Who decides when litigation is frivolous? PDF Print E-mail
Saturday, 16 December 2017 13:35
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Curbing the tendency of various govt departments to endlessly litigate a case is easier said than done


Given around 45% of the 3.1 crore cases clogging the country’s courts are from government departments—usually appealing the judgment of a lower court—various governments have talked of the need to curb frivolous litigation, and a National Litigation Policy was put in place in 2012 to fix this. According to a report in The Economic Times, modifications will be made to the policy and officers will be penalised for needlessly litigating a case—so, if the government loses a case in court, the default response should not be to simply appeal this in a higher court. The problem, though, is that it is not clear who will decide what is being excessively litigious. And if a bureaucrat decides not to appeal a particular court decision, what is to prevent the CBI from, several decades down the line, knocking on that bureaucrat’s door, accusing him/her of favouring someone by not appealing the decision—recall the ongoing HC Gupta case. So, if this policy is to stand even a small chance of working, the Prevention of Corruption Act has to be changed immediately—the government has been trying to change it for several years, but has not managed to do this so far.

Also, keep in mind, decisions on not appealing cases aren’t easy to take. In the Vodafone case, the government won in the High Court but lost in the Supreme Court—given cases can swing 180-degrees, had this been the other way around, should the government have appealed the case? And given that the government lost in the Supreme Court, should it drop the case now? Or take the Docomo case, where both the government and RBI believed Tatas could not be allowed to honour their agreement with the Japanese telco. When Docomo went in for overseas arbitration and won, RBI challenged the award in a local court. Under the new plan on frivolous litigation, should RBI be allowed to challenge an arbitration award? Expecting individual officers to decide on whether litigation is frivolous or not is unfair; if this is to work, various government departments will have to come up with rules, and instances, of what litigation is to be allowed and what is not.

And, as a general rule, if the original demand/stance of the government is an incorrect one, this is what needs to be fixed. If an income tax official finds it all right to issue a tax demand, on say a Vodafone or a Cairn, then it is too much to expect other officials to not appeal the case when they lose; in the Docomo case, once the government/RBI had taken a decision that the agreement was illegal, they simply had to keep challenging it. How important it is to fix things at the source can be seen from the fact that while tax collections rose 1.83 times, from `7.9 lakh crore in FY11 to `14.5 lakh crore in FY16, disputed tax claims rose 3.6 times, from `1.9 lakh crore to Rs 6.8 lakh crore. As any quality-control manual will tell you, you have to fix a problem at the manufacturing stage; expecting the problem to be fixed by strict testing at the end of the assembly line is not a substitute



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