March 26, 2013

Advance Decrees: An Idea Whose Time Has Come

- T.V.S.K. Kanaka Raju, Senior Advocate [ Visakhapatnam District Courts ]

T.V.S.K. Kanaka Raju

Preventive litigation or Preventive law is a very important subject in the Indian context. The concept of "Advance Decrees" is a branch out of this evolving as well as exciting subject of preventive litigation. It provides a win-win situation to both parties

Advance Decrees

The legal fraternity might be surprised to hear a name like 'Advance Decrees'. It is no doubt something which they have not heard of before in the legal field. In the field governing fiscal legislations like the Customs Act or the Service Tax or the Central Excise Act, we have heard of Advance Rulings. For instance, in the field of Service Tax, we have Service Tax (Advance Rulings) Rules 2003. In the exercise of the powers conferred under the Finance Act, the Central Government has framed Service Tax (Advance Rulings) Rules 2003. If the right to avoid law delays were to become a meaningful reality, at least in certain situations, the concept of advance decrees, conceived by this writer can be used as a wonderful device. The concept is thoroughly original and quite simple.

Advance decrees are a necessity in the context of judicial reforms. The subject of judicial reforms is not new. Eminent jurists have been voicing their concerns, giving suggestions for reform from time to time. Several papers are published on this subject, there have been several workshops, seminars and national seminars and still, we have not been able to tackle the problem of law delays and mounting arrears in trial courts effectually and completely. It is quite clear that there has not been enough focus in resolving this problem. The concept of Advance decrees is a sure, simple method of solving this formidable problem. This concept in its application ensures that judgements are delivered in advance without any loss of time in certain situations.

Turning over to the new concept of Advance Decrees:

What should be done to implement the concept?

If the concept of Advance Decrees can be introduced in the Civil Procedure Code and the provisions of the Legal Services Authorities Act, by amending them suitably, seventy per cent of the cases at the trial court level can be settled once and for all. On a trial basis, this concept can be applied to Eviction suits and Money recovery suits, which consume at least about 50% of the trial court work. An Eviction suit takes not less than 2 to 3 years and even Money recovery suits take about three years' precious time of the court. We cannot afford this much loss of time for these less serious matters.

With all seriousness, the author is putting forth his views about the concept of "Advance Decrees" as follows:

At the outset, if we examine the nature of cases that are filed in the Trial Court, the same can be classified as hereunder:

(i) Suits based on documents:

    (a) Suits on Promissory Notes.
(b) Suits for specific performance based on written agreements.
(c) Suits for recovery of money based on mortgage deeds or other documents.

(ii) Suits for eviction
(iii) Injunction suits, Declaration suits
(iv) Tort litigation

Now, except for injunction suits, declaration suits and tort litigation, rest of the aforesaid litigation filed every year can be rightaway settled by adopting the system of 'Advance Decrees'. In actual practice, how does this concept of Advance Decrees work?

Salient features of Minor Amendments conceived under the Civil Procedure Code:

    1. The definition of the term 'decree' under Section 2(2) needs to be amended to expressly include "An Advance Decree".
    2. Likewise, the term 'judgement' as defined under Section 2(9) of CPC can be amended to expressly include "a judgement passed consensually in advance".
    3. Further, an amendment can be introduced under Order 20 C.P.C., by inserting Order 20(4) CPC providing "notwithstanding anything contained hereinabove, the parties to the suit shall be at liberty to invite a judgement in advance consensually".
    4. Corresponding amendment is required under the Legal Services Authorities Act, 1987 empowering the lok adalats to pass an Award pursuant to an advance decree and judgement. The facility of refund of court fee should not be extended to advance decrees. On the other hand, exorbitant court fee can be collected from the parties choosing to be bound by advance decrees. This will generate lot of revenue for the Government.
    5. A penal clause should also be inserted in the Legal Services Authorities Act, 1987 empowering the lok adalats to levy and collect five times amount of the value of the suit in case of monetary claims and several lakhs of rupees in other claims, in the event of misuse of the provision of advance decrees. It is also desirable to take affidavits to this effect from parties choosing the option of advance decrees.


Salient features of major amendments under Civil Procedure Code-Insertion of Order XXAB:

i. By including therein an independent order dealing with advance decrees and judgements Order XXAB may be inserted under C.P.C. to serve this purpose.

ii. Essentially, Order XXAB shall contain provisions relating to the passing of advance decree and judgement based on mutual consent of the parties.

iii. The jurisdiction of the Court to grant advance decree should be made discretionary under the proposed Order XXAB and just because there is mutual consent, apparently the Court need not pass an advance decree in all cases. The Lok Adalat can be clothed with the power and competence to pass an Advance decree and judgement which would be final.

iv. It should be made mandatory under Order XXAB that only when the Court is satisfied that there is no extraneous inducement, threat or promise to the defendant/s and where the situation does not give rise to any inference to any reasonable prudent man that there is extraneous pressure against the consenting defendant, then only an advance decree should be passed.

v. The judge passing the advance decree should also have the authority and competence to insist and include the presence of family members and probable legal representatives in the decree and only if all these persons give their consent, the decree shall be passed.

To a very large extent, these decrees will be effectual having a tendency to avert a possible attack against the decree at a later stage on the plea that there was no real consensus.

