Full Judgment Text
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CASE NO.:
Appeal (civil) 3143 of 2007
PETITIONER:
Oil & Natural Gas Corporation Ltd
RESPONDENT:
City & Indust. Dev. Corpn.,Maharashtra and Ors
DATE OF JUDGMENT: 20/07/2007
BENCH:
Dr. ARIJIT PASAYAT & LOKESHWAR SINGH PANTA
JUDGMENT:
J U D G M E N T
CIVIL APPEAL NO. 3143 OF 2007
(Arising out of SLP (C) No. 21047 of 2004)
Dr. ARIJIT PASAYAT, J.
1. Leave granted.
2. Challenge in this appeal is to the order passed by a
Division Bench of the Bombay High Court dismissing the Civil
Writ Petition No.4036 of 2001 with Civil Application No.1583
of 2004. It was held that with reference to several judgments
of this Court the writ jurisdiction should not be exercised in
contractual matters. It was also held that there was no reason
whatsoever for which a Government of India undertaking shall
bypass the alternative remedy of a civil suit.
3. Background facts in a nutshell are as follows:
A writ petition was filed by the appellant alleging inaction
on the part of the City & Industrial Development Corporation
of Maharashtra Limited (hereinafter referred to as ’CIDCO’) in
not executing the agreement of lease with the appellant-
company. Prayer in the writ petition was for a direction by
issuance of an appropriate writ requiring the CIDCO to
execute the agreement in respect of the possession of plots
covered by the agreements. Prayer essentially was (i) to hand
over the possession of plot of land admeasuring 24 hectares
demarcated in favour of the appellant situated at Bhandkhal
(Navghar), Taluka Uran alongwith approach road and water
supply till the boundary of the said plot of land; (ii) execute a
lease agreement for the period set out more particularly in the
letter of allotment dated 5th March, 1984 in respect of the said
plot of land; (iii) issue appropriate writ in respect of demand
for service charge contained in the letter dated 24th July, 1990
and (iv) other reliefs.
4. The High Court referred to several correspondence
exchanged between the parties but ultimately held that the
issues related to contractual matters and the writ petition was
not the appropriate remedy. Findings were also recorded
regarding maintainability of the writ petition.
5. In support of the appeal, learned counsel for the
appellant submitted that the High Court has lost sight of the
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fact that the dispute involved two public bodies. It was
highlighted by learned counsel for the appellant that this
Court in M/s Popcorn Entertainment & Anr. V. City Industrial
Development Corpn. & Anr. (JT 2007 (4) SC 70) held in para
15 about the maintainability of the writ petition. In paragraph
42 of the judgment it was noted that there was no dispute and
in fact there was concession regarding maintainability of the
writ petition. Reference has also been made to National
Highways Authority of India v. Ganga Enterprises and Anr.
(2003 (7) SCC 410) and Rajureshwar Associates v. State of
Maharashtra (2004 (6) SCC 362) to contend that in all
contractual matters a writ application can be entertained. The
three circumstances wherein relating to contractual matters
writ applications can be entertained were set out in Whirlpool
Corporation v. Registrar of Trade Marks, Mumbai and Ors.
(1998 (8) SCC 1).
6. Mr. Altaf Ahmad, learned senior counsel on the other
hand submitted that in a dispute of this nature, the course
indicated by this Court in Oil and Natural Gas Commission
and Anr. V. Collector of Central Excise (1992 Supp (2) SCC
432) can be applied.
7. In the instant case, CIDCO is a State entity and the
appellant is a central entity. The desirability of having a
committee to sort out differences between pubic sector
undertakings, State Governments, different Govt. departments
have been highlighted by this Court in several cases. In Chief
Conservator of Forests, Govt. of A.P. v. Collector and Ors.
