The Alternative Dispute Resolution system in India should also be allowed into some areas where it is banned today. With overburdened courts and a five-crore pendency, this could be a way out to cut down the growing number of cases
By Sujit Bhar
Uttam Kumar Thakur was a simple conductor in a bus, operated by his employer, the Calcutta State Transport Corporation (CSTC), an organisation of the state of West Bengal. Eighteen years ago, the CSTC, showing a high-handed attitude, had penalised Thakur for allegedly taking a bribe of Rs 225 during his work. The penalty was a reduction of his paltry salary, no promotions and a complete disregard for his appeals for justice.
That happened in 2005. When his appeals before the CSTC authorities were turned down, Thakur went to court a year later. He fought the case on his meagre earnings, further reduced by the penal clause, and it was in mid-April 2024 that the Calcutta High Court dismissed the case and ordered the CSTC to pay all arrears to Thakur, apart from reinstating his job title and seniority. Justice has been served, maybe, but Thakur’s sufferings have not been addressed by the lackadaisical judicial system.
Thakur’s was an industrial dispute to be handled by courts as per law. Had his case been handled by an arbitration body, Thakur would have received justice in good time and his life would not have been destroyed. There is definitely sense in widening the scope of the Alternative Dispute Resolution system in India, because the courts will never be able to deliver quick justice under the current system.
The Pendency Factor
The importance of dispute resolution cannot be overstated, especially within the crowded and lackadaisical justice system of the country. Pendency in Indian courts reached an astronomical figure of five crores as of 2023, of which 1,69,000 court cases were pending for over 30 years in district and High Courts.
Some cases in the Supreme Court or in some High courts are treated as special and are fast-tracked, while the other files gather dust for years and decades. Justice has become a mirage for the common Indian. There have been suggestions that the number of courts be increased, that the number of judges, especially in lower courts, be increased and there are, sometimes, instructions from the bench that adjournments be limited.
Within this, the senior courts are closed for long holidays, presumably to allow the overworked judges to be able to breathe. And then, there are adjournments again, as courts resume work. In the midst, there are bail applications thrown out, parole applications gone unheard, and the system slithers on as a snail would.
Consider a hypothetical situation where all the suggested changes have been made: more courts, more judges, less adjournments, less holidays. How long will it take for this new, improved system to clear a backlog that large?
According to a report in The New York Times, at the current pace of work in Indian courts, it will take 300 years to clear the backlog. The pace will be just a wee bit faster if all the above changes are incorporated. That is because the mountain of pendency, growing steadily, has doubled in the past two decades. This means that the number of new cases being filed is increasing at an almost exponential rate. The courts will never be able to keep up.
The Union and state governments are to blame majorly. They are the biggest litigants of India, theirs being more than 50% of all cases filed. The number of judges is low—India has one of the lowest ratios of judges to population at 21 per million people. The US, for example, has 150. The Indian target is just 50, but the extent to which these numbers will have to be increased just to handle the new cases is astronomical. The system has been starved of funding and no proper planning has happened in years, if not decades.
The No-No Land
That brings us back to the fine print, the disputes that remain out of bounds for arbitration. While the Arbitration and Conciliation Act, 1996, does not explicitly exclude the category of civil or commercial disputes from arbitrability, Section 8 of the Act makes it obligatory for the judicial authority to ask for arbitration in terms of the arbitration agreement.
The Act doesn’t exclude the category of disputes which are to be treated as non-arbitrable. However, the courts in certain disputes refuse to refer the parties to arbitration under Section 8 of the Act. Under Indian law, the kinds of disputes that can’t be resolved by arbitration include:
Criminal offences
Matrimonial disputes
Guardianship matters
Insolvency petitions
Testamentary suits
Trust disputes
Labour and industrial disputes
Tenancy and eviction matters governed by rent control statutes.
It is easy to see why criminal matters, testamentary suits, trust disputes, etc., should be kept out of the arbitration ambit which, as per definition, would emanate from a written agreement between two private parties. However, when industrial/labour disputes in India are critical in their reach and in their urgency, there should either be special, fast track courts handling such disputes or a special system should be instituted so they can go to arbitration.
Industrial/labour disputes essentially involve common folk, who neither have the time nor the financial muscle to slog out in courts for years on end, as Thakur has had to. Some level of leverage has to be accorded to them in such disputes.
Hence there needs to be some level of change instituted into the Arbitral Tribunal, that could make it a private/public forum, capable of handling other cases, where the speed of justice is as important as justice itself.
The Case of Thakur
This is a case of suffering of the common man in India. This bus conductor, a government employee, had filed a case against the government body (CSTC) which had employed him and had unjustly punished him for an issue.
Thakur is a small-time man from the small-time town of Baranagar, near Kolkata. A conductor of a bus of the CSTC, he was employed at the Baranagar bus depot. In 2005, in order to give change to the first passenger of the bus, he asked the bus driver to provide change for Rs 500. On the way, CSTC checkers boarded the bus and found an extra amount of Rs 250 on the conductor. He was asked why he had more money in his bag than tickets were sold.
Thakur explained that he had taken change of Rs 500 from the driver to give to a passenger. The checkers did not pay heed to Thakur’s explanation and confiscated his bag, following it up with a show cause notice and a departmental inquiry. Thakur explained and, as was proved by the Calcutta High Court later, the bus driver was not even asked to verify Thakur’s claim.
Thakur was found guilty, his salary was reduced and all allowances due to him were stopped. He appealed to the chairman of CSTC, but the chairman sat on the appeal for so long that in 2006 Thakur had to approach the Calcutta High Court. This went on for a long time, till finally, before the court of Justice Partha Sarathi Chatterjee the issue was solved and Thakur got back his honour, his dues and the rest.
By then, 18 years had passed and Thakur’s lower middle class family had to suffer just because India’s judicial system failed to find a way to accelerate the issue and provide him succour.
Arbitration is for the good of people. It should be as much for the good of private parties in multi billion-rupee deals, as it should be for the good of the common man. It needs to have a larger canvas of operation. In the end, there are always courts for final appeal.
Such an approach might finally solve the increasing burden of cases and the pendency.