Banks and lending institutions often tend to behave like Shylock, rigorously invoking debt recovery laws that are all in their favour. Big corporations can defend themselves by engaging canny lawyers. But it is rural borrowers, small and medium enterprises and even housewives who have taken a Rs 1-lakh loan who are driven to financial ruin and suicides. They are dragged up to the Supreme Court.
Two judgments pronounced by the Supreme Court in recent weeks say as much. In the case, Gurgaon Gramin Bank vs Smt Khazani, the court began with the remark that the number of cases involving small and trivial matters is on the rise.
“The central and state governments and their instrumentalities, banks, nationalized or private, come to courts may be due to ego clash or to save the officers’ skin. Judicial system is over-burdened; naturally it causes delay in adjudication of disputes,” the judgment said. “On more than one occasion, this court has reminded the governments as well as various banking institutions to take earnest efforts to resolve the disputes at their end. At times, some give and take attitude should be adopted or both will sink. Unless, serious questions of law of general importance arise for consideration or a question which affects large number of persons or the stakes are very high, the courts’ jurisdiction cannot be invoked for resolution of small and trivial matters. We are really disturbed by the manner in which those types of matters are being brought to courts even at the level of the Supreme Court.”
In this case, a village woman took a loan of Rs 15,000 from the bank to buy a buffalo and insured it with New India Assurance Co. When the animal died, she sought compensation and it was denied. She moved the district consumer forum against both the bank and the insurance company and won the case. Her rivals carried the fight for over a decade to the state consumer commission and the national commission, and now the Supreme Court. They lost all the way, spending more than Rs 30,000 to resist the claim of Rs 15,000. The judgment ended with the prayer: “Let God save the gramins!”
The Madras High Court called the case, Palap Software vs Indian Bank, as a “classic example” of the misuse of the Securitisation Act and described how the lenders demanded their pound of flesh to cut non-performing assets.
Corporate goliaths can carry oppressive suits up to the Supreme Court. Last week, the court noted that though ITC Ltd lost its case in three courts below, it had stretched its neck again for the fourth defeat in the Supreme Court. The judgment in ITC vs Adarsh Society stated in its prelude: A simple issue with regard to possession of land took over two decades to reach the court at the instance of the company.
“It is indeed sad, if not unfortunate,” the judgment stated while narrating the meandering course of the case, “that what was intended by the legislature to be a summary proceeding has erupted into an over two decades old litigation. The sheer number of pending cases permitted the trial court to return its findings, after almost a decade.”
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In both the Supreme Court cases, companies that suffered serial defeats in courts below entered the apex court through the “Special Leave Petition” (SLP) route. Article 136 of the Constitution was meant to be used rarely, and it vests discretionary power on the Supreme Court to admit appeals even if the high courts did not grant “leave to appeal”. But the Supreme Court has been using this discretion indiscriminately for decades, allowing the dockets to bulge. More than 40,000 cases used this gateway in the past year alone.
In the Gramin Bank judgment discussed above, the judges remarked that the bank’s SLP was admitted “luckily”. Though it is a sarcastic observation, it is an indirect admission by judges themselves that more than substantial questions of law, what matter are the composition of Benches, gift of the garbed, or even the Delhi ambience. The final decision is little better, as the judges add that “may be due to the ill-luck of the bank, the matter is before us”.
These are a few instances in which the legal profession itself has to take the blame for mounting arrears. Two chances to appeal should normally be enough to decide a case. The third or fourth appeals to the high courts or the Supreme Court by a person who has not even won once before should be rejected at the threshold. The present disarray in the judicial system simply does not justify another gamble by the rich, however eminent the counsel may be, and however incompetent the judge below is perceived to be.
Lawyers should also not prod clients to file appeals in hopeless cases. As it is, even in the Supreme Court, dozens of review petitions are summarily dismissed in chambers every day during lunch time. Some of them return wearing another hat called “curative petition” and suffer the same fate.