution of the contractual obligations as often a particular contract forms a link in the chain of various interlinked contracts and failure to observe any one of them may lead to serious dysfunction of the economic ecosystem.

The Indian Contracts Act 1872 provides relief to the aggrieved parties for the enforcement of the contracts in the form of damages i.e. monetary compensation only. In some instances, the monetary compensation does not suffice and such circumstances demand actual enforcement of the contract. This is where the specific relief act comes into the picture and provides a speedy and just remedy by demanding the enforcement of the contractual obligations through
the instrument of specific performance of the contracts.

Section 10 of the act states that specific performance of the contracts would be enforced in cases where there is no standard for gauging the damage caused due to non-performance of the contract or where the monetary compensation would not suffice for the loss caused due to nonperformance of the contract³.

3. RECESSION OF THE CONTRACTS

Voidable contracts are those that are enforceable at the option of one party to the contract but not the other. It remains valid as long as the aggrieved party wishes to continue with the terms of the contract. There are certain factors that may render a contract voidable at the option of the other party. These factors include lack of free consent in the form of undue influence, fraud, misrepresentation, and coercion, under section 19 and 19 (A), failure to perform a time-bound contract in which the time was of the essence under section 55, and when one party to a contract prevents the performance of a reciprocal promise by the other party under section 53. So, the party at whose instance the contract becomes voidable has the right to rescind the contract. Chapter IV of the Specific Relief Act provides relief of the recession of the contracts.

Section 27 and 28 of the Act lay down detailed grounds for filing a suit for recession. A suit for a recession may be brought when the contract is voidable at the instance of the plaintiff or when the contract is unlawful for latent reasons. When the rights over the subject matter of the contract are acquired by any third party in good faith during the course of a contract for a value, implying a change of position of the parties to the contract or when the plaintiff ratified the voidable contract either expressly or impliedly, the court may refuse to rescind the contract.

4. RECTIFICATION AND CANCELLATION OF INSTRUMENTS

A written transaction is basically called an instrument. The expedience of law and prudence demands a transaction to be in writing. Sometimes, it might so happen that the instruments fail to express the intention of the parties involved due to the operative elements of mutual mistake or fraud. Such a situation demands the rectification of the documents. Section 26 of Chapter III of the Specific Relief act provides for rectification of the mistakenly executed instruments.

When documents/instruments after their due execution are discovered to be void or thereafter become void, such documents need to be canceled and Section 31 to 33 under Chapter V of the Specific Relief Act provides this relief. So basically, when a document becomes void, voidable, or has a reasonable apprehension of causing serious injury to the plaintiff if left outstanding, such instruments can be canceled at the discretion of the court. Benefits are to be restored or compensation is to be given on cancellation of an instrument

In the case of Sri Lakha Granites v. Eklavya Singh⁴, it has been held that an instrument can be canceled only by a court order under Section 31 of the Specific Relief Act and not by unilateral means.

5. PREVENTIVE RELIEF I.E. INJUNCTION

Remedy of injunction falls under the ambit of preventive relief. An injunction is a court order that either directs the party concerned to do a particular act (mandatory injunction wherein the court compels the performance of certain acts to prevent a breach of an obligation) or not do a particular act. In such cases, the order of injunction is issued at the instance of the court. Section 36 to 40 under Chapter VII of the Specific Relief act covers the relief of injunction. The objective of injunction is to restrain the commission or continuance of a wrongful act. An injunction is issued against individuals, public bodies, or states and willful disobedience of it results in contempt of court.

These orders are not granted in cases wherein the specific performance of the contract or damages is likely to serve the purpose of the contract, or where damages are appropriate to remedy, or where the plaintiff is not entitled to an injunction on account of his conduct or where an injunction is not the appropriate remedy.

