Lok Sabha Question No. 42 (STARRED), answered on 2022-02-04
Subject: National Litigation Policy
Ministry: LAW AND JUSTICE
Asked by: Sunil Kumar Singh, P.P. Chaudhary

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

## LOK SABHA

## STARRED QUESTION NO.*42

## TO BE ANSWERED ONFRIDAY, THE 04 th  February, 2022

## National Litigation Policy

## *42. SHRI SUNIL KUMAR SINGH: SHRI P.P. CHAUDHARY:

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

- (a) whether a new National Litigation Policy is being formulated by the Government;
- (b) if so, a detailed outline of considerations and provisions of the proposed policy;
- (c) whether a timeline has been set for rolling out of the new policy and if so, the details thereof;
- (d) the manner in which the Government proposes to implement the said policy; and
- (e)  the steps taken by the Government to reduce litigation during the last two years?

## ANSWER

## MINISTER OF LAW AND JUSTICE

## (SHRI KIREN RIJIJU)

- (a) to (e): A statement is laid on the Table of the House.

## STATEMENT REFERRED TO IN RESPECT OF PARTS (a) to (e) OF THE LOK SABHA STARRED QUESTION NO. *42 DATED 04 TH FEBRUARY, 2022

(a) to (d): Yes, Sir. With the objective to lay down guidelines for preventing, controlling and  reducing  litigation,  keeping  in  view  the  policy  &  plans  of  the  Government,  in  a cohesive and organized manner, formulation of Litigation Policy is under consideration.

(e): 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.  Ministry of Railways have issued instructions for effective monitoring of Court cases at all levels.  Zonal Railways and Production Units have been asked to take effective steps to reduce the number of cases in which the Government is a party and reduce the burden of courts, expedite finalization of all the cases in all courts at the earliest and to cut down the expenditure in contesting court cases.  For achieving this, emphasis has been laid on effective monitoring of cases by having regular meetings with empanelled  advocates,  for  briefing  and  necessary  directions  to  be  given  at  the  highest level,  besides  ensuring  timely  submission  of  replies,  Counter  replies  and  necessary documents to the advocates.

The  Central  Board  of  Direct  Taxes  (CBDT)  and  the  Central  Board  of  Indirect Taxes  and  Customs  (CBIC)  under  the  Department  of  Revenue,  have  issued  a  slew  of instructions  and  brought  in  several  measures,  for  reducing  litigations  and  the  resultant burden on Courts.  While the CBDT has issued circulars directing the field Officers that pending  appeals  before  Income  Tax  Appellate  Tribunals/High  Courts/Supreme  Court 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 field 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  Courts/Customs  Excise  and  Service  Tax  Appellate  Tribunal, 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  of  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                   | Monetary limit   |
|--------------------------------------|------------------|
| Before Income Tax Appellate Tribunal | Rs. 50 lakhs     |
| Before High Court                    | Rs.1 Crore       |
| Before Supreme Court                 | Rs.2 Crore       |

## CBIC:

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

For  the  purpose  of  monitoring  of  litigation  of  Union  of  India,  a  web-platform namely, Legal Information Management & Briefing System (LIMBS) was created in the year  2016.    LIMBS  Ver.2  has  been  launched  in  the  year  2019  to  overcome  the  then existing  technological  gaps  in  the  application.  The  vision  of  LIMBS  Ver.2  is ' to  be  a single  platform  for  Litigation  of  GoI  along  with  establishment  of  a  synchronized regime for monitoring of Litigation ' across all Ministries / Departments of Government of India. Presently, there are 7.95 lacs cases (including archive cases) including 5.88 lacs live/pending cases entered by 57 Ministries/Departments. It has a single database of 16055 officials/users  and  more  than 20000 advocates.  All  the  High  Courts,  except High Court of Delhi, have been integrated with LIMBS Ver.2 to facilitate monitoring of cases pending in these High Courts.  In addition, the linkage of database with the Hon'ble Supreme Court is envisaged as part of LIMBS implementation.Law Secretary, vide DO letter  dated  20.11.2020,  followed  by  reminders  dated  16.03.2021  and  09.07.2021  has taken  up  the  case  for  grant  permission  for  data  of  various  Tribunals  and  with  LIMBS Ver.2 through API with the Chairperson/President of the Tribunals and Secretaries of the respective  Ministries/Departments.  At  present,  Central  Administrative  Tribunal,  The Telecom Dispute Settlement & Appellate Tribunal and Appellate Tribunal for Electricity have provided API linkage to their database with LIMBS Ver.2.  Further, the fast track integration  of  database  of  cases  of  Railway  Claims  Tribunal,  Income  Tax  Appellate Tribunal,  National  Green  Tribunal,  National  Company  Law  Tribunal  and  National Company Law Appellate Tribunal with LIMBS is envisioned.

The  alternative  mechanism  for  the  resolution  of  Inter-Ministerial/Departmental disputes also provide for an institutionalized mechanism for resolution of such disputes, namely,  Administrative  Mechanism  for  Resolution  of  Disputes  (AMRD).    This  was

framed by the Department of Legal Affairs and circulated vide O.M. dated 31.03.2020. This mechanism,  applicable  to  disputes  other than taxation disputes, will  reduce litigations in courts and resolve the cases outside the court system, where both parties are Govt. Department or where one party is Govt. Department and other is its instrumentalities, (CPSEs/Boards/ Authorities, etc.).

To  resolve  the  commercial  disputes  between  Central  Public  Sector  Enterprises inter-se and CentralPublic Sector Enterprises and Government Departments/ Organizations  in  place  of  the  earlier  'Permanent  Machinery  of  Arbitration',  a  new scheme, namely, 'Administrative Mechanism for Resolution of CPSE  Disputes (AMRCD)' evolved by Department of Public Enterprises has been brought into  effect w.e.f. 22.05.2018.

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.

Further for facilitating quick disposal of disputes outside the court systems by way of  alternate  dispute  redressal  mechanism  of  mediation,  the  Mediation  Bill,  2021  is pending in the Rajya-Sabha inter-alia providing for pre-litigation mediation by the parties.