Govt. to Introduce Inter-Ministerial Panels for Resolving Disputes Without Court Intervention

In a significant move aimed at reducing litigation involving government bodies and easing the burden on the judiciary, the Union Government is set to introduce a new administrative framework for resolving commercial disputes between ministries, departments, and public sector undertakings (PSUs) without approaching courts.

Under the proposed mechanism, disputes that do not involve private parties will be adjudicated through specially constituted inter-ministerial panels beginning the next financial year, senior government officials confirmed. The framework is designed to ensure faster resolution, minimize procedural delays, and cut down on avoidable legal expenses borne by the exchequer.

Cabinet Secretary to Have Final Authority

The new system establishes a two-tier dispute resolution structure. In cases where disagreements persist even after being examined by the inter-ministerial panel, the Cabinet Secretary will step in to take a final decision. Importantly, this decision will be binding on all parties, with no scope for further appeals or litigation.

Officials clarified that once the Cabinet Secretary rules on a matter, the dispute will be deemed conclusively resolved, effectively closing the door on prolonged inter-departmental litigation.

Scope and Exclusions

While the mechanism is broad in its application, disputes involving income tax, customs, and railways have been excluded from its purview, according to officials familiar with the policy. The focus remains on commercial and contractual disagreements among central government entities and public sector enterprises.

Fixed Timelines to Ensure Speedy Resolution

The framework mandates strict timelines at every stage of the dispute resolution process:

Disputes must be referred to the panel within 30 days of arising
The inter-ministerial committee must issue its decision within three months
Central Public Sector Enterprises (CPSEs) are required to implement the decision within one month

Progress will be closely monitored by the Department of Public Enterprises (DPE), with monthly status reports submitted to the Cabinet Secretariat to ensure accountability and adherence to timelines.

Reducing Government Litigation Footprint

The move comes against the backdrop of an overwhelming volume of litigation involving the government. Currently, the central government is a party to approximately 7 lakh cases, while the Ministry of Finance alone is involved in nearly 1.9 lakh cases.

Officials believe that the new framework will substantially reduce the number of cases reaching courts, conserve public resources, and prevent government entities from engaging in prolonged legal battles against each other.