(2003 (3) SCC 472) it was inter alia as follows:
"14. Under the scheme of the Constitution,
Article 131 confers original jurisdiction on the
Supreme Court in regard to a dispute between
two States of the Union of India or between
one or more States and the Union of India. It
was not contemplated by the framers of the
Constitution or CPC that two departments of a
State or the Union of India will fight a litigation
in a court of law. It is neither appropriate nor
permissible for two departments of a State or
the Union of India to fight litigation in a court
of law. Indeed, such a course cannot but be
detrimental to the public interest as it also
entails avoidable wastage of public money and
time. Various departments of the Government
are its limbs and, therefore, they must act in
coordination and not in confrontation. Filing of
a writ petition by one department against the
other by invoking the extraordinary
jurisdiction of the High Court is not only
against the propriety and polity as it smacks of
indiscipline but is also contrary to the basic
concept of law which requires that for suing or
being sued, there must be either a natural or a
juristic person. The States/Union of India
must evolve a mechanism to set at rest all
interdepartmental controversies at the level of
the Government and such matters should not
be carried to a court of law for resolution of the
controversy. In the case of disputes between
public sector undertakings and the Union of
India, this Court in Oil and Natural Gas
Commission v. CCE (1992 Supp(2) SCC 432)
called upon the Cabinet Secretary to handle
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such matters. In Oil and Natural Gas
Commission v. CCE (1992 Supp (4) SCC 541)
this Court directed the Central Government to
set up a committee consisting of
representatives from the Ministry of Industry,
the Bureau of Public Enterprises and the
Ministry of Law, to monitor disputes between
Ministry and Ministry of the Government of
India, Ministry and public sector undertakings
of the Government of India and public sector
undertakings in between themselves, to ensure
that no litigation comes to court or to a
tribunal without the matter having been first
examined by the Committee and its clearance
for litigation. The Government may include a
representative of the Ministry concerned in a
specific case and one from the Ministry of
Finance in the Committee. Senior officers only
should be nominated so that the Committee
would function with status, control and
discipline.
15. The facts of this appeal, noticed above,
make out a strong case that there is a felt need
of setting up of similar committees by the State
Government also to resolve the controversy
arising between various departments of the
State or the State and any of its undertakings.
It would be appropriate for the State
Governments to set up a committee consisting
of the Chief Secretary of the State, the
Secretaries of the departments concerned, the
Secretary of Law and where financial
commitments are involved, the Secretary of
Finance. The decision taken by such a
committee shall be binding on all the
departments concerned and shall be the stand
of the Government."
8. In Punjab and Sind Bank v. Allahabad Bank and Ors.
(2006 (4) SCC 780) it was observed as follows:
"6. The matter was again examined in the case
of Chief Conservator of Forest v. Collector
(2003(3) SCC 472). In Para 14 and 15 it was
noted as follows:
"Under the scheme of the
Constitution, Article 131 confers
original jurisdiction on the Supreme
Court in regard to a dispute between
two States of the Union of India or
between one or more States and the
Union of India. It was not
contemplated by the framers of the
Constitution or the C.P.C. that two
departments of a State or the Union
of India will fight a litigation in a
court of law. It is neither
appropriate nor permissible for two
departments of a State or the Union
of India to fight litigation in a court
of law. Indeed, such a course cannot
but be detrimental to the public
interest as it also entails avoidable
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wastage of public money and time.
Various departments of the
Government are its limbs and,
therefore, they must act in co-
ordination and not in confrontation.
Filing of a writ petition by one
department against the other by
invoking the extraordinary
jurisdiction of the High Court is not
only against the propriety and polity
as it smacks of indiscipline but is
also contrary to the basic concept of
law which requires that for suing or
being sued, there must be either a
natural or a juristic person. The
States/Union of India must evolve a
mechanism to set at rest all inter-
departmental controversies at the
level of the Government and such
matters should not be carried to a
court of law for resolution of the
controversy. In the case of disputes
between public sector undertakings
and Union of India, this Court in Oil
and Natural Gas Commission v.
Collector of Central Excise (1992
Suppl. (2) SCC 432) called upon the
Cabinet Secretary to handle such
matters. In Oil and Natural Gas
Commission & Anr. v. Collector of
Central Excise (1995 Suppl. (4) SCC
541), this Court directed the Central
Government to set up a Committee
consisting of representatives from
the Ministry of Industry, the Bureau
of Public Enterprises and the
Ministry of Law, to monitor dispute
between Ministry and Ministry of
the Government of India, Ministry
and public sector undertakings of
the Government of India and public
sector undertakings in between
themselves, to ensure that no
litigation comes to court or to a
Tribunal without the matter having
been first examined by the
Committee and its clearance for
litigation. The Government may
include a representative of the
Ministry concerned in a specific case
and one from the Ministry of
Finance in the Committee. Senior
officers only should be nominated so
that the Committee would function
with status, control and discipline.
