Economic Highlights

New Delhi, 10 October 2016

Frivolous Court Cases

GOVT MOVE TO CURB LITIGATION

By Shivaji Sarkar

Government departments must cease to be compulsive litigants. The casual approach of “let the court decide” must be eschewed and condemned. The approach has a high financial cost, leads to pendency of cases and demoralises the staff. This apart, employees at different levels too are fighting legal battles with the Government, in most cases for arbitrary or biased decisions. In many cases, the employees are told to go to the court to seek redressal or even reinstatement.

However, most cases could be avoided if these are handled with a judicious and sympathetic approach at the top. But the approach in most cases is either “to teach a lesson” or to avoid taking a decision. The perpetrator, a high official, goes scot free and even gets cushy re-employment after his/her retirement but the employees continue to suffer for life in terms of financial cost and demoralisation.  

Between 1985 and September 2010 a total of 566,706 cases have been filed in the Central Administrative Tribunal (CAT), according to official data. The NDA government as per a Cabinet note has called for curbing litigation. The Supreme Court has passed severe strictures against State-run corporations fighting long battles with each other “at the cost of taxpayers”.

How much is the cost of such litigations? There is no precise estimate as different departments spend it and it is not easy to compile such data. Besides, each individual employee also spends a whopping amount in terms of fees for lawyers, courts and other expenses. Even the US government finds it difficult to assess the costs but says it is definitely huge. A US Government Accountability Office (GAO) investigation report of September 8 this year says the cost of lawsuits against the Federal government, where the plaintiffs win “cannot be fully determined” because not all federal agencies track their legal expenses.

In India, such cases, not only by Central government departments and employees but also State governments and their employees, certainly costs the nation anything from Rs 50 lakh crore to Rs 1 trillion rupees – all taxpayers’ money. Even at the minimum, the government everyday spends lakhs of rupees on counsel fees that ranges anything from Rs 9,000 to Rs 13,500 a day, plus other expenses ranging from Rs 900 to Rs 3000 a day, plus pocket expenses. In addition, there are costs for filing cases as also clerkage.

The Modi government’s move to curb litigation can save the country about one-third of the total expenses over Rs 30 lakh crore. The cases, SC has observed, are often frivolous. LIC, ONGC and other government departments are regularly approaching the court against various tax demands. These issues can be resolved through negotiations. Over 50 per cent of the cases in higher judiciary pertain to government appeals, including tax cases.

A March 2016 report of Central Board of Direct Taxes (CBDT) notes that in more than 30 per cent tax-related litigations, appeals were filed mechanically, “without appreciation of the maintainability of the issues involved”.

Calling its affairs a “scam,” the Union Law Ministry under Ravi Shankar Prasad has pulled up the Central Agency Section (CAS), which conducts the litigation work in the Supreme Court on behalf of all the ministries and departments of the Central government.

Nudged by the Prime Minister’s Office, the Law Ministry has sent a 10-page note to the CAS, enumerating various flaws and deliberate omissions which are adversely affecting the government’s cases in the top court. “The maintenance of the files in the CAS appears to be a scam. If a file gets returned to the CAS on account of postponement of the hearing, the file will never come back to the law officers/panel advocates on the subsequent date. The staff of the CAS will create a facade of non-availability of those files” the note stated.

Former Additional Solicitor General Bishwajit Bhattacharyya, who had retired at the end of his three-year term in November 2012, had published a damning account of his experience in office and said the CAS should be dismantled if the Government wants to stop losing revenue.

Countries such as the US have limited mandatory time frames, for example under the US Speedy Trial Act 1974. However, India does not have general statutory time limits comparable to the US law, Law Commission of India July 2014 report notes. This has led to accumulation of over three crore pending cases at high courts.

A committee of the Law Ministry for strengthening judiciary towards reducing the pendency and delays in 2009 of cases has suggested having a National Litigation Policy. It noted litigation between public sector undertakings is causing great concern. If litigation cannot be avoided, then alternative dispute resolution methods such as mediation must be considered. 

Analysis of cases disposed of by the CAT by Krishna Tangirala, legal intern National Law University, Jodhpur in December, 2013 finds that 40 per cent of the cases were filed by group C employees. “This can be attributed to the lack of avenues available to the lower group employees for the proper redressal of their grievances. This is mainly because of the faulty implementation of the policy of the government”, say Tangirala. In some cases, employees’ dues are not cleared even after a decade of their retirement.

Interestingly, about 43 per cent of cases filed even by Group A, B and even C employees sought relief for promotion, pay fixation and increments or anomalies in implementation of Pay Commission recommendations. Roughly 20 per cent of the cases filed prayed for quashing of the suspension orders and reinstatement with full pay and arrears.

In 14 per cent of the cases, the petitioner challenged the selection process, including interviews and exams. Majority of petitioners in this category were Group-A employees. About 13 per cent of the cases filed prayed for the regularisation of services offered by the petitioner, and majority of petitioners in this category were Group-C employees.

Around 51 per cent of the petitions sought relief directly against the existing policy of the government on suspension, regularisation of temporary and contractual employees or non-implementation of pay panel recommendation. Almost half, 49 per cent of the cases were decided in favour of the employees. In most promotion related cases, CAT accepted the employees’ plea.

If moves of the Modi government are implemented, it would save not only money but also precious man-hours lost. This apart, it would ensure healthy atmosphere and is likely to improve and speed up government functioning. ---INFA

(Copyright, India News and Feature Alliance)