Last week, the Union law ministry asked various ministries not to take their quarrels to courts but resolve these amicably through empowered agencies or arbitration and if necessary, take the matters to the cabinet secretariat or the Prime Minister’s Office. It is a good idea but similar earlier initiatives have failed.
In 1991, in the case of ONGC vs CCE, the Supreme Court asked that public sector undertakings (PSUs) and the Government of India (GOI) not fight in court and the cabinet secretary was ‘called upon to handle the matter personally’. He reported back that instructions had been issued from time to time to all departments of the GOI and PSUs, that all disputes be resolved by consultation or through the good offices of empowered GOI agencies or through arbitration, and recourse to litigation should be eliminated.
The court took note and followed with an order dated October 11, 1991, in the ONGC-II case, directing the government “to set up a committee consisting of representatives from the ministry of industry, Bureau of Public Enterprises and ministry of law, to monitor disputes between ministry and ministry, ministry and PSUs, and PSUs between themselves, to ensure no litigation comes to court or to a tribunal without the matter having been first examined by the committee and its clearance for litigation”.
Thereafter, in the ONGC-III case, the SC directed that in the absence of clearance from the ‘Committee of Secretaries’ (CoS), any legal proceeding will not be proceeded with. Appeals and petitions could be filed without such clearance to save limitation. However, the CoS clearance had to be obtained within one month from such filing. By another order dated September 20, 2007 (ONGC-IV case), the SC extended the concept of dispute resolution by a High-Powered Committee, later called the ‘CoS’ and finally termed as ‘Committee on Disputes’ (CoD), to amicably resolve disputes also involving state governments and their instruments.
However, the mechanism did not achieve the desired results and led to delays. The court found that on the same set of facts, clearance was given in one case and refused in the other. In one case, this led a PSU to institute a Special Leave Petition on the ground of discrimination. In many cases, one department gave an exemption but another denied it. Also, with the enactment of regulatory laws in several cases, there was overlapping of jurisdictions, for example between the Securities and Exchange Board of India and insurance regulators. The SC said, “Stakes in such cases are huge. One cannot possibly expect timely clearance by CoD. In such cases, grant of clearance to one and not to the other may result in generation of more and more litigation.” The SC, therefore, recalled its earlier orders.
This past experience need not detract from the merits of the latest initiative. As the SC observed, “The CoD machinery contemplated was only to ensure that no litigation comes to court without the parties having had an opportunity of conciliation before an in-house committee.” The reasons for failure of that mechanism can be studied and suitable measures taken to ensure delays and inconsistencies are avoided.
On tax mattes, the ombudsman can be empowered to decide disputes between government entities. In any case, mere directives can’t substitute carefully thought-out institutional mechanisms.
email: tncrajagopalan@gmail.com
