KHODAY DISTILLERIES LTD. (NOW KNOWN AS KHODAY INDIA LIMITED) AND OTHERS versus SRI MAHADESHWARA SAHAKARA SAKKARE KARKHANE LTD., KOLLEGAL (UNDER LIQUIDATION) REPRESENTED BY THE LIQUIDATOR

[2019] 3 S.C.R. 411

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

SRI MAHADESHWARA SAHAKARA SAKKAREKARKHANE LTD., KOLLEGAL (UNDER LIQUIDATION)REPRESENTED BY THE LIQUIDATOR

(Civil Appeal No. 2432 of 2019)

MARCH 01, 2019

[A. K. SIKRI, S. ABDUL NAZEER AND M. R. SHAH, JJ.]

Review:

Review of judgment against which Special Leave Petition wasalready dismissed by Supreme Court – Maintainability of – Inview of conflicting views on the question in *Abbai MaligaiPartnership Firm case and in **Kunhayammedcase, DivisionBench of Supreme Court referred the matter to larger Bench – Held:There is no conflict of opinion in the two cases – *Abbai MaligaiPartnership Firm case was decided on its peculiar facts –**Kunhayammed case lays down the correct law – Since the SLPswere dismissed in limine without giving any reasons, the reviewpetitions filed in the present cases were maintainable –Constitution of India – Art. 136.

Disposing of the appeals, the Court

HELD: 1. *Abbai Maligai Partnership Firm case is dulytaken cognisance of and explained in the judgment in**Kunhayammed case. There is no conflict insofar as ratio of thetwo cases is concerned. Moreover, *Abbai Maligai PartnershipFirm casewas decided on its peculiar facts, with no discussionon any principle of law, whereas **Kunhayammed caseis anelaborate discourse based on well accepted propositions of lawwhich are applicable for such an issue. The detailed judgment in**Kunhayammed caselays down the correct law and there is noneed to refer the cases to larger Bench. [Para 25] [432-D-E]

2. The conclusions rendered in **Kunhayammed caseandsummed up in paragraph 44 are affirmed and reiterated asunder:

A“(iv) An order refusing special leave to appeal may be anon-speaking order or speaking one. In either case itdoes not attract the doctrine of merger. An order refusingspecial leave to appeal does not stand substituted in placeof the order under challenge. All that it means is that theCourt was not inclined to exercise its discretion so as toBallow the appeal being filed.

(v) If the order refusing leave to appeal is speaking order,i.e., gives reasons for refusing the grant of leave, then theorder has two implications. Firstly, the statement of lawcontained in the order is declaration of law by the SupremeCCourt within the meaning of Article 141 of the Constitution.Secondly, other than the declaration of law, whatever isstated in the order are the findings recorded by the SupremeCourt which would bind the parties thereto and also thecourt, tribunal or authority in any proceedings subsequentDthereto by way of judicial discipline, the Supreme Courtbeing the Apex Court of the country. But, this does notamount to saying that the order of the court, tribunal orauthority below has stood merged in the order of theSupreme Court rejecting the special leave petition or thatthe order of the Supreme Court is the only order bindingEas res judicata in subsequent proceedings between theparties.

(vi) Once leave to appeal has been granted and appellatejurisdiction ofSupreme Court has been invoked theorder passed in appeal would attract the doctrine of merger;Fthe order may be of reversal, modification or merelyaffirmation.

(vii) On an appeal having been preferred or petitionseeking leave to appeal having been converted into anappeal before the Supreme Court the jurisdiction of HighGCourt to entertain review petition is lost thereafter asprovided by sub-rule (1) of Rule 1 of Order 47 CPC.”[Para 27] [433-D-H; 434-A-C]

3. Once it is held that law laid down in **Kunhayammedcase is to be followed, it will not make any difference whether the

review petition was filed before the filing of special leave petitionor was filed after the dismissal of special leave petition. Such asituation is covered in para 37 of **Kunhayammed case.[Para 27] [434-D-E]

4. Since Civil Appeal No. 2432 of 2019 was dismissed inlimine without giving any reasons, the review petition filed bythe appellant in the High Court would be maintainable and shouldhave been decided on merits. Order dated November 12, 2008passed by the High Court is accordingly set aside and matter isremanded back to the High Court for deciding the review petitionon merits. [Para 28] [434-F]

5. Civil Appeal No. 2433 of 2019 was also, dismissed inlimine and without any speaking order. After the dismissal of thespecial leave petition, the respondent in this appeal hadapproached the High Court with review petition. Said reviewpetition is allowed by passing order dated December 12, 2012 onthe ground of suppression of material facts by the appellant hereinand commission of fraud on the Court. Such review petitionwas maintainable. Therefore, the High Court was empowered toentertain the same on merits. Insofar as appeal of the appellantchallenging the order dated December 12, 2012 on merits isconcerned, the matter shall be placed before the regular Boardto decide the same. [Para 28] [435-A-C]

**Kunhayammed and Others v. State of Kerala andAnother (2000) 6 SCC 359 : [2000] 1 Suppl. SCR 538;Palani Roman Catholic Mission v. S. Bagirathi Ammal(2009) 16 SCC 657; Bhakra Beas Management Boardv. Krishna Kumar Vij and Another (2010) 8 SCC 701 :[2010] 10 SCR 462 ;Medical Council of India v. Stateof Kerala and Others 2018 (11) SCALE 141– relied on.

