Disputes Between Government and PSUs - No More Committee on Disputes
IN OIL AND NATURAL GAS COMMISSION v COLLECTOR OF CENTRAL EXCISE – , the Supreme Court delivered a landmark ruling that no dispute between a Public sector Undertaking and a Central Ministry should go to any court or tribunal without clearance from a high power Committee of Secretaries, known earlier as COS (Committee of Secretaries) and now as COD (Committee on Disputes)
Writing in the ELT dated 01.04.2003, I had commented,
“ After 10 years of the Supreme Court's order, today the concept of Public Sector Undertaking has totally changed, What with a minister for disinvestment vigorously pursuing disinvestments and hoping to collect more than the whole year's customs revenue, from selling PSUs, the PSUs are not really that Public. Today the Government's share in many of the major PSUs is less than 50%. And the management control is also in private hands.
The Supreme Court's decision in the ONGC case was in the context of one wing of the Government spending money and time against another wing and wasting the time of the courts – all for nothing. But today when the PSUs are not really PSUs , and when management control is in the hands of private agencies, the question of wasting one department's money and time against another department may not be all that valid.
I humbly suggest that the matter may be taken back to the hon'ble Supreme Court to decide whether in the context of large privatisation, the ONGC order is still valid.”
In 11 02 2005, I had questioned,
“How much of paper, stationery and precious man hours are wasted for this totally avoidable procedure? Should valuable judicial time be spent in dismissing and restoring the appeals by PSUs ? In the court, precious time is lost on this insignificant piece of work. The members have to pronounce the order in the court, somebody has to type it out and make about 20 copies, the honourable members have to sign it and then the registry has to issue a certified copy and then despatch it to several people - at the time of dismissing the appeal. At the time of restoration –ditto!.Can we really afford this luxury?
Why can't we do away with this useless unproductive work? Why can't we change the law so that PSUs can file their appeals after obtaining clearance from COD? If they don't give it (Strictly, the COD cannot refuse permission to appeal; In Canara Bank v Power Grid Corporation of India Ltd, the Delhi High Court held that “it does not lie with the High Power Committee to refuse clearance; it has only two options - either to resolve the dispute or to grant clearance for the litigation.”) at least the appeal papers can be saved.”
Now the Supreme Court is of the opinion that the working of the COD has failed and the mechanism has not achieved the results for which it was constituted and has in fact led to delays in litigation.
So the Supreme Court has recalled the ONGC orders and now there is no requirement of COD clearance for
1. Disputes between PSUs and Government Departments.
2. Disputes between PSUs.
3. Disputes between government Departments.
Now all these cases can be directly agitated in the Tribunals and courts without going through the complicated COD route.
I had suggested this eight years ago.
We bring you this landmark decision of the Supreme Court today. As usual we are the first to bring this case delivered yesterday. In another hour, all the other tax sites will carry it – from us.
Please see Breaking News.