Importance Of Case Management And Practice Directions Before Commercial Courts

Practice directions are issued by the Court to supplement the rules of Court by regulating court practice and procedure. Practice directions do not have statutory authority but are sometimes used to introduce important procedural innovations. The litigants are expected to comply with all Practice directions issued by the Court.

The object of the Commercial Courts Act, 2015 is to improve India's image as an attractive investment destination. The ease of doing Business index is assessed by the World Bank based on 10 parameters and "Contract enforcement" is one of them. India is known for its judicial delays and backlogs. In order to erase that image and to encourage foreign investments, the Commercial Courts Act came to be enacted for speedy disposal of commercial disputes. The modern concepts of "Case Management hearing" and "Practice Directions" were incorporated in the statute itself. Case Management hearing was inserted under Order XV-A to the schedule of the Commercial Courts Act, 2015, hereinafter referred to as the Act. Section 18 of the Act empowers the High Court to supplement the provisions of Chapter II of the Act or the Code of Civil Procedure, 1908 insofar as such provisions apply to the hearing of commercial disputes of a specified value.

With overburdened dockets, Courts in various countries have of late started management methods to the Court systems. Just as management of business enterprises has changed the business environment with the introduction of MBAs into the system, Court systems have shown tremendous improvement with "Case Management" which means that the Judge or an Officer of the Court sets a time-table and monitors the case from its initiation to its disposal. Hitherto, we are accustomed to a system where the litigants or their lawyers set the time-table which suits them but in a case management regime, these are done by the Judge. A survey of the progress made in other countries reveals that, in spite of some objections from lawyers and Judges, the case management policy has yielded exceedingly good results.

The objectives of the case management hearing under Order XV-A inserted under the Commercial Courts Act, 2015 are as follows:

• Early resolution of disputes.
• Reduction of trial time.
• More effective use of judicial resources.
• Establishment of trial standards.
• Monitoring of case loads.
• Pass summary judgments under Order XIII-A of the Act prior to the framing of issues.

• To facilitate the efficient disposal of the suit.

• To reduce the criticism of the justice delivery system by reason of perceived inefficiency.

Under the Commercial Courts Act, 2015, the first case management hearing by the Court has to take place not later than 4 weeks from the date of filing of affidavit of admission or denial of documents by all parties to the suit. Order XV-A inserted under the Act enumerates the various facets of a case management hearing. They are as follows:

(a) First case management hearing,

(b) Orders to be passed in a case management hearing,

(c) Time limit for completion of a trial,

(d) Recording of oral evidence on a day-to-day basis,

(e) Case Management hearings during the trial,

(f) Powers of the Court in a case management hearing,

(g) Adjournment of case management hearing,

(h) Consequences of non-compliance with orders passed during a case management hearing.

As seen from the above, Case Management requires early assignment of a case to a Judge who then exercises judicial control and keeps track of the record at every stage. The Judge applies judicial process to the rival contentions at the earliest stage after filing of the written statement and requires and enforces active participation and joint communication amongst the parties and their lawyers for the smooth progress of the case. Case Management technique mobilizes early preparation of respective cases by the parties and their lawyers by requiring them to identify the real controversies in the case and seeking early response from the other side on the question of facts and law. It requires submission of separate case management statements by each party and enforces the other side to answer any of the requisitions, if any made by each party and, in addition provides sanctions for non-compliance.

At the time of hearing of the case management statements by the parties, the Judge evolves a joint case management statement by all the parties recording therein, inter alia the admitted and disputed facts. Case Management hearing helps in minimizing or narrowing down the controversies, and explore the possibility of early resolution of disputes by judicial settlement, conciliation, arbitration or mediation. The Judge delivers early judgment on agreed, admitted or uncontested questions wherever possible, thereby greatly reducing the case load.

If the case remains undecided after the above stated efforts fail, the Judge fixes the schedule for the trial of the case and directs the parties to follow and adhere to the said schedule for early disposal of the case.

Case Management if followed meticulously will provide the immediate need for preventing future backlogs, providing swift justice, dealing with backlogs with more determined effort and creating an atmosphere of joint venture between Judges, lawyers, litigants and administrative officers. Identification of problem area will create the need for their solution and continuous monitoring of the life of a case will result in due attention to the complicated aspects of the litigation process. Therefore, case management hearing plays a pivotal role in the expeditious disposal of commercial court cases.

Practice directions issued by the High Court under Section 18 acts as a supplement for the smooth functioning of all commercial courts and helps in achieving the primary objective of the Act for expeditious disposal of Commercial disputes. They act as a catalyst to the case management hearing and if issued effectively whenever there is a need for one, it will go a long way in fulfilling the objectives of the Act.

Under the Commercial Courts Act, 2015 for example practice directions can be issued for expeditious service of summons/notices. In many cases, due to non-service of summons/notices, the disposal of the cases gets delayed. When the Commercial Courts Act envisages early resolution of commercial disputes, the delay in service of summons/notices will defeat the object of the Act. Just like timelines fixed under the Act for early disposal of a commercial dispute, timelines can be fixed by issuing practice directions with regard to service of summons/notices. Practice directions can also be issued for post decretal stage to enable the parties to obtain the judgment and order copies from the registry of the court expeditiously. Once effectively issued, practice directions can go a long way in making the Act a successful legislation. Many developed nations like U.S.A , England, Australia and Singapore have issued practice directions for the effective and smooth functioning of the Commercial courts. We need to examine those directions and see whether they can be applied to Indian commercial courts.

With the reduction in the specified value from Rs.1 crore to Rs.3 lakhs, commercial courts are now flooded with innumerable cases. If the case management hearing and practice directions are not effectively utilised and implemented, the very object of the Act for early disposal of commercial disputes of a specified value will get defeated. It is therefore highly recommended that the case management hearing as stipulated under Order XV-A is properly implemented as per the time schedule and practice directions are regularly issued to overcome the procedural difficulties for early disposal of commercial disputes. It is always easy to remove the difficulties for effective implementation by issuing practice directions when the Act is in a nascent stage, rather than at a later stage when the backlogs become unmanageable to be redressed as is now happening with the cases pending before the regular Courts.

Views are personal only.

(Author is a Judge at Madras High Court)