The Supreme Court has original, appellate and advisory jurisdiction. Its exclusive original jurisdiction includes any dispute between the Centre and State(s) or between States as well as matters concerning enforcement of fundamental rights of individuals. The appellate jurisdiction of the Supreme Court can be invoked by a certificate granted by the High Court concerned in respect of any judgment, decree, or final order of a High Court, in both civil and criminal cases, involving substantial questions of law as to the interpretation of the Constitution or any law. The appellate jurisdiction of the Supreme Court can also be invoked through the residuary power of Special Leave Petition, which is to be exercised only in cases when any substantial question of law is involved, or gross injustice has been done. Supreme Court decisions are binding on all Courts/Tribunals in the country and act as precedence for lower courts. Under Article 141 of the Constitution, all courts in India are bound to follow the decision of the Supreme Court as the rule of law. Further, Article 142 of the Constitution empowers the Supreme Court to pass any order as may be necessary for doing complete justice between the parties. The Supreme Court, has over the years, frequently relied upon Article 142 to meet the ends of justice, and introduced the concepts of absolute liability, prospective application of a particular judgment, etc.
High Courts have jurisdiction over the States in which they are located. There are at present, 25 High Courts in India. However, few of the High Courts have jurisdiction over more than one State or Union Territories: Bombay (Mumbai) High Court, Calcutta High Court (Kolkata), Guwahati High Court, High Court of Judicature at Hyderabad, Madras (Chennai) High Court and Punjab and Haryana High Courts. For instance, the Bombay High Court is located at Mumbai, the capital city of the State of Maharashtra. However, its jurisdiction covers the States of Maharashtra and Goa, and the Union Territories of Dadra and Nagar Haveli as well as Daman and Diu. Predominantly, High Courts can exercise only writ and appellate jurisdiction, but a few High Courts have original jurisdiction and can try suits. High Court decisions are binding on all the lower courts of the State over which it has jurisdiction.
District Courts in India take care of judicial matters at the District level. Headed by a judge, these courts are administratively and judicially controlled by the High Courts of the respective States to which the District belongs. The District Courts are subordinate to their respective High Courts. All appeals in civil matters from the District Courts lie to the High Court of the State. There are many secondary courts also at this level, which work under the District Courts. There is a court of the Civil Judge as well as a court of the Chief Judicial Magistrate. While the former takes care of the civil cases, the latter looks into criminal cases and offences.
In some states, there are some lower courts (below the district courts) called Munsif’s courts and small causes courts. These courts only have original jurisdiction and can try suits up to a small amount. Thus, Presidency- Small Causes Courts cannot entertain a suit in which the amount claimed exceeds Rs. 2,000. However, in some States, civil courts have unlimited pecuniary jurisdiction. Judicial officers in these courts are appointed on the basis of their performance in competitive examinations held by the various States’ Public Service Commissions.
Commercial Courts, Commercial Appellate Divisions as well as Commercial Divisions in High Courts were constituted under Commercial Courts Act, 2015 throughout India to specifically deal with matters pertaining to “commercial disputes” of a value more than Rs.3,00,000, arising out of a wide range of transactions, including export/import, maritime, franchising, distribution & licensing, consultancy, joint venture, intellectual property, insurance, investment agreements etc. as specified in the Commercial Courts Act, 2015. The procedure followed by Commercial Courts is different and stricter in some aspects than the procedure as applicable to adjudication process of other civil disputes in general.
Special courts or Tribunals also exist for the sake of providing effective and speedy justice (especially in administrative matters) as well as for specialized expertise relating to specific kind of disputes. These Tribunals have been set up in India to look into various matters of grave concern. The Tribunals do not have to follow any uniform procedure as laid down under the Civil Procedure Code or the Indian Evidence Act but they have to follow the principles of Natural Justice. The Tribunals that need a special mention are as follows:
- Income Tax Appellate Tribunal
- Central Administrative Tribunal
- Intellectual Property Appellate Tribunal, Chennai
- Railways Claims Tribunal
- Appellate Tribunal for Electricity
- Debts Recovery Tribunal
- Central Excise and Service Tax Appellate Tribunal
- National Company Law Tribunal
- Telecom Disputes Settlement Appellate Tribunal
- Competition Appellate Tribunal
For instance, the Rent Controller decides rent cases, Family Courts try matrimonial and child custody cases, Consumer Tribunals try consumer issues, Industrial Tribunals and/or Courts decide labour disputes, Tax Tribunals try tax issues, etc. The National Company Law Tribunal (NCLT) has been established to streamline and effectuate the liquidation proceedings of companies, dispute resolution and compliance with certain provisions of the Companies Act, 2013.