*Abbai Maligai Partnership Firm and Another v.K. Santhakumaran and Others (1998) 7 SCC 386 :–[1998] 1 Suppl. SCR 535 distinguished.

Thungabhadra Industries Ltd. v. Govt. of A.P. AIR 1964SC 1372 : [1964] SCR 174 ;Meghmala and Others v.G. Narasimha Reddy and Others (2010) 8 SCC 383 :

[2019] 3 S.C.R.

A[2010] 10 SCR 47; Gangadhara Palo v. RevenueDivisional Officer and Another (2011) 4 SCC 602 :[2011] 3 SCR 74 ; Workmen v. Board of Trustees of theCochin Port Trust(1978) 3 SCC 119 : [1978] 3 SCR971 ;Western India Match Co. Ltd. v. Industrial TribunalAIR 1958 Mad 398 ;Indian Oil Corpn. Ltd. v. State ofBBihar(1986) 4 SCC 146 : [1986] 3 SCR 553;RupDiamonds v. Union of India(1989) 2 SCC 356: [1989]1 SCR 13 ;Supreme Court Employees’ Welfare Assn. v.Union of India(1989) 4 SCC 187 : [1989] 3 SCR 488;Yogendra Narayan Chowdhury v. Union of India(1996)C7 SCC 1 : [1995] 6 Suppl. SCR 17 ; V.M. Salgaocar &Bros. (P) Ltd. v. CIT(2000) 5 SCC 373 : [2000] 2 SCR1169 ; Sree Narayana Dharmasanghom Trust v.SwamiPrakasananda (1997) 6 SCC 78 : [1997] 3 SCR799 ; State of Maharashtra v. Prabhakar Bhikaji Ingle(1996) 3 SCC 463 : [1996] 3 SCR 211 ;PenuDBalakrishna Iyer v. Ariya M. Ramaswami IyerAIR 1965SC 195: [1964] 7 SCR 49 ;Abbai Maligai PartnershipFirm v. K. Santhakumaran(1998) 7 SCC 386 :[1998] 1 Suppl. SCR 535 ;Shankar RamchandraAbhyankar v. Krishnaji Dattatreya Bapat(1969) 2 SCCE74 : [1970] 1 SCR 322 ; Sushil Kumar Sen v. State ofBihar(1975) 1 SCC 774 : [1975] 3 SCR 942 ;Gopabandhu Biswal v. Krishna Chandra Mohanty(1998) 4 SCC 447: [1998] 2 SCR 1108 ; Junior TelecomOfficers Forum v. Unionof India(1993) 4 Suppl. SCC693: [1992] 1 Suppl. SCR 764 – referred to.F

Wilson v. Colchester Justices(1985) 2 All ER 97 (HL)– referred to.

KHODAY DISTILLERIES LTD. v. SRI MAHADESHWARASAHAKARA SAKKARE KARKHANE LTD.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2432of 2019

From the Judgment and Order dated 09.09.2011 of the High Courtof Karnataka at Bangalore in Review Petition No. 96 of 2011

WITH

Civil Appeal No. 2433 of 2019.

Jaideep Gupta, Ravindra Raizada, Sr. Advs., Senthil Jagadeesan,Ms. Sonakshi Malhan, Ms. Suriti Chowdhary, Ms. Mrinal Kanwar, Partha

ASil, Anirban Sen, Saurav Gupta, Tavish B. Prasad, Gaurav Jain,Ms. Abha Jain, Ranbir Singh Yadav, Puran Mal Saini, Ms. Anzu K. Varkey,Rajeev Kumar Dubey, Kamlendra Mishra, Bhakti Vardhan Singh, AnmolTayal, S. Vinay Ratnakar, Ashok Panigrahi, Shanthkumar V. Mahale,Abdul Rahiman, Rajesh Mahale, Amith J., Ranbir Yadav, Advs. for theappearing parties.B

The Judgment of the Court was delivered by

A. K. SIKRI, J. 1. 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.C490 of 2012 are noted for discussion, as in this case, order dated October19, 2012 has been passed referring the question of law to largerBench.

3. Before we advert to the question of law, we deem it appropriateto take stock of seminal facts as the said factual background wouldDmake it easier to understand the implication of the issue that arises fordetermination.

4. Respondent No.1 herein had filed original suit against theappellant on the file of the XXXI Additional City Civil Judge, BangaloreCity. It was money suit for recovery of Rs.1,00,76,630/- along withEinterest. The City Civil Judge, after trial, dismissed the suit as barred bylimitation vide his judgment and decree dated November 11, 2005, evenafter finding on merits that money was payable by the appellant torespondent No.1. Against this, respondent No.1 preferred first appealunder Section 96 of the Code of Civil Procedure, 1908. This appeal wasFallowed by the High Court of Karnataka on November 12, 2008 byholding that the suit was filed within the period of limitation. Accordingly,it passed decree of the amount claimed along with interest @ 12% perannum 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 payment. Against this judgment of the High Court,Gthe appellant preferred the special leave petition. This special leavepetition was dismissed by this Court on December 04, 2009 with thefollowing order:

“Delay condoned.

Special Leave Petition is dismissed.”H

After the dismissal of the special leave petition, respondent No.1filed execution petition before the trial court.

