Supreme Court clarifies maintainability of review petitions after dismissal of special leave petitions in civil cases: Khoday Distilleries Ltd. vs. Sri Mahadeshwara Sahakara Sakkare Karkhane Ltd. (01 March 2019)

Introduction

Date of the Judgment: 01 March 2019
Citation: 2019 INSC 197
Judges: A.K. Sikri, J., S. Abdul Nazeer, J., M.R. Shah, J.
Can a High Court review its own judgment after the Supreme Court has dismissed a Special Leave Petition (SLP) against that judgment? The Supreme Court of India addressed this critical question, clarifying the circumstances under which a review petition is maintainable in such cases. This judgment resolves conflicting views on the application of the doctrine of merger and principles of res judicata when dealing with SLPs dismissed by the Supreme Court. The three-judge bench, consisting of Justices A.K. Sikri, S. Abdul Nazeer, and M.R. Shah, delivered this judgment. The majority opinion was authored by Justice A.K. Sikri.

Case Background

The case originated from a money recovery suit filed by Sri Mahadeshwara Sahakara Sakkare Karkhane Ltd. (Respondent No. 1) against Khoday Distilleries Ltd. (Appellant) in the XXXI Additional City Civil Judge, Bangalore City. The suit sought recovery of ₹1,00,76,630 along with interest. The City Civil Judge dismissed the suit on November 11, 2005, citing limitation, despite acknowledging the debt.

Respondent No. 1 appealed to the High Court of Karnataka, which overturned the trial court’s decision on November 12, 2008, ruling that the suit was within the limitation period. The High Court then decreed the claimed amount with interest. The appellant challenged this decision in the Supreme Court through a Special Leave Petition (SLP), which was dismissed on December 04, 2009.

Following the dismissal of the SLP, Respondent No. 1 filed an execution petition. Subsequently, the High Court rectified its judgment on October 20, 2010, directing the appellant to pay the decretal amount with interest and costs, which became the subject of the execution proceedings.

Despite the dismissal of the SLP, the appellant filed a review petition in the High Court, arguing that the High Court had granted relief not sought by Respondent No. 1 in the original suit, specifically regarding the interest rate and period. This review petition was dismissed on September 09, 2011, on the grounds that the Supreme Court had already dismissed the SLP against the High Court’s judgment. The appellant then challenged the dismissal of the review petition in the present proceedings before the Supreme Court.

Timeline

Course of Proceedings

The case began in the XXXI Additional City Civil Judge, Bangalore City, where the suit was initially dismissed on the grounds of limitation. The High Court of Karnataka overturned this decision, decreeing the suit in favor of the respondent. The Supreme Court initially dismissed the SLP against the High Court’s decree. Subsequently, a review petition was filed in the High Court, which was also dismissed, leading to the present appeal before the Supreme Court.

Legal Framework

The judgment primarily concerns the interpretation and application of the following:

• Article 136 of the Constitution of India: This article confers special discretionary power on the Supreme Court to grant special leave to appeal. The Court noted that this power is not a right of appeal but a discretionary power to interfere in suitable cases. The article starts with a non-obstante clause, indicating it is a special jurisdiction and residuary power, unfettered by any statute or other provisions of Chapter IV of Part V of the Constitution.
• Section 96 of the Code of Civil Procedure, 1908: This section provides for appeals from original decrees of a civil court. In this case, the first appeal was filed under this section before the High Court of Karnataka.
• Order 47 Rule 1 of the Code of Civil Procedure, 1908: This provision deals with the review of judgments. The judgment discusses the circumstances under which a review petition is maintainable, particularly when a special leave petition has been dismissed by the Supreme Court.

Arguments

The arguments presented before the Supreme Court can be summarized as follows:

Appellant’s Arguments:

• 
  The High Court’s decree, particularly regarding the interest rate and period, was not based on the prayer made by the plaintiff in the original suit. The appellant argued that the High Court granted relief that was not specifically sought by the respondent.
• 
  The dismissal of the Special Leave Petition (SLP) by the Supreme Court was in limine (at the threshold) and without a speaking order (without detailed reasoning). Therefore, it did not amount to a merger of the High Court’s judgment with that of the Supreme Court, and the High Court should have entertained the review petition.
• 
  The appellant contended that the High Court erred in dismissing the review petition solely on the ground that the SLP had been dismissed by the Supreme Court. They argued that the High Court should have considered the review petition on its merits.

Respondent’s Arguments:

• 
  The respondent argued that the dismissal of the SLP by the Supreme Court affirmed the High Court’s judgment, and therefore, the High Court had no jurisdiction to entertain a review petition.
• 
  The respondent relied on the judgment of the Supreme Court in Abbai Maligai Partnership Firm and Another v. K. Santhakumaran and Others [(1998) 7 SCC 386], which 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.
• 
  The respondent contended that the High Court was correct in dismissing the review petition because the Supreme Court had already dismissed the SLP.

Issues Framed by the Supreme Court

The core issue framed by the Supreme Court was:

1. Whether a review petition is maintainable before the High Court seeking review of a judgment against which the special leave petition has already been dismissed by the Supreme Court.

Treatment of the Issue by the Court

Authorities

The Supreme Court relied on the following authorities:

Cases:

Legal Provisions

Judgment

The Supreme Court analyzed the submissions and authorities as follows:

How each authority was viewed by the Court?

