Lok Sabha Question No. 2755 (UNSTARRED), answered on 2021-08-04
Subject: Growing Litigation in Courts
Ministry: LAW AND JUSTICE
Asked by: Khagen Murmu

## GOVERNMENT OF INDIA MINISTRY OF LAW AND JUSTICE DEPARTMENT OF LEGAL AFFAIRS

## LOK SABHA

## UNSTARRED QUESTION NO.2755

## Growing Litigation in Courts

2755. SHRI KHAGEN MURMU

Will the Minister of LAW AND JUSTICE be pleased to state:

- (a) whether  the  Government  has  taken  any  steps  to  reduce  the  evergrowing litigation burden in the Courts;
- (b) if so, the details thereof;
- (c) whether  in  spite  of  the  numerous  measures  implemented  for  the improvement  of  the  arbitration  environment  in  India,  there  are  still  certain challenges; and
- (d) if so, the details thereof and the measures taken by the Government to meet these challenges?

## ANSWER

## MINISTER OF LAW & JUSTICE (SHRI KIREN RIJIJO)

- (a) & (b): 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  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.  For this, emphasis has been laid on effective monitoring and regular meetings  with  empanelled  advocates  for  briefing  to  be  held  and  necessary directions  given  at  the  highest  level,  besides  ensuring  timely  submission  of replies, Counter replies and necessary documents

Similarly,  under  the  Department  of  Revenue,  the  Central  Board  of  Direct Taxes  (CBDT)  and  the  Central  Board  of  Indirect  Taxes  and  Customs  (CBIC)  have 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 the  field  Officers  that  pending  appeals  before  ITATs/HCs/SC with tax effect below the specified limits may be withdrawn/not pressed, and in the process facilitating a better and concerted focus on high demand litigations.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 to the filed officers 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 High Court/CESTAT, where the Supreme Court has decided on 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 the Zonal Chief Commissioner, an appeal can be filed for the third time.  Also, the field formation have  been  instructed  to  forward  only  those  SLP  proposals  where  in  the  issue involves  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, the details of which, are as follows:

CBDT

| For filing appeals before     | Monetary limit   |
|-------------------------------|------------------|
| Income Tax Appellate Tribunal | Rs. 50 lakhs     |
| High Court                    | Rs.1 Crore       |
| Supreme Court                 | Rs.2 Crore       |

| Monetary limits for filing appeals in cases relating to Central Excise and Service Tax before   | Monetary limits for filing appeals in cases relating to Central Excise and Service Tax before   | Monetary limits for filing appeals in cases relating to Central Excise and Service Tax before   | Monetary limits for filing appeals in cases relating to Customs before   | Monetary limits for filing appeals in cases relating to Customs before   | Monetary limits for filing appeals in cases relating to Customs before   |
|-------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------|--------------------------------------------------------------------------|--------------------------------------------------------------------------|
| CESTAT                                                                                          | High Court                                                                                      | Supreme Court                                                                                   | CESTAT                                                                   | High Court                                                               | Supreme Court                                                            |
| Rs.50 lakhs                                                                                     | Rs.1 Crore                                                                                      | Rs. 2 Crore                                                                                     | Rs. 5 lakhs                                                              | Rs.10 lakhs                                                              | Rs.25 lakhs                                                              |

(c) & (d): In  its  endeavor  to  make  India  a  hub  of  International  Commercial Arbitration and making arbitration process user friendly, cost effective, expeditious, the Central Government had amended the Arbitration and Conciliation Act, 1996 in the year 2015 & 2019.  Through these amendments, the Government  has  provided  timelines  for  completion  of  pleadings,  arbitration proceedings, provision for fast track arbitration, and incentives for arbitrators for completing the arbitral proceedings within a period of six months.  The Act also provides for reduction of fees of arbitrator in case of delay in arbitral proceedings attributable to Arbitral Tribunal. Provisions relating to  automatic  stay  of enforcement of Arbitral awards have also been done away with.

To  provide  further  options  to  ease  out  the  need  for  resort  to  litigation, other Alternate Dispute Resolution (ADR) mechanism of mediation is also being encouraged.    In  this  regard,  the  Commercial  Courts  Act,  2015  was  amended  in 2018  to inter-alia provide  for  Pre-Institution  Mediation  and  Settlement  (PIMS) mechanism.    Under  this  mechanism  a  party  which  does  not  contemplate  any urgent interim relief in a subject-matter of commercial dispute of specified value of Rs.3 lakh and above has to first exhaust the remedy of PIMS to be conducted by  the  authorities  constituted  under  the  Legal  Services  Authorities  Act,  1987, before approaching the Court.