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High courts may be referring inter-governmental disputes to central panels for resolution in order to reduce litigation, but this is giving rise to constitutional problems, says the union law ministry.

“Instances have come to the notice of the cabinet secretariat where some of the high courts have given instructions to its Committee on Disputes (CoD) to resolve disputes between central government departments/public sector undertakings (PSUs) and state government departments/state PSUs,” it says.

“We are of the considered view that such disputes are neither within the purview of the CoD working within the cabinet secretariat nor similar committees constituted by various states (to resolve their intra-governmental disputes).”

“It also goes against the federal structure of the constitution,” the ministry stated in a communication sent in May to assistant solicitor generals at various high courts who are the central government’s law officers.

The ministry advised the law officers that “whenever disputes involving government departments and PSUs come before a court, you may apprise the courts of the existing practice and composition of the committee and its jurisdiction, so that reference of disputes between the central and state entities to the CoD may be avoided.”

The CoD was constituted within cabinet secretariat in December 1991 on a Supreme Court direction in connection with a dispute between two central government entities – Oil and Natural Gas Corporation (ONGC) and the Collector of Central Excise.

Conscious of government being the largest litigant, the apex court had asked the central government to form a CoD to resolve all such disputes, before resorting to litigation in courts.

While hearing another case between Mahanagar Telephone Nigam Limited and the Central Board of Direct Taxes (CBDT) in 2004, the apex court observed that various states too should have a committee like the CoD to try to resolve disputes between various departments of a state government.

This observation subsequently led to the establishment of dispute resolution panels by some states under their respective chief secretaries.

But the problem began when various high courts began ordering litigating government departments to directly approach the CoD within the cabinet secretariat.

The high courts’ orders did not differentiate if the litigant entities belonged to the same state government or the central government or different governments.

The orders also asked the central government often to form entirely new committees, other than the CoD, to resolve a dispute between entities belonging to two different governments.

As the cabinet secretariat was deluged by such orders, it asked the law ministry to take up the matter with high courts.

The ministry wrote to assistant solicitor generals to suitably apprise the high courts of the constitutional position as per which the central government has little say in resolving inter-governmental disputes.

“The order for setting up committees other than CoD also leads to functional inconvenience and obliges the government of India to set up a separate committee for each dispute which is administratively impractical,” said the law ministry in its communication.

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