Government’s new litigation policy to target costly PSU disputes

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Subscribe to enjoy similar stories. New Delhi: Caught in a cycle of costly legal battles, the Indian government plans to roll out a new national litigation policy aimed at curbing legal expenses, particularly in cases where the government is effectively suing itself, according to officials familiar with the matter. The policy, still under development, will focus on disputes between government entities, such as public sector undertakings (PSUs), which have long been a financial burden on the administration.

The efforts to review litigation between two PSUs or between a PSU and the central government have been age-old. For instance, in 1991, the Supreme Court had noted, "Public sector undertakings of central government and the union of India should not fight their litigations in court" in a dispute between state-run oil producer ONGC and the Collector of Central Excise (CCE). This renewed push follows the law ministry's recognition of escalating legal costs involving government bodies.

Law and Justice Minister Arjun Ram Meghwal signed off on the policy in June, shortly after taking office, as part of broader efforts to rein in these expenditures. "For instance, consider two PSUs with similar mandates locked in a tender dispute. Both are ultimately owned by the government of India.

The national litigation policy will address such cases," said one of the officials. The rollout comes as India's judiciary grapples with an overwhelming backlog of cases. As of 2 October, over 50 million cases remain unresolved, including nearly 5.6 million civil suits and 27.2 million criminal cases in district courts alone, according to data from the National Judicial Data Grid.