REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.        2432  OF 2019 (ARISING OUT OF SLP (C) NO. 490 OF 2012)

KHODAY DISTILLERIES LTD. (NOW KNOWN AS KHODAY INDIA LIMITED) AND OTHERS ..… APPELLANT(S)

VERSUS

SRI MAHADESHWARA SAHAKARA SAKKARE KARKHANE LTD., KOLLEGAL (UNDER LIQUIDATION) REPRESENTED  BY THE LIQUIDATOR ..… RESPONDENT(S)

W I T H

CIVIL APPEAL NO.  2433  OF  2019 (ARISING OUT OF SLP (C) NO. 13792 OF 2013)

J U D G M E N T

A.K. SIKRI, J.

Leave granted.

2) Question of law in both these appeals is identical.  However, facts

of the Civil appeal arising out of Special Leave Petition (Civil) No.

490 of 2012 are noted for discussion, as in this case, order dated

Civil Appeal arising out of SLP (C) No. 490 of 2012 & Anr. Page 1 of 27

October 19, 2012 has been passed referring the question of law

to a larger Bench.

3) Before we advert to the question of law, we deem it appropriate to

take stock of seminal facts as the said factual background would

make it  easier  to  understand  the  implication  of  the  issue  that

arises for determination.

4) Respondent  No.1  herein  had  filed  original  suit  against  the

appellant  on  the  file  of  the  XXXI  Additional  City  Civil  Judge,

Bangalore  City.   It  was  a  money  suit  for  recovery  of

Rs.1,00,76,630/- along with interest.  The City Civil Judge, after

trial, dismissed the suit as barred by limitation vide his judgment

and  decree  dated  November  11,  2005,  even  after  finding  on

merits that money was payable by the appellant to respondent

No.1.  Against this, respondent No.1 preferred first appeal under

Section 96 of the Code of Civil  Procedure, 1908.  This appeal

was allowed by the High Court of Karnataka on November 12,

2008  by  holding  that  the  suit  was  filed  within  the  period  of

limitation.  Accordingly, it passed decree of the amount claimed

along with interest @ 12% per annum from the date of demand,

i.e. July 19, 1994, up to August 03, 1994 and the interest was

granted @ 10% per annum from August 04, 1994 till the date of

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payment.  Against this judgment of the High Court, the appellant

preferred the special leave petition.  This special leave petition

was  dismissed  by  this  Court  on  December  04,  2009  with  the

following order:

"Delay condoned.

Special Leave Petition is dismissed.”

After the dismissal of the special leave petition, respondent

No.1 filed execution petition before the trial court.  

5) It may be mentioned at this stage that after the High Court had

decreed  the  suit  of  respondent  No.1,  the  respondent  filed

application for rectification of the judgment, which was allowed on

October  20,  2010  directing  the  appellant  to  pay  the  decretal

amount with interest and costs.  This is the subject matter of the

execution proceedings.

6) The appellant  herein,  even after  dismissal  of  the special  leave

petition, went back to the High Court in the form of review petition

seeking review of the judgment dated November 12, 2008 passed

by the High Court.  It was filed on the premise that the High Court

had granted relief which was not even sought for by respondent

No.1 in the suit.  We may reproduce the precise ground taken in

this behalf in the review petition:

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"11.   The  above  Review  Petition  is  directed  only  with regard to the decree portion dated 12.11.2008 passed by this Hon’ble Court in RFA No. 427/2006 as corrected by the order dated 20.10.2010.  It reads:

“We  direct  the  plaintiff  to  recover  the  amount  as claimed at Rs.1,00,76,630/- with interest at the rate of  12%  from  the  date  of  demand  made  namely 29.07.1994  till  03.08.1994  and  at  the  rate  of  10% from 04.08.1994 till the date of payment on the said sum with costs.”

A  perusal  of  the  prayer  made  in  the  suit  O.S.  No. 2808/1997 as extracted in para 2 above shows that the plaintiff has not claimed interest at any particular rate and he has  also  not  prayed the  interest  from any  particular date.  He has also not claimed interest at different rates also.   Thus the decree passed by this  Hon’ble Court  in RFA No. 427/2006 is not based on the prayer sought for by the plaintiff in O.S. No. 2808/1997.  This mistake appears on the face of the record.  Hence the impugned judgment and  decree  in  RFA No.  427/2006  dated  12.11.2008  as corrected  on  20.10.2010  is  liable  to  be  reviewed  and modify  the  said  judgment  and  decree  in  terms  of  the prayer made by the plaintiff in O.S. No. 2808/1997.”

On that basis, it was pleaded that the award of interest from

August  04,  1994  is  also  without  jurisdiction  since  it  was  not

claimed by respondent No.1 in the trial court.

7) This review petition has been dismissed by the High Court vide

orders dated September 09, 2011,  inter alia,  with the following

observations:

"The judgment  and decree  passed by  this  Court  in  the above appeal was questioned by the petitioners before the Hon’ble  Supreme  Court  in  Special  Leave  Petition  to Appeal (Civil) CC No. 18374/2009 and the petition came to be dismissed on 4.12.2009.

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According  to  us,  when  the  judgment  and  decree passed by this Court has been confirmed by the Hon’ble Supreme Court, question of entertaining any review by us does not arise for consideration.

Accordingly, review petition is dismissed.”

