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Indian Oil Corporation, IOC, the state-owned oil marketing company, now has
around Nine Thousand cases pending in various courts across the country - bulk of
them being five to 10 years old. "An estimated Rs 5,ooo - 10,000 crore of funds are
stuck in these cases that include tax and commercial disputes," says Deepak Dhawan,
ED (Legal), Indian Oil Corporation.
There are around 3 Crore pending cases across the judicial system. Around 400
sanctioned posts of judge in the Supreme Court and various high courts are waiting
to be filled up.
According to the 253rd Law Commission of India report, submitted in January last
year, of the total 32,656 civil suits pending in the five different high courts with
original jurisdiction, a little more than half (16,884) or 51.7 per cent are the
commercial disputes.
This situation is also reflected in India's dismal track record in Ease of Doing
Business Rank (2016) - the country is placed at the 178th position (among 189
countries) when it comes to enforcing of contracts. In resolving the insolvencies,
India is at the 136th place worldwide.
When asked on the impact of such high pendency rate of cases in country's courts,
the India legal head of a US-headquartered multinational manufacturing company is
quick to point out that "litigation related to tax and intellectual property protection
in India is among the biggest concerns from an MNC perspective."
A leading corporate lawyer, closely involved with international M&A deals, concedes
that most foreign clients consider getting entangled in the judicial system as "big"
business risk while considering investing in India.
Most large corporate houses have suffered a sizable jump in their annual legal budget
over the last four-five years. For instance, Sun Pharma's annual legal budget has
ballooned almost five times - from Rs 308 crore in 2012 to Rs 1,424 crore in 2015.
The legal expense of Reliance Industries too has nearly doubled between 2012 (Rs
749 crore) and 2015 (Rs 1,242 crore).
Both the executive and the judiciary - despite mutual differences - realise that
desperate times call for some desperate measures. To cut the long shadow of
pendency of these cases across the judicial system, there is a move to re-appoint
retired judges on an ad hoc basis to different high courts.

The government is also in the process of expediting the appointment process of

judges on vacant posts. Legislative measures - such as setting up of new commercial
courts in all the states, or amendments of Arbitration and Conciliation Laws are
expected to infuse fresh blood into the overstretched judicial infrastructure.
However, legal experts and corporate Advocates say these measures are only
expected to show results over the next two to three years. "We immediately need fasttrack courts to clear commercial disputes, along with special Tax benches to tackle
taxation disputes," says Alok Prasanna Kumar, of Vidhi Centre for Legal Policy.
Corporate lawyers point out to the success of the two-judge Supreme Court bench of
judges A K Sekri and Rohinton Nariman that heard tax cases for almost whole of year
2015. In 2015, the apex court gave out as many as 197 judgements related to tax laws.
This is almost as many as the court managed in the last three years preceding 2015,
notes Kumar. In years 2013 and 2014, the apex court could give only 50 and 49 taxrelated judgments, respectively.
"Just making improvements in legislation is not sufficient. There is a need to invest
in physical judicial infrastructure and appoint more judges across courts" says
Dhawan. Clearly, there are miles to go on the road to curtail the shadow of pendency
of cases on businesses.