5. It may be mentioned at this stage that after the High Court haddecreed the suit of respondent No.1, the respondent filed application forrectification of the judgment, which was allowed on October 20, 2010directing 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 leavepetition, went back to the High Court in the form of review petitionseeking review of the judgment dated November 12, 2008 passed by theHigh Court. It was filed on the premise that the High Court had grantedrelief which was not even sought for by respondent No.1 in the suit. Wemay reproduce the precise ground taken in this behalf in the reviewpetition:

“11. The above Review Petition is directed only with regard tothe decree portion dated 12.11.2008 passed by this Hon’ble Courtin 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 atRs.1,00,76,630/- with interest at the rate of 12% from the date ofdemand made namely 29.07.1994 till 03.08.1994 and at the rateof 10% from 04.08.1994 till the date of payment on the said sumwith costs.”

perusal of the prayer made in the suit O.S. No. 2808/1997 asextracted in para 2 above shows that the plaintiff has not claimedinterest at any particular rate and he has also not prayed the interestfrom any particular date. He has also not claimed interest atdifferent rates also. Thus the decree passed by this Hon’ble Courtin RFA No. 427/2006 is not based on the prayer sought for by theplaintiff in O.S. No. 2808/1997. This mistake appears on the faceof the record. Hence the impugned judgment and decree in RFANo. 427/2006 dated 12.11.2008 as corrected on 20.10.2010 is liableto be reviewed and modify the said judgment and decree in termsof the prayer made by the plaintiff in O.S. No. 2808/1997.”

On that basis, it was pleaded that the award of interest from August04, 1994 is also without jurisdiction since it was not claimed by respondentNo.1 in the trial court.

A7. This review petition has been dismissed by the High Court videorders dated September 09, 2011, inter alia, with the followingobservations:

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

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

CAccordingly, review petition is dismissed.”

8. As can be seen from the above order, the reason for dismissalof the review petition is that the Apex Court has already dismissed thespecial leave petition against the High Court’s judgment dated November12, 2008. Therefore, review of the said judgment by the High Court isDnot permissible. It is this order in review petition which is challenged inthese proceedings inasmuch as case of the appellant is that when thespecial leave petition was dismissed in limine and not by speaking order,there was no reason not to entertain the review petition by the HighCourt, as dismissal of the special leave petition in limine by non-speakingEorder does not amount to merger of the High Court judgment with thatof the Supreme Court.

9. The question of law which needs to be determined in theaforesaid circumstances is as to whether review petition is maintainablebefore the High Court seeking review of judgment against which theFspecial leave petition has already been dismissed by this Court.

10. The reason for referring the matter to larger Bench is theconflicting views by different Benches of this Court which have beentaken note of in the referral order. Those judgments will be discussed atthe appropriate stage. At the same time, we would like to reproduce thefollowing passages from the reference order:G

“12. We may also point out in this connection that Article 136 ofthe Constitution does not confer any right of appeal on any partybut it confers discretionary power on the Supreme Court tointerfere in suitable cases. Clause (1) of Article 136 of theConstitution confers very wide and extensive powers on the

Supreme Court. The article commences with non obstante clause,the words are of overriding effect and clearly indicate the intentionof the Framers of the Constitution that it is special jurisdictionand residuary power unfettered by any statute or other provisionsof Chapter IV of Part V of the Constitution. The jurisdiction underArticle 136 of the Constitution, of course, cannot be barred bystatute since it is extraordinary power under Article 136. Article136 is an extraordinary power which cannot be taken away bylegislation.

13. We also notice that several statutes confer on aggrieved partiesright of appeal to the Supreme Court in contradistinction with thepowers conferred on the Supreme Court under Article 136 of theConstitution, for instance, Section 15-Z of the Securities andExchange Board of India (SEBI) Act, 1992 confers right ofappeal to any person aggrieved by any decision or order of theSecurities Appellate Tribunal. So also various regulatory legislationsprovide for statutory right of appeal. To what extent the principleof res judicata and merger would apply in respect of decisionrendered by this Court while exercising its statutory power ofappeal as well as the one rendered while entertaining an appealinvoking Article 136 is not seen considered by the larger Bencheither 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 beforethis Court as well as before various High Courts in the country onthe maintainability of review petitions after the disposal of thespecial leave petition without granting leave but with or withoutassigning reasons on which also conflicting views are beingexpressed by the two-Judge Benches of this Court. In order toresolve those conflicts and for proper guidance to the High Courts,we feel it would be appropriate that this matter be referred to alarger Bench for an authoritative pronouncement.”

11. There are two judgments of this court, both of which are threeJudge Bench decisions. First in line is Abbai Maligai Partnership Firmand Another v. K. Santhakumaran and Others[1]. This judgment isrelied upon by respondent No.1 with the plea that in that judgment thisCourt held that when the judgment and decree passed by the High Court1(1998) 7 SCC 386

Ais affirmed by the Supreme Court with the dismissal of the special leavepetition, there is no question of entertaining the review petition by theHigh Court, thereafter. Other judgment is in the case of Kunhayammedand Others v. State of Kerala and Another[2]. In this judgment theCourt laid down various ways in which special leave petitions can bedisposed of and decided in which cases review would be permissibleBand where such review is not entertainable, on the doctrine of mergerand res judicata, etc. We may point out at this stage itself that variousjudgments which have been pronounced by this Court (which are thejudgments rendered by two Judges’ Bench) have taken different paths,on the interpretation of the aforesaid two cases, resulting in conflictingCoutcomes.