8) As can be seen from the above order, the reason for dismissal of

the review petition is that the Apex Court has already dismissed

the special leave petition against the High Court’s judgment dated

November 12, 2008.  Therefore, review of the said judgment by

the High Court is not permissible.  It is this order in review petition

which is challenged in these proceedings inasmuch as case of

the  appellant  is  that  when  the  special  leave  petition  was

dismissed  in  limine and  not  by  speaking  order,  there  was  no

reason not to entertain the review petition by the High Court, as

dismissal of the special leave petition in limine  by non-speaking

order does not amount to merger of the High Court judgment with

that of the Supreme Court.

9) The  question  of  law  which  needs  to  be  determined  in  the

aforesaid  circumstances  is  as  to  whether  review  petition  is

maintainable before the High Court seeking review of a judgment

against  which  the  special  leave  petition  has  already  been

dismissed by this Court.

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10) The  reason  for  referring  the  matter  to  a  larger  Bench  is  the

conflicting views by different Benches of this Court which have

been taken note of in the referral order.  Those judgments will be

discussed at the appropriate stage.  At the same time, we would

like to reproduce the following passages from the reference order:

"12. We may also point out in this connection that Article 136 of the Constitution does not confer any right of appeal on any party but it  confers a discretionary power on the Supreme Court to interfere in suitable cases. Clause (1) of Article  136  of  the  Constitution  confers  very  wide  and extensive  powers  on  the  Supreme  Court.  The  article commences with a non obstante clause, the words are of overriding effect  and clearly indicate the intention of  the Framers of the Constitution that it is a special jurisdiction and  residuary  power  unfettered  by  any  statute  or  other provisions of Chapter IV of Part V of the Constitution. The jurisdiction under Article 136 of the Constitution, of course, cannot be barred by statute since it is extraordinary power under  Article  136.  Article  136 is  an  extraordinary  power which cannot be taken away by legislation.

13.   We  also  notice  that  several  statutes  confer  on aggrieved parties right of appeal to the Supreme Court in contradistinction  with  the  powers  conferred  on  the Supreme Court under Article 136 of the Constitution, for instance,  Section  15-Z  of  the  Securities  and  Exchange Board of India (SEBI) Act, 1992 confers a right of appeal to any  person  aggrieved  by  any  decision  or  order  of  the Securities  Appellate  Tribunal.  So also various regulatory legislations provide for statutory right of appeal. To what extent the principle of res judicata and merger would apply in  respect  of  a  decision  rendered  by  this  Court  while exercising its statutory power of appeal as well as the one rendered while entertaining an appeal invoking Article 136 is not seen considered by the larger Bench either in Abbai Maligai  or Kunhayammed case, which is also, in our view, an issue to be considered by the larger Bench.

14.   We  notice  that  considerable  arguments  are  being raised before this  Court  as  well  as  before various High Courts  in  the  country  on  the  maintainability  of  review

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petitions  after  the  disposal  of  the  special  leave  petition without  granting  leave  but  with  or  without  assigning reasons  on  which  also  conflicting  views  are  being expressed  by  the  two-Judge  Benches  of  this  Court.  In order to resolve those conflicts and for proper guidance to the High Courts, we feel it would be appropriate that this matter be referred to a larger Bench for an authoritative pronouncement.”

11) There are two judgments of this court, both of which are three

Judge  Bench  decisions.   First  in  line  is  Abbai  Maligai

Partnership  Firm  and  Another  v.  K.  Santhakumaran  and

Others1.  This judgment is relied upon by respondent No.1 with

the  plea  that  in  that  judgment  this  Court  held  that  when  the

judgment and decree passed by the High Court is affirmed by the

Supreme Court with the dismissal of the special leave petition,

there is no question of entertaining the review petition by the High

Court,  thereafter.   Other  judgment  is  in  the  case  of

Kunhayammed and Others v. State of Kerala and Another2.  In

this judgment the Court laid down various ways in which special

leave petitions can be disposed of and decided in which cases

review would  be  permissible  and  where  such  a  review is  not

entertainable, on the doctrine of merger and res judicata, etc.  We

may point out at this stage itself  that  various judgments which

have been pronounced by this Court (which are the judgments

rendered by two Judges’ Bench) have taken different paths, on

1 (1998) 7 SCC 386 2 (2000) 6 SCC 359

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the  interpretation  of  the  aforesaid  two  cases,  resulting  in

conflicting outcomes.   

12) In Meghmala and Others v. G. Narasimha Reddy and Others3

and  K. Rajamouli  v.  A.V.K.N.  Swamy,  the view taken by this

Court was that review petition is not maintainable.  In Meghmala

the Court, however, made one exception by holding that in case a

litigant files a review petition before filing the special leave petition

in the Supreme Court and it remains pending till the special leave

petition  is  dismissed,  the  review  petition  still  deserves  to  be

considered.  However, the review petition filed after the dismissal

of  the  special  leave  petition  would  amount  to  abuse  of  the

process of the Court.  On the other hand, in Gangadhara Palo v.

Revenue Divisional  Officer  Officer  and Another4,  this  Court

held that  it  will  make no difference whether the review petition

was filed in the High Court  before the dismissal of  the special

leave petition or after the dismissal thereof.  In either case, the

doctrine  of  merger  would  apply,  even  when  the  special  leave

petition  is  dismissed  in  limine,  which  will  bar  the  filing  of  the

review  petition  before  the  High  Court  when  the  special  leave

petition is dismissed.

