Supreme Court Closes Inquiry into Dabhol Power Project: Center of Indian Trade Unions vs. State of Maharashtra (2019)

Date of the Judgment: April 11, 2019
Citation: Not Available
Judges: Ranjan Gogoi, CJI, Deepak Gupta, J., Sanjiv Khanna, J.

The Supreme Court of India was faced with the question of whether to continue a judicial inquiry into the Dabhol Power Project, a matter that has been pending for over two decades. The Court had to consider if continuing the inquiry would serve any purpose given the significant passage of time. The bench comprised of Chief Justice Ranjan Gogoi and Justices Deepak Gupta and Sanjiv Khanna.

Case Background

The case originated from a challenge by the Center of Indian Trade Unions against the execution of the Power Project Agreement (PPA) and modified power project agreements related to the Dabhol Power Corporation Limited (DPC). The Maharashtra State Electricity Board (MSEB) had executed the initial agreement in 1993. The Bombay High Court, while acknowledging questionable actions by the Board and the Government, dismissed the writ petition due to lack of concrete evidence of corruption, bribery, fraud, and misrepresentation.

Subsequently, the petitioner approached the Supreme Court. On May 2, 1997, the Supreme Court issued a notice specifically on the accountability of the State of Maharashtra, particularly regarding its inconsistent stances. The court did not grant leave on the question of the validity of the project and contract for the Dabhol Power Project.

During the pendency of the special leave petition, the State of Maharashtra appointed the Godbole Committee to investigate the matter. This committee submitted its report on April 10, 2001, highlighting serious illegalities and infirmities in the award of the contract and processing of approvals, which were seen as against public interest. The committee noted a failure of governance across different governments and at both administrative and political levels. However, there was a difference of opinion within the committee regarding the recommendation for a judicial commission of inquiry.

Timeline

Course of Proceedings

The Bombay High Court dismissed the initial writ petition filed by the Center of Indian Trade Unions, citing a lack of concrete evidence to support the allegations of corruption, bribery, fraud, and misrepresentation. The petitioner then approached the Supreme Court. The Supreme Court initially issued a notice on the limited issue of the State of Maharashtra’s accountability. While the matter was pending, the State appointed the Godbole Committee, which found serious irregularities. Subsequently, Justice Kurdukar was appointed to investigate the culpability of public servants. However, the Union of India filed a suit, which stayed the Kurdukar Commission’s proceedings until its dismissal in 2014. The Supreme Court then asked the State of Maharashtra whether it wanted to continue the inquiry or argue the case on merits. The State responded that continuing the inquiry was no longer feasible due to the long passage of time.

Legal Framework

The judgment primarily revolves around the interpretation and application of the Commission of Inquiry Act, 1952, which empowers the government to appoint a commission of inquiry to investigate any matter of public importance. However, the judgment does not quote any specific section of the Act. The core issue was whether the judicial commission of inquiry, already constituted, should continue its proceedings or not, given the long delay and the changed circumstances.

Arguments

Arguments by Amicus Curiae (Dr. Rajeev Dhawan)

• Dr. Dhawan argued that due to serious allegations of corruption and dereliction of duties by various authorities and officials, it would be in the interest of justice to continue with the commission of inquiry. He emphasized the need for accountability in light of the findings of the Godbole Committee.

• He suggested that if Justice Kurdukar was unable to continue, another retired Judge of the Supreme Court of India could head the commission.

• Dr. Dhawan highlighted the findings of the Godbole Committee, which pointed out widespread failure of governance at various levels, including administrative and political, and across different governments and agencies.

• He noted that the Godbole Committee found serious infirmities in the execution and renegotiation of the PPA, as well as in the fixing of tariffs, which favored DPC at the expense of MSEB and the public.

• He pointed out that the foreign company, Enron, had abandoned the project, which was now operating at half capacity and at high production costs, making it economically unviable.

