NEW DELHI: India’s ranking may have improved in the World Bank ’s ease of doing business index, but the pendency of commercial disputes in courts across the country have gone up by more than 123% in 2017 compared to 2015.

According to latest data compiled by the Law ministry, the pendency of commercial disputes in courts have risen from 17,539 cases in 2015 to 39,141 in 2017. Surprisingly, Mumbai, the financial capital of the country, has seen far lesser number of commercial dispute pendency than five other states, including Delhi, UP, J&K, Tamil Nadu and Gujarat .

Delhi has emerged as the top ranking state having the highest number of commercial disputes pending in the designated courts. The total number of commercial disputes pending in Delhi was 6,452 in 2015, which went up to 11,987 in 2016 and to 16,267 in 2017 — an increase of 152% over 2015.

Country’s most populous state UP ranks second in the chart with 11,793 commercial disputes pending in courts at the end of 2017 as compared to just 5,500 cases in 2015. J&K, which has more than 6,200 commercial cases pending at the end of 2017, surprisingly, has ranked higher than states like Tamil Nadu, Gujarat, Maharashtra and Karnataka in the list with largest pendency.

To fast track disposal of commercial disputes, the NDA government had passed relevant legislation providing for disputes of Rs 1 crore and above to be referred to the commercial division of high courts specifically set up for this purpose. However, disputes of lesser amount still got stuck in the normal judicial process where courts are having pendency of over three crore cases.

India had failed to improve its ranking in the World Bank’s ease of doing business index till 2017, when it was placed 130 out of 190 economies surveyed by the Bank. This was largely due to worsening record in 'protecting minority investors' and in 'resolving insolvency'. In the 2018 survey of the World Bank, India improved 30 positions in the global ranking.

With new legislative initiatives taken by the government, the ease of doing business has improved in the country. The government has also introduced a legislation this week (on July 23) to replace the Ordinance on Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts amendment by which the specified value of a commercial dispute has been reduced to Rs 3 lakh from the present Rs 1 crore.

There is also a provision in the new bill for mediation and settlement as an option of alternate dispute resolution mechanism to settle all such commercial disputes in the designated commercial courts.

