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Yesterday, Parliament passed a Bill to increase the number of judges in the Supreme Court from 30 to 33 (excluding the Chief Justice of India).  The Bill was introduced in view of increasing pendency of cases in the Supreme Court.  In 2012, the Supreme Court approved the Scheme of National Court Management System to provide a framework for case management.  The scheme estimated that with an increase in literacy, per capita income, and population, the number of new cases filed each year may go up to 15 crore over the next three decades, which will require at least 75,000 judges.  In this blog, we analyse the pendency of cases at all three levels of courts, i.e. the Supreme Court, the Highs Courts, and the subordinate courts, and discuss the capacity of these courts to dispose of cases.

Pendency in courts has increased over the years; 87% of all pending cases are in subordinate courts

Sources:  Court News, 2006, Supreme Court of India; National Data Judicial Grid accessed on August 7, 2019; PRS.

Overall, the pendency of cases has increased significantly at every level of the judicial hierarchy in the last decade.  Between 2006 and now, there has been an overall increase of 22% (64 lakh cases) in the pendency of cases across all courts.  As of August 2019, there are over 3.5 crore cases pending across the Supreme Court, the High Courts, and the subordinate courts.  Of these, subordinate courts account for over 87.3% pendency of cases, followed by 12.5% pendency before the 24 High Courts.  The remaining 0.2% of cases are pending with the Supreme Court.  The primary reason for growing pendency of cases is that the number of new cases filed every year has outpaced the number of disposed of cases.  This has resulted in a growing backlog of cases.

In High Courts and subordinate courts, over 32 lakh cases pending for over 10 years

 

 

 

 

 

 

 

Sources:  National Data Judicial Grid accessed on August 7, 2019; Court News, 2006-17, Supreme Court of India; PRS.

In the High Courts, over 8.3 lakh cases have been pending for over 10 years.  This constitutes 19% of all pending High Court cases.  Similarly, in the subordinate courts, over 24 lakh cases (8%) have been pending for over 10 years.  Overall, Allahabad High Court had the highest pendency, with over seven lakh cases pending as of 2017.

Despite high pendency, some High Courts have managed to reduce their backlog.  Between 2006 and 2017, pendency of cases reduced the most in Madras High Court at a rate of 26%, followed by Bombay High Court at 24%.  Conversely, during the same period, the pendency of cases doubled in the Andhra Pradesh High Court, and increased by 2.5 times in Karnataka High Court.

As a result of pendency, number of under-trials in prison is more than double that of convicts

Sources:  Prison Statistics in India, 2015, National Crime Record Bureau; PRS.

Over the years, as a result of growing pendency of cases for long periods, the number of undertrials (accused awaiting trial) in prisons has increased.  Prisons are running at an over-capacity of 114%.  As of 2015, there were over four lakh prisoners in jails.  Of these, two-thirds were undertrials (2.8 lakh) and the remaining one-third were convicts. 

The highest proportion of undertrials (where the number of inmates was at least over 1,000) were in J&K (85%), followed by Bihar (82%).  A total of 3,599 undertrials were detained in jails for more than five years.  Uttar Pradesh had the highest number of such undertrials (1,364) followed by West Bengal (294). 

One interesting factor to note is that more criminal cases are filed in subordinate courts than in High Courts and Supreme Court.  Of the cases pending in the subordinate courts (which constitute 87% of all pending cases), 70% of cases were related to criminal matters.  This increase in the pendency of cases for long periods over the years may have directly resulted in an increase in the number of undertrials in prisons.  In a statement last year, the Chief Justice of India commented that the accused in criminal cases are getting heard after serving out their sentence.

Vacancies in High Courts and Subordinate Courts affect the disposal of cases

Sources:  Court News, 2006-17, Supreme Court of India; PRS.

Vacancy of judges across courts in India has affected the functioning of the judiciary, particularly in relation to the disposal of cases.  Between 2006 and 2017, the number of vacancies in the High Courts has increased from 16% to 37%, and in the subordinate courts from 19% to 25%.  As of 2017, High Courts have 403 vacancies against a sanctioned strength of 1,079 judges, and subordinate courts have 5,676 vacancies against a sanctioned strength of 22,704 judges.  As of 2017, among the major High Courts (with sanctioned strength over 10 judges), the highest proportion of vacancies was in Karnataka High Court at 60% (37 vacancies), followed by Calcutta High Court at 54% (39 vacancies).  Similarly, in major subordinate courts (with sanctioned strength over 100 judges), the highest proportion of vacancies was in Bihar High Court at 46% (835 vacancies), followed by Uttar Pradesh High Court at 42% (1,348 vacancies).