Alternate Dispute Resolution
An interesting feature of the Indian legal system is the existence of voluntary agencies called Lok Adalats (Peoples’ Courts). These forums resolve disputes through methods like Conciliation and Negotiations and are governed by the Legal Services Authorities Act, 1987. Every award of Lok Adalats shall be deemed to be a decree of a civil court and shall be binding on the parties to the dispute. The ADR mechanism has also proven to be one of the most efficacious mechanisms to resolve commercial disputes of an international nature. In India, laws relating to resolution of disputes have been amended from time to time to facilitate speedy dispute resolution in sync with the changing times. The Judiciary has also encouraged out-of-court settlements to alleviate the increasing backlog of cases pending in the courts. To effectively implement the ADR mechanism, organizations like the Indian Council of Arbitration (ICA) and the International Centre for Alternate Dispute Resolution (ICADR) were established. The ICADR is an autonomous organisation, working under the aegis of the Ministry of Law & Justice, Government of India, with its headquarters at New Delhi, to promote and develop ADR facilities and techniques in India. ICA was established in 1965 and is the apex arbitral organisation at the national level. The main objective of the ICA is to promote amicable and quick settlement of industrial and trade disputes by arbitration. Moreover, the Arbitration Act, 1940 was also repealed and a new and effective arbitration system was introduced by the enactment of the Arbitration and Conciliation Act, 1996. This law is based on the United Nations Commission on International Trade Law (UNCITRAL) model of the International Commercial Arbitration Council.
In 2015, the Arbitration and Conciliation Act, 1996 was amended to bring robust changes more particularly, structuring a model fee schedule of arbitrators, restricting interference by Courts in arbitration cases, restricting time schedule for completion of arbitral proceedings, provision for “Fast Track” proceedings for completion of proceedings within 6 months. In 2019, few more amendments were introduced in the Arbitration and Conciliation Act, 1996, most significantly, introduction of Arbitration Council of India for framing policies for governing the grading of arbitrators, accreditation of arbitrators, making recommendations to the Government of India on various aspects.
Likewise, to make the ADR mechanism more effective and in coherence with the demanding social scenario, the Legal Services Authorities Act, 1987 has also been amended from time to time to endorse the use of ADR methods. Section 89 of the Code of Civil Procedure, as amended in 2002, has introduced conciliation, mediation and pre-trial settlement methodologies for effective resolution of disputes. Mediation, conciliation, negotiation, mini trial, Lok Adalats and Banking Ombudsman have already been accepted and recognized as effective alternative dispute-resolution methodologies.
A brief description of few widely used ADR procedures is as follows:
1. Negotiation: A non-binding procedure in which discussions between the parties are initiated without the intervention of any third party, with the object of arriving at a negotiated settlement of the dispute.
2. Conciliation: In this case, parties submit to the advice of a conciliator, who talks to the each of them separately and tries to resolve their disputes. Conciliation is a non-binding procedure in which the conciliator assists the parties to a dispute to arrive at a mutually satisfactory and agreed settlement of the dispute.
3. Mediation: A non-binding procedure in which an impartial third party known as a mediator tries to facilitate the resolution process but he cannot impose the resolution, and the parties are free to decide according to their convenience and terms.
4. Arbitration: It is a method of resolution of disputes outside the court, wherein the parties refer the dispute to one or more persons appointed as an arbitrator(s) who reviews the case and imposes a decision that is legally binding on both parties. Usually, the arbitration clauses are mentioned in commercial agreements wherein the parties agree to resort to an arbitration process in case of disputes that may arise in future regarding the contract terms and conditions.