12. In Meghmala and Others v. G. Narasimha Reddy andOthers[3] and K. Rajamouli v. A.V.K.N. Swamy, the view taken by thisCourt was that review petition is not maintainable. In Meghmala theCourt, however, made one exception by holding that in case litigant

Dfiles review petition before filing the special leave petition in theSupreme Court and it remains pending till the special leave petition isdismissed, the review petition still deserves to be considered. However,the review petition filed after the dismissal of the special leave petitionwould amount to abuse of the process of the Court. On the other hand,

in Gangadhara Palo v. Revenue Divisional Officer Officer andEAnother[4], this Court held that it will make no difference whether thereview petition was filed in the High Court before the dismissal of thespecial leave petition or after the dismissal thereof. In either case, thedoctrine of merger would apply, even when the special leave petition isdismissed in limine, which will bar the filing of the review petition beforeFthe High Court when the special leave petition is dismissed.

13. As against the aforesaid view, there is another line of casesholding that review petition is maintainable if no leave has been grantedto file an appeal and there is dismissal of the special leave petition at thepreliminary stage itself. These cases have taken view that preliminaryGstage does not constitute binding precedent and, therefore, doctrine ofmerger would not apply. These cases are Palani Roman Catholic

2(2000) 6 SCC 359

3(2010) 8 SCC 3834(2011) 4 SC 602H

Mission v. S. Bagirathi Ammal[5], Bhakra Beas Management Boardv. Krishna Kumar Vij and Another[6].

14. After taking note of the aforesaid judgments, the referenceorder in the instant case makes remark about the nature of conflictbetween them, which is noted in paragraph 11 of the judgment and isreproduced below:

“11. We notice that in K. Rajamouli this Court has followedKunhayammed and distinguished Abbai Maligai PartnershipFirm and in Gangadhara Palo the later Bench did not acceptthe view expressed in K. Rajamouli. To this extent, there is someconflict between the judgments in Gangadhara Palo and K.Rajamouli which calls for resolution by larger Bench.”

15. It may be useful to add, in the line of the aforesaid cases, arecent judgment of this Court in Medical Council of India v. State ofKerala and Others[7], which is again two Judge Bench. Though in thiscase situation was not where review petition was filed after the dismissalof the special leave petition, at the same time, dismissal of the specialleave petition in limine was explained to mean that it was still decisionon merits by this Court.

16. Having stated the manner in which the issue is dealt with invarious judgments noted above, it would be apposite to first discuss thelaw laid down in Abbai Maligai Partnership Firm as well asKunhayammed’s cases since both the judgments are rendered by threeJudges’ Bench. Therefore, it is to be seen, in the first instance, as towhether they project conflicting views.

17. Abbai Maligai Partnership Firm was case under the RentControl Act and the appeal came from the High Court of Madras. In aneviction petition filed by respondent Nos. 1 and 2 in the said case, theRent Controller had ordered eviction of the appellants therein on theground of wilful default in payment of rent as well as on the ground ofbona fide requirement of the premises by respondent Nos. 1 and 2 fortheir own business. In appeal, the order of the Rent Controller was setaside as it was found that there was bona fide dispute with regard tothe title of the property which could be decided by the Civil Court. The

5 (2009) 16 SCC 6576 (2010) 8 SCC 7017 2018 (11) Scale 141

Arespondents preferred review petitions thereagainst, which weredismissed. They approached this Court by way of special leave petitionswhich were also dismissed. After the dismissal of these special leavepetitions, the respondents therein filed review petition in the High Courtwith delay of 221 days. The High Court condoned the delay and alsoentertained the review petition on merits and not only allowed thoseBreview petitions but even reversed the orders made earlier in the civilrevision petitions by allowing those petitions and ordering eviction of theappellants/ tenants. In appeal against this order passed in review andrevision petitions, this Court held that the jurisdiction exercised by theHigh Court, under the circumstances, was palpably erroneous. EntireCdiscussion in this behalf is contained in one paragraph, which we reproducebelow:

“4. The manner in which the learned Single Judge of the HighCourt exercised the review jurisdiction, after the special leavepetitions against the selfsame order had been dismissed by thisDCourt after hearing learned counsel for the parties, to say theleast, was not proper. Interference by the learned Single Judge atthat stage is subversive of judicial discipline. The High Court wasaware that the SLPs against the orders dated 7-1-1987 had alreadybeen dismissed by this Court. The High Court, therefore, had nopower or jurisdiction to review the selfsame order, which was theEsubject-matter of challenge in the SLPs in this Court after thechallenge had failed. By passing the impugned order on 7-4-1994,judicial propriety has been sacrificed. After the dismissal of thespecial leave petitions by this Court, on contest, no review petitionscould be entertained by the High Court against the same order.FThe very entertainment of the review petitions, in the facts andcircumstances of the case, was an affront to the order of thisCourt. We express our strong disapproval and hope there wouldbe no occasion in the future when we may have to say so. Thejurisdiction exercised by the High Court, under the circumstances,was palpably erroneous. The respondents who approached theGHigh Court after the dismissal of their SLPs by this Court, abusedthe process of the court and indulged in vexatious litigation. Westrongly deprecate the matter in which the review petitions werefiled and heard in the High Court after the dismissal of the SLPsby this Court. The appeals deserve to succeed on that short ground.HThe 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 Tribunalhad held that land in dispute did not vest in the Government under theprovisions of the Kerala Private Forests (Vesting and Assignment) Act,1971. Against this order the appeal of the State of Kerala was dismissedby the High Court on December 17, 1982. Thereagainst special leavepetition was filed by the State, which was dismissed in limine stating -‘Special Leave Petition is dismissed on merits’. Thereafter, the Estatefiled an application in the High Court for review of its earlier orderwhereby appeal of the State had been dismissed upholding the order ofthe Forest Tribunal. It may be noted that during the pendency of thisreview petition, Section 8(c) was inserted in the Kerala Private Forests(Vesting and Assignment) Act, 1971 by amendment made in the year1986 enabling the Government to file appeal or review in certain cases.This provision was introduced with retrospective effect, i.e. fromNovember 19, 1983. Review petition was filed in January 1984. Onthese facts, the High Court passed orders dated December 14, 1995overruling the objection to the maintainability of the review petition holdingthat review was maintainable and posted the case for hearing on merits.This order was challenged which became the subject matter of the appealin the aforesaid cases. The contention of the petitioner before this Courtwas two fold: (a) the High Court’s order dated December 17, 1982 wasmerged with order dated July 18, 1983 whereby the special leave petitionwas dismissed and, therefore, no review petition was maintainable; and(b) order of this Court in the special leave petition amounted to affirmationof the High Court’s order and, therefore, could not be reviewed by theHigh Court. This Court rejected the contention of the petitioner holdingthat review was maintainable as the doctrine of merger was not applicablein the aforesaid circumstances. However, what is important is that theCourt deliberated on the doctrine of merger and handed out well reasonedand lucid judgment explaining the situations where review would bemaintainable as well as the situations where it would not be maintainableon the aforesaid doctrine.

19. Explaining the doctrine of merger, the Court held that logicbehind this doctrine is that there cannot be more than one decree oroperative orders governing the same subject matter at given point oftime. When decree or order passed by an inferior Court, Tribunal or

AAuthority is subjected to remedy available under law before superiorforum, then, though the decree or order under challenge continues to beeffective 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 bymodifying the same, it is the decree of the superior Court, Tribunal orBAuthority which is the final binding and operative decree and the decreeor order of the lower Court, Tribunal or authority gets merged into theorder passed by the superior forum. The Court also clarified that thisdoctrine is not of universal or unlimited application. The nature ofjurisdiction exercised by the superior forum and the content or subjectCmatter of challenge laid or which could have been laid will have to bekept in view. The Court thereafter discussed the provision pertaining tothe appellate jurisdiction that is exercised by the Supreme Court conferredupon it by Articles 132 to 136 of the Constitution of India. Insofar asjurisdiction under Article 136 is concerned, it explained that Article 136opens with non-obstante clause and conveys message that even inDthe field covered by the preceding articles, jurisdiction conferred by Article136 is available to be exercised in an appropriate case. It is anuntrammelled reservoir of power incapable of being confined todefinitional bounds; the discretion conferred on the Supreme Court beingsubjected to only one limitation, that is, the wisdom and good sense orEsense of justice of the Judges. No right of appeal is conferred upon anyparty; only discretion is vested in the Supreme Court to interfere bygranting leave to an applicant to enter in its appellate jurisdiction notopen otherwise and as of right.

20. Exercise of jurisdiction under Article 136 and the manner inFwhich it is dealt with is clarified as under:

“14. The exercise of jurisdiction conferred on this Court by Article136 of the Constitution consists of two steps: (i) granting specialleave to appeal; and (ii) hearing the appeal. This distinction isclearly demonstrated by the provisions of Order 16 of the SupremeGCourt Rules framed in exercise of the power conferred by Article145 of the Constitution. Under Rule 4, the petition seeking specialleave to appeal filed before the Supreme Court under Article 136of the Constitution shall be in Form No. 28. No separate applicationfor interim relief need be filed, which can be incorporated in the

petition itself. If notice is ordered on the special leave petition, thepetitioner should take steps to serve the notice on the respondent.The petition shall be accompanied by certified copy of thejudgment or order appealed from and an affidavit in support ofthe statement of facts contained in the petition. Under Rule 10the petition for grant of special leave shall be put up for hearingex parte unless there be caveat. The court if it thinks fit, maydirect issue of notice to the respondent and adjourn the hearing ofthe petition. Under Rule 13, the respondent to whom notice inspecial leave petition is issued or who had filed caveat, shall beentitled to oppose the grant of leave or interim orders withoutfiling any written objections. He shall also be at liberty to file hisobjections only by setting out the grounds in opposition to thequestions of law or grounds set out in the SLP. On hearing, theCourt may refuse the leave and dismiss the petition for seekingspecial leave to appeal either ex parte or after issuing notice tothe opposite party. Under Rule 11, on the grant of special leave,the petition for special leave shall, subject to the payment ofadditional court fee, if any, be treated as the petition of appeal andit shall be registered and numbered as such. The appeal shall thenbe set down for hearing in accordance with the procedure laiddown thereafter. Thus, petition seeking grant of special leave toappeal and the appeal itself, though both dealt with by Article 136of 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, theCourt is called upon to see whether the petitioner should begranted such leave or not. While hearing such petition, theCourt is not exercising its appellate jurisdiction; it is merelyexercising its discretionary jurisdiction to grant or not to grantleave to appeal. The petitioner is still outside the gate of entrythough aspiring to enter the appellate arena of the SupremeCourt. Whether he enters or not would depend on the fate ofhis 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 case for invokingappellate jurisdiction of the Court was not made out;

ABCDE

426SUPREME COURT REPORTS

(3) If leave to appeal is granted the appellate jurisdiction of theCourt stands invoked; the gate for entry in the appellate arenais opened. The petitioner is in and the respondent may also becalled upon to face him, though in an appropriate case, in spiteof having granted leave to appeal, the Court may dismiss theappeal without noticing the respondent.