Arguments by the State of Maharashtra

• The State of Maharashtra submitted that due to the long lapse of time, it was no longer useful or feasible to continue with the judicial commission of inquiry.

• The State did not provide any further arguments against the continuation of the inquiry, but instead focused on the impracticality of continuing the inquiry after such a long delay.

Innovativeness of the argument: The amicus curiae’s argument was innovative in suggesting that the inquiry should continue despite the passage of time, emphasizing the importance of accountability and the serious nature of the allegations. The State’s argument was more pragmatic, focusing on the practical challenges of conducting an inquiry after such a long delay and the unavailability of key personnel.

Submissions Table

Issues Framed by the Supreme Court

The Supreme Court framed the following issue for consideration:

1. Whether the judicial commission of inquiry should continue or not.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

The Supreme Court did not cite any specific cases or books in its judgment. The primary basis for the decision was the factual circumstances of the case, the long delay, and the impracticality of continuing the inquiry.

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

The Godbole Committee Report was acknowledged for its findings of serious infirmities in the execution of the PPA. However, the Court noted that even the committee was divided on the need for a judicial inquiry. The Court did not explicitly approve or disapprove the findings but used the report as a background to the case.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the extensive delay since the initial agreements were made in 1993. The Court noted that key personnel from the foreign corporation (Enron) and the original project proponents were no longer available, and most senior officials had retired. The Court also considered the opinion of the three members of the Godbole Committee who did not support the constitution of a judicial commission of inquiry. The Court concluded that due to these factors, continuing the inquiry would not serve any useful purpose. The Court emphasized the practical difficulties and the lack of actionable outcomes after such a long period.

Sentiment Analysis of Reasons Given by the Supreme Court

Fact:Law Ratio

Logical Reasoning:

The Court considered the practical aspects of the case, noting that the passage of time and the unavailability of key personnel made the continuation of the inquiry futile. The Court also gave weight to the fact that some members of the Godbole Committee were against the constitution of a judicial commission of inquiry. The Court’s reasoning was primarily based on the assessment of the factual circumstances and the impracticality of conducting an inquiry after such a long delay.

The Court did not consider any alternative interpretations, as the primary issue was whether to continue the inquiry or not. The Court’s decision was based on the practical considerations and the lack of actionable outcomes given the passage of time.

The decision was that the judicial commission of inquiry should not continue. The reasons for the decision were:

• More than a quarter of a century had passed since the first PPA was executed.
• The foreign corporation and the original project proponents were no longer available.
• Most of the senior officials had retired.
• The commission of inquiry, even if continued or constituted afresh, would take its own time.
• Three members of the Godbole Committee had opined that the constitution of such a commission of inquiry would serve no useful purpose.

The judgment did not have any minority opinions.

The Court’s reasoning was based on the practical considerations of the situation, emphasizing the lack of actionable outcomes after such a long period. The Court did not introduce any new doctrines or legal principles.

Key Takeaways

• The Supreme Court closed the petition, deciding against continuing the judicial commission of inquiry into the Dabhol Power Project.
• The decision was primarily based on the long delay, the unavailability of key personnel, and the impracticality of conducting a meaningful inquiry after such a significant passage of time.
• The judgment highlights the importance of timely action in matters of public interest and the limitations of inquiries when key evidence and personnel are no longer available.

Directions

No specific directions were given by the Supreme Court in this case.

Development of Law

The ratio decidendi of the case is that a judicial commission of inquiry should not be continued if a significant amount of time has passed, key personnel are no longer available, and no useful purpose would be served by continuing the inquiry. There was no change in the previous position of law, as the decision was based on the specific facts and circumstances of the case.

Conclusion

The Supreme Court concluded that continuing the judicial commission of inquiry into the Dabhol Power Project would be futile due to the extensive delay, the unavailability of key personnel, and the lack of any practical benefit. The Court closed the petition, emphasizing the need for timely action in matters of public interest.