The Supreme Court has given state-run enterprises a free hand to pursue litigation against the government and other public sector units, recalling its earlier order barring these entities from approaching the courts directly without approval from a Committee on Disputes.
A five-judge Constitution bench headed by Chief Justice S H Kapadia observed that the government had formed the Committee on Disputes to resolve legal issues between PSUs and the government based on an earlier direction passed by the Supreme Court.
Under this mechanism, the PSUs were required to get the CoD's approval before seeking legal recourse to their disputes.
However, "in the changed scenario, time has come to rethink. We recall the order passed by us", said the bench.
It recalled the previous order passed by it which said that PSUs will have to come "only after getting approval from the CoD comprising secretaries of various government departments".
The apex court said that the present mechanism of CoD has failed and indicated that the mediation started by the body were not achieving any results, as the same set of facts were repeated.
It further said it has taken long time to settle disputes under the present mechanism, resulting in revenue losses for the PSUs.