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  • Aditya Vyas & Namah Bose

Dispute Resolution Mechanism in the Farm Acts: An Open Sesame or a Pandora's Box?

Introduction

The Farm laws, namely Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 (“FPTC Act”), Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020 (“Contract Farming Act”), and Essential Commodities (Amendment) Act, 2020, received the President’s assent on September 27, 2020. These laws aim at revolutionizing the agricultural system by freeing up the agricultural market from the constant control and regulation of the Agricultural Product Marketing Committee’s (“APMC”) and to provide greater incentives to farmers and increase the farmer’s income.


The Farm laws, in the most recent development, have been stayed by the Supreme Court on account of the protests in the country against them on different grounds. One such grounds includes the unique dispute resolution mechanism guided by conciliation. Though this mechanism has been opposed by the Bar Council of Delhi and the Bar Council of India in their statements, not all is bad.


Dispute Resolution Provisions in the Laws

Under the FPTC Act

For Farmer Trader Dispute:

For any dispute arising between the farmer and the trader, an application may be filed to the Sub-Divisional Magistrate (“SDM”) under Section 8(1), who shall be responsible for setting up a conciliation board to arrive at a mutually acceptable solution. The Conciliation Board shall consist of a Chairperson appointed by the SDM and either 2 or 4 persons, half each of which shall represent the parties in dispute. Such other members shall be appointed by the Chairperson on the recommendation of the parties, and in case the parties fail to make recommendations in 7 days, the appointment shall be done directly by the SDM.

An appeal may be made, if no settlement is achieved within 30 days from the setting up of the conciliation board, to the SDM acting as the Sub-Divisional Authority (“SDA”) in resolving the dispute as per Section 8(5). Further, an appeal can also be made from the order of SDA, within 30 days, to the Appellate Authority (Collector or Additional Collector so nominated by the Collector).


For Electronic Trading and Transaction Platform

For any violation of the norms and procedures for the electronic trading and transaction platform, any officer authorized by the State government may take cognizance and pass an order within 60 days under Section 9. An appeal may be made by the aggrieved within 60 days to an officer nominated by the Central Government. The delay of 60 days (but not more than 90 days) may be condoned if sufficient cause is shown as per Section 10. The Appeal shall have to be disposed off within a period of 90 days.


Under the Contract Farming Act

Section 13 provides that every farming agreement shall provide for a stipulation concerning setting up of a conciliation board with fair and balanced representations of the parties involved. The SDM acting as the SDA shall be the first appellate authority. Second Appeal may be made to the Appellate Authority in the form of Collector or Additional Collector nominated by the Collector. The appeals (both first and second) have to be filed within 30 days of the Order so assailed.


Provisions Common to Both Acts

Firstly, there is a complete bar on the jurisdiction of civil courts (Section 15, FPTC and Section 19, Contract Farming Act). Secondly, protection from prosecution has been afforded to the Central or State government or SDA or Appellate Authority or any other person in case of anything done or intended to be done in good faith (Section 13, FPTC and Section 18, Contract Farming Act).


Analysis of the Provisions

Executive Overreach

Extensive control has been given in the hands of the executive with no judicial involvement in the dispute resolution mechanism of the farm laws. The appointments of Chairman and the other members are appointed by the executive authorities. Even where the appointment is made on the recommendation of the parties, it is the SDM who is empowered to make the appointment in case the parties fail to make recommendations in 7 days. Both, the first and the second appeals, are also considered by executive authorities.


This dispute resolution structure impinges on the powers of the judiciary. By barring the jurisdiction of civil courts, separation of powers is clearly trampled upon, unlike in case of Tribunals or quasi-judicial bodies where separation of powers is patent due to the existence of both judicial and technical members. The only possible judicial resolution, under these farm laws, is by way of writs under Articles 226 and 32 of the Constitution. However, farmers may be unable to approach higher courts under Article 32 or 226 because of the financial constraints.


In most of the cases wherein Executive Magistrates are given authority under the Code of Criminal Procedure, 1973, fairly simple tasks that do not require much legal acumen are required. For example- assistance in execution of warrant (Section 78); authorising temporary arrest and ensuring remand (Section 167), among others. Many SDMs or other Executive Magistrates are only trained for administrative tasks, and do not undergo legal training like judges.[1] However, the present scenario involves complex contractual matters requiring considerable legal acumen for dispute resolution which is lacking in the executive machinery.


Lack of Trust in the Existing Mechanism

One of the reasons for failure of Alternative Dispute Resolution (“ADR”) in general in India is the lack of trust and awareness. It is very important that a person adjudicating the dispute, whether in a conciliatory capacity or as an arbitrator, should be someone in the agriculture-related field or have experience vis-à-vis agricultural issues. The Authorities under the farm laws do not possess the requisite experience or understanding of the concerns of the farmers.

Previously, under the Model AMPC Act, 2003 (“Model Act, 2003”) and the Model Agricultural Produce and Livestock Marketing (Promotion and Facilitation) Act, 2017 (“Model Act, 2017”), the dispute resolution was to be governed by arbitration carried out by APMC or the Director of Agricultural Marketing so appointed by the government. Further, these Acts, similar to the Farm laws, also put a bar on civil courts (Section 105 and Section 80 of the Model Acts of 2003 and 2017 respectively) from exercising jurisdiction.


In the Model Acts, arbitration was conducted by the APMC which was, in some ways, well-versed with the concerns of the farmers as it consisted of farmers and agriculturists (Sections 17 and 18 of Model Act, 2017). This is a major difference between earlier laws and the recently enacted farm laws which impose overarching bureaucracy, having no relation to the farmers, in the present conciliation mechanism.


