Tribunal Upholds Supreme Court Directive on PSU Litigation Clearance

The Tribunal upheld the applicability of the Supreme Court's directive in the ONGC case, emphasizing the necessity of clearance from the Committee of Secretaries before proceeding with litigation involving Public Sector Undertakings (PSUs) and government departments. It concluded that appeals of PSUs must be heard by the Committee of Secretaries and that the revenue should abstain from coercive measures until the Committee resolves the disputes. An individual member expressed dissent, suggesting a referral to a Larger Bench for resolution due to conflicting views within the Tribunal.

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Issues Involved:
1. Applicability of the Supreme Court's directive in the ONGC case regarding disputes between Public Sector Undertakings (PSUs) and government departments.
2. Interpretation of statutory rights of appeal in light of the Supreme Court's directive.
3. The role of the Committee of Secretaries in resolving disputes before litigation.
4. Whether stay applications are exempt from the Supreme Court's directive.
5. Judicial propriety and the Tribunal's obligation to follow the Supreme Court's directive.

Issue-wise Detailed Analysis:

1. Applicability of the Supreme Court's Directive:
The department raised a preliminary objection based on the Supreme Court's directive in the ONGC case (Civil Appeal No. 2058-59 of 1988), which mandates that disputes between the Government of India and PSUs must first be examined by a Committee of Secretaries before proceeding to litigation. The Tribunal noted that this directive aims to save public money and time by encouraging amicable settlements. The directive explicitly states that no litigation should proceed without clearance from the Committee, and this applies to all courts and tribunals.

2. Interpretation of Statutory Rights of Appeal:
The counsels for the PSUs argued that the Supreme Court's directive cannot override statutory rights of appeal provided by law. They contended that the right of appeal originates when a dispute arises and that the Supreme Court cannot legislate or impair statutory procedures. They emphasized that the directive should be interpreted to apply only to disputes arising after the directive's issuance or the Committee's appointment. They cited several precedents, including AIR 1988 Supreme Court 1531 and 1991 (4) S.C.C 496, to support their arguments.

3. Role of the Committee of Secretaries:
The Tribunal highlighted that the Supreme Court's directive aims to resolve disputes through the Committee of Secretaries before resorting to litigation. The directive requires that all disputes between PSUs and government departments be referred to the Committee, and only if the Committee fails to resolve the issue, can the matter proceed to litigation. The Tribunal emphasized that it would be improper to interpret or sit in judgment over the Supreme Court's directive, and it must be respected in the interest of judicial discipline and decorum.

4. Exemption of Stay Applications:
The Tribunal considered whether stay applications are exempt from the Supreme Court's directive. It noted that stay applications are interim reliefs and do not decide disputes finally. Therefore, they could be construed to be outside the purview of the directive. However, the Tribunal also acknowledged that the revenue should not take coercive action until the Committee of Secretaries has settled the disputes.

5. Judicial Propriety and Tribunal's Obligation:
The Tribunal concluded that it must adhere to the Supreme Court's directive and refrain from proceeding with disputes between PSUs and government departments until clearance from the Committee is obtained. The Tribunal recognized that the directive does not take away the statutory remedy of filing appeals, but it requires that the Committee of Secretaries be approached for an early settlement. The Tribunal also noted that the revenue should not resort to coercive measures until the Committee has given its decision.

Separate Judgment by Judicial Member G.P. Agarwal:
G.P. Agarwal, Judicial Member, expressed reservations about the majority view. He noted that different benches of the Tribunal had taken conflicting views on the issue. He referred to the West Regional Bench's decision in Digvijay Textile Mills (N.T.C.) Another v. CCE, Bombay-I & Vadodara, which held that appeals should not be entertained without clearance from the Committee. In contrast, the Special Bench-B in ONGC v. CCE, Calcutta, held that the right of appeal cannot be taken away. Agarwal suggested that the matter be referred to a Larger Bench for a definitive resolution.

Majority Order:
The majority order, endorsed by Members R. Jayaraman and S.L. Peeran, concluded that:
1. Appeals of Public Undertakings must be heard by the Committee of Secretaries constituted by the Cabinet Secretary, notwithstanding pending appeals in the Tribunal.
2. The revenue should not resort to coercive measures until the Committee of Secretaries has settled the disputes.

Conclusion:
The Tribunal disposed of the preliminary issue by adhering to the Supreme Court's directive, emphasizing the need for clearance from the Committee of Secretaries before proceeding with litigation involving PSUs and government departments. The Tribunal also noted that the revenue should refrain from coercive actions until the Committee has resolved the disputes.

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