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M J Antony: Litigating for a lark

Frivolous suits by the government have cramped the judicial system

M J Antony 

M J Antony

It is well known that the government is the largest litigant in courts. It has some 10 million pending. The attorney general had remarked two years ago that the government is a "compulsive litigant". Courts brim over with frivolous lawsuits. This is because the expense is on the government. Officials get paid trips to various courts in the country and lawyers compete for fat, dumb briefs. Curiously, this is a worldwide phenomenon.

It was this tendency that the Supreme Court condemned last week in a case of compassionate appointment. The judges remarked: "For decades, courts across the country witness appeals on frivolous grounds, resulting in wastage of public money and consuming valuable time of the courts. This happens because officers involved in these frivolous appeals are not personally responsible and don't pay from their pockets." The court was hearing an appeal moved by the Chennai Port Trust against an order of the Madras High Court, directing it to offer appointment to a poor widow on compassionate grounds. The bench directed the port trust to appoint her within one month and pay her Rs 1 lakh as compensation for the delay in giving the job.

The observations of the judges are even truer in revenue matters. A few weeks earlier, the court dismissed a batch of appeals of the income tax authorities with strong remarks for pursuing futile The question was rather simple: Whether the benefit of an entitlement to make duty-free imports of raw materials is income in the year in which the exports are made or in the year in which the duty-free imports are made? The court answered the question in the next paragraph itself: the income does not accrue in the year of export but in the year in which the imports are made. But it took 10 years for the appeals to reach the Supreme Court (Commissioner of Income Tax vs Excel Industries).

The view of the companies had already been accepted by the authorities in 1992, but the issue was exhumed to invent The authorities were not successful in their gamble in the Bombay High Court; so, they moved the Supreme Court. The court made some stinging remarks against them. The firms had already paid the tax due and, therefore, the government was not deprived of any tax. Moreover, the tax rate had not changed over the years in this case. The court remarked that the dispute raised was "academic or at best may have a minor tax effect. There was, therefore, no need for the revenue [department] to continue with this litigation… it ought to let the matter rest rather than spend the taxpayers' money in pursuing for its own sake".

Some appeals lead to a suspicion of an official-lawyer nexus to mulch the government in legal expenses. Despite the court condemning the litigation between the government and its departments and public sector undertakings suing each other, this practice has not been stopped. At one time, the court asked the government to set up an internal mechanism to avoid such fratricidal litigation. However, later, the court found that it was a remedy worse than the disease in practice and, therefore, scrapped the idea. For example, in many cases, the industry department took one view about a dispute while the revenue department took an opposite stand. With the acknowledged failure of the mechanism, the Left and Right arms of the government and its agencies have returned to the courts to cram the creaking system.

The proliferation of trumped-up suits have tickled the funny bones of judges in some cases. Sometime ago, HAL and Mysore Sales International reached the apex court on a dispute over Rs 9,000. The judges analysed the psychology of executives and gave the following insight a la Parkinson's: All claims against the government/statutory authorities should be viewed as illegal and be resisted and fought up to the highest court of the land. If taking a decision on an issue could be avoided, it is prudent not to decide the issue and let the aggrieved party approach the court and secure a decision.

The law commission has identified various reasons the government became an irresponsible litigant. The attorney general, who should know, discussed them and has said that in most cases, the government litigated because of the utter indifference on the part of civil servants. Sometimes, the government pursued litigation as a matter of prestige, with an attitude of vengeance. In several cases, the officials had an attitude of arrogance and a superiority complex. It is easy to file a case in court and leave it for the courts to decide. One obvious reason to do so is to avoid the necessity of taking decisions. Though a special team with paraphernalia was set up to weed out wasteful litigation, little has been achieved as indicated by the recent outburst of the judges.

First Published: Tue, November 05 2013. 21:48 IST