JUDGMENT

Arijit Pasayat, J.—Challenge in these appeals is to the judgment delivered by a Division Bench of the Calcutta High Court, in an appeal filed by the appellant, the defendant in the suit filed by respondent no.1-Bank. Learned Single Judge in the said suit held that there was no need to adopt procedure indicated by this Court in Oil and Natural Gas Commission and Anr. v. Collector of Central Excise (1992 Supp. (2) SCC 432) (described hereinafter case as ONGC-I Case). The Division Bench affirmed the view of learned Single Judge. The correctness of the view expressed by the learned Single Judge and the Division Bench forms the subject-matter of challenge in this appeal.

2. The suit was filed by the respondent no.1 - Bank against the appellant-Bank along with 11 other defendants with the following prayers :-

(a)Declaration that the Banker’s cheque copy whereof is annexed Marked A hereto is void and not binding on the plaintiff.

(b)Decree of Rs. 5,62,66,671/- against the defendants jointly and/or severally and/or such of them for such amount as this Hon’ble Court may deem fit and proper.

(c)Decree of Rs. 5,62,66,671/- against the defendant no.1 together with interest.

(d)Interest including interim interest as claimed in paragraph 29;

(e)Receiver;

(f)Costs;

(g)Further any other reliefs.

3. An application was filed by the appellant-Bank for dismissal of the suit on the ground that the modalities indicated in ONGC-I case (supra) were not followed. Learned Single Judge held that the decision has to be read in the context which was passed. This Court never intended to extinguish the right to sue. Intention was to avoid litigation when the parties are government or its undertakings.

4. The order was challenged before the Division Bench which, inter-alia, upheld view of learned Single Judge with some additional reasons. We shall deal with the reasoning in detail later.

5. The view in ONGC-I case (supra) was further elaborated in Oil and Natural Gas Commission v. C.C.E. 1995 (Supp.) 4 SCC 541) (For sake of convenience described as ONGC-II). It was noted in Oil and Natural Gas Commission v. C.C.E. (2004(6) SCC 437) (for convenience described as ONGC-III) that some doubts and problems arose in the working out of the arrangements in terms of the order of this Court dated 11.10.1991 ONGC-II case (supra). It was noted in ONGC-III case (supra) as follows :

“There are some doubts and problems that have arisen in the working out of these arrangements which require to be clarified and some creases ironed out. Some doubts persist as to the precise import and implications of the words “and recourse to litigation should be avoided”. It is clear that the order of this Court is not to the effect that – nor can that be done – so far as the Union of India and its statutory corporations are concerned, their statutory remedies are effaced. Indeed, the purpose of the constitution of the High-powered Committee was not to take away those remedies. The relevant portion of the order reads: (SCC pp. 541-42 para 3)

“3. We direct that the Government of India shall 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.”

It is abundantly clear that the machinery contemplated is only to ensure that no litigation comes to court without the parties having had an opportunity of conciliation be