Government Litigation in India and National Litigation Policy
What is Litigation?
Litigation is the term used to describe
proceedings initiated between two opposing parties to enforce or defend a legal
Litigation is typically settled by agreement
between the parties ,but may also be heard and decided by a jury or judge
Pros and Cons of Litigation
Legal battles are costly and require a high
commitment over a significant period of time.
Can create a damaging precedent if you lose,
making it harder for other communities to defend themselves against the offence
Can heighten conflict, making it more difficult
to repair relationships in the community later on
Litigation in India
In India there is a single hierarchy of courts.
India has three tier system of judiciary.
District Courts, at the first tier.
High Court at 2nd tier, which has the appellate
and supervisory jurisdiction over all the courts and tribunals in such state.
The Supreme Court of India at the third tier, is the highest court of
justice in India having appellate and supervisory jurisdiction over High Courts
Proceedings seeking judicial review.
Cases involving vires, or statutes or rules and
Public Interest Litigation
Introduction of Public Interest Litigation has democratized
the access of justice to common
man. It has paved way to a new regime of human rights by
giving a wider interpretation to
the right to equality, life and personal liberty and DPSP.
Problems with Indian Litigation System
in India is very time taking process . Indian Judicial System is marred with
judicial delays and slow process.
Supreme Court is bogged down by routine
The main culprit include-
Tendency among litigants to seek special leave
to appeal against any order or decision of the high courts and tribunals
for statutory appeals against orders of various tribunals.
Eg. The Electricity Act, 2003,
and the Telecom Regulatory Authority of India (Amendment) Act, 2000, provide
for direct appeals to the Supreme Court against orders of appellate tribunals
power to grant special leave is one that is meant to be used sparingly; in
practice it is used much too liberally. This
has an impact on the time and number of judges devoted to hearing matters of
frame for Litigation
to solve Loop Holes in Litigation Process
Suggestions by Law Commission
The Law Commission in its 229th Report suggested
having a Constitution Bench in Delhi, with four Cassation Benches’ in different
for Enforcement of Judgments
along with other Legal Services Institutions conducts Lok Adalats.
Lok Adalat is one of the alternative dispute
It is a
forum where disputes/cases pending in the court of law or at pre-litigation
stage are settled/ compromised amicably.
said Act, the award (decision) made by the Lok Adalats is deemed to be a decree
of a civil court and is final and binding on all parties and no appeal against
such an award lies before any court of law.
parties are not satisfied with the award of the Lok Adalat though there is no
provision for an appeal against such an award, but they are free to initiate
litigation by approaching the court of appropriate jurisdiction by filing a
case by following the required procedure, in exercise of their right to
Nature of Cases to be Referred to Lok Adalat
A Lok Adalat has the jurisdiction to settle, by
way of effecting compromise between the parties, any matter which may be
pending before any court, as well as matters at pre-litigative stage i.e.
disputes which have not yet been formally instituted in any Court of Law.
Such matters may be civil or criminal in nature.
But any matter relating to an offence not
compoundable under any law cannot be decided by the Lok Adalat even if the
parties involved therein agree to settle the same.
National Lok Adalat National Level Lok Adalats
are held for at regular intervals where on a single day Lok Adalats are held
throughout the country, in all the courts right from the Supreme Court till the
Taluk Levels wherein cases are disposed off in huge numbers.
Permanent Lok Adalat The other type of Lok
Adalat is the Permanent Lok Adalat, organized under Section 22-B of The Legal
Services Authorities Act, 1987.
Permanent Lok Adalats have been set up as
permanent bodies with a Chairman and two members for providing compulsory
pre-litigative mechanism for conciliation and settlement of cases relating to
Public Utility Services like transport, postal, telegraph etc.
Judiciary Effort towards Cost Effective Litigation
SC tries to make legal services affordable
The Supreme Court has introduced a
self-supporting scheme for providing legal services to the middle and
relatively lower income groups.
to the Union Law Ministry The ?Middle Income Group Scheme is meant to provide
legal services to litigants in the Supreme Court whose gross income does not
exceed ?60,000 per month or ?7.5 lakh per annum.
