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Sunday, March 27, 2022

How did courts respond to the pandemic lockdowns: evidence from the NCLT

by Pavithra Manivannan, Susan Thomas and Bhargavi Zaveri-Shah

Introduction

An important problem of the Indian state is the working of the judiciary, which is hampered by procedural frictions and delays. Several research papers measure the output of the judiciary in terms of number of cases disposed and the elapsed time from start to finish (DAKSH (2016), NALSAR (2016), Regy and Roy (2016), Datta et. al (2017), Tata Trust (2019), Vidhi Centre for Legal Policy (2021)). While recognising that the end objective of a sound judiciary is to decide cases correctly, these practical measures of the output of the judiciary are interesting in capturing what the judicial performance is at any point in time, as well as how it changes from one point to the next.

An example of such an episode is the COVID-19 pandemic. This event disrupted all economic and social processes in India, including the working of courts. Service organisations all over the world responded by building an all-digital workflow. With digital adaptations, many service organisations have matched upon pre-pandemic levels of output and productivity. We analyse the quarterly results of listed non-finance services firms for 2019, 2020 and 2021, for the April-May-June quarter. The total net sales of the firms was Rs.2.87 trillion, Rs.2.2 trillion and Rs.3 trillion. These firms had output in 2021 that was similar to that seen in 2019.

In case of the judiciary, the response included selecting urgent matters for hearing, as well as adopting e-filing and virtual hearings as the norm. How did the judiciary in India fare during the lockdowns that were put in place during the peak of the pandemic, once in 2020 and another in 2021?

Sharma and Zaveri (2020) examined the response of the Indian judiciary during the pandemic. They introduced an important innovation in the literature on court performance, by constructing a data-set of outputs based on cause-lists of the NCLT. They used this data-set to examine the relative output of the NCLT during the first pandemic lockdown (25 March 2020 to 30 June 2020) to the output in the pre-lockdown period in 2020 (1 February 2020 to 24 March 2020).

In this study, we carry this research agenda forward. We argue that a useful quantitative measure of output is the number of cases scheduled per day and cases disposed per day. We use this to examine the extent to which the output of the NCLT changed during their repeated exposure to pandemic triggered lockdown conditions. We examine these for three comparable periods in 2019, 2020 and 2021. In this, we recognise that the NCLT added courtrooms during the pandemic period of 2020, which can influence the NCLT output. We also recognise that the NCLT scheduled hearings only for urgent matters, and that the complexity of the matters scheduled can impact the number of disposals. We introduce a classification scheme of complexity of cases, and examine the extent to which the number of cases disposed responds to metrics of case complexity.

Methodology

As with Sharma and Zaveri (2020), our data-set is constructed from the cause-lists of the NCLT. In this article, we measure the months of March, April and May for 2019, 2020 and 2021. We focus on the same three months in each year for two reasons: One, it controls for any variation that may arise due to seasonal factors, such as court vacations and festivals. Second, India saw the peak of the pandemic in these three months in both 2020 and 2021.

The daily cause-lists for each of these periods are available for 11 out of 15 benches of the NCLT. Our analysis is focused on those benches which consistently published cause-lists during each of these three periods. These were the benches of Cuttack, Jaipur, Kolkota, Mumbai and New Delhi (including the Principal bench). This data-set makes it possible to observe the number of cases scheduled on each day and the number of cases disposed. If the NCLT is viewed as a black box, its performance can be measured by the number of cases disposed. (As stated before, there is a quality dimension, which is not addressed in this quantitative research).

When the systems of the NCLT are augmented, whether by introducing additional courtrooms or technology and technology led processes, we expect a scaling up of the number of cases disposed per courtroom per day. In addition to the per day averages, we focus on hearings scheduled and disposals per courtroom per day to understand the extent to which this took place.

When the pandemic began and only urgent matters were scheduled, there could be a selection bias on the part of both plaintiffs and judges to emphasise important and urgent cases. This could generate an increase or decrease in the complexity of cases which, in turn, could impact the measured output of the court. In order to explore this problem, we construct a measure of complexity of cases. For this, we categorise each hearing under five heads: Insolvency and Bankruptcy Code (IBC), Oppression and Mismanagement (O & M) under the Companies Act (CA), Schemes, Strike off Appeals and Miscellaneous. We classify IBC and O & M matters as Complex and all the others as Simple. This allows us to examine the extent to which the observed changes in output have been influenced by a change in complexity.

Results

Table 1: Average daily NCLT output

Period Hearings Disposals
Mar - May 2019 399 65
Mar - May 2020 149 30
Mar - May 2021 255 48

In 2019, NCLT scheduled 399 hearings per day and disposed 65 cases per day. Table 1 shows us that, in 2020, in the aftermath of the first extreme lockdown, the output of NCLT dropped both in terms of scheduled hearings (149) and disposed cases (30). It then partially increased in 2021 (255 hearings per day and 48 disposed cases per day). This demonstrates resilience in the NCLT capacity during the second wave, in 2021.

Some benches of the NCLT had a higher number of courtrooms in 2020 and 2021. For example, the number of courtrooms in New Delhi went from 4 in 2019 to 6 in 2020 and 2021. Similarly, in Mumbai, it increased from 3 in 2019 to 5 in 2020 and 2021. On the other hand, the courtrooms for the Kolkata, Cuttack and Jaipur benches remained constant during all three periods. Some of the increased outcomes in 2021 may be owed to the increased number of courtrooms.