Money Suit: Illustration-I

'A' wants to lend money to 'B'. At the same time, 'A' wants to be sure that he gets back the money he is proposing to lend together with interest without laws delays. Therefore 'A' will insist that he would lend money only to someone, who is willing to suffer an advance decree. 'B', the borrower is in need of money and naturally, he will be willing to follow whatever procedure that 'A' would adopt. Both 'A' and 'B' can opt for an advance decree which works out like this.

i. 'A' and 'B' will execute a written document evidencing the loan and necessary conditions that govern the repayment.

The concept of "Advance Decrees" is a branch out of this evolving as well as exciting subject of preventive litigation

ii. Immediately 'A' files a suit seeking an advance decree on the strength of the said written instrument. 'B' admits the suit claim and agrees to suffer a decree. The matter is immediately referred to the Lok-Adalat and a decree is drawn up clearly mentioning that 'A' will have the right to execute the decree in case 'B' fails to return the money within the stipulated time.

A conditional decree would be passed and the enforceability of the decree will be deferred till such time the condition is complied with. In other words, the decree becomes enforceable and begins to operate upon contravention of the condition imposed. Necessary legal fiction can be introduced by amending the relevant statute deeming that the decree is passed only on the date when it becomes enforceable.

Therefore here is the case where at or around the time of borrowing money itself, a decree is passed conditionally. If the parties feel that there should be some security for repayment, the same thing can be incorporated in the terms of the decree.

Eviction Suit: Illustration-II

In case of an eviction suit, at the time of giving the property on lease or while entering into written lease agreement or may be during the pendency of a lease, the lessor and lessee can together seek an advance decree. Where 'O', the owner wants to lease his property to 'L', the lessee, both of them will enter into a lease deed complying legal requirements. Thereafter, 'O' files a suit seeking advance decree of eviction. The matter can be referred to either Lok Adalat and an award can be passed immediately.

The disadvantages in adopting this new concept are absolutely nil and the advantages one gets are just unbelievable.

This is preventive litigation. Preventive litigation or preventive law is a very important subject in the Indian context. In view of the fact that a lawsuit is viewed as the most dreadful and dishonourable thing, preventive law or preventive litigation assumes any amount of significance and discussion. The concept of "Advance Decrees" is a branch out of this evolving as well as exciting subject of preventive litigation. It provides a win-win situation to both parties. It is an exception to the adversarial system.

There is no loser in the court room! All are gainers, including the lawyer. No emotional traumas. No loss of time and on the other hand, there is certainty and definiteness in this system. Believe me! Courts will then really become fast track! We have placed old wine in new bottle and given them label of Fast Track Courts! There can be nothing fast track with our old, archaic and obsolete procedures. The system which is the engine should change. A passenger train continues to be a passenger train with an old engine. To call it 'Rajdhani Express', we have to think of an improvised engine. This is the essence of the concept of advance decrees in a nutshell.

The revenue generation from courts will increase by leaps and bounds. The entire lawyering community will be viewed with respect and admiration. Ask any trial court lawyer whether he has seen the finished product of his job with happiness and contentment. You all know the answer! In this system of hierarchy of appeals, first appeal, second appeal, special leave, etc. no lawyer can afford to see the finished product. However, in the concept of advance decrees, it is possible and practicable to see the finished product.

Lawyers will have great contentment as there will be a finality and closing litigation forever. In fact, lawyers transform themselves into judges while drafting the advance decrees and they can by using all their skills, draft the decrees in the best possible manner. Inartistic drafting of such a decree, inability to visualise future contingencies would give rise to serious problems to clientele and the system will ensure that clients elect only the skilled lawyer for this purpose. From the point of view of the litigant, the lawyer will be viewed as a "Deliverer of goods" or rather as a meaningful service provider.

The litigation is reduced to a day or two and the fees of the lawyer, is also assured. In fact, clients will be willing to pay the Advocate fee with satisfaction. There can be no scope for malpractice, no scope for fabrication of documents, no scope for false or frivolous defences. Dishonesty in any quarter will have no room in a foolproof system like this. The readers should not think that this system will be a substitute for the existing system.

From the point of view of the litigant, the lawyer will be viewed as a "Deliverer of goods" or rather as a meaningful service provider

In fact, to begin with, this system will supplement but not supplant the existing system. It will run parallely. The litigation ends even before it starts! Rather, it starts with a view to end quickly and finally. In certain situations, the right to avoid law delays becomes an enforceable right. Under this system, the plaintiff will have the right to pick and choose only a law-abiding person as the defendant. It is only when the defendant consents to suffer a decree, the implementation of this procedure would be possible.

Once the concept is implemented over a period of time, each and every plaintiff will naturally insist for an advance decree and the defendant will then have no option except to become law-abiding and suffer a decree. May be, upon continuous use and application of this concept, all landlords and all money lenders will definitely choose this system and consequently all lessees and all borrowers will transform themselves into law abiding persons by consenting to such decrees.

The Law Commission should seriously think of this. A widespread debate is desirable on this exciting proposal in the legal community as well as public to give shape to this concept which is still on the anvil.


Disclaimer-The views expressed in this article are the personal views of the author and are purely informative in nature.

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