(4) In spite of petition for special leave to appeal having beenfiled, the judgment, decree or order against which leave toappeal has been sought for, continues to be final, effective andbinding as between the parties. Once leave to appeal has beengranted, the finality of the judgment, decree or order appealedCagainst is put in jeopardy though it continues to be binding andeffective between the parties unless it is nullity or unless theCourt may pass specific order staying or suspending theoperation or execution of the judgment, decree or order underchallenge.”

D21. The Court thereafter analysed number of cases where ordersof different nature were passed and dealt with these judgments byclassifying them in the following categories:

(i) Dismissal at the stage of special leave petition - without reasons- no res judicata, no merger[8].

E(ii) Dismissal of the special leave petition by speaking or reasonedorder - no merger, but rule of discipline and Article 141 attracted[9].

(iii) Leave granted - dismissal without reasons - merger results[10].

8 Proposition based on judgments in Workmen v. Board of Trustees of the Cochin PortTrust, (1978) 3 SCC 119; Western India Match Co. Ltd. v. Industrial Tribunal, AIRF1958 Mad 398; Indian Oil Corpn. Ltd. v. State of Bihar, (1986) 4 SCC 146; RupDiamonds 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 DharmasanghomTrust v. SwamiPrakasananda, (1997) 6 SCC 78 and State of Maharashtra v. PrabhakarBhikaji Ingle, (1996) 3 SCC 463.G9 Penu Balakrishna Iyer v. Ariya M. Ramaswami Iyer, AIR 1965 SC 195; Abbai MaligaiPartnership Firm v. K. Santhakumaran, (1998) 7 SCC 386; Shankar RamchandraAbhyankar v. Krishnaji Dattatreya Bapat, (1969) 2 SCC 74; Sushil Kumar Sen v. Stateof 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 693and Supreme Court Employees’ Welfare Assn. Case, (1989) 4 SCC 187.10 Thungabhadra Industries Ltd. v. Govt. of A.P., AIR 1964 SC 1372.

22. It may be pertinent to mention here that while laying down thesecond principle mentioned above, the Court took note of the judgmentin Abbai Maligai Partnership Firm and discussed it in the followingmanner:

“26. The underlying logic attaching efficacy to an order of theSupreme Court dismissing SLP after hearing counsel for the partiesis discernible from recent three-Judge Bench decision of thisCourt in Abbai Maligai Partnership Firm v.K. Santhakumaran [(1998) 7 SCC 386] . In the matter of evictionproceeding initiated before the Rent Controller, the order passedtherein was subjected to appeal and then revision before the HighCourt. Special leave petitions were preferred before the SupremeCourt where the respondents were present on caveat. Both thesides were heard through the Senior Advocates representing them.The special leave petitions were dismissed. The High Courtthereafter entertained review petitions which were highly belatedand having condoned the delay reversed the orders made earlierin civil revision petitions. The orders in review were challengedby filing appeals under leave granted on special leave petitions.This Court observed that what was done by the learned SingleJudge was “subversive of judicial discipline”. The facts andcircumstances of the case persuaded this Court to form an opinionthat the tenants were indulging in vexatious litigations, abusing theprocess of the Court by approaching the High Court and the veryentertainment of review petitions (after condoning long delay of221 days) and then reversing the earlier orders was an affront tothe order of this Court. However the learned Judges deciding thecase have nowhere in the course of their judgment relied ondoctrine of merger for taking the view they have done. carefulreading of this decision brings out the correct statement of lawand fortifies us in taking the view as under.”

23. It may also be of interest to note that the Court dealt with thesituation where the review is filed earlier in point of time and the specialleave petition is filed thereafter, and dealt with the situation in the followingmanner:

“37. Let us assume that the review is filed first and the delay inSLP is condoned and the special leave is ultimately granted and

the appeal is pending in this Court. The position then, under Order47 Rule 1 CPC is that still the review can be disposed of by theHigh Court. If the review of decree is granted before the disposalof the appeal against the decree, the decree appealed against willcease to exist and the appeal would be rendered incompetent. Anappeal cannot be preferred against decree after review againstthe decree has been granted. This is because the decree reviewedgets merged in the decree passed on review and the appeal to thesuperior court preferred against the earlier decree — the onebefore review — becomes infructuous.”

24. After elaborate discourse on almost all the aspects, the Courtgave its conclusions and also summed up the legal position from paragraphs39 to 44. We reproduce the same hereunder:

“39. We have catalogued and dealt with all the available decisionsof this Court brought to our notice on the point at issue. It is clearthat as amongst the several two-Judge Bench decisions there is aconflict of opinion and needs to be set at rest. The source ofpower conferring binding efficacy on decisions of this Court isnot uniform in all such decisions. Reference is found having beenmade to (i) Article 141 of the Constitution, (ii) doctrine of merger,(iii) res judicata, and (iv) rule of discipline flowing from this Courtbeing the highest court of the land.

