- Heavy interest burden on the borrower
- Foreign investors would be reluctant to come
- Banks would be constrained to declare the loans as NPAs
It will be appreciated that to achieve the award in global business, either by a manufacturing unit or a trading unit or a business concern; it is invariably essential to ensure “EASE OF DOING BUSINESS WITH ETHICS IN PUBLIC LIFE”. This is mandatory for the benefit of our society and also for the posterity, since it would simultaneously enable the business concern to gain goodwill in the market for the concerned product and to make profits thereon perennially and pass on the business to next generation, with abundant goodwill in the market.
To ensure hassle-free business, it is mandatory for the business establishment to ensure compliance of various provisions of law of the land, where the business is established; while simultaneously ensuring discharge of obligations cast upon the party concerned, either under the oral agreements or written agreements, as the case may be.
It will be appreciated that with advanced technology and Deployment of Artificial 1ntelligence by industrial/ business establishments; while resorting to credit facility for some period; either by receiving post-dated cheques or MOU or Agreements etc.; while ensuring compliance of terms & conditions, as agreed upon between buyer & seller, or manufacturer & supplier, whole-seller & retailer; there is a probability for breach of terms and conditions in agreements or frustration of agreements and/ or failure to honor the cheques on presentation thereof, the concerned person or business unit is constrained to approach a court of law, or some other readily available adjudicating mechanism, to redress the grievance.
In the event of any default, either willingly or unwillingly or by the force of circumstances, or due to force majure or with evil intentions, as the case may be, by either of the party to the agreement; the victim, who got cheated or sustained losses/ aggrieved party, would be constrained to knock the doors of Hon’ble courts, either under the Commercials Courts Act or under the Indian Contract Act or under the IBC or under the N I Act etc.., In the event of approaching the Hon’ble Courts or the adjudicating forum, in the prevailing scenario, by the time adjudication is done, it would be a minimum of 4 to 5 years on the lesser side and in the event of carrying the judgment/ Order / Award passed thereon, either in Appeal, Review or Revision. The final adjudication would be further delayed and sometimes stands extended, beyond a decade or more than a decade, when the parties to the litigation, venture upon to carry the matters in appeal till it’s logical end, up to the Supreme Court of India.
In the event of getting involved in the litigation, in respect of commercial disputes, heavy interest burden would be on the person, who borrowed money/ availed a bank loan or loan from a financial Institution or Foreign Investor, as the case may be. Heavy Interest burden, over a period of years, so long as the litigation is pending, would be detrimental to the business, since no profits are envisaged. Due to uncertainty in timely adjudication of commercial disputes and interest servicing during the period of adjudication, the investors would not venture upon for Investment, particularly, foreign investors and the Banks would be constrained to declare the loan as NPA. In the view of the foregoing I am of considered opinion that the government through its three arms should devise a mechanism to ensure :—
- Adjudication of disputes under NI Act, within three months.
- Adjudication of disputes under a Contract within six months.
- Adjudication of disputes in the commercial courts within nine months.
- Adjudication of any disputes, by any other forum, should be within a maximum period of one year;
Such timely adjudication would facilitate the foreign investors as well as the Banks and financial institutions to volunteer for investment in India and would simultaneously facilitate the BANKS, NBFC and other investors to extend Credit Facilities, with ease and comfort.
As such one of the foremost essential requisites is to facilitate the adjudicating mechanism / Honorable Courts to ensure finality of commercial litigation, within a maximum period of one year for EASE OF DOING BUSINESS WITH ETHICS IN PUBLIC LIFE; While simultaneously ensuring that the license raj is coming to an end and all the mandatory Compliances with the local government or local authority are expedited .
S. AGASTHYA SHARMA
___________________________________________________________
OFFICE AT: 1-9-321/4, VIDYA NAGAR, HYDERABAD-44
MOBILE No. 98491 28860