The facts of this appeal,
noticed above, make out a strong
case that there is felt need of setting
up of similar committees by the
State Government also to resolve the
controversy arising between various
departments of the State or the
State and any of its undertakings. It
would be appropriate for the State
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Governments to set up a Committee
consisting of the Chief Secretary of
the State, the Secretaries of the
concerned departments, the
Secretary of Law and where
financial commitments are involved,
the Secretary of Finance. The
decision taken by such a committee
shall be binding on all the
departments concerned and shall be
the stand of the Government. "
7. The directions as noted above were
quoted in Mahanagar Telephone Nigam Ltd. v.
Chairman, Central Board, Direct Taxes and
another (2004(6) SCC 431) and were adopted
in paragraph 8. It was noted as follows:
"Undoubtedly, the right to
enforce a right in a court of law
cannot be effaced. However, it must
be remembered that courts are
overburdened with a large number
of cases. The majority of such cases
pertain to Government Departments
and/or public sector undertakings.
As is stated in Chief Conservator of
Forests’ case [2003] 3 SCC 472 it
was not contemplated by the
framers of the Constitution or the
Civil Procedure Code that two
departments of a State or Union of
India and/or a department of the
Government and a public sector
undertaking fight a litigation in a
court of law. Such a course is
detrimental to public interest as it
entails avoidable wastage of public
money and time. These are all limbs
of the Government and must act in
co-ordination and not confrontation.
The mechanism set up by this court
is not, as suggested by Mr.
Andhyarujina, only to conciliate
between Government Departments.
It is also set up for purposes of
ensuring that frivolous disputes do
not come before courts without
clearance from the High Powered
Committee. If it can, the High
Powered Committee will resolve the
dispute. If the dispute is not
resolved the Committee would
undoubtedly give clearance.
However, there could also be
frivolous litigation proposed by a
department of the Government or a
public sector undertaking. This
could be prevented by the High
Powered Committee. In such cases
there is no question of resolving the
dispute. The Committee only has to
refuse permission to litigate. No
right of the Department/public
sector undertaking is affected in
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such a case. The litigation being of a
frivolous nature must not be
brought to court. To be remembered
that in almost all cases one or the
other party will not be happy with
the decision of the High Powered
Committee. The dissatisfied party
will always claim that its rights are
affected, when in fact, no right is
affected. The Committee is
constituted of highly placed officers
of the Government, who do not have
an interest in the dispute, it is thus
expected that their decision will be
fair and honest. Even if the
Department/public sector
undertaking finds the decision
unpalatable, discipline requires that
they abide by it. Otherwise the
whole purpose of this exercise will
be lost and every party against
whom the decision is given will
claim that they have been wronged
and that their rights are affected.
This should not be allowed to be
done."
8. The ONGC I to III cases (supra), Chief
Conservator’s case (supra) and Mahanagar
Telephone’s case (supra) deal with disputes
relating to Central Government, State
Government and Public Sector Undertakings.
They have no application to the facts of these
cases as the High Court has not indicated any
reason for its abrupt conclusion that the writ
petitioners are Public Sector Undertakings. In
the absence of a factual determination in that
regard, the decisions can have no application."
9. The position has also been examined in U.P. SEB and
Anr. V. Sant Kabir Sahakari Katai Mills Ltd. (2005 (7) SCC
576) and Mahanagar Telephone Nigam’s case (supra).
10. The matter is pending since 1990. Considering the
nature of the controversy which is a recurring feature we
direct that a committee be formed to sort out the differences
between the Central Government and the State Government
entities. The composition of such committee shall be as
follows:
(1) The Cabinet Secretary of the Union;
(2) Chief Secretary of the State;
(3) Secretaries of the concerned departments of Union
and the State; and
(4) Chief Executive Officers of the concerned
undertakings.
11. As the matter is pending since long, we direct that the
Committee shall be constituted forthwith to take a decision
within 4 months from the date of receipt of copy of this
judgment.
12. The appeal is disposed of with no order as to costs.