Exclusive: Tamil Nadu PSUs Face Legal Scrutiny Amid Judicial Backlash on Non-Compliance

C Shivakumar @ CHENNAI:

Tamil Nadu’s state-owned enterprises have come under sharp scrutiny after the judiciary voiced alarm over persistent non-compliance with court orders—prompting the state’s finance department to issue a sweeping directive aimed at tightening legal oversight across the public sector.

In a letter circulated last month, S. Nagarajan, the state’s finance secretary (expenditure), instructed all public sector undertakings (PSUs) to proactively manage litigation, especially in cases involving state functionaries or departments as respondents. The letter underscores the urgent need for timely filings of deletion petitions, counter-affidavits, and appeals to avoid spiralling into contempt proceedings—an increasingly common occurrence in recent months.

The directive follows mounting criticism from the Madras High Court, where judges have repeatedly expressed frustration at what they describe as "systematic lapses" in implementing judicial orders. In particular, Justices G.K. Ilanthiryan and N. Anand Venkatesh, presiding over a contempt bench in March, pointed to a noticeable uptick in petitions filed for wilful disobedience, calling it symptomatic of “deeper institutional failures” in the state’s administrative apparatus.

“The increasing number of contempt petitions is a serious issue, as it undermines the authority of the judiciary and erodes public trust in the rule of law,” the bench observed during a March 18 hearing, laying bare the widening trust deficit between the courts and the executive arm of the state.

Concerns from the judiciary were formally conveyed to the government via a letter from J. Ravindran, the state’s additional advocate general (Coordination), addressed to Chief Secretary. In it, Ravindran urged the creation of a cross-departmental legal compliance mechanism that would ensure all court directions are adhered to within specified timelines. His letter also advocated for institutionalising legal vigilance across statutory boards and public corporations, with built-in accountability and escalation processes.

Reacting swiftly, the finance department has now asked PSUs to institute internal tracking systems to monitor litigation, maintain meticulous records for review by government auditors, and coordinate more effectively with legal counsel. Perhaps most notably, the directive includes provisions to hold errant officials personally liable for legal or financial losses incurred due to delays or negligence—marking a departure from the typically opaque and diffused responsibility structures within public administration.

The push from the state comes amid a broader national backdrop in which India’s apex court has also signalled a tougher stance. The Supreme Court has recently cautioned states against filing appeals with undue delay and has directed governments to streamline legal processes. In particular, it has asked states to clearly assign accountability in instances of procedural lapses and to impose financial penalties on officials found responsible for legal setbacks.

 This also cones in the wake of Tamil Nadu cadre IAS officer Anshul Mishra has been held in contempt by Madras High Court and directed to undergo simple imprisonment for a month.