3 (2010) 8 SCC 383 4 (2011) 4 SC 602

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13) As  against  the  aforesaid  view,  there  is  another  line  of  cases

holding that review petition is maintainable if no leave has been

granted to file  an appeal  and there is  dismissal  of  the special

leave petition at the preliminary stage itself.  These cases have

taken  a  view  that  a  preliminary  stage  does  not  constitute  a

binding precedent and, therefore, doctrine of merger would not

apply.  These cases are  Palani Roman Catholic Mission v.  S.

Bagirathi  Ammal5,  Bhakra  Beas  Management  Board  v.

Krishna Kumar Vij and Another6.  

14) After taking note of the aforesaid judgments, the reference order

in the instant case makes a remark about the nature of conflict

between them, which is noted in paragraph 11 of the judgment

and is reproduced below:

"11.  We  notice  that  in  K.  Rajamouli this  Court  has followed  Kunhayammed  and  distinguished  Abbai Maligai Partnership Firm  and in  Gangadhara Palo  the later  Bench did  not  accept  the  view expressed in  K. Rajamouli.  To  this  extent,  there  is  some  conflict between the  judgments  in  Gangadhara  Palo   and  K. Rajamouli which calls for resolution by a larger Bench.”

15) It  may be useful  to  add,  in  the line  of  the aforesaid  cases,  a

recent  judgment  of  this  Court  in  Medical  Council  of  India  v.

State of Kerala and Others7, which is again a two Judge Bench.

Though in this case situation was not where review petition was

5 (2009) 16 SCC 657 6 (2010) 8 SCC 701 7 2018 (11) Scale 141

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filed after the dismissal of the special leave petition, at the same

time,  dismissal  of  the  special  leave  petition  in  limine  was

explained to mean that it  was still  a decision on merits by this

Court.

16) Having  stated  the  manner  in  which  the  issue  is  dealt  with  in

various  judgments  noted  above,  it  would  be  apposite  to  first

discuss the law laid down in Abbai Maligai Partnership Firm as

well  as  Kunhayammed’s  cases since both  the judgments are

rendered by three Judges’ Bench.  Therefore, it is to be seen, in

the first instance, as to whether they project conflicting views.

17) Abbai  Maligai  Partnership  Firm was  a  case  under  the  Rent

Control Act and the appeal came from the High Court of Madras.

In an eviction petition filed by respondent Nos. 1 and 2 in the said

case, the Rent Controller had ordered eviction of the appellants

therein on the ground of wilful default in payment of rent as well

as on the ground of  bona fide  requirement of the premises by

respondent Nos. 1 and 2 for their own business.  In appeal, the

order of the Rent Controller was set aside as it was found that

there  was  a  bona  fide  dispute  with  regard  to  the  title  of  the

property  which  could  be  decided  by  the  Civil  Court.   The

respondents preferred review petitions thereagainst, which were

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dismissed.  They approached this Court by way of special leave

petitions which were also dismissed.  After the dismissal of these

special  leave  petitions,  the  respondents  therein  filed  review

petition in the High Court with a delay of 221 days.  The High

Court condoned the delay and also entertained the review petition

on merits and not only allowed those review petitions but even

reversed the orders made earlier in the civil revision petitions by

allowing those petitions and ordering eviction of the appellants/

tenants.   In  appeal  against  this  order  passed  in  review  and

revision petitions, this Court held that the jurisdiction exercised by

the  High  Court,  under  the  circumstances,  was  palpably

erroneous.  Entire discussion in this behalf is contained in one

paragraph, which we reproduce below:

"4.  The manner in which the learned Single Judge of the High  Court  exercised  the  review  jurisdiction,  after  the special  leave  petitions  against  the  selfsame  order  had been dismissed by this Court after hearing learned counsel for  the  parties,  to  say  the  least,  was  not  proper. Interference by the learned Single Judge at that stage is subversive of judicial discipline. The High Court was aware that  the  SLPs  against  the  orders  dated  7-1-1987  had already  been  dismissed  by  this  Court.  The  High  Court, therefore,  had  no  power  or  jurisdiction  to  review  the selfsame order, which was the subject-matter of challenge in the SLPs in this Court after the challenge had failed. By passing the impugned order on 7-4-1994, judicial propriety has  been  sacrificed.  After  the  dismissal  of  the  special leave  petitions  by  this  Court,  on  contest,  no  review petitions could be entertained by the High Court against the  same  order.  The  very  entertainment  of  the  review petitions, in the facts and circumstances of the case, was an affront to the order of this Court. We express our strong

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disapproval and hope there would be no occasion in the future  when  we  may  have  to  say  so.  The  jurisdiction exercised  by  the  High  Court,  under  the  circumstances, was  palpably  erroneous.  The  respondents  who approached  the  High  Court  after  the  dismissal  of  their SLPs by this Court, abused the process of the court and indulged in vexatious litigation. We strongly deprecate the matter in which the review petitions were filed and heard in the  High  Court  after  the  dismissal  of  the  SLPs  by  this Court.  The  appeals  deserve  to  succeed  on  that  short ground. The appeals are, consequently, allowed and the impugned  order  dated  7-4-1994  passed  in  the  review petitions is hereby set aside. The respondents shall  pay Rs 10,000 as costs.”  

