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Explained: Will the SC now start charging all rich corporates before admitting their cases? And would it matter?

Pay to play: A good idea as far as rich corporates and litigation go?
Pay to play: A good idea as far as rich corporates and litigation go?

So, Chief Justice of India (CJI) TS Thakur today lectured senior counsel Abhishek Manu Singhvi, saying, according to LiveLaw:

Litigation should become expensive for your big clients. The learned Attorney General had suggested it to us yesterday as one of the step which can be adopted to reduce pendency and discourage litigation. This is a beginning. Only those big clients who can pay deposit shall file cases here.

The Thakur-led bench ordered that the apex court would not start hearings would not start until the petitioner – Star India – and the respondents – Idea Cellular and the BCCI jointly - deposit Rs 50 lakh each in court within four weeks.

Why did he do that?

Manu Singhvi is the counsel for Star India, which is the appellant in this case that .  The case has its origin in this Delhi high court judgment, delivered in 2013.  The SLP was heard 18 times earlier, taking a lot of the court's time.

What’s the case about?

The facts are that Star India had filed three suits against Piyush Agarwal (a director at Cricbuzz), Idea Cellular and OnMobile Global Ltd.

The Board of Cricket Control in India (BCCI) was arrayed as the common defendant in all three cases, and supported Star (as the paramount organiser and promoter of cricket in India).

Star and the BCCI contended in the suit that in an agreement dated 10 August 2012, the BCCI had assigned Star a “bouquet of rights” exclusively (including “mobile rights” and “mobile activation rights”).

Star then alleged that the defendants had violated those rights and then filed the suits for permanent injunction and damages.

Star also moved an interim injunction applications against the defendants alleging that they had violated those rights which were exclusively assigned to Star.

The defendants of course resisted Star’s claims and asserted that the rights claimed by Star did not exist, and because you can’t enforce a non-existent right, no relief could be granted.

What did Star and the BCCI argue?

Before the high court, Star and the BCCI both argued that unauthorised dissemination of match information through live score cards, match updates and score alerts through SMS and mobile value added services (MVAS) was in violation of a single judge's judgment that favoured Star.

They also argued that the alerts by the defendants constituted “unfair competition”, commercial misappropriation or unjust commercial enrichment. Star claimed to have spent Rs 3,581 crores to acquire these rights, through the Media Rights Agreement dated 10 August 2012.

The appellants had no license whatsoever to those such rights from Star or the BCCI, they said.

What did the larger bench decide?

The Division Bench of the Delhi high court held that as the benefit gained by the defendants cannot be said to be “at the expense” of Star – i.e., Star did not lose any money - the claim for unjust enrichment was not tenable.

The bench also dismissed the complaint of unfair competition.

Seems like an open and shut case?

Indeed, the reasoned judgment of the high court could have been sufficient for the Supreme Court not to entertain the special leave petition (SLP) filed by Star; in fact, in many other jurisdictions it may have been the end of the road, with the top courts usually declining appeals of cases that don’t involve fundamental questions of law.

However, as the corporate in this case knocked at the doors of the Supreme Court of India for another round of legal battle, Justice Thakur’s predecessors had granted their request, though Thakur’s mind was clearly still on the very recent hearings related to the National Court of Appeals (NCA) case.

And, to Star and the BCCI’s detriment, Thakur apparently wanted to use this case to test out the theory recently re-popularised in the NCA case that making corporates to pay before a hearing would be a good thing. 

What happened in the National Court of Appeal (NCA) hearings?

The NCA hearings are about whether India should have a new court that is placed between the high courts and the Supreme Court of India, effectively reducing the burden on the Supreme Court in dealing with routine cases.

It was the attorney general Mukul Rohatgi who had suggested earlier this week, as an alternative to the NCA, that if the Supreme Court really wanted to discourage routine SLPs it should maybe make those who could afford it pay a deposit into court.

Is there precedent to this?

In a precursor to Thakur’s Star deposit, Justice J Chelameswar introduced a version of this in his 19 April 2016 judgment in Messer Holdings Ltd. v. Shyam Madanmohan Ruia & others, which he delivered with Justice Abhay Manohar Sapre. 

The bench imposed a fine of Rs 20 lakh on each of the three parties to the case, observing:

This case should also serve as proof of the abuse of the discretionary Jurisdiction of this Court under Article 136 by the rich and powerful in the name of a ‘fight for justice’ at each and every interlocutory step of a suit.

Enormous amount of judicial time of this 31 Page 32 Court and two High Courts was spent on this litigation. Most of it is avoidable and could have been well spent on more deserving cases.

So is this becoming a trend? Will the SC use it to dissuade corporate litigation?

At the very least, it appears to have had a good April.

But both Chelameswar and Thakur have repeatedly expressed their discomfort with the indiscriminate admission of SLPs under Article 136, but have suggested different ways to tackle it. 

Chelameswar has questioned the practice of mushrooming SLPs while speaking at a public forum, while Thakur believes that the National Court of Appeals may be a way out.  

But whether the trend catches on with other judges of the Supreme Court remains to be seen.

Could this have an effect on pendency?

If the cost imposed on them is so huge that the corporates can’t afford it, they may decide not to file the SLP in the SC. 

On the contrary, if the cost is just a pittance, they may not mind paying it, and fighting it out.

What is expensive or a pittance to corporates?

Good question and it’s worth considering, as revealed by Legally India and Mint last year, that Abhishek Manu Singhvi himself charges around Rs 6 to 11 lakh for a single appearance in the Supreme Court (which can go up to Rs 15 lakh for some senior counsel).

If that’s the amounts we are talking about, then Thakur’s Rs 50 lakhs may comparatively be merely large peanuts (at least for now).

Furthermore, reports on today’s hearing suggest that the amount to be paid by the corporates is refundable to the parties after the disposal of the case.  

If it is refundable, what deterrent effect could this have?  The corporates might even consider it a good investment rather than a punitive measure.

Ok, let’s cut to the chase, is this a good thing?

Several good things may come out of it.

For one, judges may think more than twice before admitting an SLP in a routine manner.

And maybe, it’ll also have a deterrent effect on rich corporates, if judges begin to exercise those powers more often.

But really, it’s too early to tell: results must be assessed after a year, by looking at data of admission of SLPs in civil cases.

Photo by Vijay Chennupati

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