40. petition seeking grant of special leave to appeal may berejected for several reasons. For example, it may be rejected (i)as barred by time, or (ii) being defective presentation, (iii) thepetitioner having no locus standi to file the petition, (iv) the conductof the petitioner disentitling him to any indulgence by the court,(iv) the question raised by the petitioner for consideration by thisCourt being not fit for consideration or deserving being dealt withby the Apex Court of the country and so on. The expression oftenemployed 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 oppositeparty appears on caveat or on notice and offers contest to themaintainability of the petition. The Court may apply its mind to themeritworthiness of the petitioner’s prayer seeking leave to file anappeal and having formed an opinion may say “dismissed onmerits”. Such an order may be passed even ex parte, that is, inthe absence of the opposite party. In any case, the dismissal wouldremain dismissal by non-speaking order where no reasonshave been assigned and no law has been declared by the SupremeCourt. The dismissal is not of the appeal but of the special leavepetition. Even if the merits have been gone into, they are the meritsof the special leave petition only. In our opinion neither doctrine ofmerger nor Article 141 of the Constitution is attracted to such anorder. Grounds entitling exercise of review jurisdiction conferredby Order 47 Rule 1 CPC or any other statutory provision or allowingreview of an order passed in exercise of writ or supervisoryjurisdiction of the High Court (where also the principles underlyingor emerging from Order 47 Rule 1 CPC act as guidelines) are notnecessarily the same on which this Court exercises discretion togrant or not to grant special leave to appeal while disposing of apetition for the purpose. Mere rejection of special leave petitiondoes not take away the jurisdiction of the court, tribunal or forumwhose order forms the subject-matter of petition for special leaveto review its own order if grounds for exercise of review jurisdictionare shown to exist. Where the order rejecting an SLP is speakingorder, that is, where reasons have been assigned by this Court forrejecting the petition for special leave and are stated in the orderstill the order remains the one rejecting prayer for the grant ofleave to appeal. The petitioner has been turned away at thethreshold without having been allowed to enter in the appellatejurisdiction of this Court. Here also the doctrine of merger wouldnot apply. But the law stated or declared by this Court in its ordershall attract applicability of Article 141 of the Constitution. Thereasons assigned by this Court in its order expressing itsadjudication (expressly or by necessary implication) on point offact or law shall take away the jurisdiction of any other court,tribunal or authority to express any opinion in conflict with or indeparture from the view taken by this Court because permittingto do so would be subversive of judicial discipline and an affrontto the order of this Court. However this would be so not byreference to the doctrine of merger.

41. Once special leave petition has been granted, the doors forthe exercise of appellate jurisdiction of this Court have been let

open. The order impugned before the Supreme Court becomesan order appealed against. Any order passed thereafter would bean appellate order and would attract the applicability of doctrineof merger. It would not make difference whether the order isone of reversal or of modification or of dismissal affirming theorder appealed against. It would also not make any difference ifthe order is speaking or non-speaking one. Whenever this Courthas felt inclined to apply its mind to the merits of the order put inissue before it though it may be inclined to affirm the same, it iscustomary with this Court to grant leave to appeal and thereafterdismiss the appeal itself (and not merely the petition for specialleave) though at times the orders granting leave to appeal anddismissing the appeal are contained in the same order and at timesthe orders are quite brief. Nevertheless, the order shows theexercise of appellate jurisdiction and therein the merits of the orderimpugned having been subjected to judicial scrutiny of this Court.

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

43. We may look at the issue from another angle. The SupremeCourt cannot and does not reverse or modify the decree or orderappealed against while deciding petition for special leave toappeal. What is impugned before the Supreme Court can bereversed or modified only after granting leave to appeal and thenassuming appellate jurisdiction over it. If the order impugned beforethe Supreme Court cannot be reversed or modified at the SLPstage obviously that order cannot also be affirmed at the SLPstage.

44. To sum up, our conclusions are:

(i) Where an appeal or revision is provided against an order passedby court, tribunal or any other authority before superior forumand such superior forum modifies, reverses or affirms the decisionput in issue before it, the decision by the subordinate forum merges

in the decision by the superior forum and it is the latter whichsubsists, remains operative and is capable of enforcement in theeye of law.

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

(iii) The doctrine of merger is not doctrine of universal orunlimited application. It will depend on the nature of jurisdictionexercised by the superior forum and the content or subject-matterof challenge laid or capable of being laid shall be determinative ofthe applicability of merger. The superior jurisdiction should becapable of reversing, modifying or affirming the order put in issuebefore it. Under Article 136 of the Constitution the Supreme Courtmay reverse, modify or affirm the judgment-decree or orderappealed against while exercising its appellate jurisdiction and notwhile exercising the discretionary jurisdiction disposing of petitionfor special leave to appeal. The doctrine of merger can thereforebe applied to the former and not to the latter.

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

(v) If the order refusing leave to appeal is speaking order, i.e.,gives reasons for refusing the grant of leave, then the order hastwo implications. Firstly, the statement of law contained in theorder is declaration of law by the Supreme Court within themeaning of Article 141 of the Constitution. Secondly, other thanthe declaration of law, whatever is stated in the order are thefindings recorded by the Supreme Court which would bind theparties thereto and also the court, tribunal or authority in anyproceedings subsequent thereto by way of judicial discipline, theSupreme Court being the Apex Court of the country. But, thisdoes not amount to saying that the order of the court, tribunal or

authority below has stood merged in the order of the SupremeCourt rejecting the special leave petition or that the order of theSupreme Court is the only order binding as res judicata insubsequent proceedings between the parties.

