NON­REPORTABLE

IN THE SUPREME COURT OF INDIA  CIVIL APPELLATE JURISDICTION

SPECIAL LEAVE PETITION (C) NO. 7734  OF 1997

CENTER OF INDIAN TRADE UNIONS,  A FEDERATION OF REGISTERED  TRADE UNIONS  …PETITIONER(S)

Versus

STATE OF MAHARASHTRA        …RESPONDENT(S)

J U D G M E N T

Deepak Gupta, J.

1. The petitioner had challenged the execution of the Power

Project Agreement (PPA) and the modified power project

agreements first of which was executed in the year 1993 by the

Maharashtra  State  Electricity  Board (for short ‘the  MSEB’) in

favour of  Dabhol Power  Corporation Limited (for short ‘DPC’)

before the Bombay High Court.

2. Though  the  High Court came  to the  conclusion that the

action of the Board and the Governments concerned was

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questionable and that everything was not above board, it

dismissed the writ petition(s) on the ground that the petitioner

had not been able to place on record before the Court any

material justifying the allegations as regards corruption, bribery,

fraud and misrepresentation.

3. Thereafter, the petitioner filed the present petition.  On

02.05.1997, this Court issued notice only on the following issue:

“(2) The accountability of the State of Maharashtra (respondent No. 2) in this matter, particularly, on account of the inconsistent stand taken by it from time to time.”

4. By the same order, this Court refused leave in so far as the

question of the validity of the project and contract for  Dabhol

Power Project was.

5. While the special  leave petition was pending, the State of

Maharashtra appointed a Committee headed by Dr. Mahdav

Godbole, former Home Secretary (known as ‘Godbole Committee’)

to go into the matter.

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6. The Godbole Committee submitted its report to the State of

Maharashtra on 10th  April, 2001 indicating serious

illegalities/infirmities in the matter of award of the contract and

processing of approvals,  which were  prima facie  against public

interest.  Failure of governance, it was observed, was broad and

across different governments and at both administrative and

political levels.  However, there was difference of opinion amongst

members of the Godbole Committee, whether it should

recommend appointment of a judicial commission of inquiry

under the Commission of Inquiry Act, 1952.  Whereas 2 members

felt that that a Judicial Commission of Inquiry should be

constituted, 3 members did not agree with the said proposal.

7. On 7th  November, 2001, Shri Justice S. P. Kurdukar, a

former Judge, was appointed for thorough investigation into the

aspects of culpability of various public servants.

8. The Union of India filed a suit before this Court (Original

Suit No.2 of 2003 – Union of India vs. State of Maharashtra &

Anr.) and an order was passed in the said suit staying further

proceedings of the Kurdukar commission of  inquiry.   This suit

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came to be finally dismissed in the year 2014.   Thereafter, the

matter came up before this Court on 18.02.2015 when learned

counsel appearing for the State of Maharashtra prayed for some

time to find out whether Justice Kurdukar would be in a position

to resume the proceedings.  No response has been filed.  The fact

remains that the Commission has not functioned even after

dismissal of the suit.

9. It appears that  nothing  much  was  done  and the  matter

came up before this Court on 07.03.2018 when this Court

directed the State of Maharashtra to inform the Court whether it

would like the Kurdukar Commission of inquiry to continue or

would they like the case to be argued on merits.   The State of

Maharashtra subsequently filed an affidavit that due to long

efflux of time it was no longer useful or feasible to continue with

the judicial commission of inquiry.

10. Therefore, the hearing in this case is limited to the question

as to whether the judicial commission of inquiry should continue

or not.

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11. Dr.  Rajeev  Dhawan, learned  senior  counsel appearing  as

amicus curiae, urged that  in view of  the serious allegations of

corruption and abdication of duties by various authorities and

officials, it would be in the interest of justice to continue with the

commission of inquiry and in case Justice Kurdukar was not able

to continue with the commission of inquiry, the same could be

headed by some other retired Judge of the  Supreme Court  of

India.

12. Dr. Dhawan drew our attention to the various portions of

the report submitted by Dr. Godbole committee.   We may make

reference only to following portion:

“The Committee  is  troubled with the  failure of governance that seems to have characterised almost every step of the decision making process on  matters relating to DPC.   This failure of governance has been broad, across different governments at different points of time, at both the State and the Central level, and across different agencies associated with examining the project, and at both the administrative and political levels.   It  strains belief to accept that such widespread and consistent failure to execute assigned responsibilities is purely coincidental.   Though the Committee was given certain additional terms of reference, specifically, item (3) of Resolution No. PSP 2001/CR3448/NRG­2 dated March 9,  2001, it has unanimously decided that it is not the proper forum to investigate such matters to the degree that would be required.  The Committee,

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in the  short time  allocated to it, is  unable to determine reasons for the consistent lapses, but is extremely concerned at it.”

13. The Committee has found serious infirmities in the manner

in which the PPA was executed, the manner in which it was re­

negotiated, the manner in which the tariff was fixed etc..  As per

the Committee, everything was done in a manner which helped

DPC and caused loss to the MSEB and the public at large.

14. It would be pertinent to mention that the foreign company

Enron,  which  was involved,  has  abandoned the  project.   The

project is virtually working at half the capacity and the rate of

production of electricity is so high that the project has become

economically unviable.   In these circumstances, Dr. Dhawan

urged that this Court should continue with the commission of

inquiry.

15. We are of the considered view that though normally in such

a case a judicial inquiry should have been conducted but as far

as the present case is concerned, more than a quarter of century

has elapsed since the first PPA was executed.   The foreign

corporation  and the  original  project  proponents  are  no longer

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available.  Most  of the  senior  officials  would have  retired and

virtually no action can be taken against them.  Furthermore, the

commission of inquiry even  if  continued or constituted afresh,

will take its own time and, as opined by 3  Members of the

Godbole Committee, the constitution of such commission of

inquiry would serve no useful purpose.  This was the stand in the

year 2001 and has greater force 18 years later.

16. In view of the long delay and in view of the fact that due to

non­availability of  many persons involved, no useful purpose

would be served in continuing with the judicial commission of

inquiry, we close the petition in the peculiar facts and

circumstances of the case.

……………………..CJI. (Ranjan Gogoi)

…………………………J. (Deepak Gupta)

…………………………J. (Sanjiv Khanna)

New Delhi April 11, 2019

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