S. Shanmugavel Nadar vs State of Tamil Nadu and Another

Leave granted.

Looking at the nature of the controversy arising for decision and theview which we propose to take of the matter before us, a detailed statementof the facts is not called for. We will briefly notice bare essential facts.The Madras City Tenants Protection (Amendment) Act, 1994 (Tamil NaduAct 2 of 1996) was enacted by the State Legislature and came into forcew.e.f. 11th January, 1996. The constitutional validity of this Act was put inissue by several writ petitions filed in the High Court. When the mattercame up for hearing before the Division Bench reliance on behalf of therespondents in the High Court was placed on Division Bench decision ofthe High Court dated 25th January, 1972 reported as M. Varadaraja Pillaiv. Salem Municipal Council, 85 LW 760.

Diverting a little in narration of facts it is necessary to note that at anearlier point of time the State Legislature had entitled the Madras CityTenants Protection (Amendment) Act, 1960 (Act No. 13 of 1960) wherebycertain amendments were incorporated in the Madras City TenantsProtection Act, 1921. Constitutional validity of Act No. 13 of 1960 waschallenged by filing several writ petitions which came up to be heard anddisposed of by M. Varadaraja Pillai's case (supra). The Constitutionalvalidity of Act No. 13 of 1960 was upheld.

Appeals (SIC) special leave were filed before this Court against theDivision Bench decision in M. Varadaraja Pillai's case. This Courtdismissed the appeals vide its order dated 10.9.1986. It will be useful toextract and reproduce the brief order of this Court in its entirety for it willhave a material bearing on the issue arising for decision before us in the present appeals. This Court held:-

"The Constitutional validity of Act 13 of 1960amending the Madras City Tenants' Protection Act,1921 is under challenge in these appeals. The State ofTamil Nadu was not made a party before the TrialCourt. However, The State was impleaded as asupplemental respondent in appeal as per orders of t heHigh Court. When the appellants lost the appeal, theysought leave to appeal to this Court. The State ofTamil Nadu was not made a party in the said leavepetition. In the SLP before this Court also the Stateof Tamil Nadu was not made a party. A challenge tothe constitutional validity of the Act cannot beconsidered or determined, in the absence of theconcerned State. The learned counsel now prays fortime to implead the State of Tamil Nadu. This appealis of the year 1973. In our view it is neither necessarynor proper to allow this prayer at this distance of time.No other point survives in these appeals. Therefore,we dismiss these appeals, but without any order as tocosts."

It is clear that this Court did not go into the question of constitutionalvalidity of Act 13 of 1960 nor did this Court apply its mind to thecorrectness or otherwise of the view taken by the High Court in M.Varadaraja Pillai's case. This Court simply dismissed the appeals as notproperly constituted, and hence incompetent, in view of the State of TamilNadu, a necessary party, having not been impleaded in the special leavepetitions and the appeals. Thus, briefly stated, the appeals were disposed ofwithout any adjudication on merits.

Now, as stated in opening para of this judgment, when the matter asto the constitutional validity of Act 2 of 1996 came up for hearing before aDivision Bench of the High Court, the decision in M. Varadaraja Pillai'scase was cited as a precedent and reliance was placed on behalf of therespondents on the law laid down therein. The Division Bench entertainedsome doubt about the correctness of the view of the law taken by the earlierDivision Bench in M. Varadaraja Pillai's case. However, consistentlywith the rules of judicial discipline and decorum, the Division Benchthought it fit to refer the matter to a Bench of three Judges (Full Bench) forreconsidering the decision of Madras High Court in M. Varadaraja Pillai'scase, assigning the reasons in support of the opinion formed by it. TheDivision Bench in the operative part of its order concluded as under:-

"The aforesaid decision in S.M. Transport'sCase, AIR 1963 SC 384, of the Supreme Court, was heavily relied uponby this Court in deciding Varadaraja Pillai's case 85 P.W.760 . However, the aforesaid aspect of the casepointed out by the Supreme Court does not appear tohave been taken note of. For all these reasons, we areof the view that the decision in Varadaraja Pillai's case 85 L.W. 760 requires re-consideration. Therefore,we are of the opinion that it is just and appropriate torefer these cases to a larger Bench."