Yesterday, the government circulated certain official amendments to the Constitution (122nd Amendment) Bill, 2014 on GST.  The Bill is currently pending in Rajya Sabha.  The Bill was introduced and passed in Lok Sabha in May 2015.  It was then referred to a Select Committee of Rajya Sabha which submitted its report in July 2015.  With the Bill listed for passage this week, we explain key provisions in the Bill, and the amendments proposed. What is the GST? Currently, indirect taxes are imposed on goods and services.  These include excise duty, sales tax, service tax, octroi, customs duty etc.  Some of these taxes are levied by the centre and some by the states.  For taxes imposed by states, the tax rates may vary across different states.  Also, goods and services are taxed differently. The Goods and Services Tax (GST) is a value added tax levied across goods and services at the point of consumption.  The idea of a GST regime is to subsume most indirect taxes under a single taxation regime.  This is expected to help broaden the tax base, increase tax compliance, and reduce economic distortions caused by inter-state variations in taxes. What does the 2014 Bill on GST do? The 2014 Bill amends the Constitution to give concurrent powers to Parliament and state legislatures to levy a Goods and Services tax (GST).  This implies that the centre will levy a central GST (CGST), while states will be permitted to levy a state GST (SGST).  For goods and services that pass through several states, or imports, the centre will levy another tax, the Integrated GST (IGST). Alcohol for human consumption has been kept out of the purview of GST.  Further, GST will be levied on 5 types of petroleum products at a later date, to be decided by the GST Council.  The Council is a body comprising of Finance Ministers of the centre and all states (including Delhi and Puducherry).  This body will make recommendations in relation to the implementation of GST, including the rates, principles of levy, etc.  The Council is also to decide the modalities for resolution of disputes that arise out of its recommendations. States may be given compensation for any revenue losses they may face from the introduction of the GST regime.  Such compensation may be provided for a period of up to five years. Further, the centre may levy an additional tax, up to 1%, in the course of interstate trade.  The revenues from the levy of this tax will be given to the state from where the good originates.  Expert bodies like the Select Committee and the Arvind Subramanian Committee have observed that this provision could lead to cascading of taxes (as tax on tax will be levied).[i]  It also distorts the creation of a national market, as a product made in one state and sold in another would be more expensive than one made and sold within the same state. What are the key changes proposed by the 2016 amendments? The amendments propose three key changes to the 2014 Bill.  They relate to (i) additional tax up to 1%; (ii) compensation to states; and (iii) dispute resolution by the GST Council.

  • Additional tax up to 1% on interstate trade: The amendments delete the provision.
  • Compensation to states: The amendments state that Parliament shall, by law, provide for compensation to states for any loss of revenues, for a period which may extend to five years. This would be based on the recommendations of the GST Council.  This implies that (i) Parliament must provide compensation; and (ii) compensation cannot be provided for more than five years, but allows Parliament to decide a shorter time period.  The 2014 Bill used the term ‘may’ instead of ‘shall’.   The Select Committee had recommended that compensation should be provided for a period of five years.  This recommendation has not been addressed by the 2016 amendments.
  • Dispute resolution: The GST Council shall establish a mechanism to adjudicate any dispute arising out of its recommendations. Disputes can be between: (a) the centre vs. one or more states; (b) the centre and states vs. one or more states; (c) state vs. state.  This implies that there will be a standing mechanism to resolve disputes.

These amendments will be taken up for discussion with the Bill in Rajya Sabha this week.  The Bill requires a special majority for its passage as it is a Constitution Amendment Bill (that is at least 50% majority of the total membership in the House, and 2/3rds majority of all members present and voting).  If the Bill is passed with amendments, it will have to be sent back to Lok Sabha for consideration and passage.  After its passage in Parliament, at least 50% state legislatures will have to pass resolutions to ratify the Bill. Once the constitutional framework is in place, the centre will have to pass simple laws to levy CGST and IGST.  Similarly, all states will have to pass a simple law on SGST.  These laws will specify the rates of the GST to be levied, the goods and services that will be included, the threshold of the turnover of businesses to be included, etc.  Note that the Arvind Subramanian Committee, set up by the Finance Ministry, recommended the rates of GST that may be levied.  The table below details the bands of rates proposed.

Table 1: Rates of GST recommended by Expert Committee headed by Arvind Subramanian
Type of rate Rate Details
Revenue Neutral Rate 15% Single rate which maintains revenue at current levels.
Standard Rate 17-18% Too be applied to most goods and services
Lower rates 12% To be applied to certain goods consumed by the poor
Demerit rate 40% To be applied on luxury cars, aerated beverages, paan masala, and tobacco
Source: Arvind Subramanian Committee Report (2015)

Several other measures related to the back end infrastructure for registration and reporting of GST, administrative officials related to GST, etc. will also have to be put in place, before GST can be rolled out. [For further details on the full list of amendments, please see here.  For other details on the GST Bill, please see here.]