In order to control for this feature, we focus on the average disposals per courtroom per day. Table 2 shows that there was a 66% decline from 2019 to 2020, and then a 50% rise in 2021. The final level – 3 disposals per courtroom per day – was half than seen before the pandemic, but better than during the first wave in 2020. This suggests that the addition of courtrooms alone did not significantly alter the output of the NCLT. Wide-scale adoption of technology such as video-conferencing facilities that enabled the NCLT to operate without exposing the members to the virus is likely to have contributed to these improvements in outcome.

Table 2: NCLT output, measured as the average per courtroom per day

Period Hearings Disposals
Mar - May 2019 36 6
Mar - May 2020 10 2
Mar - May 2021 17 3

NCLT hears matters of varying complexity. Time taken to dispose off a complex matter might be higher due to the procedures, technicalities and stages involved. The increased outcome in 2021 could have been achieved by NCLT by merely altering the scheduling proportion of complex v. simple cases. We examine whether such a selection bias contributed to higher disposals in 2021.

Table 3: The role of case complexity

Period Complex Complex Simple Simple

Hearings Disposal Hearings Disposal
Mar - May 2019 263 35 126 29
Mar - May 2020 102 13 44 16
Mar - May 2021 199 33 50 14

Table 3 shows that the proportion of complex vs. simple cases scheduled for a day, is greater in 2021 than in the pre-pandemic period 2019. In terms of disposal, in 2019, complex and simple cases disposed were of a similar order of magnitude (35 complex cases a day vs. 29 simple cases per day). In 2021, there is evidence of a greater proportion of complex cases being disposed off: 33 complex cases a day vs. 14 simple cases per day. This shift in the case load, in favour of more complex cases, would mean that the increased output of NCLT in 2021 is not out of scheduling larger fraction of simple cases. But this shift would ordinarily go with a reduction in output per courtroom per day, holding productivity constant.

Discussion

The working of the judiciary has deep ramifications on the working of the economy which depends upon timely and just decisions on disputes. While the ultimate objective is that cases should be decided correctly, there is an emerging literature which emphasises quantitative measures of the output of courts. This is an interesting and important line of questioning, even without bringing in the analysis of the quality of court judgements, because it helps to identify and understand the response of the court to disruptions such as the COVID-19 pandemic.

The evidence here shows that NCLT was disposing 65 cases per day under pre-pandemic conditions. In the worst pandemic conditions in 2020, this output dropped to 30 cases disposed per day. Under similar conditions in 2021, output was higher at 48 cases disposed per day.

Did additional courtrooms that were added in 2020 help explain this rise? When output is measured per courtroom per day, there was a decline in 2020 to 2 cases per courtroom per day from a disposal of 6 cases per courtroom per day in 2019. The output went up to 3 cases disposed per courtroom per day in 2021. This is an improvement in the NCLT output, even if it is still at a level which is half of that seen under pre-pandemic conditions, and resulting productivity gain.

Was the output higher because the case mix emphasised more simple cases? This was not the case. On the contrary, there was a shift in favour of more complex cases. In our evidence, complex cases went up from 55% of disposals in 2019 to 70% in 2021. As these cases would be expected to require more time, this constitutes a partial explanation for the reduced output per courtroom seen in 2021 when compared with 2019.

A third factor is the technology and the digital processes adopted and refined by the NCLT after the strict lockdown imposed in 2020 was lifted. The evidence in our study shows that these new processes yielded the NCLT gains in 2021 when compared with 2020.

The Indian law fraternity is debating whether it would be beneficial to revert to physical functioning of courts as opposed to going further into the video environment (Press Trust of India, 2021). In our data, we see that, NCLT productivity was at 3 disposals per courtroom per day in pandemic environment of 2021, as compared with 6 disposals per courtroom per day in the pre-pandemic environment of 2019. These facts can help shape judgement about future possibilities.

References

DAKSH, Access to Justice Survey, Technical report 2016.

Pratik Datta, Surya Prakash B. S. and Renuka Sane, Understanding judicial delay at the Income Tax Appellate Tribunal in India, NIPFP Working Paper No. 208, October 2017

NALSAR University of Law, A study of court management techniques for improving the efficiency of subordinate courts, Technical report 2016.

Prasanth V. Regy and Shubho Roy, Understanding judicial delays in debt tribunals, NIPFP Working Paper No. 195, April 2017.

Tata Trust 2019, India Justice Report: Ranking states on police, judiciary, prison and legal aid, Technical report 2019.

Vidhi Centre for Legal Policy, The Delhi High Court Roster review: A step towards judicial performance evaluation, Technical report 2021.

Anjali Sharma and Bhargavi Zaveri (2020), Measuring court output in the pandemic: evidence from India’s largest commercial tribunal The LEAP blog, 11 September 2020.

Press Trust of India (2021), Continuance of courts virtually will be a problem’: SC on resuming physical hearing, Business Standard, 8 November 2021 at 

Acknowledgements

Pavithra Manivannan is a Research Associate and Susan Thomas is a Senior Research Fellow, both at XKDR Forum in Mumbai. Bhargavi Zaveri-Shah is a doctoral candidate at the National University of Singapore. We thank Pramod Rao, M. S. Sahoo, Ajay Shah, Anjali Sharma and Diya Uday for comments and suggestions.

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