ETAH GRAMIN BANK Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) Heard Sri Ravi Kant, senior advocate, assisted by Sri Shakil Ahmad, advocate on behalf of the petitioner and Sri Bharat Ji Agarwal, senior advocate, assisted by Sri N. Mahajan, advocate on behalf of all the contesting respondent Nos. 1, 2 and 3.

(2.) At the outset, preliminary objection regarding maintainability of the present writ petition under Article 226, Constitution of India, is being raised on behalf of the respondents, relying upon the decision in the case of Chief Conservator of Forests, Government of A.P. v. Collector and Ors. AIR2003 SC 1805 , 2003 (4)ALD27 (SC), [2003 (2)JCR175 (SC)], JT2003 (5)SC 210 , (2003)2 MLJ57 (SC), 2003 (2)SCALE429 , (2003)3 SCC472 , wherein vide para 14 of the above reported judgment, apex Court observed....It is neither appropriate nor permissible for two Departments of a State or the Union of India to fight litigation in a Court of law. Indeed, such a course cannot but be detrimental to the public interest as it also entails avoidable wastage of public money and time. Various Departments of the Government are its limbs and, therefore, they must act in co-ordination and not in confrontation. Filing of a writ petition by one Department against the other by invoking the extraordinary jurisdiction of the High Court is not only against the propriety and polity as it smacks of indiscipline but is also contrary to the basic concept of law which requires that for suing or being sued, there must be either a natural or a juristic person. The States/Union of India must evolve a mechanism to set at rest all inter-Departmental controversies at the level of the Government and such matters should not be carried to a Court of law for resolution of the controversy. In the case of disputes between public sector undertakings and the Union of India, this Court in Oil & Natural Gas Commission v. CCE reported at (1992) 104 CTR (SC) 31-Ed. called upon the Cabinet Secretary to handle such matters... this Court directed the Central Government to set up a Committee consisting of representatives... to ensure that no litigation comes to Court or to a Tribunal without the matter having been first examined by the Committee and its clearance for litigation....

(3.) The aforesaid decision has been followed by the apex Court in the case of Mahanagar Telephone Nigam Ltd v. Chairman, CBDT and Anr. AIR2004 SC 2434 , (2004)189 CTR97 (SC), 2004 (168)ELT147 (SC), [2004 ]267 ITR647 (SC), 2004 (5)SCALE705 , (2004)6 SCC431 , wherein apex Court observed : We have heard the parties. Undoubtedly, the right to enforce a right in a Court of law cannot be effaced. However, it must be remembered that Courts are overburdened with a large number of cases. The majority of such cases pertain to Government Departments and/or public sector undertakings. As is stated in Chief Conservator of Forests' case , AIR2003 SC 1805 , 2003 (4)ALD27 (SC), [2003 (2)JCR175 (SC)], JT2003 (5)SC 210 , (2003)2 MLJ57 (SC), 2003 (2)SCALE429 , (2003)3 SCC472 it was not contemplated by the framers of the Constitution or the CPC that two Departments of a State or Union of India and/or a Department of the Government and a public sector undertaking fight a litigation in a Court of law. Such a course is detrimental to public interest as it entails avoidable wastage of public money and time. These are all limbs of the Government and must act in co-ordination and not confrontation. The mechanism set up by this Court is not, as suggested by Mr. Andhyarujina, only to conciliate between Government Departments. It is also set up for purposes of ensuring that frivolous disputes do not come before Courts without clearance from the High Powered Committee. If it can, the High Powered Committee will resolve the dispute. If the dispute is not resolved the Committee would undoubtedly give clearance. However, there could also be frivolous litigation proposed by a Department of the Government or a public sector undertaking. This could be prevented by the High Powered Committee. In such cases there is no question of resolving the dispute, The Committee only has to refuse permission to litigate. No right of the Department/public sector undertaking is affected in such a case. The litigation being of a frivolous nature must not be brought to Court. To be remembered that in almost all cases one or the other party will not be happy with the decision of the High Powered Committee. The dissatisfied party will always claim that its rights are affected, when in fact, no right is affected. The Committee is constituted of highly placed officers of the Government, who do not have an interest in the dispute, it is thus expected that tneir decision will be fair and honest. Even if the Department/public sector undertaking finds the decision unpalatable, discipline requires that they abide by it. Otherwise the whole purpose of this exercise will be lost and every party against whom the decision is given will claim that they have been wronged and that their rights are affected. This should not be allowed to be done.