New Delhi (Agencies): The Supreme Court has given state-run enterprises approval to pursue litigation against the government and other public sector units, recalling its previous 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 SH Kapadia observed that the government had formed the Committee on Disputes (CoD) to resolve legal disputes between PSUs and the government based on an earlier direction passed by the SC.

Under this mechanism, the PSUs were required to get the CoD's nod before seeking legal recourse to their disputes.

However, "In the changed scenario, time has come to rethink. We recall the order passed by us," the bench added.

The apex court said that the present system 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 period to settle disputes under the present mechanism, resulting in revenue losses for the PSUs.