Judicial Delays: ‘Tareek Pe Tareek’ And The Tryst With $5 Trillion GDP
| Shankkar Aiyar |BloombergQuintOpinion |March 03 2021, 8:36 AM
The law always abhors delay…so says the maxim Lex dilationes semper exhorret. That may be true elsewhere but not in India.
For the tryst with justice, the argumentative Indian, cohabiting in a landscape of litigious governments, must traverse through persistent pendency immortalised in by the line, Tareek Pe Tareek…, in a Bollywood blockbuster.
The state of affairs and its consequence was encapsulated in a sentence earlier this month by former Chief Justice of India, Ranjan Gogoi. He said, “You want a 5 trillion dollar economy but you have a ramshackled judiciary.”
The question embedded in the answer demands attention and action for an economy aspiring for $5 trillion GDP.
A Mounting Crisis
How bad is the pendency? Data from the Lok Sabha presents a shocking history.
In 2002, over 2.58 crore cases were pending in courts. In 2012 the number touched 3.22 crore cases. In January 2021, over 4.28 crore cases are pending across India’s courts. The math on the number of Indians locked in litigation is mind-boggling.
Drill down the data to get a sense of the magnitude of the problem and pendency. There are 3.75 crore cases pending in the lower courts of which 96 lakh for over 5 years and, believe it or not, over six lakh cases for over 20 years. Over 56 lakh cases are pending in the high courts, of which 12 lakh since 10 years. Add over 63,000 cases in the Supreme Court.
To get a sense of the state of delay and decay consider this one factoid. Over two-thirds of the country’s 4.78 lakh prisoners are under trial, yet to be convicted. In 2019, Gogoi, then the CJI, had observed there were over a thousand 50-year-old cases, two lakh 25-year-old cases. He revealed that even summons had been issued in 20 lakh of the 90 lakh civil cases and one crore of the 2.10 crore criminal cases.
Ease of Doing Business
The consequence is vividly visible. In 2010, India was placed 133rd in the World Bank Ease of Doing Business rankings. On enforcement of contracts, it was placed at 182 of 183 countries, in the company of Angola and Timor-Leste.
In 2010 it took 1,420 days to enforce a contract. In 2020 India’s rankings are vastly improved at 63 of 190 countries but it takes 1,445 days to resolve a dispute and enforce a contract — as against 120 days in Singapore, 589 days in OECD countries, and 1,101 days elsewhere in South Asia.
The Insolvency and Bankruptcy Code was defined by the government as “a necessity after all options failed”. Section 12 of the IBC states that the “insolvency resolution process shall be completed within a period of one hundred and eighty days.” On Feb. 8, the government informed the Parliament that as of Dec. 31, 2020, there were 21,259 cases pending before the NCLT and its benches. For sure the pandemic made matters worse but even before Covid-19 struck the world, over 18,900 cases were pending disposal.
The consequence is manifest in headlines — the delay in JSW’s acquisition of Bhushan Power and Steel for three years, the chaos around the IHH takeover of Fortis Healthcare, and the unending wait of creditors for their dues from IL&FS. Indeed, the average pendency of economic cases in high courts is estimated at 4.3 years in high courts and that of tax cases is six years.
In the run-up to the Budget, the government revealed that it collected Rs 83,000 crore and settled over 90,000 cases via the Vivad se Vishwas settlement scheme. The dismal side of the story is that over Rs 9 lakh crore is stuck in dispute. There are nearly 3.5 lakh appeals pending at the commissioner level, 88,000 cases in Income Tax Appeals Tribunals, and 31,800 cases in High Courts, and over 5,400 cases in the Supreme Court.
The Capacity Gap
India’s justice delivery system is haunted by scale and complexity. The fact that India needs more courts, and judges, has been known for decades. So how well is the judicial apparatus of a $2.8 trillion economy, with aspirations of leading the club of trillion-dollar economies aka #G2T, funded?
The Budget of 2011–12 allocated Rs 1,432 crore for Law and Justice when India had over 3.2 crore cases pending. In 2021 with over 4.2 crore cases pending the allocation is Rs 2,645.82 crore. Yes, it has nearly doubled but is yet barely 0.07% or a fraction of the total expenditure of Rs 34.83 lakh crore.
