Justices P.S. Narasimha and Alok Aradhe observed that the absence of uniform rules governing court‑ordered deposits has created a patchwork of practices, with each court or tribunal deciding on a case‑by‑case basis how the money should be invested during the pendency of appeals.
The bench noted that, as a result, large sums of litigants’ money are tied up in disparate financial instruments across multiple banks, earning varying rates of interest and often sparking post‑judgment disputes over how that interest should be calculated.
Inflationary pressures and broader economic uncertainty, the judges said, exacerbate litigants’ anxieties about the real value of their deposits, underscoring the need for a clear, uniform framework that respects the time‑value of money.
The Supreme Court warned that the lack of common standards also adds to court backlog, as judges repeatedly have to resolve routine questions about investment choices, renewal terms, quantum, accounting and interest on deposits.
To address these issues, the bench suggested adopting a model similar to the United States’ Court Registry Investment System (CRIS), where deposits from federal courts are pooled into a single platform and invested in Government Account Series securities, providing automatic interest accrual, transparency and liquidity.
Justice Narasimha urged the Law Commission to examine the matter, consult the Reserve Bank of India, the Ministry of Finance and the Ministry of Law and Justice, and consider international precedents before drafting suitable legislation.
The court directed that a copy of the judgment be forwarded to the Law Commission chairperson, the Governor of the Reserve Bank of India, and the secretaries of the Finance and Law and Justice ministries for immediate action.