They can avail themselves of the services for a
DPSP : Article 39 A :
To promote equal justice and to provide free
legal aid to the poor
The National Legal Services Authority (NALSA) Constituted under the Legal Services
Authorities Act, 1987 to provide free Legal Services to the weaker sections of
the society and to organize Lok Adalats for amicable settlement of disputes.
Excessive Govt. Litigation
Government litigation constitutes nearly half of all litigation in
the Indian judiciary.
Besides being a constraint on the public
exchequer, government litigation has contributed to judicial backlog, thus
affecting justice delivery .
The Law Commission of India also studied this problem in
its 126th Report in 1988, and made appropriate observations on this front.
National Litigation Policy” (NLP) 2010
A litigation policy can have a profound effect on how the
government thinks about itself as a litigant, and can help curb the problem,
provided it is a constructed with a thorough understanding of the problem and
offers solutions based on evidence rather than conjecture.
Its aim is to transform Government into an
Efficient and Responsible litigant.
easy approach, “Let the court decide,” must be eschewed and condemned.
The purpose underlying this policy is also to
reduce Government litigation in courts so that valuable court time would be
spent in resolving other pending cases.
Government advocates must be well equipped and
provided with adequate infrastructure.
Training programs, seminars, workshops and
refresher courses for Government advocates must be encouraged.
Accepting that frequent adjournments are
resorted to by Government lawyers, unnecessary and frequent adjournments will
be frowned upon and infractions dealt with seriously.
Alternative Dispute Resolution Arbitration
The resort to arbitration as an alternative
dispute resolution mechanism must be encouraged at every level.
Public Interest Litigation
Public Interest Litigations must be approached
in a balanced manner.
PILs should not be taken as matters of
convenience to let the courts do what Government finds inconvenient.
“National Litigation Policy” (NLP) 2010 failed as it
was generic and without any scope for implementation.
Problems in NLP 2010
It fails to provide a yardstick for determining
responsibility and efficiency. The text does not define “suitable action” against
officials violating this policy.
creates “Empowered Committees” to regulate the implementation of the policy.
But there is ambiguity about their role and powers.
It also lacks any form of impact assessment to
evaluate actual impact on reducing government litigation.
of the NLP needs to ensure certain critical features are not missed out.
It must have clear objectives that can be
The role of different functionaries must be
standards for pursuing litigation must be listed out.
Fair accountability mechanisms must be
Making India hub of Arbitration
Government of India has laid emphasis on making
Arbitration a preferred mode for settlement of commercial disputes .
The initiatives aim at minimizing court
intervention, bring down costs, fix timelines for expeditious disposal, and
ensure neutrality of arbitrator and enforcement of awards.
Arbitration and Conciliation (Amendment) Act, 2015
various ways to encourage foreign investment by projecting India as an investor
friendly country having a sound legal framework and ease of doing business in
Justice B. N. Srikrishna Committee Recommendation
Suggestion regarding measures to improve the overall quality and
performance of arbitral institutions in India
Setting up of an autonomous body called Arbitration
Promotion Council of India (APCI).
recognize professional institutes providing for acceleration of arbitration.
Creation of a specialist arbitration bench to
deal with commercial disputes in the domain of the courts. National Litigation
Policy must promote arbitration in government contracts.
Review of the working of International Centre for Alternate Dispute
Suggested for declaring the ICADR as an Institution of
Recommendation for the creation of post of ‘International Law Advisor’ (ILA)
To advise the Government and coordinate dispute
resolution strategy for the Government in disputes arising out of its
international law obligations, particularly disputes arising out of BITs.
With India’s focus gradually shifting towards
greater growth and development through increased Foreign Investment, it is
essential for the government to make India safer for the foreign investments.
The World Bank’s Ease of Doing Business ranking
for 2017 reveals that India continues to fare badly on enforcement of
contracts, with an average of 1,420 days taken for enforcement. The absence of
effective means for enforcement of contracts is a serious fetter on the legal
system and impedes economic growth and development. ? Also, it was found that
judicial intervention and failure of the government and its agencies to use
institutional arbitration has, among others, led to India’s reputation as an
“arbitration-unfriendly” jurisdiction. ? In India, both ad hoc arbitration
mechanism and institutionalised mechanism are riddled with various problems.