Injunctions are a discretionary relief and may be temporary or perpetual. Temporary injunctions are granted at any stage of suit for a specified period of time and are governed by the provisions of CPC 1908. They are granted for the protection of interest in the property or to prevent a continuous breach of contract. A perpetual injunction can be made only by deciding the merits of the suit via decree and deciding the rights of the parties. It is to be noted that in suits for an injunction, damages may also be claimed additionally.

In Ishwarbhai v. Bhanushali Nanda⁵, the court observed that the interim injunction can only be sought in the cases where a perpetual injunction is prayed for and not otherwise.

6. DECLARATORY RELIEF

At times, the person legally entitled to the possession or enjoyment of any immovable property might be denied the right to the enjoyment of such property at the instance of the other. It is in the backdrop of such wrongful denial that the court may issue a general declaration as to the entitlement of such right to the aggrieved party. So if a cloud is cast on the title of any immovable property of the plaintiff, he may dispel it with the aid of this discretionary power of the court and avoid future litigation. Section 34 and 35 under Chapter VI of the Specific Relief Act deal with declaratory relief against the impugned person who denies or is interested in denying the right to the aggrieved party.

Conclusion

The Indian Contracts Act forms the backbone of the contracts law in India. Sometimes, the nature of the contracts demands specific performance. However, the Indian Contracts Act lacks effective means for the enforcement of the contracts and provides remedies for the breach of the contractual obligations in the form of damages only. Further, it lacks means for mandatory enforcement of the contract in the form of injunction orders. The Specific Relief Act strikes to cover the loopholes of the Indian contract act by providing the remedies of specific performance of the contracts, orders of injunction, and recession of instruments.

Besides facilitating the smooth execution of contractual obligations, it seeks to provide a host of other reliefs in the civil sphere through means of rectification and cancellation of instruments, declaratory relief, and orders for peaceful possession of the movable and immovable property. In a nutshell, the Specific Relief Act makes a decent effort to facilitate the cause of the aggrieved parties of the civil sphere of law.

Citations:

1. AIR 2002 Ker 221
2. AIR 1983 SC 441
3. Falcke v. Gray (1859) 4 Drew 651
4. AIR 2011 Raj 49
5. AIR 2002 Guj 328

Written by Riya Ganguly student at Bharati Vidyapeeth New Law College, Pune.

Introduction

Industrialization has resulted in a dramatic increase in global trade and business. To keep up with financial growth and avoid lengthy lawsuits, the parties have chosen arbitral proceedings as their preferred method of dispute resolution¹.
Arbitration is not at all a modern process, especially in India. It can be traced back to the Vedic ages². Even though it had been in practice for ages, it is still in its evolving stage. Arbitration is a type of “alternative dispute resolution” (ADR). Some other forms of ADR include mediation, Lok adalats, negotiation, etc. There are a number of pending cases that need resolution. Hence, ADR techniques have been proven to be very useful to reduce the pressure on the conventional court system. The recommendation made by the “Malimath committee” was related to mandating the usage of ADR techniques. In the article, there is mention of certain problems with these techniques (especially arbitration).

History of arbitration in India

If we want to trace back the origins of arbitration procedures in India, we would find the reference to the panchayat system ³. It showed a lot of improvement mainly in the nineteenth century. The “Indian Arbitration Act, 1899” had been very very important legislation that has changed the dynamics of the arbitration process. This Act was relevant only in Calcutta, Madras, and Bombay. This Act was quite lengthy and confusing. The same was held in the case of Dinkarrai Lakshmiprasad vs. Yeshwantrai Hariprasad ⁴ . To end the complexities of the Act, a new Act needed to be enacted. Therefore, in the year 1940, “The Arbitration Act, 1940” came into action. It applied to the whole country and not only to specific presidency towns. Later arbitration was codified under Section 89 and Schedule II of the “Code of Civil
The procedure, 1908”.

