OIL & NATURAL GAS CORPORATION LTD. v. CITY & INDUST. DEV. CORPN., MAHARASHTRA AND ORS.

E The Judgment of the Court was delivered by

DR. ARIJIT PASAYAT, J. I. 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 of2001 F ~ith Civil Application No.1583 of2004: 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 und~rtaking shall bypass the alternative remedy of a .civil suit. G · 3·. Background facts in a nutshell are as follows:

A writ petition was filed l;>y 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 H

OIL& NATURALGASCORPN. LTD. v. CITY & INDUST. DEV. CORPN., MAHARASHTRA(PASAYAT,J.) 43)

with the appellant-company. Prayer in the writ petition was for a direction by A ' 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 w~s (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 B 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.

4Copy pinpoint4. The High Court referred to several correspondence exchanged between c 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 .

5Copy pinpoint5. In support of the appeal, learned counsel for the appellant submitted D , 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 appellantthat this Court in Mis Popcorn Entertainment & Anr. v. City Industrial Development Corpn. & Anr., JT (2007) 4 SC 70 held in para 15 about the maintainability of the writ petition. In paragraph 42 of thejudgment it was noted that there was no dispute and in fact there was concession regarding maintainability of E the writ petition. Reference has also been made to National Highways Authority of India v. Ganga Enterprises and Anr., [2003] 7 SCC 410 and Rajureshwar Associates v. State of Maharashtra, [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 F ·...,{_ entertained were set out in Whirlpool Corporation v. Registrar of Trade Marks, Mumbai and Ors., [1998] 8 sec I.

6Copy pinpoint6. 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 Excise, [1992] G. Supp 2 sec 432 can be applied.

7Copy pinpoint7. 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. H

p. 432 Copy page pinpoint

A departments have been highlighted by this Court in several cases. In Chief Conservator of Forests, Govt. ofA.P. v. Collector and Ors., [2003] 3 SCC 472 ~ it was inier alia as follows:

"I 4. Under the scheme of the Constitution, Article 131 confers original jurisdiction on the Supreme Court in regard to a dispute between two B 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 perm,issible for two departments of a State or the Union of India

OIL&NATURALGASCORPK LID. v. CITY &INDUST. DEV.CORPN.,MAHARASHTRA(PASAYAT,J.) 433 ·

15. The facts of this appeal, noticed above, make out a strong case that there is a felt need of setting up of similar committees by the State Government also to resolve the controversy arising between various departments of the State or the State and any of its undertakings. It would be appropriate for the State Governments to set up a committee consisting of the Chief Secretary of the State, the Secretaries of the departments concerned, the Secretary of Law and where financial commitments are involved, the Secretary of Finance. The decision taken by such a committee shall be binding on all the departments concerned and shall be the stand of the Government."

8Copy pinpoint8. In Punjab and Sind Bank v. Allahabad Bank and Ors.. [2006] 4 SCC C 780 it was observed as follows:

"6. The matter was again examined in the case of Chief Conservator of Forest v. Collector, [2003] 3 SCC 472. In Para 14 and 15. it was noted as follows: "Under the scheme of the Constitution, Article 131 confers original D .. ,.._ 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 E 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 co-ordination and not in confrontation. Filing of a writ F . 7' 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. G 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 --1 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. Collector of Central Excise, H

p. 434 Copy page pinpoint

A (1992) Suppl. 2 SCC 432 called upon the Cabinet Secretary to handle such matters. In Oil and Natural Gas Commission & Anr. V. Collector of Central Excise, (1995) Suppl. 4 sec 541, this Court directed the Central Government to set up a Committee consisting of representatives from the Ministry of Indµstry, the Bureau of Public Enterprises and the Ministry of Law, to monitor B dispute 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 c and its clearance for litigation. The Government may include a a representative of the Ministry concerned in 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.

·n The facts of this appeal, noticed above, make out a strong case that there is felt need of setting up of simifar committees by the State Government also to resolve .the controversy arising between various departments of the State or the State and any of its undertakings. It would be appropriate for the State Governments to set up a Committee consisting of the Chief Secretary of the E State, the Secretaries of the concerned departments, the Secretary of Law and where financial commitments are involved, the Secretary of Finance. The decision taken by such a committee shall be binding on all the departments concerned and shall be the stand of the Government. "

F 7. The directions as noted above were quoted in Mahanagar Telephone Nigam Ltd v. Chairman, Central Board, Direct Taxes and Anr., [2004) 6 SCC 431 and were adopted in paragraph 8. It was noted as follows:

"Undoubtedly, the right to enforce a right in a court of law cannot G 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 (2-003) 3 sec 472 it was not contemplated by the framers of the H Constitution or the Civil Procedure Code that two departments of a

9Copy pinpoint9. The position has also been examined in U.P. SEB and Anr. v. Sant H

436 SUPREME COURT REPORTS (2007) 8 S.C.R ..

A Kabir Sahakari Katai Mills ltd, [2005) 7 SCC 576 and Mahanagar Telephone Nigam 's case (supra).

10Copy pinpoint10. The matter is pending since 1990. Considering the nature of the controversy which is a recurring feature we direct that a committee be formed to sort out the differences between the Central Government and the State B Government entities. The composition of such committee shall be as follows: (I) The Cabinet Secretary of the Union; (2) Chief Secretary of the State; (3) Secretaries of the concerned departments of Union and the State; c and (4) Chief Executive Officers of the concerned undertakings.

I I. As the matter is pending since Jong, we direct that the Committee shall be constituted forthwith to take a decision within 4 months from the date D of receipt of copy of this judgment.

12Copy pinpoint12. The appeal is disposed of with no order as to costs.

R.P. Appeal disposed of.