In its bid to placate farmers protesting on the borders of the national capital for over three weeks against the new farm laws, the Centre offered to significantly water down key provisions of these laws. Among the changes proposed is the rollback of a unique dispute resolution mechanism for issues between farmers and buyers, and instead bringing such disputes under the jurisdiction of a civil court.
What is the dispute settlement mechanism?
The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020, provides a buyer a right to engage in trade and commerce of a farmer’s produce across the country. This means a farmer has freedom to engage in intra-state and inter-state trade with buyers, expanding her choices beyond a traditional market.
The law also provides for a dispute resolution mechanism in Chapter 3 of the Act. Section 8 of the Act, which lays down the “dispute resolution mechanism for farmers” states that “in case of any dispute arising out of a transaction between the farmer and a trader”, a Conciliation Board appointed by the Sub- Divisional Magistrate will settle the dispute. It says the settlement by the Conciliation Board will be binding on the parties.
How will the Board decide the dispute?
The law provides that the Board will consist of a chairperson and two to four such members as the Sub-Divisional Magistrate may deem fit. Parties will first have to make an application to the SDM seeking a “mutually acceptable solution through conciliation”.
Then the Board will take up the dispute. The parties themselves can recommend one or two members each as members to the Board along with the Chairperson, who will be a government employee appointed by the Sub-Divisional Magistrate.📣 Follow Express Explained on Telegram
What if the parties cannot reach a settlement?
If the dispute is not settled within 30 days of being brought to the Board, the SDM will hear the dispute acting as the “Sub-Divisional Authority” for settlement of such dispute. The Sub-Divisional Authority is empowered to pass three kinds of orders under the law: (a) pass an order for the recovery of the amount payable to the farmers and traders; (b) impose a penalty as stipulated in sub-section (2) of section 11; or (c) suspend for such period as he deems fit or cancel the right to operate as an electronic trading and transaction platform.
The law also provides for an appeal against the orders of the Sub-Divisional Authority, which is within 60 days from the date of the order to an officer not below the rank of Joint Secretary to the Government of India, to be nominated by the Central Government for this purpose.
Why are farmers upset with this dispute resolution framework?
As the new law provides for a special dispute resolution mechanism, it bars the jurisdiction of the civil court from entertaining any suit or proceedings in respect of any matter that could be dealt through the special mechanism provided in the law.
Section 15 of the Act says “no civil court shall have jurisdiction to entertain any suit or proceedings in respect of any matter, the cognisance of which can be taken and disposed of by any authority empowered by or under this Act or the rules made thereunder.”
It is essentially the replacing of the jurisdiction of civil courts with a heavily bureaucratic procedure under the authority of the SDM, a government employee, that has raised fears among the farmers.
Can a statute bar courts from having jurisdiction?
Jurisdiction of civil courts is governed by Section 9 of the Civil Procedure Code. The provision says that civil courts have the jurisdiction to try all suits of a civil nature, except suits of which cognisance is either expressly or impliedly barred.
So statutes routinely bar the jurisdiction of civil courts to set up alternative dispute mechanisms. Many statutes, including the Income Tax Act, rent Control Laws, Companies Act, bar jurisdiction of civil courts giving preference to alternate dispute mechanisms.
However, statutes cannot take away the jurisdiction of the High Courts and the Supreme Court. Any action by the state can be challenged before such courts on various grounds including arbitrariness. Judicial review is part of the basic structure of the Constitution and the right to approach courts for violation of fundamental rights is itself a fundamental right under Article 32 of the Constitution. In the context of the farm laws, decisions of the Sub-Divisional Authority can always be challenged before the relevant High Court on grounds of arbitrariness etc, if either party is aggrieved.
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