2004 (5) TMI 7 - SC - Income Tax

Held that decision taken by the High Powered Committee is binding on all Departments of Union of India

Summary

Issues:
- Preliminary objection to special leave petition
- Dispute resolution mechanism between Government Departments and public sector undertakings
- Right of public sector bodies to approach court
- Role of High Powered Committee in resolving disputes
- Clarification on statutory remedies and conciliation process
- Duty of Government Departments to abide by Committee decisions

Preliminary Objection to Special Leave Petition:
The appeal challenges a judgment from 2000. Mr. Rohatgi raised a preliminary objection, citing the need to refer disputes between Government Departments and public sector undertakings to a High Powered Committee before proceeding in court. He relied on previous cases emphasizing the duty to seek clearance from the Committee before litigation.

Dispute Resolution Mechanism:
The judgment highlights the need for a conciliation mechanism to prevent frivolous litigation between Government Departments and public sector undertakings. The Committee's role is to ensure disputes are resolved internally before reaching the courts, aiming to avoid wastage of public resources and time.

Right of Public Sector Bodies to Approach Court:
The argument presented by Mr. Andhyarujina stresses that every entity, including public sector bodies, has the right to seek legal redress if fundamental rights are affected. It is clarified that statutory remedies are not to be erased, and the High Powered Committee's purpose is to facilitate conciliation before resorting to litigation.

Role of High Powered Committee:
The judgment elucidates that the High Powered Committee's function is not solely conciliation but also to prevent frivolous disputes from reaching the courts. The Committee's decisions are expected to be fair, and parties are required to abide by them, even if dissatisfied, to maintain discipline and avoid unnecessary litigation.

Clarification on Statutory Remedies and Conciliation Process:
The court clarifies that the High Powered Committee's role is to prevent frivolous litigation and ensure conciliation before legal action. The mechanism aims to streamline dispute resolution and avoid unnecessary court interventions, protecting the interests of all parties involved.

Duty of Government Departments to Abide by Committee Decisions:
The judgment emphasizes that Government Departments and public sector undertakings must respect the decisions of the High Powered Committee, even if dissatisfied. Failure to comply results in wastage of public resources and time, undermining the purpose of the conciliation mechanism.

In conclusion, the court held that as clearance was not granted to the appellants, the proceedings could not continue. The judgment underscores the importance of abiding by the Committee's decisions to prevent frivolous litigation and uphold the efficiency of the dispute resolution mechanism. The appeal was disposed of with a directive for the respondents to proceed with the order, while the appellants retained the right to pursue legal remedies if affected by the decision.