Supreme Court clarifies the scope of review of land acquisition judgments post the Indore Development Authority ruling (17 March 2023)

Introduction

Date of the Judgment: 17 March 2023

Citation: 2023 INSC 259

Judges: M.R. Shah, J. and B.V. Nagarathna, J. (Divided Opinion)

Can a judgment be reviewed simply because the legal precedent it relied upon was later overruled? The Supreme Court of India recently grappled with this question in a batch of review petitions concerning land acquisition. These petitions sought to revisit earlier judgments that had applied the now-overruled decision of Pune Municipal Corporation v. Harakchand Misirimal Solanki. The core issue was whether the subsequent overruling of a precedent provides sufficient grounds for reviewing judgments that had relied on it. The bench was divided, with Justice M.R. Shah allowing the review petitions and Justice B.V. Nagarathna dissenting, emphasizing the limitations on review powers.

Case Background

The cases before the Supreme Court involved appeals against various High Court judgments. These judgments had declared that certain land acquisitions had lapsed under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (the 2013 Act). The High Courts had based their decisions on the interpretation of Section 24(2) of the 2013 Act as laid down by the Supreme Court in Pune Municipal Corporation v. Harakchand Misirimal Solanki, (2014) 3 SCC 183. The Government of NCT of Delhi and the Delhi Development Authority (DDA) were the primary applicants seeking review, arguing that the legal basis of the previous judgments had been overturned by a Constitution Bench of the Supreme Court in Indore Development Authority v. Manohar Lal & others, (2020) 8 SCC 129, which had specifically overruled Pune Municipal Corporation.

Timeline

Course of Proceedings

The various High Courts, relying on the precedent set by Pune Municipal Corporation, had ruled that land acquisitions had lapsed under Section 24(2) of the 2013 Act. These decisions were then appealed to the Supreme Court. The Supreme Court initially dismissed these appeals, adhering to the Pune Municipal Corporation ruling. However, the subsequent overruling of Pune Municipal Corporation by a Constitution Bench in Indore Development Authority led to the filing of the present review petitions. The applicants argued that the legal foundation of the earlier dismissals had been invalidated, necessitating a review of the judgments.

Legal Framework

The core legal issue revolves around Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (the 2013 Act), which states:

“(2) Notwithstanding anything contained in sub-section (1), in case of land acquisition proceedings initiated under the Land Acquisition Act, 1894 (1 of 1894), where an award under the said section 11 has been made five years or more prior to the commencement of this Act but the physical possession of the land has not been taken or the compensation has not been paid the said proceedings shall be deemed to have lapsed and the appropriate Government, if it so chooses, shall initiate the proceedings of such land acquisition afresh in accordance with the provisions of this Act:”

This section provides that if land acquisition proceedings under the Land Acquisition Act, 1894 (the 1894 Act) have not resulted in the taking of physical possession or payment of compensation for five years or more before the 2013 Act came into effect, the proceedings would lapse. The Supreme Court’s interpretation of this provision in Pune Municipal Corporation was that the failure to do either of the two would result in a lapse. This interpretation was overruled by the Constitution Bench in the case of Indore Development Authority, which held that the word “or” should be read as “nor” or “and”.

The review petitions were filed under Article 137 of the Constitution of India, which grants the Supreme Court the power to review its judgments, subject to any law made by Parliament or rules made under Article 145. The review process is also governed by Order XLVII Rule 1 of the Code of Civil Procedure (CPC), which specifies the grounds for review, including “any other sufficient reason.”

The Supreme Court Rules, 2013, Order XLVII, also states that no application for review will be entertained in a civil proceeding except on the ground mentioned in Order XLVII Rule 1 of the CPC.

Arguments

Applicants’ Arguments:

• The applicants, primarily the Government of NCT of Delhi and the DDA, argued that the dismissal of their civil appeals was based on the Pune Municipal Corporation judgment, which was specifically overruled by the Constitution Bench in Indore Development Authority.
• They contended that the Constitution Bench’s decision in Indore Development Authority not only overruled Pune Municipal Corporation but also all other decisions that followed it.
• They cited the earlier decision in Indore Development Authority v. Shailendra, (2018) 3 SCC 412, which had held that the decisions based on Pune Municipal Corporation were open to review.
• They argued that the power to review flows from Article 137 of the Constitution of India and that the principle of res judicata should not apply to questions of law when the law has been altered by a higher court.
• The applicants also highlighted that the judgment in Pune Municipal Corporation had been recalled by a three-judge bench.
• They relied on Mathura Prasad Bajoo Jaiswal & Others v. Dossibai N.B. Jeejeebhoy, (1970) 1 SCC 613, to support their argument that a change in law since an earlier decision prevents the earlier decision from operating as res judicata.
• They also cited Assistant Commissioner, Income Tax, Rajkot v. Saurashtra Kutch Stock Exchange Limited, (2008) 14 SCC 171, arguing that judicial decisions act retrospectively and that a later decision clarifies the correct principle of law, which must be applied retrospectively.
• The applicants emphasized that in many cases, possession of the lands had already been handed over to the DDA, which was to be used for public purposes and that the lapse of acquisition due to the incorrect interpretation of the law in Pune Municipal Corporation would harm public interest.
• They contended that a mistake on the part of the Court may also call for a review of the order, relying on Board of Control for Cricket in India v. Netaji Cricket Club (2005) 4 SCC 741.