18) In Kunhayammed’s case, on the other hand, the Forest Tribunal

had  held  that  land  in  dispute  did  not  vest  in  the  Government

under the provisions of the Kerala Private Forests (Vesting and

Assignment) Act, 1971.  Against this order the appeal of the State

of  Kerala  was dismissed by  the High Court  on  December  17,

1982.  Thereagainst special leave petition was filed by the State,

which was dismissed in limine stating - ‘Special Leave Petition is

dismissed on merits’.  Thereafter, the Estate filed an application in

the High Court for review of its earlier order whereby appeal of

the State had been dismissed upholding the order of the Forest

Tribunal.  It may be noted that during the pendency of this review

petition, Section 8(c) was inserted in the Kerala Private Forests

(Vesting and Assignment) Act, 1971 by amendment made in the

year 1986 enabling the Government to file appeal or review in

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certain cases.  This provision was introduced with retrospective

effect, i.e. from November 19, 1983.  Review petition was filed in

January 1984.   On these facts,  the High Court  passed orders

dated  December  14,  1995  overruling  the  objection  to  the

maintainability  of  the  review  petition  holding  that  review  was

maintainable and posted the case for  hearing on merits.   This

order  was challenged which became the subject  matter  of  the

appeal in the aforesaid cases.  The contention of the petitioner

before this Court was two fold: (a) the High Court’s order dated

December 17, 1982 was merged with order dated July 18, 1983

whereby the special leave petition was dismissed and, therefore,

no review petition was maintainable; and (b) order of this Court in

the  special  leave  petition  amounted  to  affirmation  of  the  High

Court’s order and, therefore, could not be reviewed by the High

Court.  This Court rejected the contention of the petitioner holding

that review was maintainable as the doctrine of merger was not

applicable  in  the  aforesaid  circumstances.   However,  what  is

important is that the Court deliberated on the doctrine of merger

and handed out well reasoned and lucid judgment explaining the

situations  where  review would  be  maintainable  as  well  as  the

situations where it  would not be maintainable on the aforesaid

doctrine.

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19) Explaining the doctrine of merger, the Court held that logic behind

this  doctrine is that  there cannot be more than one decree or

operative orders governing the same subject matter at a given

point  of  time.   When a decree or  order  passed by an inferior

Court,  Tribunal or  Authority is  subjected to a remedy available

under law before a superior forum, then, though the decree or

order  under  challenge  continues  to  be  effective  and  binding,

nevertheless, this finality is to put in jeopardy.  Once the superior

court disposes of the dispute before it in any manner, i.e. either

by  affirming  the  decree  or  order  or  by  settings  aside  or  by

modifying  the  same,  it  is  the  decree  of  the  superior  Court,

Tribunal  or  Authority  which  is  the  final  binding  and  operative

decree and the decree or order of the lower Court, Tribunal or

authority  gets  merged  into  the  order  passed  by  the  superior

forum.   The  Court  also  clarified  that  this  doctrine  is  not  of

universal  or  unlimited  application.   The  nature  of  jurisdiction

exercised by the superior forum and the content or subject matter

of challenge laid or which could have been laid will have to be

kept  in  view.   The  Court  thereafter  discussed  the  provision

pertaining to  the  appellate  jurisdiction  that  is  exercised by  the

Supreme Court conferred upon it by Articles 132 to 136 of the

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Constitution of India.  Insofar as jurisdiction under Article 136 is

concerned,  it  explained  that  Article  136  opens  with  a  non-

obstante clause and conveys a message that even in the field

covered by the preceding articles, jurisdiction conferred by Article

136 is available to be exercised in an appropriate case. It is an

untrammelled reservoir of power incapable of being confined to

definitional  bounds;  the  discretion  conferred  on  the  Supreme

Court being subjected to only one limitation, that is, the wisdom

and good sense or sense of justice of the Judges. No right of

appeal is conferred upon any party; only a discretion is vested in

the Supreme Court to interfere by granting leave to an applicant

to enter in its appellate jurisdiction not open otherwise and as of

right.

20) Exercise of jurisdiction under Article 136 and the manner in which

it is dealt with is clarified as under:

"14. The exercise of jurisdiction conferred on this Court by Article  136 of  the Constitution consists  of  two steps:  (i) granting  special  leave  to  appeal;  and  (ii)  hearing  the appeal.  This  distinction  is  clearly  demonstrated  by  the provisions of Order 16 of the Supreme Court Rules framed in exercise of  the power conferred by Article 145 of  the Constitution.  Under  Rule  4,  the  petition  seeking  special leave  to  appeal  filed  before  the  Supreme  Court  under Article 136 of the Constitution shall be in Form No. 28. No separate application for interim relief need be filed, which can  be  incorporated  in  the  petition  itself.  If  notice  is ordered on the special leave petition, the petitioner should take  steps  to  serve  the  notice  on  the  respondent.  The

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petition shall  be accompanied by a certified copy of  the judgment  or  order  appealed  from  and  an  affidavit  in support of the statement of facts contained in the petition. Under Rule 10 the petition for grant of special leave shall be put up for hearing ex parte unless there be a caveat. The court if it thinks fit, may direct issue of notice to the respondent and adjourn the hearing of the petition. Under Rule 13, the respondent to whom a notice in special leave petition  is  issued  or  who  had  filed  a  caveat,  shall  be entitled  to  oppose  the  grant  of  leave  or  interim  orders without  filing any written objections.  He shall  also be at liberty to file his objections only by setting out the grounds in opposition to the questions of law or grounds set out in the SLP. On hearing, the Court may refuse the leave and dismiss  the  petition  for  seeking  special  leave to  appeal either ex parte or after issuing notice to the opposite party. Under Rule 11, on the grant of special leave, the petition for special leave shall, subject to the payment of additional court fee, if any, be treated as the petition of appeal and it shall  be  registered  and numbered as  such.  The appeal shall then be set down for hearing in accordance with the procedure laid down thereafter.  Thus,  a petition seeking grant  of  special  leave  to  appeal  and  the  appeal  itself, though both dealt with by Article 136 of the Constitution, are two clearly  distinct  stages.  In  our  opinion,  the legal position which emerges is as under:

