Unhappy with two Ministries taking contradictory stands before it, Supreme Court asks Centre to evolve mechanism to resolve differences at Governmental Level itself

Supreme Court: In a dispute between Central Warehousing Corporation(CWC) and Adani Ports Special Economic Zone Limited (APSEZL) over 34 acres of land wherein the Ministry of Commerce and Industry (Ministry of C & I) and the Ministry of Consumer Affairs, Food and Public Distribution (Ministry of CAF&PD) had taken contradictory stands, the bench of BR Gavai* and CT Ravikumar has observed that the two departments of the Union of India cannot be permitted to take stands which are diagonally opposite. The Court has hence asked the Union of India to evolve a mechanism to ensure that whenever such conflicting stands are taken by different departments, they should be resolved at the governmental level itself.

The Issue relates to 34 acres of land that was leased to CWC for setting up a warehouse. The lease was to continue till 2031. For the uninitiated, CWC set up by the Government of India in the year 1957 to provide support to the agricultural sector by operating warehouses and Container Freight Stations across the country.

However, vide notification dated 23rd June 2006 issued by the Ministry of C & I, a vast area came to be notified as a Special Economic Zone (SEZ). CWC made a representation to the Ministry of C & I for delineation/denotification of the said 34 acres of land from the SEZ and till the year 2017, there was no obstruction to CWC in utilizing the said area.

It was Adani Ports Special Economic Zone Limited (APSEZL)’s case that CWC had not obtained and complied with all approvals, consent and permits under the applicable law pertaining to the sub-leased premises and hence, it had taken a decision of discontinuing the issuance of gate-passes, and further that it would not permit CWC to continue the warehousing activities.

Being aggrieved, CWC filed the first writ petition before the Gujarat High Court but since the Single Judge of the High Court did not grant an interim relief while issuing notice, CWC went on to file an LPA.

Meanwhile, the Ministry of C & I rejected the request of CWC to delineate/denotify the said land. Being aggrieved thereby, CWC filed the second writ petition before the High Court.

While the Ministry of C&I has been taking a stand that the delineation/denotification was not permissible, the Ministry of CAF&PD took a contrary stand by stating that CWC had fulfilled its obligations as per the agreement dated 2nd June 2004 for warehousing activities. It is also the stand of the said Ministry that APSEZL has included the subleased premises of CWC in the SEZ areas by suppressing the facts. The communication by the Ministry of CAF&PD clearly stated that the view of the Ministry of C&I that there was no possibility of delineation/denotification was not a correct stand and that there are also precedents of such partial denotifications taking place.

Concerned with the diagonally opposite stands taken by two ministries of the Union of India, the Court observed that it does not augur well for the Union of India to speak in two contradictory voices. The two departments of the Union of India cannot be permitted to take stands which are diagonally opposite.

The Court, hence, directed the Registry to furnish a copy of the judgment to the Attorney General for India to do the needful and suggested the Union of India to evolve a mechanism to ensure that whenever such conflicting stands are taken by different departments, they should be resolved at the governmental level itself.

On the facts of the case, the Court has set aside the judgment passed by the Division Bench of the High Court and has remitted the matter back to the Single Bench and has directed expeditious disposal of matter within 6 months.

[Central Warehousing Corporation v. Adani Ports Special Economic Zone Limited, 2022 SCC OnLine SC 1398, decided on 13.10.2022]


*Judgment by: Justice BR Gavai


For CWC: Senior Advocate Maninder Singh

For APSEZL: Senior Advocate Shyam Divan

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