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As a nation whose global economic rankings have been on the rise, India continues to be perceived as failing to provide a suitable environment for litigating parties. The country has yet to become a haven for those pursuing claims or seeking prosecution. Endeavours in the past few years to improve litigation have borne some fruit, with the face of Indian litigation evolving at a much faster rate.

The framework

India¡¯s legal framework draws inspiration from the era of British colonial rule, while also incorporating indigenous legal principles and customs. Civil disputes in Indian courts are predominantly governed by the Code of Civil Procedure, 1908 (CPC), the Commercial Courts Act, 2015, the Indian Evidence Act, 1872 (now Bharatiya Sakshya Adhiniyam), and the Limitation Act, 1963.

Jurisdiction and limitation play a pivotal role in the pursuit and defence of claims. The courts are required to possess territorial, pecuniary and subject matter jurisdiction, which can be complicated in certain cases involving multiple laws and convoluted facts, resulting in combined cause of action. Whether a dispute finds itself before the High Court or a lower court is decided on the basis of the pecuniary jurisdiction defined by each territorial (state-wise) High Court.

Various Indian states have not provided for any pecuniary jurisdiction to be bestowed on the High Court, resulting in high-value disputes also being brought before the subordinate courts and then climbing the judicial ladder by way of appeals.

Criminal disputes in India are primarily governed by the Code of Criminal Procedure, 1973 (CrPC, now the Bharatiya Nagrik Suraksha Sanhita) and the Indian Evidence Act, 1872. Further, while the Indian Penal Code, 1860 (now Bharatiya Nyaya Sanhita) is a primary legislation providing for classification of different offences in India, various special statutes deal with the offences of corruption (Prevention of Corruption Act, 1988), money laundering (Prevention of Money Laundering Act, 2002), sexual assault and sexual harassment of children (The Protection of Children from Sexual Offences Act, 2012), etc.

The offences under most of these special statutes are also governed by the CrPC, which provides the machinery for the investigation of crime, collection of evidence and determination of guilt/innocence. Cheque bouncing is also a criminal offence in India, and the drawer of a dishonoured cheque can be subject to up to two years in prison.

The CrPC also lays down guidelines on territorial jurisdiction that are primarily based on where the offence was committed, and specifies the jurisdiction of magistrates and judges based on the maximum punishment that can be imposed in a case. Pertinently, the notions of limitation do not apply to criminal proceedings unless there are express and specific provisions to that effect.

From 1 July 2024, the colonial criminal substantive and procedural laws that govern criminal prosecutions in India (the Indian Penal Code, 1860; the CrPC, and the Indian Evidence Act, 1872) have been replaced with the Bharatiya Nyaya Sanhita, the Bharatiya Nagrik Suraksha Sanhita, and the Bharatiya Sakshya Adhiniyam.

These laws are expected to promote usage of technology in criminal trials on taking effect. In addition to these, there are various other developments in specialised fields of litigation that have been significant and include: the constitution of specialised courts for resolution of commercial disputes of specified value; introduction of a new insolvency and bankruptcy code; and necessary amendments to the arbitration law (especially those catering to international commercial arbitration).

Further, for violation of any fundamental right or any other right, writ is a common-law remedy provided to the people of India through article 32 (Supreme Court) and article 226 (High Courts) of the Constitution of India, 1950.

Exclusive jurisdiction clauses

Contracting parties often incorporate exclusive jurisdiction clauses conferring exclusive jurisdiction to a particular court in their contract to reduce inconvenience, prevent multiple litigations and forum-hunting.

Under Indian law, such exclusive jurisdiction is not absolute and cannot be conferred upon a court that would ordinarily not have jurisdiction under dian law. The exception to this would be an arbitration agreement, where the parties are free to agree to a particular venue as the seat of the arbitration, even though the said place does not otherwise have jurisdiction.

Specialised courts, tribunals

Specialised forums have been established in India to deal with specialised disputes.

• Commercial Courts. These courts were established with the intent of providing faster and specialised resolution of commercial disputes, which inevitably involve complex facts and questions of law under the Commercial Courts Act, 2015. This has been met with some practical challenges, as the civil judges are often posted in the commercial courts on a rotational basis, which prevents development of special expertise in commercial disputes.
• National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT). These tribunals were established under the Companies Act, 2013 to adjudicate corporate disputes and matters related to companies and limited liability partnerships, as well as insolvency proceedings. The NCLT and the NCLAT oversee the corporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016 (IBC) for facilitating restructuring and resolving companies¡¯ financial distress. They adjudicate applications for mergers, amalgamations and corporate restructurings, as well as oppression and mismanagement petitions.
• Prevention of Money Laundering Act, 2002 (PMLA), the Adjudicating Authority and the Appellate Tribunal. These forums were established under the PMLA to adjudicate cases related to money laundering and confiscation of proceeds of crimes. The Enforcement Directorate is mandated to investigate such cases and trace assets believed to be derived from proceeds of crime and provisionally attach them.

Other specialised courts and tribunals have been established under various statutes for ensuring a robust legal framework for commercial activities, corporate governance and financial integrity in India.

It is not uncommon for the civil and criminal courts and specialised tribunals mentioned previously to suffer because of overreach, or encounter an overlapping of jurisdictions. The NCLT and PMLA often face the issue of these conflicts, especially in the context of properties that are subject to attachment under the PMLA and are also subject to insolvency/liquidation proceedings under the IBC. Similarly, the NCLT and civil courts also face various conflicts including those pertaining to contentious shareholder agreements, directorships, etc.

Enforcement and execution

Once a judgment or decree is pronounced, the successful party in a lawsuit is required to initiate execution proceedings by filing an application for execution. Upon receipt of the execution application, the court issues an execution order directing the judgment debtor (the party against whom the decree is passed) to comply with the terms of the decree. Various methods are available for executing judgments and decrees including attachment and sale of property, arrest and detention, and appointment of a receiver.

Similarly, a foreign judgment can be enforced by initiating execution proceedings in case of ¡°reciprocating territories¡±; in the case of a non-reciprocating territory, however, a civil suit will have to be instituted by the decree holder.

While enforcing foreign decrees in India, the executing court is required to examine whether the decree has been passed by a competent court of a reciprocating territory, whether it has finally and conclusively decided the dispute between the parties, and whether the decree is compatible with Indian law or public policy.

While obtaining a favourable judgment or decree in India is a significant legal victory, the process of enforcing such a decision can often be challenging and fraught with obstacles. Even though the enforcement mechanisms are available, their efficacy is hindered by the resistance shown by judgment debtors to comply with the judgments or decrees (by concealing assets, transferring properties, etc.) and the lack of specialised enforcement agencies.

Conclusion

The country continues to make strides to afford better dispute resolution options and simpler mechanisms for protecting infringed rights, contractual or otherwise. The use of e-filing portals by lawyers and litigants to file cases electronically, better access to court records, and virtual access to courtrooms have invited modernisation into a sphere that has largely been considered archaic by international standards.

The wide adoption of arbitration as a dispute resolution mechanism has also assisted in reducing the burden on the courts in India. This fast-evolving litigation landscape is expected to advance the cause of litigants and provide an atmosphere that is more conducive to international business.