Arbitration had also been mentioned in ancient times. “Brihadaranyaka Upanishad” is one of the ancient scriptures that supposedly talks about arbitration. In the 1700s and 1800s, separate regulations were present that were applicable in Calcutta, Bombay, and Madras. In the case of Gajendra Singh v. Durga Kunwar _⁵, it was considered that arbitration is more of a “compromise between two parties”.
In the year 1996, following the UNCITRAL model, the “Arbitration and Conciliation Act” came into action.

Advantages and disadvantages of arbitration

Arbitration has proven to be more effective as compared to litigation (going to the court). It is more flexible than litigation techniques. Also, arbitration is comparatively less time-consuming and more cost-effective when compared to litigation. Many believe that justice provided through arbitration is of better quality.

Along with the pros mentioned above, there are some cons too. When compared to other ADR techniques (for instance, mediation), arbitration is a more expensive and time-consuming method. In the case of an arbitration proceeding, the arbitrator has to study the evidence and hear both sides before making a decision. This whole procedure takes quite some time. Unlike mediation, in the case of an arbitral proceeding, there is a scene where a party
wins and the other loses. Due to such a win or loss situation, the relation between the two parties often gets stressed.

Present status of arbitration in India

Judiciary in India has been trying a lot to simplify the processes of arbitration (especially in cases of “International Commercial Arbitration”) ⁶. There are some significant differences that the 1996 Act had when compared to the previous legislation. One of the most significant changes in the judicial involvement to the arbitral product. If an arbitration agreement is present, the judicial system has to direct the parties to opt for arbitration. The powers that an
arbitrator can exercise have been improved too. A specific mention of “domestic arbitration”⁷ had also been mentioned in the Act. In 2015, an act was enacted in order to make amendments to the existing 1996 Act. This 2015 Act was declared to be applicable to arbitral as well as court proceedings⁸.
Recently, an “Arbitration and Conciliation (Amendment) Act” was enacted in March 2021. One of the main purposes of this Act was to promote India as a center of international arbitration. To ensure the above purpose, Schedule VIII of the 1996 Act was scrapped off. This schedule banned certain categories of people from being selected as arbitrators in India.

Conclusion

From this article, it can be concluded how arbitration had become a preferred method of dispute resolution. We can see how arbitration in India is in an evolving stage. Lots of amendments are still required to make. This process had already evolved a lot if the scenario is compared to the pre-British era and in the past in general. It has also been mentioned by the experts that more professionalism is expected on the part of the arbitrators. This would
improve the scenario of this dispute resolution process in India. In order to improve the situation of arbitration procedures in India, the mechanism should be made more time effective and cost-efficient. People should be made more aware of the ADR techniques.

References:

1. “India: Evolution of Arbitration in India”, [October 21, 2016], https://www.mondaq.com/india/arbitration-dispute-resolution/537190/evolution-of-arbitration-in-india.
2. Ashutosh Singh, “Evolution of arbitration in India and the lack of professionalism”, [October 9, 2021], https://blog.ipleaders.in/evolution-arbitration-india-lack-of-professionalism/#Arbitration_in_pre-British_era.
3. “Evolution Of the Arbitration Law in India”, https://www.legalserviceindia.com/legal/article-4145-evolution-of-the-arbitration-law-in-india.html.
4. Dinkarrai Lakshmiprasad v. Yeshwantrai Hariprasad, [1930 AIR BOM 98].
5. Gajendra Singh v. Durga Kunwar, [1925 ILR 47A II 637].
6. Aditi Goyal, “Arbitration Law in India: Everything You Want to Know”, https://viamediationcentre.org/readnews/NTUy/Arbitration-law-in-India-Everything-you-want-to-know.
7. Section 2(7), Arbitration and Conciliation Act 1996.
8. Abhinav Kumar, “Making India a global hub for arbitration”, [March 24, 2021], https://www.thehindubusinessline.com/opinion/making-india-a-global-hub-for-arbitration/article34152992.ece.

This article is written by Aaratrika Bal student at National Law University Odisha.