A committee appointed by Prime Minister Manmohan Singh to suggest ways to make India a better place to do business is for overhauling the system in which courts,including High Courts,deal with cases involving business houses as well as speed up cases where enforcement of clauses of contracts is the subject matter of dispute. Sources told The Indian Express that this report,which is still preliminary,would be discussed threadbare at a meeting being called by the Cabinet Secretary soon. Concerned with the plummeting ranking of the country in successive World Bank Doing Business reports,the Prime Minister ordered that a Committee of Secretaries recommend changes in law and statutes that could make India a more welcome destination for doing business. The latest World Bank report for 2009 puts India at a dismal 180 out of the total 181 on the subject of enforcing contracts,one of the parameters in the report. The preliminary report on enforcing contracts, already submitted to the PMO,recommends establishment of commercial courts to speed up enforcement of contracts. Taking a cue from countries such as the US and the UK,it also suggests constituting a commercial division in each High Court for adjudicating commercial disputes and connected matters. This,the report says,would speed up the judicial process. Indias rank in successive reports has been falling,with even neighbouring Pakistan and Nepal and most African countries ahead of the country on almost all parameters. The yearly report ranks countries on parameters such as ease of starting a new business,enforcing contracts,employing workers,protecting investors,etc. These parameters,which also include dealing with licenses,registering property,getting credit,paying taxes,trading across borders and closing a business,are based on regulations and laws that either support enhanced business activity or constrain them. The parameter pertaining to contract enforcement relates to disputes relating to sale of goods and tracks the time,cost and number of procedures involved from the moment the plaintiff files a lawsuit to actual payment. An earlier World Bank report had said that as many as 56 steps were involved in the procedure in India,which takes about 1,420 days from filing of the lawsuit to enforcement of the judgment. Getting a contract enforced in India has been divided into three phases. Of these,the filing and service phase has 17 stages,trial and judgment in 23 stages while the enforcement phase has 16 stages. Incidentally,the preliminary report questions the authenticity of the World Bank report,pointing to defects in the methodology followed by the Bank in arriving at the conclusions. It has suggested that introduction of case management in the judiciary as already envisaged by the Supreme Court could go a long way not only in addressing the problem of enforcement of contracts but also the problem of backlog. It recommends that some funds be earmarked and software developed and made available to the high courts to keep tab on commercial cases. It also says that the offer of the government of UK to assist the Indian judiciary in this regard should be accepted and pilot projects be taken up in High Courts in the four metros. It also suggests that a consultant from the private sector be appointed to monitor the project. While we have our reservations about the report itself,the government is keen that steps be taken to remove all bottlenecks, said a senior officer associated with the process.