When the Full Bench took up the hearing of the case, the order ofthe Supreme Court dated 10.9.1986, referred to hereinabove, was broughtto its notice. The Full Bench formed an opinion that in view of the appealsagainst the Division Bench decision in M. Varadaraja Pillai's case havingbeen dismissed by the Supreme Court, though on technical ground,nevertheless the Division Bench decision of the Madras High Court stoodmerged into the decision of the Supreme Court according to the doctrine ofmerger and, therefore, it was no more open for the Full Bench to examineand consider the correctness of the law laid down by the Division Bench inM. Varadaraja Pillai's case which, the Full Bench thought, would bedeemed to have been affirmed by the Supreme Court in view of the dismissalof the appeals there against.

Feeling aggrieved by the abovesaid decision of the Full Bench, theseappeals have been filed by special leave.

Having heard the learned counsel for the parties, we are of theopinion that these appeals deserve to be allowed and the decision of theFull Bench dated 30.8.2000 deserves to be set aside as erroneous for thereasons more than one as stated hereinafter.

Firstly, the doctrine of merger. Though loosely an expressionmerger of judgment, order or decision of a court or forum into thejudgment, order or decision of a superior forum is often employed, as ageneral rule the judgment or order having been dealt with by a superiorforum and having resulted in confirmation, reversal or modification, whatmerges is the operative part, i.e., the mandate or decree issued by the Courtwhich may have been expressed in positive or negative form. For example,take a case where the subordinate forum passes an order and the same,having been dealt with by a superior forum, is confirmed for reasonsdifferent from the one assigned by the subordinate forum what wouldmerge in the order of the superior forum is the operative part of the orderand not the reasoning of the subordinate forum; otherwise there would bean apparent contradiction. However, in certain cases, the reasons fordecision can also be said to have merged in the order of the superior court ifthe superior court has, while formulating its own judgment or order, eitheradopted or reiterated the reasoning, or recorded an express approval of thereasoning, incorporated in the judgment or order of the subordinate forum.

Secondly, the doctrine of merger has a limited application In Stateof U.P. v. Mohammad Nooth - AIR 1958 SC 86 the Constitution Benchby its majority speaking through S.R. Das, CJ so expressed itself, "while itis true that a decree of a court of first instance may be said to merge in thedecree passed on appeal therefrom or even in the order passed in revision, itdoes so only for certain purposes, namely, for the purposes of computingthe period of limitation for execution of the decree". A three Judge Benchin State of Madras Vs. Madurai Mills Co., Ltd., , held"the doctrine of merger is not a doctrine of rigid and universal applicationand it cannot be said that wherever their are two orders, one by the inferiorauthority and the other by a superior authority, passed in an appeal orrevision, there is a fusion or merger of two orders irrespective of thesubject-matter of the appellate or revisional order and the scope of theappeal or revision contemplated by the particular statute. The applicationof the doctrine depends on the nature of the appellate or revisional order ineach case and the scope of the statutory provisions conferring the appellateor revisional jurisdiction. (emphasis supplied). Recently a three-JudgeBench of this Court had an occasion to deal with doctrine of merger in Kunhayammed and Others Vs. State of Kerala and Another, ,and this Court reiterated that the doctrine of merger is not of universal orunlimited application; the nature of jurisdiction exercised by the superiorforum and the content or subject-matter of challenge laid or which couldhave been laid, shall have to be kept in view. (emphasis supplied). In thisview of the law, it cannot be said that the decision of this Court dated10.9.1986 had the effect of resulting in merger into the order of this Courtas regard the statement of law or the reasons recorded by the DivisionBench of the High Court in its impugned order. The contents of the orderof this Court clearly reveal that neither the merits of the order of the HighCourt nor the reasons recorded therein nor the law laid down thereby weregone into nor they could have been gone into.

