(PER : VINAY JOSHI, J.)

1. Heard.

2. Rule. Rule made returnable forthwith. By consent of learned Counsel for the parties, the matter is taken up for final hearing at the stage of admission.

3. The petitioner is a private registered partnership firm indulging into construction activities. A contractual work has been assigned to the petitioner in which dispute arose, which was finally resolved by way of Arbitration proceeding. Monetary Award has been passed by learned Arbitrator on 30/11/2020, directing the respondent No.2 to pay a sum of Rs.4,98,40,174/- plus interest for first contract and 1,42,46,389/- plus interest for second contract. Being aggrieved, the respondent No.2 - WCL has approached to the Commercial Court under Section 34 of the Arbitration and Conciliation Act, and the said lis is still pending. Moreover, the Commercial Court has stayed the execution of the award on deposit of 75% of the amount awarded.

4. Ministry of Finance has floated one time settlement policy by issuing office memorandum dated 29/05/2023, which is called as “Vivad se Vishwas II (Contractual Disputes)” to effectually settle the pending disputes. The said policy came into effect from 15/07/2023, with liberty to file claims till 31/10/2023. In short, it was the Government policy that if the amount of arbitral award was passed on or before 31/01/2023, then the contractor can make an offer to settle the awarded amount in 65% of the net amount of the award which is incorporated in Clause 10(b) of the policy. In terms of said policy, petitioner gave offer to avail the benefit of scheme by claiming 65% of the net amount as per policy. However, respondent No.2 has declined to accord policy benefits to the petitioner vide impugned communication dated 14/12/2023. It has been informed that the Board of Directors of respondent (WCL) has decided to opt out the “Vivad se Vishwas Scheme II for claim amount more than Rs.25,00,000/-. In support of that a copy of minutes of meeting dated 09/12/2023 has been placed on record by respondent.

5. The petitioner’s learned Counsel submitted that in terms of Clause - 4 of the office memorandum dated 29/05/2023, the scheme will apply to contractual disputes, where one of the party is either Government of India and/or an organization detailed in the scheme. Our attention is invited to Clause - 18 of the office memorandum which mandates for the Government undertakings to accept the claim, if the claim is less than Rs.500 corers.

6. It is the contention of the petitioner that in terms of office memorandum, which is a policy framed by the Ministry of Finance, the respondent No.2 is under obligation to accept the claim of the petitioner which was denied. It is submitted that WCL is a Central Public Sector Enterprises, which is bound by the policy and thus denial of it’s applicability on any count is an arbitrary exercise.

7. Respondent - WCL resisted this petition vide reply affidavit dated 28/02/2024. It is their main contention that WCL has discretion to either submit to the policy or opt out the policy which they did by passing resolution. The entire controversy revolves around the issue as to whether respondent - WCL has discretion to opt out as per terms of policy. In order to resolve the controversy, we deem it appropriate to reproduce Clause – 4 of the policy which carries significance.

“4. The scheme will apply to contractual disputes where one of the parties is either the Government of India and/or an organisation detailed below. Apart from Ministries/Departments, attached and subordinate bodies, notwithstanding anything contained in Rule 1 of the GFRs 2017, the scheme shall also be applicable

a) to all Autonomous Bodies of the Government of India;

b) to public sector banks and public sector financial institutions;

c) to all Central Public Sector Enterprises;

d) to Union Territories without legislature and all agencies/undertakings thereof; and

e) to all organisations, like Metro Rail Corporations,

where Government of India has shareholding of 50%; however, these organisations can opt out of the scheme at their discretion, with approval of the Board of Directors.

The above mentioned organisations shall hereinafter be referred to as “procuring entities.” The other party in dispute with the procuring entity shall be referred to as contractor(s) hereinafter.”

8. It is not in dispute that respondent No.2 – WCL falls in category – (c) i.e. Central Public Sector Enterprises. It is the contention of respondents that in continuation of Clause – (e), a policy has left option to the organizations to opt out of the scheme at their discretion. According to respondent, the said option is available to all the organizations which are incorporated in Clause – (a) to (e). The petitioner has countered this submission by contending that the said special concession is only available to the organizations which are falling in Clause – (e) only.

9. The policy has specified the Government/Semi Government organizations detailed under Clause – (a) to (e) to whom it would apply. Clause – (e) pertains to the organizations where Government of India has share holding of 50% and in continuation it is stated that these organizations can opt out of the scheme at their discretion. Though it is argued that the said option would apply to Clause – (a) to (d) also, the said submission is not acceptable for more than one reason. If the policy framers intend to give absolute option to everyone then there would have been a separate proviso below Clause (a) to (e) specifying that the option is available to everyone, however, the recital about grant of option has been inserted in continuity in Clause – (e). Secondly it reveals that the organizations referred in Clause (a) to (d) appears to be fully controlled by the Government. The organizations referred in Clause – (e) bears separate configurations where the Government is having 50% share holding whilst remaining 50% has been generated from outside and thus in our view, considering the said configuration the option is available to those organizations only. It needs to be mentioned that when the Government is framing a policy, they cannot give option to the organizations which are fully controlled by them, otherwise there is no use of framing of the policy. We made it clear that though the Arbitral award has been challenged that would not come in the way, as the policy under Clause 10(b) itself contemplates that irrespective of the award under challenge, the policy would apply.

10. In view of above, writ petition is allowed. We hold and declare that the policy framed by the Government vide office memorandum dated 29/05/2023 would apply to respondent No.2 - WCL, which has no discretion to opt out. In consequence respondent No.2 shall consider the offer given by the petitioner as per policy and take an appropriate decision according to law.

11. Rule is made absolute in aforesaid terms with no order as to costs.