(1)  While  hearing  the  petition  for  special  leave  to appeal, the Court is called upon to see whether the petitioner should be granted such leave or not. While hearing such petition, the Court is not exercising its appellate  jurisdiction;  it  is  merely  exercising  its discretionary jurisdiction to grant or not to grant leave to appeal.  The petitioner is still  outside the gate of entry though aspiring to enter the appellate arena of the Supreme Court. Whether he enters or not would depend on the fate of his petition for special leave;

(2) If the petition seeking grant of leave to appeal is dismissed, it is an expression of opinion by the Court that a case for invoking appellate jurisdiction of the Court was not made out;

(3)  If  leave  to  appeal  is  granted  the  appellate jurisdiction of the Court stands invoked; the gate for entry in the appellate arena is opened. The petitioner is in and the respondent may also be called upon to

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face him, though in an appropriate case, in spite of having  granted  leave  to  appeal,  the  Court  may dismiss the appeal without noticing the respondent.

(4) In spite of a petition for special leave to appeal having  been  filed,  the  judgment,  decree  or  order against which leave to appeal has been sought for, continues  to  be  final,  effective  and  binding  as between the parties. Once leave to appeal has been granted, the finality of the judgment, decree or order appealed  against  is  put  in  jeopardy  though  it continues  to  be  binding  and effective  between  the parties unless it is a nullity or unless the Court may pass  a  specific  order  staying  or  suspending  the operation  or  execution  of  the  judgment,  decree  or order under challenge.”

21) The Court thereafter analysed number of cases where orders of

different nature were passed and dealt with these judgments by

classifying them in the following categories:

(i)   Dismissal  at  the  stage  of  special  leave  petition  -  without

reasons - no res judicata, no merger8.

(ii)   Dismissal  of  the  special  leave  petition  by  speaking  or

reasoned order - no merger, but rule of discipline and Article 141

attracted9.

8 Proposition based on judgments in Workmen v. Board of Trustees of the Cochin Port Trust, (1978) 3 SCC 119; Western India Match Co. Ltd. v.  Industrial  Tribunal,  AIR 1958 Mad 398; Indian Oil Corpn. Ltd. v.  State of Bihar,  (1986) 4 SCC 146; Rup Diamonds v. Union of India, (1989) 2 SCC 356; Wilson v.  Colchester Justices, (1985) 2 All  ER 97 (HL); Supreme Court Employees' Welfare Assn. v. Union of India, (1989) 4 SCC 187; Yogendra Narayan Chowdhury v. Union of India, (1996) 7 SCC 1; V.M. Salgaocar & Bros. (P) Ltd. v. CIT, (2000) 5 SCC 373; Sree Narayana Dharmasanghom Trust v. SwamiPrakasananda, (1997) 6 SCC 78 and State of Maharashtra v. Prabhakar Bhikaji Ingle, (1996) 3 SCC 463.

9 Penu Balakrishna Iyer v. Ariya M. Ramaswami Iyer, AIR 1965 SC 195; Abbai Maligai Partnership Firm v. K. Santhakumaran, (1998) 7 SCC 386; Shankar Ramchandra Abhyankar v. Krishnaji Dattatreya Bapat, (1969) 2 SCC 74; Sushil Kumar Sen v. State of Bihar, (1975) 1 SCC 774; Gopabandhu Biswal v. Krishna Chandra Mohanty, (1998) 4 SCC 447; Junior Telecom Officers Forum v. Union of India, 1993 Supp (4) SCC 693 and Supreme Court Employees' Welfare Assn. Case, (1989) 4 SCC 187.

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(iii)  Leave granted - dismissal without reasons - merger results10.

22) It may be pertinent to mention here that while laying down the

second principle  mentioned above,  the Court  took note  of  the

judgment in Abbai Maligai Partnership Firm and discussed it in

the following manner:

"26.  The underlying logic attaching efficacy to an order of the Supreme Court dismissing SLP after hearing counsel for  the  parties  is  discernible  from a  recent  three-Judge Bench decision of this Court in Abbai Maligai Partnership Firm v.  K.  Santhakumaran [(1998)  7  SCC 386]  .  In  the matter  of  eviction  proceeding  initiated  before  the  Rent Controller,  the  order  passed  therein  was  subjected  to appeal and then revision before the High Court.  Special leave petitions were preferred before the Supreme Court where the respondents were present on caveat. Both the sides  were  heard  through  the  Senior  Advocates representing  them.  The  special  leave  petitions  were dismissed.  The High Court  thereafter  entertained review petitions which were highly belated and having condoned the delay reversed the orders made earlier in civil revision petitions. The orders in review were challenged by filing appeals  under  leave granted  on  special  leave petitions. This Court observed that what was done by the learned Single Judge was “subversive of  judicial  discipline”.  The facts and circumstances of the case persuaded this Court to  form  an  opinion  that  the  tenants  were  indulging  in vexatious litigations, abusing the process of the Court by approaching the High Court and the very entertainment of review petitions (after condoning a long delay of 221 days) and then reversing the earlier orders was an affront to the order of this Court. However the learned Judges deciding the case have nowhere in  the course of  their  judgment relied on doctrine of merger for taking the view they have done.  A careful  reading  of  this  decision  brings  out  the correct statement of law and fortifies us in taking the view as under.”