Thirdly, as we have already indicated, in the present round oflitigation, the decision in M. Varadaraa Pillai' case was cited only as aprecedent and not as res judicata. The issue ought to have been examinedby the Full Bench in the light of Article 141 of the Constitution and not byapplying the doctrine of merger. Article 141 speaks of declaration of lawby the Supreme Court. For a declaration of law there should be a speech,i.e., a speaking order. In Krishena Kumar and Others Vs. Union of India and others, , this Court has held that the doctrine of precedent, that is beingbound by a previous decision, is limited to the decision itself and as to whatis necessarily involved in it. In State of U.P. and Another Vs. Synthetics and Chemicals Ltd. and Another, , R.M. Sahai, J. (vide para41) dealt with the issue in the light of the rule of sub-silentio. The questionposed was: can the decision of an Appellate Court be treated as a bindingdecision of the Appellate Court on a conclusion of law which was neitherraised nor preceded by any consideration or in other words can suchconclusion be considered as declaration of law? His Lordship held that therule of sub-silentio is an exception to the rule of precedents. " A decisionpasses sub-silentio, in the technical sense that has come to be attached tothat phrase, when the particular point of law involved in the decision is notperceived by the court or present to its mind." A court is not bound by anearlier decision if it was rendered 'without any argument, withoutreference to the crucial words of the rule and without any citation of theauthoirty'. A decision which is not express and is not founded on reasons,nor which proceeds on consideration of the issues, cannot be deemed to bea law declared, to have a binding effect as is contemplated by Article 141.His Lordship quoted the observation from B. Shama Rao Vs. The Union Territory of Pondicherry, , "it is trite to say that adecision is binding not because of its conclusions but in regard to its ratioand the principles, laid down therein". His Lordship tendered an advice ofwisdom - "restraint in dissenting or overruling is for sake of stability anduniformity but rigidity beyond reasonable limits is inimical to the growth oflaw."

Rup Diamonds and Others Vs. Union of India and Others, , is an authority for the proposition that apart altogether fromthe merits of the grounds for rejection, the mere rejection by a superiorforum, resulting in refusal of exercise of its jurisdiction which was invoked,could not by itself be construed as the imprimatur of the superior forum onthe correctness of the decisions sought to be appealed against. In SupremeCourt Employees Welfare Association v. Union of India and Ors. , this Court observed that a summary dismissal, without layingdown any law, is not a declaration of law envisaged by Article 141 of theConstitution. When reasons are given, the decision of the Supreme Courtbecomes one which attracts Article 141 of the Constitution which providesthat the law declared by the Supreme Court shall be binding on all thecourts within the territory of India. When no reasons are given, a dismissalsimpliciter is not a declaration of law by the Supreme Court under Article141 of the Constitution. In Indian Oil Corporation Ltd. v. State of Bihar and Ors. AIR 1986 SC 1780 this Court observed that the questionswhich can be said to have been decided by this Court expressly, implicitlyor even constructively, cannot be re-opened in subsequent proceedings; butneither on the principle of res judicata nor on any principle of public policyanalogues thereto, would the order of this Court bar the trial of identicalissue in separate proceedings merely on the basis of an uncertainassumption that the issues must have been decided by this Court at least by implication.

It follows from a review of several decisions of this Court that it isthe speech, express or necessarily implied, which only is the declaration oflaw by this Court within the meaning of Article 141 of the Constitution.

A situation, near similar to the one posed before us, has been dealt inSalmond's Jurisprudence (Twelfth Edition, at pp. 149-150) under thecaption "Circumstances destroying or weakening the binding force ofprecedent (perhaps) affirmation or reversal on a different ground". Itsometimes happens that a decision is affirmed or reversed on appeal on adifferent point. As an example, suppose that a case is decided in Courtof Appeal on ground A and then goes on appeal to the House of Lords,which decides it on ground B, nothing being said upon A. What, in suchcircumstances, is the authority of the decision on ground A in the Court of Appeal? Is the decision binding on the High Court, and on the Court ofAppeal itself in subsequent cases? The learned author notes the difficultyin the question being positively answered and then states: (i) the High Courtmay, for example shift the ground of its decision because it thinks that thisis the easiest way to decide the case, the point decided in the court belowbeing os some complexity. It is certainly possible to find cases in thereports where judgments affirmed on a different point have been regardedas authoritative for what they decided; (ii) the true view is that a decisioneither affirmed or reversed on another point is deprived of any absolutebinding force it might otherwise have had; but it remains an authoritywhich may be followed by a court that thinks that particular point to havebeen right decided.

