IMPORTANT POINT
Dispute between Government Departments and/or between Government Department and a Public Sector Undertaking should be referred to High Powered Committee established by the Government and only on clearance from such Committee that either party should approach Court.

Headnote:Constitution of India-Article 136 -Dispute between Government Departments and/or between a Government Department and a Public Sector Undertaking-Should be referred to High Powered Committee established by Government-If dispute is not resolved the Committee would give clearance-Even if the Department/Public Sector Undertaking found decision unpalatable, discipline required that they abide by it-As clearance had not been given to appellants by High Powered Committee, proceedings could not be proceeded with-High Court was wrong in dealing with matters on merits.
Held : 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 (supra) it was not contemplated by the framers of the Constitution or C.P.C. 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 the 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 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. In this case this is absolutely what has happened. The Appellants wanted to approach the Court only against a show-cause-notice. It is settled law that against a show-cause-notice litigation should not be encouraged. The decision of the High Powered Committee, set out hereinabove, merely emphasizes the well settled position. It is an eminently fair and correct decision. The purpose of the decision was to prevent frivolous litigation. No right of the Appellants is being affected. It has been clarified that the Appellants could move a Court of law against an appealable order. By not maintaining discipline and abiding by the decision the Appellants have wasted public money and time of the Courts. The clarificatory order, relied upon by Mr. Andhyarujina, clarifies in Para 5 as to what is to happen if clearance is not given by the Committee. It is set out that in the absence of the clearance the proceedings must not be proceeded with. This position is further clarified in Chief Conservator of Forests case (supra) where again this Court has held that the decision taken by such a Committee is binding on all Departments concerned and it is the stand of the Government. In view of this settled law, which is binding on us, we hold that as clearance has not been given to the Appellants these proceedings cannot be proceeded with. The High Court was wrong in dealing with the merits of the matter. We, therefore, do not examine whether the High Court was right on merits. The Appeal accordingly stands disposed of with no order as to costs. (Paras 7 to 9)

ORDER

Leave granted.

This Appeal is against the Judgment dated 24th August, 2000.

2. Mr. Rohatgi has raised a preliminary objection to the Special Leave Petition being proceeded with by this Court. He submits that this Court has, in the case of Oil and Natural Gas Commission vs. Collector of Central Excise reported in (1995) Supp. (4) SCC 541, held that in every case where a dispute is between Government Departments and/or between a Government Department and a Public Sector Undertaking, the matter should be referred to the High Powered Committee established by the Government pursuant to an order of this Court dated 11th September, 1991. He pointed out that it has been held by this Court that it is the duty of every Court or Tribunal to demand clearance from the Committee and that in the absence of clearance the proceedings must not be proceeded with.

3. Mr. Rohatgi also relied upon the case of C.C.E. vs. Jeesop and Co. Ltd. reported in (1999) 9 SCC 181, wherein this Court has again disposed of an Appeal filed by the Collector of Central Excise against two public sector companies by holding that the course indicated in Oil and Natural Gas Commission s case (supra) has to be followed. He also relied on a decision of this Court in the case of Canara Bank vs. National Thermal Power Corporation reported in (2001) 1 SCC 43, wherein it has been held that the purpose of the directions in Oil and Natural Gas Commission s case (supra) is to see that frivolous litigation between Government Departments and Public Sector Undertakings should not be dragged on in the Courts. He also relied upon the case of Chief Conservator of Forests vs. Collector reported in (2003) 3 SCC 472, wherein it is held 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 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 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 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. CCE (1992 Suppl. (2) SCC 432) called upon the Cabinet Secretary to handle such matters. In Oil and Natural Gas Commission & Anr. v. CCE (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 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

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2004 Supreme(SC) 653

IMPORTANT POINT Dispute between Government Departments and/or between Government Department and a Public Sector Undertaking should be referred to High Powered Committee established by the Government and only on clearance from such Committee that either party should approach Court.

Cases Referred (5)

IMPORTANT POINT
Dispute between Government Departments and/or between Government Department and a Public Sector Undertaking should be referred to High Powered Committee established by the Government and only on clearance from such Committee that either party should approach Court.