10 Thungabhadra Industries Ltd. v. Govt. of A.P., AIR 1964 SC 1372.

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23) It  may also be of interest to note that the Court dealt  with the

situation where the review is filed earlier in point of time and the

special  leave  petition  is  filed  thereafter,  and  dealt  with  the

situation in the following manner:

"37.  Let us assume that the review is  filed first and the delay  in  SLP  is  condoned  and  the  special  leave  is ultimately granted and the appeal is pending in this Court. The position then, under Order 47 Rule 1 CPC is that still the review can be disposed of by the High Court.  If  the review of a decree is granted before the disposal of the appeal  against  the decree, the decree appealed against will  cease  to  exist  and  the  appeal  would  be  rendered incompetent.  An  appeal  cannot  be  preferred  against  a decree  after  a  review  against  the  decree  has  been granted. This is because the decree reviewed gets merged in  the  decree  passed  on  review  and  the  appeal  to  the superior court preferred against the earlier decree — the one before review — becomes infructuous.”

 24) After  elaborate  discourse on almost  all  the aspects,  the Court

gave its conclusions and also summed up the legal position from

paragraphs 39 to 44.  We reproduce the same hereunder:

"39.  We have catalogued and dealt with all the available decisions of this Court brought to our notice on the point at issue. It  is clear that as amongst the several  two-Judge Bench decisions there is a conflict of opinion and needs to be  set  at  rest.  The  source  of  power  conferring  binding efficacy on decisions of this Court is not uniform in all such decisions.  Reference  is  found  having  been  made  to  (i) Article 141 of the Constitution, (ii) doctrine of merger, (iii) res  judicata,  and (iv)  rule  of  discipline  flowing from this Court being the highest court of the land.

40. A petition seeking grant of special leave to appeal may be rejected for several reasons. For example, it  may be rejected  (i)  as  barred  by  time,  or  (ii)  being  a  defective presentation, (iii) the petitioner having no locus standi to file the petition, (iv) the conduct of the petitioner disentitling him to any indulgence by the court, (iv) the question raised

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by the petitioner for consideration by this Court being not fit  for consideration or deserving being dealt  with by the Apex Court of the country and so on. The expression often employed by this Court while disposing of such petitions are — “heard and dismissed”, “dismissed”, “dismissed as barred by time” and so on. May be that at the admission stage itself  the opposite  party  appears  on caveat  or  on notice  and  offers  contest  to  the  maintainability  of  the petition.  The  Court  may  apply  its  mind  to  the meritworthiness of the petitioner's prayer seeking leave to file  an  appeal  and  having  formed  an  opinion  may  say “dismissed on merits”. Such an order may be passed even ex parte, that is, in the absence of the opposite party. In any case,  the dismissal  would  remain a  dismissal  by  a non-speaking order where no reasons have been assigned and no law has been declared by the Supreme Court. The dismissal  is  not  of  the  appeal  but  of  the  special  leave petition. Even if the merits have been gone into, they are the merits of the special leave petition only. In our opinion neither  doctrine  of  merger  nor  Article  141  of  the Constitution is attracted to such an order. Grounds entitling exercise of review jurisdiction conferred by Order 47 Rule 1 CPC or any other statutory provision or allowing review of  an  order  passed  in  exercise  of  writ  or  supervisory jurisdiction of  the  High  Court  (where also  the  principles underlying or emerging from Order 47 Rule 1 CPC act as guidelines)  are  not  necessarily  the  same  on  which  this Court exercises discretion to grant or not to grant special leave  to  appeal  while  disposing  of  a  petition  for  the purpose.  Mere rejection of  a special  leave petition does not take away the jurisdiction of the court, tribunal or forum whose order forms the subject-matter of petition for special leave to review its  own order  if  grounds for  exercise of review  jurisdiction  are  shown to  exist.  Where  the  order rejecting  an  SLP  is  a  speaking  order,  that  is,  where reasons have been assigned by this Court for rejecting the petition for special leave and are stated in the order still the order remains the one rejecting prayer for the grant of leave to appeal. The petitioner has been turned away at the threshold without having been allowed to enter in the appellate jurisdiction of this Court. Here also the doctrine of merger would not apply. But the law stated or declared by this Court in its order shall attract applicability of Article 141  of  the  Constitution.  The  reasons  assigned  by  this Court in its order expressing its adjudication (expressly or by necessary implication) on point of fact or law shall take away  the  jurisdiction  of  any  other  court,  tribunal  or

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authority  to  express  any  opinion  in  conflict  with  or  in departure  from  the  view  taken  by  this  Court  because permitting  to  do  so  would  be  subversive  of  judicial discipline  and  an  affront  to  the  order  of  this  Court. However this would be so not by reference to the doctrine of merger.