In the present case, the order dated 10.9.1986 passed by this Courtcan be said to be a declaration of law limited only to two points -- (i) that ina petition putting in issue the constitutional validity of any State Legislationthe State is a necessary party and in its absence the issue cannot be goneinto, and (ii) that a belated prayer for impleading a necessary party may bedeclined by this Court exercising its jurisdiction under Article 136 of theConstitution if the granting of the prayer is considered by the Court neithernecessary nor proper to allow at the given distance of time. By no stretchof imagination can it be said that the reasoning or view of the law containedin the decision of the Division of the High Court in M. Varadaraja Pillai'scase had stood merged in the order of this court dated 10.9.1986 in suchsense as to amount to declaration of law under Article 141 by this Court orthat the order of this Court had affirmed the statement of law contained inthe decision of High Court.

We are clearly of the opinion that in spite of the dismissal of theappeals on 10.9.1986 by this Court on the ground of non-joinder ofnecessary party, though the operative part of the order of the DivisionBench stood merged in the decision of this Court, the remaining part of theorder of the Division Bench of the High Court cannot be said to havemerged in the order of this Court dated 10.9.1986 nor did the order of thisCourt make any declaration of law within the meaning of Article 141 ofthe Constitution either expressly or by necessary implication. Thestatement of law as contained in the Division Bench decision of the HighCourt in M. Varadaraja Pilai's case would therefore continue to remainthe decision of the High Court, binding as a precedent on subsequentbenches of coordinate or lesser strength but open to reconsideration by anybench of the same High Court with a coram of judges more than two.

The Full Bench was not dealing with a prayer for review of theearlier decision of the Division Bench in M. Varadaraja Pillai's case andfor setting it aside. Had it been so, a different question would have arisen,namely, whether another Division Bench or a Full Bench had jurisdiction orcompetence to review an earlier Division Bench decision of that particularCourt and whether it could be treated as affirmed, for whatsoever reasons,by the Supreme Court on a plea that in view of the decision having beendealt with by the Supreme Court he decision of the High Court was nolonger available to be reviewed. We need not here go into the question,whether it was a case of review, or whether the review application shouldhave been filed in the High Court or Supreme Court. Such a question is not arising before us.

Under Article 141 of the Constitution, it is the law declared by theSupreme Court, which is binding on all Courts within the territory of India.Inasmuch as no law was declared by this Court, the Full Bench was notprecluded from going into the question of law arising for decision before itand in that context entering into and examining the correctness or otherwiseof the law stated by the Division Bench in M. Varadaraja Pillai's case andeither affirming or overruling the view of law taken therein leaving theoperative part untouched so as to remain binding on parties thereto.

Inasmuch as in the impugned judgment, the Full Bench has notadjudicated upon the issues arising for decision before it, we do not deem itproper to enter into the merits of the controversy for the first timein exercise of the jurisdiction of this Court under Article 136 of theConstitution. We must have the benefit of the opinion of the Full Bench ofthe High Court as to the vires of the State legislation involved.

For the foregoing reasons, the appeals are allowed. The impugnedjudgment of the High Court is set aside. All the appeals shall stand restoredbefore the Full Bench of the High Court and shall be heard and decided inaccordance with law. The Full Bench while doing so, shall not feelinhibited by the fact that the appeals against the decision in M. VaradarajaPillai's case were dismissed by this Court which, as we have already stated,were dismissed only on the technical ground without any law being laiddown by this Court. We also clarify that in view of the time that hasalready been lost, the Full Bench may proceed to hear and decide all thecontroversies arising for decision in the writ petitions in the High Court,that is, the Full Bench may obviate the need of sending the matter back tothe Division Bench for hearing on such other issues as are not decided by it.Instead it may decide all the issues raised in the writ petitions fully andfinally so far as the High Court is concerned. The hearing before the FullBench shall be expedited as there are a number of writ petitions and a largenumber of cases are likely to be affected by the view that the Full Benchmay ultimately take. In view of the writ petitions having been restored forhearing on the file of the High Court, we also clarify that all the interimorders, which were passed by the High Court shall also stand restored.Needless to say the High Court shall have the liberty of reconsidering theinterim orders passed by it if any such occasion arises.