Besides this a lack of awareness about the advantages of institutional
arbitration and the existence of certain institutions leads to parties avoiding
institutional arbitration or preferring foreign arbitral institutions over
The Arbitration and Conciliation Act, 1996 provides two alternate methods
Arbitration and Conciliation
Arbitration is a method for settling disputes privately,
but its decisions are enforceable by law.
An arbitrator is a private extraordinary judge between
the parties, chosen by mutual consent to sort out controversies between them.
Arbitrators are so called because they have an arbitrary
power; for if they observe submissions and keep within due bounds their
sentences are definite from which there is no appeal. Arbitration offers
greater flexibility, prompt settlement of national and international private disputes
and restricted channels of appeal than litigation.
In the words of Richard Cobden “At all events,
arbitration is more rational, just, and humane than the resort to the sword.”
Arbitration hearings usually last only a few
hours and the opinions are not public record. Litigation is expensive, time
consuming and full of complexities.
Types of Arbitration
Adhoc Arbitration: In the course of a
commercial transaction if a dispute arises and could not be settled amicably
either by way of mediation or conciliation, the parties have the right to seek
Institutional Arbitration: In this kind of arbitration
there will be a prior agreement
the parties regarding the institution that they will refer to in order to
• Contractual Arbitration: The parties
entering into a commercial transaction prefer to incorporate an arbitration
Clause in their agreement. The arbitration Clause provides that if in future
any dispute arises between the parties they will be referred to a named arbitrator(s).
Statutory Arbitration: If by operation of
law the court provides that the parties have to refer the matter to arbitration
it is termed as Statutory Arbitration. In this kind of arbitration the consent
of the parties is not required. It is more of a compulsory arbitration and it
is binding on the parties as the law of the land.
Advantages of Arbitration over Litigation
In a civil court, the proceedings are held in public. While Arbitration
Arbitration provides liberty to choose an arbitrator, who can be a specialist
matter of the dispute. Thus, arbitrators who are sector specialists can be
selected who resolve the dispute fairly and expeditiously.
The venue of arbitration can be a place convenient to both the parties.
can choose a language of their choice.
Even the rules governing arbitration proceedings can be defined mutually by both
A court case is a costly affair. The claimant has to pay advocates, court fees,
and other incidental expenses. In arbitration, the expenses are less and many times
the parties themselves argue their cases. Arbitration involves few procedural steps
and no court fees.
Arbitration is faster and can be expedited. A court has to follow a systematic procedure,
which takes an abnormally long time to dispose of a case.
A judicial settlement is a complicated procedure. A court has to follow the procedure
laid down in the Code of Civil Procedure, 1908 and the Rules of the Indian Evidence
Act. An Arbitrator has to follow the principles of natural justice. The Arbitration
and Conciliation Act, 1996 specifically states that the Arbitral Tribunal shall
not be bound by The Code of Civil
1908 and The Indian Evidence Act, 1872.
Section 34 of the Act provides very limited grounds upon which a court may set
award. The Act has also given the status of a decree for the award by
award of the arbitrators is final and generally no appeal lies against the
In a large number of cases, ‘Arbitration’ facilitates the maintenance of continued
relationship between the parties even after the settlement.
Other Solutions –
Proposed by the 114th Law Commission way back in
Gram Nyayalaya with two objectives.
While addressing the pendency in the subordinate
courts was the major objective,
The introduction of a participatory forum of
Concept was such a model of adjudication will be
best suited for rural litigation.
INTERNATIONAL ARBITRATION MECHANISM
asked the BRICS nations to develop an arbitration mechanism among them.
proposal was made by Finance Minister at BRICS Conference on International
for such a mechanism
? West’s domination:
It is observed that the arbitration centers are concentrated in west with apprehensions
of biased awards against emerging economies.
? Further, the emerging
economies are not adequately represented in the arbitration area thus the
exigencies and concerns of developing nations are not put forward properly.
Thus, there is a need for developing nations to build capacity.
Recent example- British oil and gas explorer Cairn Energy had initiated
international arbitration seeking $5.6 billion in compensation from the Indian
govt. against a retrospective tax demand of Rs. 29,047 crore.
2016, Singapore Arbitration center had agreed to open its branch office at GIFT
This effort is in consonance of Making India a
Global Arbitration Hub.
made changes to its Bilateral Investment Treaty regime.
India has made changes to the Arbitration and Conciliation