41.  Once a special leave petition has been granted, the doors for the exercise of appellate jurisdiction of this Court have  been  let  open.  The  order  impugned  before  the Supreme Court becomes an order appealed against. Any order passed thereafter would be an appellate order and would  attract  the  applicability  of  doctrine  of  merger.  It would not make a difference whether the order is one of reversal  or  of  modification  or  of  dismissal  affirming  the order  appealed  against.  It  would  also  not  make  any difference if the order is a speaking or non-speaking one. Whenever this Court has felt inclined to apply its mind to the merits of the order put in issue before it though it may be inclined to affirm the same, it  is  customary with  this Court to grant leave to appeal and thereafter dismiss the appeal itself (and not merely the petition for special leave) though at times the orders granting leave to appeal and dismissing the appeal are contained in the same order and at times the orders are quite brief. Nevertheless, the order shows the exercise of appellate jurisdiction and therein the merits  of  the order  impugned having been subjected to judicial scrutiny of this Court.

42.  “To merge” means to sink or disappear in something else; to become absorbed or extinguished; to be combined or  be  swallowed  up.  Merger  in  law  is  defined  as  the absorption of  a thing of  lesser importance by a greater, whereby the lesser ceases to exist, but the greater is not increased; an absorption or swallowing up so as to involve a  loss  of  identity  and  individuality.  (See  Corpus  Juris Secundum, Vol. LVII, pp. 1067-68.)

43.  We may look  at  the issue from another  angle.  The Supreme Court cannot and does not reverse or modify the decree or order appealed against while deciding a petition for special leave to appeal. What is impugned before the Supreme  Court  can  be  reversed  or  modified  only  after granting  leave  to  appeal  and  then  assuming  appellate jurisdiction  over  it.  If  the  order  impugned  before  the Supreme Court cannot be reversed or modified at the SLP

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stage obviously that order cannot also be affirmed at the SLP stage.

44. To sum up, our conclusions are: (i)  Where  an  appeal  or  revision  is  provided  against  an order  passed by a court,  tribunal  or  any other  authority before superior forum and such superior forum modifies, reverses or affirms the decision put in issue before it, the decision by the subordinate forum merges in the decision by the superior forum and it is the latter which subsists, remains operative and is  capable of  enforcement  in  the eye of law.

(ii)  The  jurisdiction  conferred  by  Article  136  of  the Constitution is divisible into two stages. The first stage is upto  the  disposal  of  prayer  for  special  leave  to  file  an appeal.  The second stage commences  if  and when the leave to appeal is granted and the special leave petition is converted into an appeal.

(iii) The doctrine of merger is not a doctrine of universal or unlimited  application.  It  will  depend  on  the  nature  of jurisdiction  exercised  by  the  superior  forum  and  the content or subject-matter of challenge laid or capable of being  laid  shall  be  determinative  of  the  applicability  of merger.  The  superior  jurisdiction  should  be  capable  of reversing,  modifying  or  affirming  the  order  put  in  issue before  it.  Under  Article  136  of  the  Constitution  the Supreme  Court  may  reverse,  modify  or  affirm  the judgment-decree  or  order  appealed  against  while exercising its appellate jurisdiction and not while exercising the  discretionary  jurisdiction  disposing  of  petition  for special  leave  to  appeal.  The  doctrine  of  merger  can therefore be applied to the former and not to the latter.

(iv)  An order refusing special leave to appeal  may be a non-speaking order or  a speaking one.  In either  case it does not attract the doctrine of merger. An order refusing special leave to appeal does not stand substituted in place of the order under challenge. All that it means is that the Court was not inclined to exercise its discretion so as to allow the appeal being filed.

(v)  If  the  order  refusing  leave  to  appeal  is  a  speaking order, i.e.,  gives reasons for refusing the grant of leave, then the order has two implications. Firstly, the statement of law contained in the order is a declaration of law by the

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Supreme Court  within the meaning of  Article 141 of  the Constitution. Secondly, other than the declaration of law, whatever is stated in the order are the findings recorded by the Supreme Court which would bind the parties thereto and also the court, tribunal or authority in any proceedings subsequent  thereto  by  way  of  judicial  discipline,  the Supreme Court being the Apex Court of the country. But, this does not amount to saying that the order of the court, tribunal or authority below has stood merged in the order of the Supreme Court rejecting the special leave petition or that  the  order  of  the  Supreme  Court  is  the  only  order binding  as  res  judicata  in  subsequent  proceedings between the parties.

(vi) Once leave to appeal has been granted and appellate jurisdiction of Supreme Court has been invoked the order passed in appeal would attract the doctrine of merger; the order  may  be  of  reversal,  modification  or  merely affirmation.

(vii)  On  an  appeal  having  been  preferred  or  a  petition seeking leave to  appeal  having  been converted into  an appeal before the Supreme Court the jurisdiction of High Court  to  entertain  a  review petition  is  lost  thereafter  as provided by sub-rule (1) of Rule 1 of Order 47 CPC.”

25) Having noted the aforesaid two judgments and particularly

the fact that the earlier judgment in the case of  Abbai Maligai

Partnership Firm  is duly taken cognisance of and explained in

the latter judgment, we are of the view that there is no conflict

insofar as ratio of the two cases is concerned.  Moreover, Abbai

Maligai Partnership Firm was decided on its peculiar facts, with

no discussion on any principle of law, whereas  Kunhayammed

is an elaborate discourse based on well accepted propositions of

law which are applicable for such an issue.  We are, therefore, of

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the view that detailed judgment in Kunhayammed lays down the

correct  law and there  is  no  need to  refer  the  cases  to  larger

Bench, as was contended by the counsel for the appellant.

