Supreme Court Upholds Mandatory E-Filing in Debt Recovery Tribunals: M P High Court Bar Association vs. Union of India (2023)

Introduction

Date of the Judgment: March 29, 2023

Citation: 2023 INSC 321

Judges: Dr Dhananjaya Y Chandrachud, CJI, Pamidighantam Sri Narasimha, J, J B Pardiwala, J

Can the government mandate e-filing for all cases in Debt Recovery Tribunals (DRTs) and Debt Recovery Appellate Tribunals (DRATs), even when a significant portion of the population lacks access to technology? The Supreme Court of India addressed this critical question in a recent judgment. The court examined the validity of mandatory e-filing, balancing the benefits of technology with the need to ensure equal access to justice for all citizens. The judgment was delivered by a three-judge bench comprising Dr Dhananjaya Y Chandrachud, CJI, and Justices Pamidighantam Sri Narasimha and J B Pardiwala.

Case Background

The case arose from a challenge to the Union government’s decision to make e-filing mandatory for all cases in DRTs and DRATs, regardless of the monetary value involved. Previously, e-filing was optional, then mandatory only for cases above Rs 100 crores. The government’s move to make it mandatory for all cases was aimed at increasing efficiency and transparency in the justice system. However, the M P High Court Bar Association raised concerns about the digital divide in the country, arguing that mandatory e-filing would disadvantage those without access to technology and internet connectivity.

Timeline

Course of Proceedings

The M P High Court Bar Association filed a writ petition under Article 32 of the Constitution of India, challenging the amended Rule 3 of the E-filing Rules, which made e-filing mandatory. The petitioner sought a direction to allow hybrid filing of pleadings and applications. The Union of India filed a counter-affidavit stating that the decision to make e-filing mandatory was not abrupt and was preceded by consultations and training programs.

Legal Framework

The legal framework for this case is primarily based on the Recovery of Debts and Bankruptcy Act 1993, specifically Section 36, which empowers the Union government to make rules for the functioning of DRTs and DRATs. The Electronic Filing Rules 2020, as amended, are also central to the dispute.

The relevant provision is Section 36 of the Recovery of Debts and Bankruptcy Act 1993 which states:

“36. Power to make rules.—(1) The Central Government may, by notification, make rules to carry out the provisions of this Act. (2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:— (a) the form in which an application may be made under section 19; (b) the fees payable in respect of applications under this Act; (c) the procedure to be followed by the Tribunal in the discharge of its functions under this Act; (d) the procedure to be followed in respect of appeals under section 20; (e) any other matter which is required to be, or may be, prescribed.”

Arguments

Arguments on behalf of the Petitioner (M P High Court Bar Association):

• The amendment to the 2020 Rules making e-filing compulsory in all cases irrespective of value was done without proper deliberations with all stakeholders.
• DRTs are located in remote areas where internet connectivity is not always reliable.
• There should be exceptions to mandatory e-filing for:
  • Just and sufficient cause
  • Senior citizens
  • Female practitioners and clients
• Alternative modalities should be available in case of software glitches.

Arguments on behalf of the Respondent (Union of India):

• The introduction of mandatory e-filing was not abrupt but followed consultations and training programs for members of the Bar.
• Implementation was done gradually in three stages:
  • Initially, e-filing was optional.
  • Then, it was made compulsory for cases above Rs 100 crores.
  • Finally, it was made mandatory for all cases.
• Help desks have been set up at all DRTs/DRATs to address glitches and provide assistance.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section. However, the core issue was whether mandatory e-filing in DRTs and DRATs is valid, considering the digital divide and the need for access to justice.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

The Court did not explicitly cite any previous cases or books. However, it did refer to the following:

• The Recovery of Debts and Bankruptcy Act 1993
• The Debt Recovery Tribunals (DRTs) and Debt Recovery Appellate Tribunals (DRATs) Electronic Filing Rules 2020
• Multiple Indicator Survey in India: NSS 78th Round (2020 -2021)
• National Family Health Survey (NFHS -5) 2019 -2021
• The GSMA Mobile Gender Gap Report 2022

Judgment

The Supreme Court upheld the mandatory e-filing in DRTs and DRATs, recognizing its benefits in terms of transparency and efficiency. However, the Court also acknowledged the digital divide and directed the government to take measures to ensure that no segment of the population is excluded from accessing justice.

