It is bad enough that more than 60 per cent of the litigation is triggered by the government and its undertakings; but when the arms of the government sue each other, it is time to call for a ceasefire. When the Supreme Court noticed a rise in the number of such cases, it asked the government to set up a committee on disputes to examine the issues before any party rushes to the court. The department concerned is allowed to move the court only if the committee permits it to do so.
However, it is not rare that suits are filed against the advice of the committee on disputes. Last week, the Supreme Court came across the Oil and Natural Gas Corporation vs Commissioner of Income Tax case. The committee had expressly refused permission to the commissioner of income tax, Dehra Dun, to pursue appeals before the Uttarakhand High Court.
However, the commissioner went ahead and won its case in the high court. In the ONGC’s appeal to the Supreme Court, the judgment noted the defiance of the revenue authorities but heard the case on its merits. It did so as a special case as the high court had handed a wrong ruling on a tax matter and if the judgment was allowed to stand, it would perpetuate the mistake.
Some courts reject such petitions at the threshold itself on the ground that the disputes have not been examined by the committee or the parties ignored the advice of the committee. The Delhi High Court did so in the Central Bank of India vs Union of India case. The dispute was between the public sector bank and the India Tourism Development Corporation (ITDC). The issue was related to the premises taken on licence by the bank from ITDC in the Ashok Hotel. Proceedings were taken by ITDC under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971. When the dispute landed in the high court, it dismissed the petition on the ground that the committee on disputes had not given it clearance to move the court.
In the Steel Authority of India vs Life Insurance Corporation case, 1997, the Supreme Court had taken the view that in petty disputes like tenancy, the committee’s green light was not necessary. It was required only in major fiscal disputes involving policy.
However, the Supreme Court itself has changed that stand in recent times. In 2004, a larger bench of the court, in its judgment in the Mahanagar Telephone Nigam Ltd vs Chairman, CBDT case, insisted on clearance from the committee in all matters. The judgment said: “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 PSUs. It was not contemplated by the framers of the Constitution that two departments of a state or the Union of India and/or a department of the government and a PSU fight 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 coordination and not confrontation. The mechanism set up by this court is not 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 committee. If it can, the committee will resolve the dispute. If the dispute is not resolved, the committee would undoubtedly give clearance.”
According to the court, “In almost all cases one or the other party will not be happy with the decision of the committee. The dissatisfied party will always claim that its rights are affected, when in fact, no right is affected. The committee consists 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/PSU 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 which the decision is given will claim that it has been wronged and that its rights are affected. This should not be allowed to be done.”
If the high courts do not follow this norm and lay down wrong principles as in the ONGC case, it would result in “double jeopardy”. Like the Delhi High Court, government establishments should be strictly told to take their disputes elsewhere.
