MC Explains: The What, Why, When and How of National Litigation Policy

Why do we need a litigation policy?

The National Litigation Policy was conceptualised in 2010 with the primary goal to bring down the overwhelming number of cases involving either the Central government, State governments, or Public Sector Undertakings (PSUs). The proposal received positive feedback in the legal circles but could not be implemented. However, the Ministry of Law and Justice again envisaged the ‘National Litigation Policy, 2015’.

In its efforts to implement the National Litigation Policy and streamline efforts to reduce government litigation, the Department of Justice in 2017 came up with a draft called 'Action Plan to Reduce Government Litigation'. This draft while highlighting the issue of pendency stated that all states have formulated State Litigation Policies and a National Litigation Policy is expected shortly.

Who delayed the implementation of the National Litigation Policy?

However, in a strange turn of events in December 2022 the then Union Minister of Law and Justice Kiren Rijiju in a reply to a question put forward by Member of Parliament S Niranjan Reddy in Rajya Sabha stated that on the recommendation of the Committee of Secretaries (CoS), the government did not go ahead with the implementation of National Litigation Policy. In his reply, Rijiju said that: “The National Litigation Policy was formulated by the Department of Legal Affairs in 2010. The draft Note for the Cabinet was circulated to all the Ministries/Departments for their suggestions and inputs.”

He added, "Subsequently, the National Litigation Policy of 2010 was reformulated and the revised policy, after multiple deliberations at various levels including inter-ministerial, committee of Secretaries, informal team of Ministers and Law Commission, was re-submitted for consideration by the Committee of Secretaries (CoS). During the meeting on 14.09.2017, the CoS had, inter-alia, recommended that the intent of reducing litigation can be optimally achieved through simplified guidelines rather than formulating a National Litigation Policy".

The reasons for the Committee of Secretaries (CoS) not favouring the National Litigation Policy are not known as an RTI filed by a news portal was not entertained. Under Section 8(1)(i) of the Right to Information Act, the government is allowed to deny requests for information contained in cabinet papers for matters still under consideration.

What happened to the litigation policy in Modi 2.0?

The newly appointed Law Minister in the Narendra Modi government, Arjun Ram Meghwal, approved the National Litigation Policy, giving it a greater probability and possibility to be implemented.

According to the ‘Action Plan to Reduce Government Litigation’ the top 10 departments with the highest pendency in 2017 were as follows:

1 Railway: 67,332

2 Finance: 15,646

3 Communications: 12,621

4 Home Affairs: 11,600

5 Defence 3433

6 Health and Family Welfare: 3275

7 Urban Development: 2306

8 Labour and Employment: 1774

9 Environment, Forest and Climate Change: 1714

10 Commerce and Industry 1430
The importance of the National Litigation Policy can be gauged from the fact that despite several measures taken by the government to reduce cases on behalf of the government, not much has been achieved. Former Union Minister of Law and Justice Kiren Rijiju highlighted the steps taken by the government in this respect.

He said that the ministries and departments like the Railways and Department of Revenue, involved in a high number of litigations have been taking several measures for reducing the number of Court cases. For instance, Railways have issued instructions for effective monitoring of Court cases at all levels. Zonal Railways and Production Units have been instructed to take effective steps to reduce the number of Government cases and lighten the burden of courts, expedite finalization of all the cases in all courts at the earliest to cut down the expenditure in contesting court cases. Emphasis has been laid on effective monitoring and regular meetings with empanelled advocates to hold briefing and take necessary directions at the highest level, besides ensuring timely submission of replies, counter replies and necessary documents.

How have some government departments cut back on litigation?

Under the Department of Revenue; the Central Board of Direct Taxes (CBDT) and the Central Board of Indirect Taxes and Customs (CBIC), issued a slew of instructions and brought in several measures by way of reducing litigations and the resultant burden on Courts. While the CBDT has issued circulars directing the field Officers that pending appeals before ITATs/HCs/SC with tax effect below the specified limits may be withdrawn/not pressed, and in the process facilitating a better and concerted focus on high-demand litigations. CBDT has also clarified that appeals should not be filed merely because the tax effect in a particular case exceeds the prescribed monetary limits and the filing of an appeal should be decided strictly on the merits of the case.

Similarly, the field formations under the CBIC have been instructed to withdraw appeals pending in the High Court/CESTAT, where the Supreme Court has decided on an identical matter. Besides, CBIC has also instructed its field formations not to contest further in appeal where the issue has been lost in two stages of appeals. It has been decided, however, that in cases where it is felt that the issue is fit for further appeal, then on proper justification and approval by the Zonal Chief Commissioner, an appeal can be filed for the third time. Also, the field formation has been instructed to forward only those Special Leave Petitions (SLP) proposals where the issue involves a substantial question of law or gross perversity or illegality in the appreciation of evidence. In this direction, both the CBDT and the CBIC have also enhanced the threshold monetary limit for filing appeals.

What’s the judiciary’s stand on National Litigation Policy?

All these measures have not provided the desired results as higher judiciary on different occasions have highlighted the importance of bringing in a National Litigation Policy.

In September 2023, the Delhi High Court Bench comprising Chief Justice Satish Chandra Sharma and Justice Sanjeev Narula asked the government to prepare a "time-bound action plan for implementation of the National Litigation Policy or the guidelines that are under contemplation".

Highlighting its need, the court said, "The government, as the largest litigant in the country, bears an intrinsic responsibility — a duty that goes beyond traditional roles. It is expected to be a beacon of propriety, setting precedents in litigation ethics, fairness, and judicious use of resources".

It is important to understand that while "simplified guidelines" can have some positive and incremental impact on reducing government litigation, an institutional measure in the form of a National Litigation Policy is the need of the hour for a complete overhauling of the clogged wheels of justice. And, with the new Union government keen on effectuating necessary judicial reforms, this can be the beginning.