1991 JTR(SC) 464
1992 Supp2 SCC 432
SUPREME COURT OF INDIA
Ranganath Misra, CJI., Kuldip Singh, J.
Oil, Natural Gas Commission
Versus
Collector Of Central Excise
Case No., 1 , 2 , 2058 , 2059 of 1988
Date of Decision, 9/11/91
Advocates Appeared: Dutta B., Jain Sushil Kumar, Joshi R.K.
Public sector undertakings and the state should avoid litigating against each other using public funds, as such disputes waste judicial time and public resources and should be resolved internally.
Act
Referred
:CONSTITUTION OF INDIA
: Art.226, Art.136, Art.133, Art.32
(A) Government Litigation - Litigation between state entities - Public sector undertakings of the central government and the state should not engage in litigation against each other by spending public money on counsel fees, court fees, and procedural expenses, as this wastes public time and resources. (Para 3)
Facts of the case:
Applications were filed for the restoration of civil appeals that had been previously withdrawn based on instructions from a government ministry. Subsequently, the entity was advised to approach the court for relief after the tax authority refused to withdraw a demand and refer the matter to arbitration.
Findings of Court:
The court observed that courts are maintained for appropriate litigations and their time should not be consumed by disputes between government bodies funded by the same public source. The conduct in the present case was described as an instance of total callousness. (Para 3)
Issues: Whether litigation between a public sector undertaking and the state, funded by public money, is a permissible use of judicial time and public resources.
Ratio Decidendi: Government entities and public sector undertakings should resolve disputes internally rather than through court litigation to avoid wasting public funds and judicial time.
Result: The concerned high-ranking government official is directed to personally handle the matter and report to the court within four weeks, supported by an affidavit, explaining why the litigation is being conducted.
Facts of the case:
Applications were filed for the restoration of civil appeals that had been previously withdrawn based on instructions from a government ministry. Subsequently, the entity was advised to approach the court for relief after the tax authority refused to withdraw a demand and refer the matter to arbitration.
Findings of Court:
The court observed that courts are maintained for appropriate litigations and their time should not be consumed by disputes between government bodies funded by the same public source. The conduct in the present case was described as an instance of total callousness. (Para 3)
Issues: Whether litigation between a public sector undertaking and the state, funded by public money, is a permissible use of judicial time and public resources.
Ratio Decidendi: Government entities and public sector undertakings should resolve disputes internally rather than through court litigation to avoid wasting public funds and judicial time.
Result: The concerned high-ranking government official is directed to personally handle the matter and report to the court within four weeks, supported by an affidavit, explaining why the litigation is being conducted.
B.DUTTA, R.K.Joshi, SUSHIL JAIN
(1) THESE are applications for restoration of civil nos. 2058-59 of 1988 which on 3/02/1989 were permitted to be withdrawn at the request of the appellants.
(2) THE withdrawal was on the basis of the instructions issued by the Ministry of Petroleum and Natural Gas vide their letter dated 3/10/1988. Later on 28/09/1989 the Chairman of the ONGC was intimated to the following effect:
"PLEASE refer to our DO letter No. DBC/Acctts/l 11/9/87 dated 24/06/1989 regarding excise duty on lean gas supplied to consumers ex-Uran. The suggestion made by you has been examined and in view of the fact that the CBEC is not prepared to withdraw the demand and refer the matter to arbitration, ONGC may approach the Supreme court for appropriate relief."
On the basis of the later instructions, these applications are said to have been filed.
(3) THIS court has on more than one occasion pointed out that Public Sector Undertakings of central government and the Union of India should not fight their litigations in court by spending money on fees of counsel, court fees, procedural expenses and wasting public time. courts are maintained for appropriate litigations. courts time is not to be con sumed by litigations which are carried on either side at public expenses from the source. Notwithstanding these observations repeated on a number of occasions, the present cases appear to be an instance of total callousness. The letter of 3/10/1988, indicated that the Cabinet secretary was looking into the matter. That has not obviously been followed up. As an instance of wasting public time and energy this matter involves a principle to be examined at the highest level.
(4) THE Cabinet secretary is called upon to handle this matter personally and report to this court within four weeks as to why this litigation is being conducted when the two sides are a public sector undertaking and the Union of India. The report of the Cabinet secretary should be supported by an affidavit of a responsible officer. The matter be placed again before us on 11/10/1991.
COURT Masters