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• The Recovery of Debts and Bankruptcy Act 1993: The court relied on the powers conferred by Section 36 of the Act to the Union Government to make rules to carry out the provisions of the Act.
• The Debt Recovery Tribunals (DRTs) and Debt Recovery Appellate Tribunals (DRATs) Electronic Filing Rules 2020: The court examined the amendments to these rules and upheld the mandatory e-filing while directing the government to address the difficulties faced by the stakeholders.
• Multiple Indicator Survey in India: NSS 78th Round (2020 -2021): The court used this survey to highlight the digital divide between men and women in India and to emphasize the need to address digital exclusion on the basis of gender.
• National Family Health Survey (NFHS -5) 2019 -2021: The court used this data to further emphasize the gender gap in internet usage and the need to address this gap.
• The GSMA Mobile Gender Gap Report 2022: The court cited this report to show the widening mobile internet gender gap in South Asia, including India, and to emphasize the need to address this gap.

What weighed in the mind of the Court?

The Supreme Court’s decision was influenced by several factors, including the need to modernize the judicial system, the benefits of e-filing, and the need to ensure access to justice for all citizens. The court recognized that technology can enhance efficiency and transparency, but it also acknowledged the digital divide and the potential for exclusion. The court’s reasoning was a balance between these competing considerations.

Fact:Law Ratio

The court’s reasoning was based on the need to balance the benefits of technology with the need to ensure equal access to justice. The court’s decision was influenced by the factual context of the digital divide in India and the legal framework of the Recovery of Debts and Bankruptcy Act 1993.

The court’s reasoning was also influenced by the need to ensure that no segment of the population is excluded from accessing justice. The court’s decision was a balance between the need to modernize the judicial system and the need to ensure that all citizens have equal access to justice.

The court quoted the following from the judgment:

“There can be no gainsaying the fact that e -filing provides transparency and efficiency in the administration of justice. E -filing provides for 24×7 access to the court system and, in fact, facilitates the convenience of lawyers as well as litigants.”

“At the same time, the Court cannot be unmindful of the fact that there is a digital divide in the country and not all citizens have access to the internet or the facilities required for the effective use of technology.”

“Technology is an enabler and a facilitator. Hence, no segment of the citizens should be left behind in the adoption of technology, least of all, in terms of access to justice.”

The court did not have a dissenting opinion.

Key Takeaways

• Mandatory e-filing in DRTs and DRATs is valid and promotes efficiency and transparency.
• The digital divide is a significant concern, and measures must be taken to ensure that no one is excluded from accessing justice.
• E-sewa kendras and help desks should be set up at all DRTs and DRATs to assist those without access to technology.
• Bar Associations and DRT/DRAT authorities should submit reports and representations to address specific difficulties in e-filing.

Directions

The Supreme Court issued the following directions:

• Bar Associations representing lawyers in DRTs/DRATs can submit representations to the Department of Financial Services regarding difficulties in e-filing.
• Chairpersons of DRATs and Presiding Officers of DRTs should submit monthly reports to the Department of Financial Services on their experience with e-filing.
• The National Informatics Centre should monitor the progress of e-filing and upgrade the software periodically.
• The Union Government should set up e-sewa kendras at all DRT/DRAT centers to facilitate e-filing.
• The Department of Financial Services should prepare a Standard Operating Procedure for e-sewa kendras.

Development of Law

The ratio decidendi of the case is that while mandatory e-filing is valid and beneficial for the judicial system, it is essential to address the digital divide and ensure equal access to justice for all citizens. The court did not change any previous position of law but clarified the procedure and the need for inclusivity.

Conclusion

The Supreme Court’s judgment in M P High Court Bar Association vs. Union of India upholds the validity of mandatory e-filing in Debt Recovery Tribunals and Appellate Tribunals. The court recognized the importance of technology in modernizing the judicial system while also emphasizing the need to address the digital divide and ensure that all citizens have access to justice. The court’s directions for setting up e-sewa kendras and help desks are aimed at bridging this gap and making the justice system more accessible to all.