The National Litigation Policy of India: Striving for an Efficient and Responsible State Litigant

The National Litigation Policy of India: Striving for an Efficient and Responsible State Litigant

Introduction

The Indian judicial system is characterized by a significant volume of litigation, a substantial portion of which involves the Government of India and its various agencies as litigants. Recognizing this, and the consequent burden on the judiciary leading to pendency and delays, the Government of India formulated the National Litigation Policy (NLP). This policy emerged from a consensus at the National Consultation for strengthening the Judiciary toward Reducing Pendency and Delays held in October 2009 (Commissioner Of Income-Tax And Another v. Ranka And Ranka, 2011; Commissioner Of Income-Tax And Another v. Shyam Biri Works, 2015). The NLP's overarching aim is to transform the Government into an "Efficient and Responsible litigant" (Director Of Income Tax, Circle 26(1), New Delhi v. S.R.M.B. Dairy Farming Private Limited, 2017), thereby reducing frivolous litigation, expediting dispute resolution, and decreasing the average pendency time of cases, with an ambitious target of reducing it from 15 years to 3 years (Commissioner Of Income-Tax And Another v. Ranka And Ranka, 2011). This article analyzes the National Litigation Policy, its objectives, judicial perspectives on government litigation, and its envisioned impact on the Indian legal landscape, drawing upon relevant case law and policy documents.

The Genesis and Vision of the National Litigation Policy

The Imperative for a Policy

The Government and its agencies are acknowledged as the "pre-dominant litigants in courts and Tribunals in the country" (National Litigation Policy, as cited in Commissioner Of Income-Tax And Another v. Ranka And Ranka, 2011; Director Of Income Tax, Circle 26(1), New Delhi v. S.R.M.B. Dairy Farming Private Limited, 2017). The Supreme Court has observed that the Income Tax Department, for instance, is one of the major litigants (Director Of Income Tax, Circle 26(1), New Delhi v. S.R.M.B. Dairy Farming Private Limited, 2017). This high volume of government litigation contributes significantly to docket explosion. The Law Commission of India, in its 126th Report on 'Government and Public Sector Undertaking Litigation Policy and Strategies', underscored the urgent need for a cohesive litigation policy to alleviate the judicial burden and minimize litigation costs. This sentiment was echoed by the 13th Finance Commission (SHAGUFTA YASMIN v. PRASAR BHARTI, 2023). The judiciary has also persistently called for a comprehensive National Litigation Policy to ensure a cohesive approach by governmental bodies in initiating and prosecuting legal matters (SHAGUFTA YASMIN v. PRASAR BHARTI, 2023).

Core Objectives: The 'Efficient and Responsible Litigant'

The National Litigation Policy's vision is to transform the Government into an "Efficient and Responsible litigant." This transformation is based on the recognition that "it is the responsibility of the Government to protect the rights of citizens, to respect fundamental rights and those in charge of the conduct of Government litigation should never forget this basic principle" (National Litigation Policy, as cited in Director Of Income Tax, Circle 26(1), New Delhi v. S.R.M.B. Dairy Farming Private Limited, 2017).

An "Efficient litigant" is defined as one who:

A "Responsible litigant" means:

A key tenet of the policy is that "The Government must cease to be a compulsive litigant. The philosophy that matters should be left to the courts for ultimate decision has to be discarded" (Director Of Income Tax, Circle 26(1), New Delhi v. S.R.M.B. Dairy Farming Private Limited, 2017).

Judicial Scrutiny and Exhortations on Government Litigation

Judicial Concerns over Frivolous Government Litigation

The judiciary has frequently expressed concern over the propensity of government departments and public sector undertakings (PSUs) to engage in unnecessary litigation. The Supreme Court in Punjab State Power Corporation Limited, Patiala And Others v. Atma Singh Grewal (2013) noted that courts are burdened with unnecessary litigation primarily because government entities decide to file appeals even with no merit. The Court lamented this tendency, referencing its earlier observations in Gurgaon Gramin Bank v. Khazani (2012) and recalling that the Law Commission of India in its 54th Report (1973) had already addressed this issue. The Court in Dilbagh Rai Jarry v. Union of India (1974) emphasized that "the State is no ordinary party trying to win a case against one of its own citizens by hook or by crook" (as cited in Punjab State Power Corporation Limited, Patiala And Others v. Atma Singh Grewal, 2013). This aligns with the NLP's vision of a government that does not pursue litigation at any cost.

The Policy's Evolution and Implementation Challenges

The National Litigation Policy, 2010, has been subject to review, with a formulation of a National Litigation Policy, 2015, being under consideration. The Supreme Court in Union of India v. Pirthwi Singh (2018) observed the uncertainty regarding its finalization (M/S CEMENT CORPORATION OF INDIA LTD v. MOHAN SINGH, 2021; GEETA DEVI v. UNION OF INDIA, 2021). An "Action Plan to Reduce Government Litigation" was also formulated in June 2017 (M/S CEMENT CORPORATION OF INDIA LTD v. MOHAN SINGH, 2021). Despite these efforts, the consistent and effective implementation of such a policy across all government departments remains a challenge. The courts have continued to urge Governments and statutory authorities to act decisively in eradicating vexatious litigation (SHAGUFTA YASMIN v. PRASAR BHARTI, 2023).