• The Supreme Court followed the principles laid down in Kunhayammed and Others v. State of Kerala and Another [(2000) 6 SCC 359], which clarified the doctrine of merger and its applicability to SLP dismissals.
• The Court distinguished Abbai Maligai Partnership Firm and Another v. K. Santhakumaran and Others [(1998) 7 SCC 386], stating that it was decided on its peculiar facts and did not lay down any principle of law.
• The Court reiterated that the dismissal of a Special Leave Petition (SLP) in limine (at the threshold) without a speaking order does not attract the doctrine of merger.
• The Court clarified that the law stated in a speaking order of the Supreme Court is binding under Article 141 of the Constitution, but this does not mean the order of the lower court is merged with the Supreme Court order.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the need to clarify the law regarding the maintainability of review petitions after the dismissal of Special Leave Petitions (SLPs). The Court emphasized the distinction between the dismissal of an SLP in limine and the exercise of appellate jurisdiction. The Court was also keen to ensure that the High Courts are not unduly restricted from exercising their review jurisdiction when the Supreme Court has not made a substantive pronouncement on the merits of the case.

The Court’s reasoning was primarily based on legal principles and precedents, with less emphasis on the specific facts of the case.

The Court considered alternative interpretations but rejected them in favor of a clear distinction between the dismissal of an SLP in limine and the exercise of appellate jurisdiction. The Court emphasized that a dismissal in limine does not amount to a substantive decision on the merits of the case.

The Court’s decision was that a review petition is maintainable in the High Court if the Special Leave Petition (SLP) was dismissed by the Supreme Court in limine (at the threshold) and without a speaking order (without giving reasons). The Court clarified that in such cases, the doctrine of merger does not apply, and the High Court retains the jurisdiction to review its own judgment.

The reasons for the decision can be summarized as follows:

• The dismissal of an SLP in limine without a speaking order does not amount to a merger of the High Court’s judgment with that of the Supreme Court.
• The Supreme Court’s dismissal of an SLP in limine is not a decision on the merits of the case but rather a refusal to exercise its discretionary appellate jurisdiction.
• The doctrine of merger applies only when the Supreme Court exercises its appellate jurisdiction and not when it dismisses an SLP at the preliminary stage.
• The High Court retains its jurisdiction to review its own judgment when the Supreme Court has not made a substantive pronouncement on the merits of the case.

The court quoted the following from the judgment:

• “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.”
• “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.”
• “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.”

There were no dissenting opinions in this case. The bench unanimously agreed on the interpretation and application of the doctrine of merger and the maintainability of review petitions.

Key Takeaways

The key practical implications of this judgment are:

• ✓ High Courts can entertain review petitions even after the Supreme Court has dismissed a Special Leave Petition (SLP), provided the SLP was dismissed in limine without a speaking order.
• ✓ The doctrine of merger does not apply when the Supreme Court dismisses an SLP in limine without a speaking order.
• ✓ Litigants can seek review of High Court judgments even after the dismissal of their SLP by the Supreme Court, if the above conditions are met.
• ✓ This judgment clarifies the scope of the Supreme Court’s discretionary power under Article 136 of the Constitution.

The potential future impact of this judgment includes:

• This judgment will serve as a guiding precedent for High Courts in determining the maintainability of review petitions after the dismissal of SLPs.
• It will reduce the number of cases where High Courts dismiss review petitions solely on the ground that the Supreme Court has dismissed the SLP, without considering the merits of the review.
• It will ensure that the High Courts retain their jurisdiction to correct errors in their judgments, even after the dismissal of an SLP by the Supreme Court, as long as the dismissal was in limine and without a speaking order.

Directions

The Supreme Court gave the following directions:

• In Civil Appeal arising out of Special Leave Petition (Civil) No. 490 of 2012, the order dated November 12, 2008, passed by the High Court was set aside, and the matter was remanded back to the High Court for deciding the review petition on merits.
• In Civil Appeal arising out of Special Leave Petition (Civil) No. 13792 of 2013, the Court held that the review petition was maintainable. The appeal of the appellant challenging the order dated December 12, 2012, on merits, was directed to be placed before the regular Board for decision.

Development of Law

The ratio decidendi of this case is that a review petition is maintainable before the High Court if the Special Leave Petition (SLP) against the original judgment was dismissed by the Supreme Court in limine (at the threshold) and without a speaking order. This judgment clarifies the application of the doctrine of merger and the jurisdiction of High Courts in such cases.

This judgment reinforces the principles laid down in Kunhayammed and Others v. State of Kerala and Another [(2000) 6 SCC 359] and settles the conflicting views expressed in various two-judge bench decisions of the Supreme Court. It clarifies that the mere dismissal of an SLP in limine does not bar the High Court from exercising its review jurisdiction.

Conclusion

In conclusion, the Supreme Court’s judgment in Khoday Distilleries Ltd. vs. Sri Mahadeshwara Sahakara Sakkare Karkhane Ltd. clarifies the maintainability of review petitions in High Courts after the dismissal of Special Leave Petitions by the Supreme Court. The Court held that if the SLP is dismissed in limine without a speaking order, the review petition is maintainable and should be decided on merits. This judgment settles conflicting views on the doctrine of merger and ensures that High Courts retain their jurisdiction to review their judgments in appropriate cases.