Expressing displeasure over the opposing stands taken by the ministries of commerce and consumer affairs on a dispute between state-run Central Warehosuing Corporation and Adani Ports, the Supreme Court on Thursday said there must be a mechanism to ensure that such conflicting views are resolved within the government.

“We are of the considered view 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,” a Bench led by Justice BR Gavai said.

The apex court also directed its Registry to furnish a copy of the judgment to the Attorney General “to use his good offices and do the needful.”

The dispute between CWC and Adani Ports Special Economic Zone (APSEZ) is over a 34-acre plot allegedly adjacent to latter’s Mudra Port in Gujarat.

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In this case, the ministry of commerce and industry had held that the delineation/denotification of the area from APSEZL, as sought by the CWC, was not permissible in law as there is no provision in the SEZ Act and Rules which empowers the authority to grant such a waiver from complying with the conditions/obligations applicable to SEZ Units. However, the Ministry of consumer affairs, food and public distribution had taken the stand that such a delineation/denotification was permissible and there were precedents. The consumer affairs ministry had also said that shifting of the warehouses to the alternate locations would be against the interest of CWC as well as public revenue.

The SC has set aside the Gujarat High Court’s June 2021 order that asked CWC to get approval or a waiver as a SEZ-compliant unit for its warehouse facility comprising of two godowns with a total capacity of 66,000 MTs on the 34-acre plot.

The HC had also held that in case CWC failed to get such approval within three months, the APSEZ would acquire the land of the same size outside SEZ area for the construction of a warehouse facility within one year. The HC had also asked CWC to vacate and give possession of its existing warehousing facility and the land within three months after a new alternative arrangement was made by the APSEZ.

The SC asked the single judge of the HC to decide the issue afresh. “When an issue involved the balancing of interests of a statutory corporation and a private company, the approach of the HC ought to have been a balanced one… If a settlement was to be arrived at, unless the same was found to be in the interest of both the parties, it could not have been thrust upon a statutory Corporation to its detriment and to the advantage of a private entity,” according to the SC judgment.