Manifestations of the Policy's Spirit in Practice

Monetary Limits for Departmental Appeals

One tangible outcome reflecting the spirit of the NLP is the issuance of circulars by various government departments setting monetary limits for filing appeals. For instance, the Income Tax Department issued Instruction No. 3 of 2011, providing that appeals should not be filed before High Courts where the tax impact was less than a specified threshold (Director Of Income Tax, Circle 26(1), New Delhi v. S.R.M.B. Dairy Farming Private Limited, 2017). Similarly, the Central Board of Excise and Customs (CBEC) issued instructions regarding monetary limits for departmental appeals before CESTAT and High Courts (Commissioner Of C. Ex. & S.T, Bangalore v. Mico Ltd., 2011). These measures are aimed at filtering out low-stake, frivolous appeals, thereby conserving judicial resources and allowing the government to focus on substantial matters of law, aligning with the NLP's goal of ensuring "good cases are won and bad cases are not needlessly persevered with."

Conduct of Government as a Litigant: Efficiency and Responsibility

The principles of an "efficient and responsible litigant" have implications for various aspects of government litigation:

  • Diligence and Procedural Propriety: The expectation of efficiency implies that government departments must act with due diligence. In Union Of India v. Ram Charan (1963), the Supreme Court emphasized that mere ignorance of a party's death without evidence of lack of negligence does not constitute "sufficient cause" to set aside abatement. An efficient government litigant, under the NLP, would be expected to exercise diligence to avoid such procedural lapses. Similarly, delays in asserting rights, potentially leading to issues of laches as discussed in Union Of India And Others v. N. Murugesan Etc. (2021), would be contrary to the principle of conducting litigation in a "time-bound manner."
  • Condonation of Delay: While the NLP stresses efficiency, courts have recognized the operational realities of governmental machinery. In State Of Haryana v. Chandra Mani And Others (1996), the Supreme Court advocated for a liberal interpretation of "sufficient cause" for condoning delays by governmental entities, provided bona fide reasons are shown. This balances the need for efficiency with fairness, expecting the government to be responsible in explaining delays and not use its position to cause undue hardship.
  • Avoiding Frivolous Pleas and Upholding Citizen Rights: The NLP's mandate that the government should not take "false pleas" and should "protect the rights of citizens" is crucial. In cases like State Of Punjab And Others v. Jagjit Singh And Others (2016), concerning equal pay for equal work, a responsible government litigant would be expected to assess claims fairly and not litigate merely to deny legitimate dues, especially when fundamental principles of equality are involved. The government's role is not just to win cases but to ensure justice.
  • Facilitating Dispute Resolution: The direction by the Karnataka High Court in M/S. HINDUSTAN STEEL WORKS CONSTRUCTION LIMITED v. THE UNION OF INDIA (2022) for the respondent (Union of India) to constitute an arbitral tribunal aligns with the broader goal of reducing court dockets. An efficient government would facilitate such alternative dispute resolution mechanisms promptly.

The Road Ahead: Strengthening the Framework

Need for Effective Grievance Redressal and Alternative Dispute Resolution (ADR)

A critical aspect of reducing government litigation is the establishment of robust internal grievance redressal mechanisms within government departments. As noted by the Delhi High Court, the National Litigation Policy should ideally imbibe compulsory mediation processes for the Government (M/S CEMENT CORPORATION OF INDIA LTD v. MOHAN SINGH, 2021). Effective ADR can prevent many disputes from reaching the courts, fulfilling the NLP's aim that "litigation will not be resorted to for the sake of litigating."

Ensuring Accountability and Consistent Application

For the National Litigation Policy to be truly effective, its principles must be embedded in the decision-making processes of all government departments. This requires clear accountability mechanisms for decisions to litigate, especially in cases involving low stakes or settled points of law. Empowered Committees, as envisioned in the draft stages of the policy, could play a role in curtailing unnecessary litigation (SHAGUFTA YASMIN v. PRASAR BHARTI, 2023). Consistent application across states, with State Governments formulating policies that synchronize with the national directive, is also essential (SHAGUFTA YASMIN v. PRASAR BHARTI, 2023; Commissioner Of Income-Tax And Another v. Ranka And Ranka, 2011).

The judiciary's role in overseeing the government's adherence to its own policy is also significant. However, courts must operate within their constitutional bounds, primarily interpreting law rather than directing legislative or executive policy formulation, as underscored in State Of Uttar Pradesh And Others v. Mahindra And Mahindra Limited (2011) concerning judicial intervention in tax exemption notifications. The NLP itself is an executive policy, and its enforcement relies heavily on the executive's commitment.

Conclusion

The National Litigation Policy represents a significant and commendable initiative by the Government of India to address the challenges posed by its extensive involvement in litigation. By aspiring to transform itself into an "Efficient and Responsible litigant," the government aims to reduce the burden on the judiciary, protect citizens' rights, and ensure that public resources are not wasted on frivolous or avoidable legal battles. While the policy's vision is clear, its success hinges on sustained commitment, effective implementation mechanisms, robust internal grievance redressal, a proactive embrace of ADR, and a cultural shift within government departments to view litigation as a last resort. The judiciary's continued vigilance and constructive critique will also be vital in encouraging the State to live up to the ideals enshrined in the National Litigation Policy, thereby fostering a more just and efficient legal system in India.