The Central and state governments, their departments and public sector undertakings comprise the largest litigants in the country. It is not just because that they are at the receiving end, sued by the public for various reasons. They have innumerable disputes between themselves, too. Many of them are taken to the court. In order to reduce this heavy burden on the already creaking judiciary, the Supreme Court in 1992 asked the Central and state governments to set up high-powered committees to examine the disputes before they are brought before the courts. However, this decision in the ONGC case had to be explained further in at least five later judgements. Still, it would seem that the confusion has not ended, going by last month's judgement of the Supreme Court in Punjab & Sind Bank vs Allahabad Bank. |
Allahabad Bank sued Punjab & Sind Bank for Rs 5 crore with interest as the banker's cheque issued by it was void. The latter bank filed an application in the Calcutta High Court on the ground that the modalities indicated by the Supreme Court in the ONGC judgement were not followed. |
The high court held the view that the ONGC judgement did not wipe out the rights of any party to sue another. The call to the governments to get the disputes examined by a committee was only to avoid litigation; it did not extinguish the rights of the parties to move the court. |
This stand of the high court is not entirely new. Doubts had arisen in the past decades about the import of the ONGC judgement. In two later cases bearing the same name (ONGC), the Supreme Court had examined the gray areas left by the original ONGC judgement. In one of them, the court said: "Some doubts persist as to the precise meaning of the words "recourse to litigation should be avoided". It is clear that the order of this court is not to the effect that 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. |
It further clarified that the purpose of setting up the committee was to ensure that no litigation comes to the court or a tribunal without the matter having been first examined by the committee and its clearance for litigation. The parties should be given an opportunity of conciliation before an in-house committee. |
This explanation, given in 1995, had apparently failed to settle the doubts. Therefore, the matter was examined again in another major judgement of the Supreme Court in 2003, in Conservator of Forests vs Collector. This decision gave a longer elucidation of the scheme. It said that the Constitution-makers had not contemplated that two departments of the state or the centre would fight litigation in a court of law. Nor their agencies. "Such a course cannot but be detrimental to public interest as it also entails avoidable wastage of public money and time... They must act in co-ordination and not in confrontation," the judgement said. That was why all inter-departmental disputes and those between public sector undertakings should initially be examined by the committee. Only after clearance from the committee should the concerned parties go to court. |
The matter did not end there. In 2004, two more judgements were delivered on the same theme. One was in the ONGC case itself. Another was MTNL vs Chairman, CBDT. In the latter case, the Supreme Court emphasised that no one's right could be taken away. However, it should be remembered that the courts are overburdened with cases. The majority of such cases pertain to government departments and/or public sector undertakings. Therefore, frivolous cases should be eliminated by the committee. It further said: "It should be remembered that 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 above judgements mainly dealt with government agencies. However, in the present case involving banks, their status also was another issue. The Calcutta High Court concluded that they were public sector undertakings. The Supreme Court remarked that the conclusion was "abrupt" without determining the facts in this regard. Unless they are examined, the earlier judgements could have no application, said the court. Therefore, the matter was remitted to the high court. |
The present judgement also may not have solved the problem as it only quotes extensively from the earlier decisions in various cases. It does not specify or crystallise the findings of the earlier judgements for the benefit of the courts below. The Supreme Court has remarked that the Calcutta High Court had confused and misunderstood the earlier judgements, especially when the high court says that the ONGC judgement was "of an administrative nature though a judicial order." It would be interesting to watch how the high court deals with the issue after it reconsiders the case. |