A law is necessary to protect crores deposited by litigants across courts and tribunals in the country during pending appeals, the Supreme Court said in a recent judgment.
The apex court pointed out the problem of the absence of uniform rules governing court-ordered deposits. For example, a court would direct a litigant to deposit money in order to get a stay while his or her appeal is heard out.
So far, individual courts and tribunals have passed orders on deposits and their investment during the pendency of appeals on a case-to-case basis. “In order to preserve the economic integrity of any deposit and to provide interest, there must be clarity and uniformity in the method and manner in which the deposit itself is handled. Lack of standardisation in the process by which sums deposited into the court are to be handled undermines this essential underlying principle of the time value of money as well as the accrual of interest in a certain and clear manner,” the recent verdict observed. Further, the top court pointed out that the asymmetry in treating deposits made by litigants is leading to further pendency across courts. The court suggested the U.S. model of having a common platform where deposits made in courts and tribunals were pooled into one unified scheme and put into the most beneficial financial instrument for the litigating parties. The apex court recommended a statutory framework modeled after international precedents, specifically pointing to the United States’ Court Registry Investment System (CRIS). “We are of the opinion that it is necessary to evolve and formulate suitable legislation on the subject. We request the Law Commission of India to examine the issues which we have highlighted and, in the process, also consider the laws which other countries have enacted. It may be necessary for the Law Commission to consult the Reserve Bank of India, Ministry of Finance and also the nodal Ministry of Law and Justice,” the apex court directed.
This, the court said, has left huge sums of money entangled in financial instruments across different banks, earning inconsistent interest rates and triggering post-judgment litigation over the interest-accounting of their deposits.