26) While taking this  view,  we may also point  out  that  even in  K.

Rajamouli  this  Court  took  note  of  both  these  judgments  and

explained the principle of res judicata in the following manner:

"4. Following the decision in Kunhayammed [(2000) 6 SCC 359] we are of the view that the dismissal of the special leave petition against the main judgment of the High Court would  not  constitute  res  judicata  when  a  special  leave petition  is  filed  against  the  order  passed  in  the  review petition provided the review petition was filed prior to filing of special leave petition against the main judgment of the High Court.  The position would be  different  where  after dismissal  of  the  special  leave  petition  against  the  main judgment a party files a review petition after a long delay on the ground that the party was prosecuting remedy by way of special leave petition. In such a situation the filing of review would be an abuse of the process of the law. We are  in  agreement  with  the  view  taken  in  Abbai  Maligai Partnership Firm [(1998) 7 SCC 386] that if the High Court allows  the  review  petition  filed  after  the  special  leave petition was dismissed after condoning the delay, it would be treated as an affront to the order of the Supreme Court. But  this  is  not  the  case  here.  In  the  present  case,  the review  petition  was  filed  well  within  time  and  since  the review petition was not being decided by the High Court, the appellant  filed the special  leave petition against  the main judgment of the High Court. We, therefore, overrule the preliminary objection of the counsel for the respondent and  hold  that  this  appeal  arising  out  of  special  leave petition is maintainable.”

27) From a cumulative reading of the various judgments, we sum up

the legal position as under:

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(a) The conclusions rendered by the three Judge Bench of this

Court in  Kunhayammed  and summed up in paragraph 44 are

affirmed and reiterated.

(b) We reiterate the conclusions relevant  for  these cases as

under:

"(iv) An order refusing special leave to appeal may be a non-speaking order or  a speaking one.  In either  case it does not attract the doctrine of merger. An order refusing special leave to appeal does not stand substituted in place of the order under challenge. All that it means is that the Court was not inclined to exercise its discretion so as to allow the appeal being filed.

(v)  If  the  order  refusing  leave  to  appeal  is  a  speaking order, i.e.,  gives reasons for refusing the grant of leave, then the order has two implications. Firstly, the statement of law contained in the order is a declaration of law by the Supreme Court  within the meaning of  Article 141 of  the Constitution. Secondly, other than the declaration of law, whatever is stated in the order are the findings recorded by the Supreme Court which would bind the parties thereto and also the court, tribunal or authority in any proceedings subsequent  thereto  by  way  of  judicial  discipline,  the Supreme Court being the Apex Court of the country. But, this does not amount to saying that the order of the court, tribunal or authority below has stood merged in the order of the Supreme Court rejecting the special leave petition or that  the  order  of  the  Supreme  Court  is  the  only  order binding  as  res  judicata  in  subsequent  proceedings between the parties.

(vi) Once leave to appeal has been granted and appellate jurisdiction of Supreme Court has been invoked the order passed in appeal would attract the doctrine of merger; the order  may  be  of  reversal,  modification  or  merely affirmation.

(vii)  On  an  appeal  having  been  preferred  or  a  petition seeking leave to  appeal  having  been converted into  an appeal before the Supreme Court the jurisdiction of High

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Court  to  entertain  a  review petition  is  lost  thereafter  as provided by sub-rule (1) of Rule 1 of Order 47 CPC.”

 (c) Once we hold that law laid down in Kunhayammed is to be

followed,  it  will  not  make  any  difference  whether  the  review

petition was filed before the filing of special leave petition or was

filed after the dismissal of special leave petition.  Such a situation

is covered in para 37 of Kunhayammed case.

28) Applying the aforesaid principles, the outcome of these appeals

would be as under:

Civil Appeal arising out of Special Leave Petition (Civil) No.

490 of 2012: In the instant case, since special leave petition was

dismissed in limine without giving any reasons, the review petition

filed by the appellant in the High Court would be maintainable and

should have been decided on merits.  Order dated November 12,

2008  passed  by  the  High  Court  is  accordingly  set  aside  and

matter is remanded back to the High Court for deciding the review

petition on merits.  Civil Appeal disposed of accordingly.

Civil Appeal arising out of Special Leave Petition (Civil) No.

13792 of 2013: In this case, we find that the special leave petition

was dismissed with the following order passed on January 05,

2012:

"We  find  no  ground  to  interfere  with  the  impugned order.  The special leave petition is dismissed.”

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Here  also,  special  leave  petition  was  dismissed  in  limine and

without any speaking order.   After  the dismissal  of  the special

leave petition, the respondent in this appeal had approached the

High Court with review petition.  Said review petition is allowed by

passing  order  dated  December  12,  2012  on  the  ground  of

suppression  of  material  facts  by  the  appellant  herein  and

commission of fraud on the Court.  Such a review petition was

maintainable.   Therefore,  the  High  Court  was  empowered  to

entertain the same on merits.  Insofar as appeal of the appellant

challenging  the  order  dated  December  12,  2012  on  merits  is

concerned, the matter shall be placed before the regular Board to

decide the same.   

.............................................J. (A.K. SIKRI)

.............................................J. (S. ABDUL NAZEER)

.............................................J. (M.R. SHAH)

NEW DELHI; MARCH 01, 2019.

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