important point
Public Sector undertakings or departments of the Government should not fight out their disputes in courts of law. Constitution of a Committee for the purpose directed.

judgment

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 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.1 (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.2 (2003 (7) SCC 410) and Rajureshwar Associates v. State of Maharashtra3 (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.4 (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 Excise5 (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.6 (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