“We have to control frivolous and vexatious litigation” – Law Secretary PK Malhotra

Law Secretary and Indian Legal Service veteran, PK Malhotra, has held a number of posts before being appointed Secretary to the legislative department in December 2012..Over a career spanning three decades, Malhotra has been chairman of Adjudicating Authority under the Prevention of Money Laundering Act, Judicial Member of Income-tax Appellate Tribunal, and member, COFEPOSA Preventive Detention Advisory Committee. He was also a legal adviser to a number of ministries. In this interview with Bar & Bench’s Pallavi Saluja, Malhotra talks about the Indian Legal services, reducing government litigation, the liberalization of the Indian legal market, and much more..Pallavi Saluja: When did you join the Indian Legal Services?.PK Malhotra: I initially wanted to practice law and I did go to the courts, but the environment prevalent in the early 70s did not make me feel comfortable. So I thought I could make better use of my services as a legal adviser to the government..I started from the bottom of the ladder; maybe the system has been kind to me. I am happy with what I have achieved and whatever I have contributed to the system..Pallavi Saluja: How can more lawyers be encouraged to join the ILS?.PK Malhotra: The ILS is an organised service since 1957. On a lighter note, people know who is the hero and heroine of a movie, but many people do not know the director or the cameraman. So, the officers who provide legal advice to the government ministries do not come to the forefront, because the decision is taken by the ministry to whom the advice is given..But ILS officers play an important role in the ultimate decisions taken by the government..People are more than keen to join ILS; whenever we advertise a vacancy, UPSC says that they receive 400-500 applications..We have not been able to expand this service because of some constraints but we are in the process of recruiting more officers..Pallavi Saluja: With reference to ease of doing business, what are the reforms the government is working on?.PK Malhotra: During the last one and a half years, and even before that, many reforms have already been brought in. The fruits we are enjoying today can be credited to the process of liberalisation, which started in 1991..We have brought amendments to the Arbitration Act, which had been pending for almost 12 years. We have also enacted the Commercial Courts Act, which prescribes dedicated courts for disposal of commercial disputes. These courts will be manned by those judges who have had exposure to commercial laws. Under the new Act, we have amended certain provisions under the CPC, laying down the time limits within which the court has to pass an order and decide an appeal..We are also coming out with a new insolvency law; the Bill has already been introduced in Parliament. I am very optimistic that this legislation will soon see the light of day..To increase ease of doing business, it has to be ensured that the mechanism of commercial disputes is easy, accessible and less time consuming. To that end, the policy of the government from the very beginning has been to promote ADR. I think to some extent, India has succeeded in implementing it, ever since we amended the CPC, making a provision under Section 89..After the present government took over, I think many procedures have been simplified. For example, we have said that to the extent possible, there should be single-page application forms. The attestation need not necessarily be done by a notary or a magistrate or a gazetted officer. The number of clearances has also been reduced. We are also planning to further the e-governance model..Our World Bank rating for enforcing contracts was not very good in the past. But after taking the steps mentioned, our ranking has gone up by 12 points..Pallavi Saluja: The country’s biggest litigant is the government. What is being done to deal with pendency of government-related cases?.PK Malhotra: You must realise that due to the sheer size of the government and the number of decisions taken, [the government] will always be the biggest litigant. Hundreds of decisions are taken every day, and some of them are challenged in the courts. What we have to control is the frivolous and vexatious litigation..Similarly, with regard to the disputes between two departments of the government, there should be an in-house mechanism for dispute settlement. This is part of the National Litigation Policy which we are coming out with. Under this, there should be a public grievances redressal system, and after that ADR methods should be tried. Only if these don’t work should the courts be approached, and if a judicial forum has given a decision based on facts and not on law, to the extent possible, further filing of appeal by the government should be avoided..Once this Policy is announced, the government servants will feel safer in taking decisions and there would be lesser litigation before the courts. We have been working on it and it has been discussed at the apex level. I am sure it will go to the Cabinet very soon, and once it is cleared by them, it will be implemented..Also, after the 13th Finance Commission approved around 5,000 crore for improvements in the judiciary’s infrastructure, we have been able to contain the pendency of cases to about 3 crore. Had the strength of the courts not been increased, the pendency would have been much more..The last analysis has shown that pendency has started coming down. If we fill up the vacancies in courts – and we are in the process of doing that – I think the pendency will come down further..Pallavi Saluja: Given the state of tribunals, the government is looking to prune the number of tribunals..PK Malhotra: The Ministry of Law and Justice has done a preliminary study, and we have come to the conclusion that going by the nature of these tribunals, some of them can be merged. Once that is done, probably the infrastructure crunch these tribunals are facing will be taken care of. It will also reduce the burden on the public exchequer, and dispute resolution will be much easier..The appointments process should be expedited; before a vacancy arises, the process for filling up that vacancy should be initiated. Once the posts are vacant, pendency accumulates. It