In February 2020, papers filed with the Supreme Court revealed that the expenditure of 31 states on the judiciary in 2018–19 was Rs 17,413.91 crore — 0.44% of their total expenditure.
Inadequacy of funding is worsened by inertia in staffing. Of the 1,080 sanctioned posts for judges in 25 High Courts across the country, 411 (that is nearly 40%) are vacant. It is worse in the subordinate judiciary where of the 24,248 sanctioned posts 4,942 are vacant.
No Dearth of Counsel
Virtually every aspect of what ails the justice delivery system has been studied and the committees have offered sage counsel on every issue. India’s rendezvous with judicial reforms began in 1924 with the Civil Justice Committee also known as Rankin Committee Report. Its remit: efficient functioning of the judicial system.
Since then a parade of committees and commissions have submitted advice on what needs to be done — these include the SR Das Arrears Committee of 1949, a series of Law Commission Reports, the NCRWC, and the Malimath Committee Report.
The quest to find the fault-lines in the redressal mechanism has been unceasing. A Supreme Court directive led to the appointment of a task force for Judicial Impact Assessment which submitted two reports. The Department of Justice website lists over 30 reports which have been submitted and ten different studies commissioned to look into the various aspects of the judicial process and reforms.
The fact that justice continues to be delayed and denied is emblematic of the choices made by governments and the state of implementation.
Litigious Governments And Governance
The trouble with the discourse on judicial reforms is that it tends to focus on the supply side issues –setting up new courts, staffing of courts, expanding alternative channels for dispute resolution, and lately induction of technology to reduce pressure on precious court hours.
Addressing the supply side issues is necessary but not sufficient. The criticality of timely delivery rests on also addressing the demand side issues. The delivery of justice does depend on how the caseload is processed. It is also about how processes of governance cause litigation.
India’s legal landscape is littered with laws; many of them so archaic that texts are unavailable for citizens to be informed of. As per India Code, there are 980 Central Acts — the oldest Bengal Indigo Contracts Act is dated 1936. The number of laws under state governments is at best a guesstimate. There is the volume of laws and then there is the complexity of administration — for instance, healthcare is governed by over 70 laws administered by 20 ministries.
The Indian state is a litigious entity. In February 2021, the Law Minister, citing Legal Information Management & Briefing System data, informed Parliament that “4.71 lakh court cases have been entered by the various Ministries/Departments of the Government of India”. The use of the phrase ‘entered’ suggests the number could be higher.
Data on cases by state governments is unavailable and states have shunned the LIMBS mechanism. A 2018 report posted by the department of justice states: “Approximately 46% of the total pending cases in courts pertain to the government”.
Every factor of productivity land, labour, and capital is shackled by archaic laws — the two-member committee on obsolete laws presented ten reports. Governance is often divorced from transparency and fairness and officials adhere to the safe ‘why take a chance’ maxim.
Land titles are sketchy and open to question in courts with no time standards — anybody can challenge any sale anytime. India’s income tax laws uniquely allow the department to appeal against an order of its own officers if the verdict favours the assessee. Labour laws have been codified but regulatory cholesterol persists — MSMEs face over 60,000 possible compliances and over 3,000 filings.
And by no means are these the only fault-lines. The geography of governance is replete with maladies causing litigation.
India’s public policy response has a default mode — focus on consequences. Yes, it is important to address the persistent pendency of cases — particularly the infirmity of implementation haunting declared intent. Equally, it is important to address the legislative and regulatory fault-lines which haunt lives and livelihoods IF justice is to be liberated from delay and detention.
The Constitution of India guarantees citizens Justice, Liberty, and Equality. It is the guarantee of ‘Justice’ that scaffolds the social contract.
Shankkar Aiyar, political-economy analyst, is the author of ‘The Gated Republic –India’s Public Policy Failures and Private Solutions’, ‘Aadhaar: A Biometric History of India’s 12-Digit Revolution’; and ‘Accidental India’. You can email him at email@example.com and follow him on Twitter. This column was first published here. Previous columns can be found at Thought Capital.