(vi) Once leave to appeal has been granted and appellateBjurisdiction of Supreme Court has been invoked the order passedin appeal would attract the doctrine of merger; the order may beof reversal, modification or merely affirmation.

(vii) On an appeal having been preferred or petition seekingleave to appeal having been converted into an appeal before theCSupreme Court the jurisdiction of High Court to entertain reviewpetition is lost thereafter as provided by sub-rule (1) of Rule 1 ofOrder 47 CPC.”

25. Having noted the aforesaid two judgments and particularlythe fact that the earlier judgment in the case of Abbai MaligaiDPartnership Firm is duly taken cognisance of and explained in the latterjudgment, we are of the view that there is no conflict insofar as ratio ofthe two cases is concerned. Moreover, Abbai Maligai PartnershipFirm was decided on its peculiar facts, with no discussion on any principleof law, whereas Kunhayammed is an elaborate discourse based onwell accepted propositions of law which are applicable for such an issue.EWe are, therefore, of the view that detailed judgment in Kunhayammedlays down the correct law and there is no need to refer the cases tolarger Bench, as was contended by the counsel for the appellant.

26. While taking this view, we may also point out that even inK. Rajamouli this Court took note of both these judgments and explainedFthe 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 petitionagainst the main judgment of the High Court would not constituteres judicata when special leave petition is filed against the orderGpassed in the review petition provided the review petition wasfiled prior to filing of special leave petition against the mainjudgment of the High Court. The position would be different whereafter dismissal of the special leave petition against the mainjudgment party files review petition after long delay on the

ground that the party was prosecuting remedy by way of specialleave petition. In such situation the filing of review would be anabuse of the process of the law. We are in agreement with theview taken in Abbai Maligai Partnership Firm [(1998) 7 SCC386] that if the High Court allows the review petition filed afterthe special leave petition was dismissed after condoning the delay,it would be treated as an affront to the order of the SupremeCourt. But this is not the case here. In the present case, the reviewpetition was filed well within time and since the review petitionwas not being decided by the High Court, the appellant filed thespecial leave petition against the main judgment of the High Court.We, therefore, overrule the preliminary objection of the counselfor the respondent and hold that this appeal arising out of specialleave petition is maintainable.”

27. From cumulative reading of the various judgments, we sumup the legal position as under:

(a) The conclusions rendered by the three Judge Bench of thisCourt in Kunhayammed and summed up in paragraph 44 areaffirmed and reiterated.

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

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

(v) If the order refusing leave to appeal is speaking order, i.e.,gives reasons for refusing the grant of leave, then the order hastwo implications. Firstly, the statement of law contained in theorder is declaration of law by the Supreme Court within themeaning of Article 141 of the Constitution. Secondly, other thanthe declaration of law, whatever is stated in the order are thefindings recorded by the Supreme Court which would bind theparties thereto and also the court, tribunal or authority in anyproceedings subsequent thereto by way of judicial discipline, the

Supreme Court being the Apex Court of the country. But, thisdoes not amount to saying that the order of the court, tribunal orauthority below has stood merged in the order of the SupremeCourt rejecting the special leave petition or that the order of theSupreme Court is the only order binding as res judicata insubsequent proceedings between the parties.

(vi) Once leave to appeal has been granted and appellatejurisdiction of Supreme Court has been invoked the order passedin appeal would attract the doctrine of merger; the order may beof reversal, modification or merely affirmation.

(vii) On an appeal having been preferred or petition seekingleave to appeal having been converted into an appeal before theSupreme Court the jurisdiction of High Court to entertain reviewpetition is lost thereafter as provided by sub-rule (1) of Rule 1 ofOrder 47 CPC.”

D(c) Once we hold that law laid down in Kunhayammed is to befollowed, it will not make any difference whether the review petitionwas filed before the filing of special leave petition or was filed after thedismissal of special leave petition. Such situation is covered in para 37of Kunhayammed case.

E28. Applying the aforesaid principles, the outcome of these appealswould be as under:

Civil Appeal arising out of Special Leave Petition (Civil)No. 490 of 2012: In the instant case, since special leave petition wasdismissed in limine without giving any reasons, the review petition filedFby the appellant in the High Court would be maintainable and shouldhave been decided on merits. Order dated November 12, 2008 passedby the High Court is accordingly set aside and matter is remanded backto the High Court for deciding the review petition on merits. Civil Appealdisposed of accordingly.

Civil Appeal arising out of Special Leave Petition (Civil)GNo. 13792 of 2013: In this case, we find that the special leave petitionwas dismissed with the following order passed on January 05, 2012:

“We find no ground to interfere with the impugned order. Thespecial leave petition is dismissed.”

Here also, special leave petition was dismissed in limine andAwithout any speaking order. After the dismissal of the special leavepetition, the respondent in this appeal had approached the High Courtwith review petition. Said review petition is allowed by passing orderdated December 12, 2012 on the ground of suppression of material factsby the appellant herein and commission of fraud on the Court. Such aBreview petition was maintainable. Therefore, the High Court wasempowered to entertain the same on merits. Insofar as appeal of theappellant challenging the order dated December 12, 2012 on merits isconcerned, the matter shall be placed before the regular Board to decidethe same.

Kalpana K. Tripathy

Appeals disposed of.