has to be ensured that we have a judicious mind while appointing members of these tribunals..One problem that we find is that because most of the members have a judicial background, they are used to the procedure under the CPC or the Evidence Act, and this results in lengthy arguments. They forget that they are in a tribunal, which gives decisions based on the principles of natural justice. If they are reminded of this, the objective of effecting quick redressal of disputes through tribunals will be achieved..Pallavi Saluja: Is there a plan to bring all the tribunals under the Law Ministry?.PK Malhotra: This has been under consideration ever since the Supreme Court’s 1997 judgment in L Chandrakumar. The Supreme Court itself had suggested that all these tribunals come under one ministry. A proposal was mooted, but at that time, consensus could not be built up between all the ministries..This issue is also related to the convergence of tribunals; once we identify how many tribunals need to be abolished and how many should be merged, a decision on this will also be taken..Pallavi Saluja: Every six months we hear that the Indian legal market is going to be liberalised..PK Malhotra: The government is very keen that the legal sector is opened because in other sectors, we have allowed foreign investment and participation. The legal sector will be benefited if foreign lawyers come and practice in India..But we have a statutory body, the Bar Council of India and the Parliament as well. We don’t want to take a decision in haste; their views also have to be taken on board. There were certain issues that needed to be sorted out, and those issues are now at the advanced stage of discussion..Even the BCI has now said that they are willing to allow it, as long as precautions are taken. They are working on that and will shortly come out with a proposal which will be examined by the government. We will be framing certain regulations on the basis of recommendations that come from the BCI..I am very optimistic it will happen soon..I can’t say whether it will be a two-phased or three-phased approach, but one thing is very clear – we will definitely prefer that the foreign firms that come here should advise foreign clients on foreign law. At a later stage – and we haven’t worked out a timeline on this – they can perhaps be permitted to advise on Indian law. Whether they should be allowed to argue in courts will be the third step; whether they should only be allowed to appear in the Supreme Court and High Courts or the lower courts as well..Pallavi Saluja: Another reason for the delay is the litigation pending in the Supreme Court. .PK Malhotra: From whatever discussion I had with the Bar Council Chairman on this issue, he has told me that they have come up with a draft proposal, which is under consultation with the state bar councils..In fact we have already asked the BCI whether they have some proposal as to how this appeal pending before the Supreme Court can be finally disposed of..Maybe a consensus affidavit can be filed in the court stating the modality which is going to be adopted in order to allow entry of foreign law firms..If it fits within the existing framework, it can be adopted without any amendment to the Act..Pallavi Saluja: The Department of Legal Affairs had started the Legal Information Management & Briefing System (LIMBS) in 2014. .PK Malhotra: We conceived it in 2014, but it became operational only since August last year. It is currently manned by a Joint Secretary of the Law Ministry..Each department of the government maintains its own system for case management. The idea was to consolidate this. We are sensitizing all ministries and departments and urging them to upload their cases on LIMBS. If this is done, we would be able to know how many cases are pending, what cases need to be given priority, etc..The Ministry of Law and Justice wants to create a databank to know how many cases are pending for or against the government of India throughout the country. Once the data is made centralised through LIMBS, we can further analyse and carry out research as to how litigation can be reduced..Pallavi Saluja: The government has expressed the need to repeal obsolete laws. .PK Malhotra: Already, more than 150 laws have been repealed and about 1053 legislations are under repeal, Bills are pending in Parliament. Around 700 odd legislations have been identified for repeal; we are awaiting comments from various departments of the government so that we can go ahead and see how many can be repealed. I am very optimistic that our statute books will be less burdened with obsolete laws than they are today..Pallavi Saluja: What are your thoughts on the All India Judicial Services?.Speaking for myself, it is a very good suggestion. If you have an all-India service for civil matters, police, or forests, on the same pattern why can’t you have the judicial service?.The states have not been agreeing to it, and I don’t see why. In any case, the Constitution mandates it. But we have a federal structure, and unless the states agree, it will be impossible to implement it..Pallavi Saluja: Do you think that the retirement age of judges should be increased?.PK Malhotra: That is something the government is considering. There are arguments in favour of increasing the superannuation age in all fields, including the judiciary. Life expectancy has gone up, people are healthier now..But we have a large population, you have to look at employment of the younger generation as well. If people don’t retire, how will the youngsters get employment? Whenever the government takes a policy decision, it has to balance between them..Pallavi Saluja: Do you think India will ever become a hub for arbitration like Singapore or London?.PK Malhotra: I am very optimistic about this, having worked on it for so long. The Arbitration Act has been amended to make it more user-friendly and more comfortable for international arbitration disputes. We have tried to reduce the intervention by our courts, which is the main concern of those coming to India..The legal regime is already in place; what we lack today is the proper infrastructure for conducting these international arbitrations. If proper infrastructure is there, I don’t see why we can’t become a hub of international arbitration.