Kerala High Court
New India Assurance Co. Ltd. vs Shipping Corporation Of India Ltd. on 2 April, 2003
Equivalent citations: 2003(2)KLT331
Author: K.S. Radhakrishnan
Bench: K.S. Radhakrishnan, K. Padmanabhan Nair
JUDGMENT K.S. Radhakrishnan, J.
1. This appeal has been preferred by New India Assurance Co. Ltd. against the judgment and decree of the learned single Judge in A.S.325 of 1983, which arose out of the judgment and decree in O.S. 215/81 of Sub Court, Cochin.
2. O.S.215/81 was a suit filed by the Cashew Corporation of India Ltd., along with the Kerala State Cashew Development Corporation and the New India Assurance Co. Ltd. First defendant was the Shipping Corporation of India Ltd. and the second defendant was the New Dholera Shipping & Trading Co. Ltd., carrier. Suit was instituted for realisation of an amount of Rs. 82,162.03. First defendant had shipped a consignment of cashewnuts from Mombaza as per order placed by the first plaintiff. The same had to be transported to Cochin. The ship arrived at Cochin and after discharge the ship left Cochin Port on 23.11.1980. Delivery was effected by the second defendant for and on behalf of the first defendant on 20.11.1980 and thereafter full quantity was not delivered. There was a short delivery of 13,436 Kg. cashewnuts. A joint survey was conducted and a total loss of Rs. 83,002.03 was determined. In addition to that a sum of Rs. 150/- was spent towards surveyor fee. Though plaintiff had addressed the defendant to make good the said amount the same was not done. Consequently the suit was instituted. Since defendant did not settle the claim, amount was paid by the third plaintiff Insurance Company. Consequently plaintiffs had instituted the suit for realization of the said amount. On the side of the plaintiffs A1 to A8 documents were produced and PW1 to PW3 were examined. On the side of the defendants B1 to B9 documents were produced and X1 to X2(a) were also produced. On the side of the defendants DW1 to DW3 were examined. Suit was ultimately decreed allowing the plaintiffs to realize from the first defendant and from the assets of the first defendant if any in the hands of the 2nd defendant, a sum of Rs. 82040.20 with interest at 6% from the date of suit till the date of realization. It was also ordered that the plaintiffs were entitled to the costs of the suit and defendants was ordered to suffer their costs.
3. The Shipping Corporation of India along with the second defendant had then preferred A.S.325/83 before this Court. Notices were issued to the respondents-plaintiffs. Matter was hotly contested and the appeal was kept pending before this Court for 7 years. Learned single Judge of this Court allowed the appeal and set aside the judgment and decree of the lower court and the suit was dismissed. Insurance company has come up with this appeal from first appeal with Shipping Corporation of India, Cashew Corporation of India, Kerala State Cashew Development Corporation and the carriers as respondents. AH of them engaged lawyers and this appeal from appeal was kept pending before this Court for another 12 years. We do not know for what purpose they are litigating for the last 22 years. The Cashew Corporation of India, a Government of India organization is seeking relief as against Shipping Corporation of India another Government of India organization for an amount of Rs. 82,040.20. Apex Court had occasion to consider identical issue in Oil and Natural Gas Commission and Anr. v. Collector of Central Excise (1992 Supp. (2) SCC 432). In that case the Apex Court had directed the Cabinet Secretary to resolve those disputes. In that case the Supreme Court had stated as follows:
"I would also like to state that the Government respects the views expressed by this Hon'ble Court and has accepted them that public undertakings of Central Government and the Union of India should not fight their litigation in court by spending money on fees on counsel, court fees, procedural expenses and wasting public time. It is in this context that the Cabinet Secretariat has issued instructions from time to time to all departments of the Government of India as well as to public undertakings of the Central Government to the effect that all disputes, regardless of the type, should be resolved amicably by mutual consultation or through the good offices of empowered agencies of the Government or through arbitration and recourse to litigation should be eliminated."
In the above mentioned case Supreme Court directed the Government of India to set up a High Power Committee consisting of representatives from the Ministry of Industry, the Bureau of Public Enterprises and Ministry of Law to monitor disputes between Ministry and Ministry of Government of India, Ministry and Public Sector Undertaking of the Government of India and Public Sector Undertakings in between themselves, 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. The above mentioned decision of the Supreme Court was subsequently clarified by order in I.A. Nos. 3 and 4 of 1992 in Civil Appeal Nos. 2058-59/1998 dated 7.1.1994. It was pointed out that the earlier order was intended to ensure that no litigation comes to court without the parties having had the opportunity of conciliation before an in-house committee. It was ordered that pending matters before any court or Tribunal should also be the subject matter of the deliberations of the High Power Committee. It was ordered that all matters pending as on that day either instituted by the Union of India or any of the Public Sector Undertakings should within one month from that day be referred to the High Power Committee. It was also ordered that whenever appeals or petitions are filed without clearance from the committee so as to save limitation, the appellant or the petitioner, as the case may be shall within four months from such filing, refer the matter to the High Power Committee with prior notice to the Designated Authority in Cabinet Secretary of Government of India authorised to receive notices in that behalf. It was also ordered that it was only after getting clearance from the High Power Committee that the matter be proceeded with. The above mentioned decision was followed by one of us, K.S. Radhakrishnan, J. in K.S.E.B. v. Chief Conservator of Forests, 1996 (2) KLT 232, which was a dispute between a State Government entity and Government Departments. Similar issue came up for consideration before the Apex Court again in Oil and Natural Gas Commission v. Collector of Central Excise (1995 Supp. (4) SCC 541) and the Court directed the Central Government to set up a Committee consisting of representatives from the Ministry of Industry, the Bureau of Public Enterprises and the Ministry of Law, to monitor dispute between Ministry and Ministry of the Government of India, Ministry and public sector undertakings of the Government of India and public sector undertakings in between themselves, 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.
4. Similar issue also came up for consideration before the Apex Court in a recent decision in Chief Conservator of Forests v. Collector and Ors., 2003 AIR SCW 1251 and the court detailed the position stating as follows:
"Under the scheme of the Constitution, Article 131 confers original jurisdiction on theSupreme Court in regard to a dispute between two States of the Union of India or between one or more States and the Union of India. It was not contemplated by the framers of the Constitution or the C.P.C. that two departments of a State or the Union of India will fight a litigation in a court of law. 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."
We are of the view in the instant case the Cashew Corporation of India and Shipping Corporation of India are the two Government of India Organizations and the New India Assurance Co. Ltd. are fighting in the court of law for the last 22 years. Dispute is with regard to the realisation of sum of Rs. 82040.20 by the Cashew Corporation of India Ltd. from the Shipping Corporation of India. We hope better wisdom would dawn upon them in the years to come. Both of them are litigating this matter by paying court fee, lawyers' expense, travelling expenses and meeting other litigational expenses. We fail to see why the Cabinet Secretary has taken no decision to resolve this case by referring it to a committee in spite of the general direction given by the Apex Court in ONGC case. We direct all the parties concerned to address their grievance before the Cabinet Secretary, Government of India who will take appropriate steps as per the direction of the Apex Court. In this case all the same we are inclined to give a direction to the Cashew Corporation of Inida Ltd., Kerala State Cashew Development Corporation Ltd. and the New India Assurance Company Ltd. to file a statement regarding the expenses they had incurred in this litigation during the last twenty two years before this Court within a period of two months from today. Appeal is disposed of accordingly leaving the matter to the Cabinet Secretary. Parties would suffer their respective costs.