India's low rank in the World Bank's Ease of Doing Business Ranking 2016 reflects, inter alia, the difficulties faced in enforcing contracts. The two main areas where the World Bank's report faults India is in the time it takes to resolve a case, and the cost of enforcing a contractual claim. Indeed, the delay and high cost of enforcing claims affect the judicial system across all levels in India, and now needs to be tackled on a war footing. India's low rank for several years now is a reflection of the lack of serious judicial reform by successive governments.
Among the many long term and short term measures necessary for easier enforcement of contracts, the most pressing is the reform of the civil procedural laws. While substantial amendments have been made to parts of the Code of Civil Procedure, 1908 over the years (most recently in 2002), they cannot be said to have had the intended impact as the World Bank rankings. The data from the National Judicial Data Grid goes on to validate that. The problem fundamentally relates to how litigation is approached in India; the burden of ensuring the case proceeds is cast on the litigant, leaving it open for much misuse and abuse.
What is needed, therefore, is a shift, as in other jurisdictions, from a litigant- driven process to a judge-driven process where responsibility and the power to ensure speedy and effective disposal of a case are given to the judge presiding over a case. This approach has been recommended by the Law Commission of India (253rd report) in the context of the Commercial Division and Commercial Appellate Division of High Courts and Commercial Courts Bill, 2015. Though now applied only to commercial courts and divisions, there is no reason why this approach to civil procedure cannot be extended to all civil cases in India. Adopting it calls for large-scale reform of the Code of Civil Procedure, 1908 and the template set in the Commercial Courts Bill should help in not only improving India's ranking, but also reduce delay in disposal of cases across the board.
Disclaimer: He assisted the Law Commission of India in the preparation of its 253rd Report.)