Respondents’ Arguments:

• The respondents, primarily landowners, argued that a change in law due to a subsequent decision cannot be a ground for review.
• They contended that the Indore Development Authority judgment should be construed as prospective and should not reopen cases that had already attained finality.
• They submitted that the law operational at the time the High Court delivered its judgment was that laid down in Pune Municipal Corporation.
• They argued that the Constitution Bench in Indore Development Authority was only concerned with the correctness of the law laid down in Pune Municipal Corporation and Sree Balaji Nagar Residential Assn. v. State of Tamil Nadu (2015) 3 SCC 353, and did not intend to review judgments in those cases.
• They relied on BSNL v. Union of India (2006) 3 SCC 1, to argue that overruling a decision only affects its precedential value and does not affect the binding nature of a decision between the parties to the lis.
• They cited Neelima Srivastava v. State of U.P. (2021 SCC OnLine SC 610) to argue that the overruling of principles by a subsequent judgment does not dilute the binding effect of a decision between the parties.
• They contended that none of the conditions for review under Order 47 Rule 1 of the CPC and the Supreme Court Rules were satisfied.
• They pointed out that the Explanation to Order 47 of the CPC states that a subsequent reversal or modification of a decision on a question of law by a superior court is not a ground for review.
• They cited Beghar Foundation v. K.S. Puttaswamy (2021) 3 SCC 1, which observed that a change in law or a subsequent judgment of a larger bench is not a ground for review.
• They argued that the recall of the judgment in Pune Municipal Corporation does not provide any additional basis for review.

[TABLE] of Submissions by Parties:

Issues Framed by the Supreme Court

The Supreme Court considered the following key issues:

1. Whether the review petitions are maintainable under Article 137 of the Constitution of India and Order XLVII Rule 1 of the Code of Civil Procedure, 1908, and the Supreme Court Rules, 2013.
2. Whether the overruling of Pune Municipal Corporation by the Constitution Bench in Indore Development Authority provides a sufficient ground for reviewing the judgments that relied on the overruled precedent.
3. Whether the Explanation to Order XLVII Rule 1 CPC bars the review of judgments based on a change in law.
4. Whether the expression “any other sufficient reason” in Order XLVII Rule 1 CPC includes the overruling of a precedent.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

The Supreme Court considered the following authorities:

Cases:

Justice B.V. Nagarathna’s Dissenting Opinion:

• Justice Nagarathna dissented, holding that the review petitions were not maintainable.
• She argued that a change in law due to a subsequent decision cannot be a ground for review.
• She contended that the Indore Development Authority judgment should be construed as prospective and should not reopen cases that had already attained finality.
• She submitted that the law operational at the time the High Court delivered its judgment was that laid down in Pune Municipal Corporation.
• She held that the Constitution Bench in Indore Development Authority was only concerned with the correctness of the law laid down in Pune Municipal Corporation and Sree Balaji Nagar Residential Assn. v. State of Tamil Nadu and did not intend to review judgments in those cases.
• She relied on BSNL v. Union of India, to argue that overruling a decision only affects its precedential value and does not affect the binding nature of a decision between the parties to the lis.
• She cited Neelima Srivastava v. State of U.P., to argue that the overruling of principles by a subsequent judgment does not dilute the binding effect of a decision between the parties.
• She held that none of the conditions for review under Order 47 Rule 1 of the CPC and the Supreme Court Rules were satisfied.
• She pointed out that the Explanation to Order 47 of the CPC states that a subsequent reversal or modification of a decision on a question of law by a superior court is not a ground for review.
• She relied on Beghar Foundation v. K.S. Puttaswamy, which observed that a change in law or a subsequent judgment of a larger bench is not a ground for review.
• She held that the recall of the judgment in Pune Municipal Corporation does not provide any additional basis for review.
• She held that the Explanation to Order XLVII Rule 1 CPC carves out an exception to the expression “for any other sufficient reason”.

Decision-Making Flowchart

Ratio of the Judgment

The ratio of the judgment can be summarized as follows:

Sentiment of the Judgment

The sentiment of the judgment can be summarized as follows:

Conclusion

The Supreme Court’s decision in this case highlights the complexities surrounding the review of judgments when a legal precedent is overruled. The divided opinion underscores the tension between the need to correct judicial errors and the importance of maintaining the finality of judgments. Justice M.R. Shah’s opinion emphasizes the importance of ensuring that the correct law is applied, even if it means revisiting past decisions. His view is that the overruling of a precedent by a higher court is a valid ground for review, especially when public interest is at stake. On the other hand, Justice B.V. Nagarathna’s dissenting opinion prioritizes adherence to procedural rules and the finality of judgments. She argues that a change in law due to a subsequent decision cannot be a ground for review and that the Indore Development Authority judgment should be construed as prospective.

The judgment has significant implications for future cases involving land acquisition and other matters where a precedent has been overruled. It clarifies that judgments based on overruled precedents can be reviewed, especially when the overruling is by a Constitution Bench. However, the dissenting opinion also serves as a reminder of the limitations on review powers and the need to respect the finality of judgments. This case will likely be a key reference point in future discussions on the scope of review and the impact of overruling precedents. The final outcome of the review petitions will depend on the decision of the larger bench, which will have to resolve the conflict between the two opinions.