The role of conciliation and conciliators is to assist parties in an impartial manner, as is also codified in Section 67 of the Arbitration and Conciliation Act, 1996 (“the A&C Act”). There arises a high probability that due to their appointment and regulation by the government in the farm laws, the conciliators’ decisions might reek of favouritism towards the big entities and corporations and/or be in favour of government related individuals. This takes away the independence and fairness of the dispute settlement mechanism and renders it illusory. Since this is a major shift of authority from the agriculturists to a government appointed individual in dispute resolution, it has led to a trust deficit.


Issues in Constitution of Conciliation Board

There are three concerns in the constitution of Conciliation Board. Firstly, the qualification or criteria for the selection of the Chairman has not been laid down which puts the aggrieved party in a very weak position as there is no certainty as to the level of expertise and knowledge about the only neutral person on the Conciliation board. Secondly, there is no constancy with regards to a Chairman of the Conciliation Board. For every new dispute, a fresh Chairman might be appointed which will further increase the executive overreach in every dispute. Thirdly, there is only one neutral person in the whole conciliation board who shall be the deciding factor in all disputes. This might lead to concentration of power and decisions may be easily manipulated.


Condonation of Delay

Another troublesome aspect of the farm laws is regarding the selective condonation of delay. Under the FPTC Act, where the electronic trading and transaction platforms are concerned, a delay of 90 days is allowed to be condoned on sufficient cause. However, such provision neither exists under the FPTC Act for the farmer disputes under Section 8, nor for the disputes arising under the Contract Farming Act. Such absence deprives the aggrieved party to put up an appeal beyond the period of 30 days. This interpretation is guided by the maxim for interpretation of statutes- expressio unius est exclusio alterius i.e. expression mention of one is the exclusion of the other.[2] Further, since the SDM or the Collector is not a civil court, there is no question of condonation via the inherent powers under Section 151 of the Code of Civil Procedure, 1908, and it puts the aggrieved party in a very weak position.


Possible Solutions

Setting up of a Farmer Tribunal

Existence of tribunals has been a feature of legislations like the National Green Tribunal Act 2010, or the Industrial Disputes Act, 1947. In these Tribunals, there are judicial as well as expert members[3] along with fixed timelines to ensure speedy disposal[4].


Similarly, for the speedy and cost-efficient resolution of farmer disputes, a Farmer Tribunal could be set up. It is equally important to ensure that it has agriculturists and such other members, who have expertise and knowledge about farming and related concerns, as expert members in addition to the judicial members. Setting up a separate tribunal in itself becomes especially important as the Executive Magistrates are not sufficiently legally equipped. The tribunal may be given a shorter time frame as their sole work would be to resolve these disputes and as it would have judicial members well equipped to solve complex matters.


Setting up a Conciliation/Mediation Committee

To cater to the problems in the constitution and working of conciliation board under the farm laws, a fixed Conciliation Committee could be set up for every state wherein panels may be decided for every district, or any other division, as deemed fit to ease out the process. There are three specific recommendations vis-à-vis the constitution of conciliation committee. Firstly, conciliators should have certain qualifications. A comparison may be drawn to the 2009 law in China for resolution of rural land contract disputes which established ‘rural land contract arbitration committee’ for appointing arbitrators and deciding disputes. Half of the members of this committee are from rural collective organisations, farmer’s representatives among others. Additionally, in India, the Eighth Schedule of the A&C Act, added via the Amendment of 2019, provides for qualifications of an arbitrator wherein there exist certain general norms applicable to an arbitrator. Similar to the afore-mentioned legislations, in appointing conciliation committee members for the farmer-related disputes, for every state, a certain number of conciliators may be chosen who, firstly, have expertise in the agricultural fields and/or have experience as agriculturists and secondly, are guided by the general norms, so applicable to arbitrators.


Secondly, a fixed term may be given to the Committee members so as to bring consistency and certainty in dispute resolution and ensure minimal interference of the Executive in all disputes. Thirdly, in making these panels, for every dispute, there should be a compulsory presence of at least three conciliators with at least one person each representing the parties in the dispute additionally. This will help in reducing the odds stacked against the poor farmers and will provide a fairer dispute resolution mechanism altogether.


Allowing Condonation of Delay

As there is a clear anomaly in the provisions for condonation of delay, the provisions should be duly amended to allow condonation for farmer disputes, on sufficient cause, under both the FPTC Act and the Contract Agreement Act.


Conclusion

ADR has always been touted as being more cost efficient and speedy mechanism for delivering justice than court litigation. The same has been so considered for contract farming issues as well and thus, the adoption of ADR in the farm laws is, principally, justified. As far as the exclusion of civil courts is concerned, which existed in the Model Acts as well, it is justified only where the statutory mechanism is intact and delivers justice de facto and not just de jure.


The government has succumbed to the pressure of the protests and has offered to roll back the unique dispute resolution mechanism in the farm laws. Though this is a welcome step given the severe flaws in the mechanism, the government should not, in order to pacify the farmers, roll it back in entirety as the ADR seems to be the only mechanism that can truly do justice to the farmers in a speedy manner.

 

[1] M.Venugopal v. The District Magistrate, 2014 SCC OnLine Mad 5642.

[2] Swastik Gases v. Indian Oil Corporation Ltd., (2013) 9 SCC 32.

[3] The National Green Tribunal Act, 2010, ss. 4-7; the Industrial Disputes Act, 1947, ss. 7-7D.

[4] The National Green Tribunal Act, 2010, s. 18; the Industrial Disputes Act, 1947, s. 25M.


This article has been authored by Aditya Vyas, Senior Editor and Namah Bose, Assistant Editor at RSRR. This blog is a part of our Editorial Series, ‘Agricultural Laws: Breaking New Ground for Sustainable Futures’. 

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