We need reduced government litigation to unclog the judicial system

Matthieu Chemin’s research indicates that judicial reforms enhance firm productivity by 22%. However, while judicial reforms are critical, it is equally important for the government, as the largest litigator, to reduce unnecessary litigation and unclog the system.

Justice V.R. Krishna Iyer’s remarks in Dilbagh Rai Jarry vs Union of India (1973) highlighted the government’s problematic litigation practices: “In this country, the State is the largest litigant to-day and the huge expenditure involved makes a big draft on the public exchequer." Things are same even in 2024.

The Tenth Law Commission’s 100th report observed that “a pretty bulk of litigation in the courts, including, in particular, writ petitions in the Supreme Court and the high courts, consists of cases to which the government is a party." 

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More recently, the Delhi high court emphasized the need to curb unnecessary and frivolous litigations involving government departments. Supreme Court’s Justice B.R. Gavai also noted that “70% of government litigation is frivolous." 

Vidhi Centre for Legal Policy in 2019 cited a ministry of law document that 46% of all litigation in India involves the government. This excessive litigation clogs the judiciary, delays dispute resolution and diverts resources to unnecessary litigation.

However, devising an effective intervention to address excessive government litigation in India is challenging without a clear understanding of the problem’s magnitude. The lack of comprehensive and transparent data on government litigation impedes efforts to identify and address the root causes of the high volume of cases. 

Article 12 of the Constitution broadly defines the “State" encompassing the Government and Parliament of India, state governments and legislatures, and all local or other authorities within Indian territory or control. 

This expansive definition, further interpreted by the judiciary to include entities exercising governmental or quasi-governmental functions, complicates the assessment of the true extent of government litigation. 

Entities such as public-sector undertakings (PSUs), nationalized banks, and cooperative societies fall under this definition, making the scope of government litigation vast and challenging to manage.

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The Union government established the Legal Information Management and Briefing System (LIMBS) in 2016, with an updated version launched in 2019 to tackle this issue. LIMBS aims to serve as a unified platform for monitoring legal cases involving the Government of India across all ministries and departments. 

Data from LIMBS reveals that the ministry of finance leads with 188,994 cases, including over 32,000 pending cases over five years and 2,324 cases over 10 years. The railways follow with 114,387 cases, the defence ministry with 95,189, and the labour and employment ministry with 80,027 cases. 

There is an urgent need for a national-level portal to track litigation across all entities defined as “State". Without such comprehensive data, any intervention to reduce government litigation will remain inadequate.

The Central Board of Direct Taxes (CBDT) and the Central Board of Indirect Taxes and Customs (CBIC) have issued directives to withdraw low-impact appeals and focus on significant cases. Both boards have raised the threshold monetary limits for appeals. 

In Union Budget 2024-25, the thresholds related to direct taxes, excise and service tax have been increased to ₹60 lakhs, ₹2 crores, and ₹5 crores, respectively, for tax tribunals, high courts, and the Supreme Court.

Yet, the persistently high volume of government litigation points to the entrenched bureaucratic hesitation to take decisive action. While the Union government has reduced its litigation, the same cannot be said about the states. There are instances when governments have appealed in cases where the amount involved is less than ₹1000.

There are several reasons why governments tend to litigate. Bureaucratic risk aversion is one. In his book, Bureaucratic Structure and Personality, Robert Merton elucidates the intrinsic risk aversion within bureaucratic systems, attributing it to their fundamental emphasis on predictability and strict adherence to established protocols. 

He posits that bureaucracies inherently aim to minimize uncertainties and maintain operational stability, often at the expense of innovation and adaptability. 

This leads to what Merton terms as “trained incapacity," where members of the bureaucracy become so accustomed to following rules that their ability to respond effectively to new challenges is diminished. Merton articulates, “adherence to the rules, originally conceived as a means, becomes transformed into an end in itself."

Also read: State-level litigation policies present a dismal picture

To reduce this risk aversion, the Union and state governments should introduce enforceable litigation policies, which promote decision over litigation. The 11th Law Commission’s 126th report (1988) cited the lack of a coherent policy. 

Despite the recommendation for a National Litigation Policy, it took 22 years to introduce NLP 2010, which aimed to make the government an “efficient" and “responsible" litigant. However, without concrete thresholds and effective enforcement, NLP 2010 was never implemented. 

The 13th Finance Commission proposed grants for states to improve justice delivery, conditional on adopting state litigation policies based on national policy. While states introduced these policies to avail grants, implementation was weak.

The Union government has also yet to come up with NLP. The Department of Legal Affairs suggested NLP 2015, but no substantial progress followed. 

The law minister’s recent announcement of NLP 2024 in June 2024 is commendable, but its success hinges on overcoming past shortcomings and ensuring rigorous implementation. 

NLP 2024 must include robust implementation mechanisms, measurable targets, penalties for non-compliance, legal support for decision-makers, and strict limits on government appeals.

These are the author’s personal views.