Executive Vice President, Chief Legal Officer & Company Secretary,
Datamatics Global Services Limited, India
Mumbai, October 11, 2017: Any organization that has done business in India knows the unique challenges that are faced when it comes to approaching the Judiciary for the legal recovery of dues. The statistics that are now publicly available portray a dismal picture as to the state and capacity of our judiciary, overburdened as it is, to handle the large number of civil disputes that are continuously being filed. As per the most recent statistics, there are currently 7,892,109 civil cases pending in the lower judiciary, out of which 617,280 (i.e. 7.82%) have been pending for more than 10 years. The national average period of time for which a civil case remains pending in the lower judiciary is nearly six years (2184 days) – a figure that becomes far scarier when we take into count that this includes summary proceedings such as applications for the appointment of arbitrators, probate proceedings, etc. Things do not get any better in the High Courts, where the national average for pendency of proceedings stands at three years and one month (1128 days). Standing at 18 judges per million persons, India’s low per capita judge ratio results in a situation where it is not uncommon for 30 – 50 matters to be listed for hearing before a judge each day. In fact as of today, 304187 civil matters are listed for hearing in the courts of 16718 judges of the lower judiciary, and this is apart from criminal cases that the same judges may also be handling.
One of the main focus areas in the corporate sector today is doing business, for which time is of great essence. Getting stuck with an expensive and slow litigation is surely a barrier that no one wants. Hence, to have the right strategy in place is of utmost importance. Where there is no vision, strategies fail. For us, the vision was to retrieve legitimate dues of significant amount through the civil recovery process in India. By embracing this vision, we were, by necessity, focussing not just on the short-term, but also on the long-term strategy.
In light of these alarming figures, it is imperative for Indian businesses to adopt fluid and flexible strategies whilst prosecuting their claims in civil courts. A recent recovery made by Datamatics is a good example of how a correct strategy towards the success of any civil case is actually a combination of multiple smaller strategies that are flexible enough to be changed at any time, if required.
The claim was significant for a company of our size as we felt cheated, when the Debtor Company, for whom, we have not only provided technical services but also supported them with financial assistance in the form of a loan, failed to pay for the services as well as the loan.
The dispute revolved around recovery of a large amount from one entity, which we can refer to as the Debtor Company, on account of (i) Loan given to them by one of the Datamatics subsidiary company and (ii) Services rendered to them by Datamatics’ parent entity. The total principal amount of recovery was slightly above Rs. 10 million, and including interest, it amounted to a significant amount of Rs. 20 million.