CENTER OF INDIAN TRADE UNION, A FEDERATION OF REGISTERED TRADE UNIONS vs. THE STATE OF MAHARASHTRA

NON­REPORTABLE

SPECIAL LEAVE PETITION (C) NO. 7734  OF 1997

J U D G M E N T Deepak Gupta, J. 1. The petitioner had challenged the execution of the Power Project   Agreement   (PPA)   and   the   modified   power   project agreements first of which was executed in the year 1993 by the Maharashtra  State   Electricity   Board   (for   short   ‘the   MSEB’)  in favour   of   Dabhol   Power   Corporation   Limited   (for   short   ‘DPC’) before the Bombay High Court. Signature Not Verified Digitally signed by DEEPAK GUGLANI Date: 2019.04.11 16:10:59 IST Reason: 2. Though the High Court came to the conclusion that the action   of   the   Board   and   the   Governments   concerned   was 1 questionable   and   that   everything   was   not   above   board,   it dismissed the writ petition(s) on the ground that the petitioner had   not   been   able   to   place   on   record   before   the   Court   any material justifying the allegations as regards corruption, bribery, fraud and misrepresentation. 3. Thereafter,   the   petitioner   filed   the   present   petition.     On 02.05.1997, this Court issued notice only on the following issue: “(2) The   accountability   of   the   State   of Maharashtra (respondent No. 2) in this matter, particularly,   on   account   of   the   inconsistent stand taken by it from time to time.” 4. By the same order, this Court refused leave in so far as the question of the validity of the project and contract for Dabhol Power Project was. 5. While the special leave petition was pending, the State of Maharashtra   appointed   a   Committee   headed   by   Dr.   Mahdav Godbole, former Home Secretary (known as ‘Godbole Committee’) to go into the matter. 2 6. The Godbole Committee submitted its report to the State of th Maharashtra   on   10   April,   2001   indicating   serious illegalities/infirmities in the matter of award of the contract and processing of approvals, which were   against public prima facie   interest.  Failure of governance, it was observed, was broad and across   different   governments   and   at   both   administrative   and political levels.  However, there was difference of opinion amongst members   of   the   Godbole   Committee,   whether   it   should recommend   appointment   of   a   judicial   commission   of   inquiry under the Commission of Inquiry Act, 1952.  Whereas 2 members felt   that   that   a   Judicial   Commission   of   Inquiry   should   be constituted, 3 members did not agree with the said proposal. th 7. On   7   November,   2001,   Shri   Justice   S.   P.   Kurdukar,   a former Judge, was appointed for thorough investigation into the aspects of culpability of various public servants. 8. The Union of India filed a suit before this Court (Original Suit No.2 of 2003 – Union of India vs. State of Maharashtra & Anr.) and an order was passed in the said suit staying further proceedings of the Kurdukar commission of inquiry.   This suit 3 came to be finally dismissed in the year 2014.   Thereafter, the matter came up before this Court on 18.02.2015 when learned counsel appearing for the State of Maharashtra prayed for some time to find out whether Justice Kurdukar would be in a position to resume the proceedings.  No response has been filed.  The fact remains   that   the   Commission   has   not   functioned   even   after dismissal of the suit. 9. It appears   that   nothing   much  was   done   and  the   matter came   up   before   this   Court   on   07.03.2018   when   this   Court directed the State of Maharashtra to inform the Court whether it would like the Kurdukar Commission of inquiry to continue or would they like the case to be argued on merits.   The State of Maharashtra   subsequently   filed   an   affidavit   that   due   to   long efflux of time it was no longer useful or feasible to continue with the judicial commission of inquiry. 10. Therefore, the hearing in this case is limited to the question as to whether the judicial commission of inquiry should continue or not. 4 11. Dr. Rajeev Dhawan, learned senior counsel appearing as amicus curiae, urged that in view of the serious allegations of corruption and abdication of duties by various authorities and officials, it would be in the interest of justice to continue with the commission of inquiry and in case Justice Kurdukar was not able to continue with the commission of inquiry, the same could be headed by some other retired Judge of the Supreme Court of India. 12. Dr. Dhawan drew our attention to the various portions of the report submitted by Dr. Godbole committee.  We may make reference only to following portion: “The Committee is troubled with the failure of governance   that   seems   to   have   characterised almost every step of the decision making process on   matters   relating   to   DPC.     This   failure   of governance   has   been   broad,   across   different governments at different points of time, at both the   State   and   the   Central   level,   and   across different agencies associated with examining the project,   and   at   both   the   administrative   and political levels.   It strains belief to accept that such   widespread   and   consistent   failure   to execute   assigned   responsibilities   is   purely coincidental.  Though the Committee was given certain   additional   terms   of   reference, specifically,   item   (3)   of   Resolution   No.   PSP 2001/CR3448/NRG­2 dated March 9, 2001, it has   unanimously   decided   that   it   is   not   the proper forum to investigate such matters to the degree that would be required.  The Committee, 5 in the short time allocated to it, is unable to determine reasons for the consistent lapses, but is extremely concerned at it.” 13. The Committee has found serious infirmities in the manner in which the PPA was executed, the manner in which it was re­ negotiated, the manner in which the tariff was fixed etc..  As per the Committee, everything was done in a manner which helped DPC and caused loss to the MSEB and the public at large. 14. It would be pertinent to mention that the foreign company Enron, which  was   involved,  has   abandoned  the   project.     The project is virtually working at half the capacity and the rate of production of electricity is so high that the project has become economically   unviable.     In   these   circumstances,   Dr.   Dhawan urged that this Court should continue with the commission of inquiry. 15. We are of the considered view that though normally in such a case a judicial inquiry should have been conducted but as far as the present case is concerned, more than a quarter of century has   elapsed   since   the   first   PPA   was   executed.     The   foreign corporation and the  original project proponents  are no longer 6 available.   Most of the senior officials would have retired and virtually no action can be taken against them.  Furthermore, the commission of inquiry even if continued or constituted afresh, will   take   its   own   time   and,   as   opined   by   3   Members   of   the Godbole   Committee,   the   constitution   of   such   commission   of inquiry would serve no useful purpose.  This was the stand in the year 2001 and has greater force 18 years later. 16. In view of the long delay and in view of the fact that due to non­availability   of   many   persons   involved,   no   useful   purpose would be served in continuing with the judicial commission of inquiry,   we   close   the   petition   in   the   peculiar   facts   and circumstances of the case. ……………………..CJI. (Ranjan Gogoi) …………………………J. (Deepak Gupta) …………………………J. (Sanjiv Khanna) New Delhi April 11, 2019 7