KHODAY DISTILLERIES LTD. (NOW KHODAY INDIA LIMITED) vs. SRI MAHADESHWARA SAHAKARA SAKKARE KARKHANE LTD.

1 NON-REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION SPECIAL LEAVE PETITION (Civil) No. 490 of 2012 Khoday Distilleries Ltd. & Ors. .. Petitioners Versus Mahadeshwara S.S.K. LTD. .. Respondent R D E R O 1. This special leave petition has been filed against the order of the High Court of Karnataka at Bangalore dated 9.9.2011 in RP No.96/2011 in RFA No.427 of 2006. On 20.1.2012 notice was issued on the special leave petition as well as on the prayer of JUDGMENT interim relief. The respondent entered appearance and filed a detailed counter affidavit and raised a preliminary objection about the maintainability of the special leave petition. 2. Shri Rajesh Mahale, learned counsel appearing for the respondent submitted that the petitioner had earlier challenged the judgment and order dated 12.11.2008 in RFA No.427 of 2006 Page 1 2 before this Court. The same came up for hearing before this Court on 4.12.2009 and the respondent entered appearance and opposed the petition. This Court, while condoning the delay in filing SLP,

Review Petition NO.96 of 2011 for reviewing the Judgment dated 12.11.2008 in RFA No.427 of 2006 before the High Court of Karnataka at Bangalore. Review petition was dismissed by the High Court by the impugned order dated 9.9.2011. Learned counsel placed considerable reliance on the three Judge Bench Judgment of this Court in Abbai Maligai Partnership Firm and another v. K. Santhakumaran and others (1998) 7 SCC 386 and contended that decision would squarely apply to the facts of this case and the High Court has rightly dismissed the review petition by holding that JUDGMENT when the Judgment and decree passed by the High Court was confirmed by the Supreme Court by dismissing the SLP, there was no question of entertaining the review petition. 3. Mr. Gopal Jain, learned counsel appearing for the petitioners submitted that the High Court has committed an error in dismissing the review petition since the earlier SLP was dismissed Page 2 3 by this Court on 4.12.2009 without stating any reason. Reliance was placed on a three Judge Bench Judgment of this Court in Kunhay Ammed and others v. State of Kerala and another

was dismissed at the admission stage by a non-speaking order it would not constitute res-judicata and does not culminate in merger of the impugned judgment and the High Court has committed a grave error in dismissing the review petition. 4. We notice that large number of review petitions are being filed by the parties even after dismissal of the SLPs by this Court, either by non-speaking orders or on merits, and depending upon the out- come of the review petitions again SLPs are being filed before this Court and both sides place reliance on the reasoning of the three JUDGMENT Judge Bench Judgment in Abbai Maligai Partnership Firm and another (supra) or Kunhay Ammed and others (supra), in respect of their rival contentions on maintainability. 5. We notice applying the ratio of the Judgments in Abbai Maligai Partnership Firm and another (supra) or Kunhay Ammed and others (supra) conflicting views are being expressed in Page 3 4 few of the subsequent judgments of this Court. In Meghamala and others v. G. Narasimha Reddy and others (2010) 8 SCC 383, this Court after referring to Abbai Maligai Partnership Firm

expressed the following view: “25. Thus, the law on the issue stands crystallised to the effect that in case a litigant files a review petition before filing the special leave petition before this Court and it remains pending till the special leave petition stands dismissed, the review petition deserves to be considered. In case it is filed subsequent to dismissal of the special leave petition, the process of filing review application amounts to abuse of process of the court. 26. In view of the above, we are of the considered opinion that filing of such a review application by the respondents at a belated stage amounts to abuse of process of the court and such an application is not maintainable. Thus, the High Court ought not to have entertained the writ petition against the order of dismissal of the review application by the Special Court and the order of the High Court to that extent is liable to be set aside.” JUDGMENT 6. In Palani Raman Catholic Mission v. S. Bagirathi Ammal (2009) 16 SCC 657 this Court has taken the view that review petition can be filed if no leave has been granted to file an appeal and until there is no appeal in the eye of law in the superior court, review can be preferred in the High Court under Order 47 Rule 1. Page 4 5 This Court, in that case, set aside the judgment of the High Court and directed the High Court to consider the review petition in accordance with law.

Kumar Vij and another (2010) 8 SCC 701 this Court held that the mere dismissal of a special leave petition at a preliminary stage does not constitute a binding precedent, and any order passed by the High Court placing reliance on earlier order, can still be challenged subsequently. 8. In K. Rajamouli v. A.V.K.N. Swamy i (2001) 5 SCC 37 following the Judgment in Abbai Maligai Partnership Firm and another (supra) and Kunhay Ammed and others (supra) this JUDGMENT Court further explained the principle of res-judicata and held as follows: “Following the decision in the case of Kunhayammed we are of the view that the dismissal of the special leave petition against the main judgment of the High Court would not constitute res judicata when a special leave petition is filed against the order passed in the review petition provided the review petition was filed prior to filing of special leave petition against the main judgment of the High Court. The position would be different where after dismissal of the special leave petition against the Page 5 6

9. A different note was struck by this Court in Gangadhara Palo v. Revenue Divisional Officer and another (2011) 4 SCC 602 and after referring to the Judgment in K. Rajamouli (supra) held as follows: JUDGMENT “We regret, we cannot agree. In our opinion, it will make no difference whether the review petition was filed in the High Court before the dismissal of the special leave petition or after the dismissal of the special leave petition. The important question really is whether the judgment of the High Court has merged into the judgment of this Court by the doctrine of merger or not. When this Court dismisses a special leave petition by giving some reasons, however meagre (it can be even of just one sentence), there will be a merger of the Page 6 7

10. We notice that in K. Rajamouli (supra) this Court has followed Kunhay Ammed and others (supra) and distinguished Abbai Maligai Partnership Firm and another (supra) and in Gangadhara Palo (supra) later Bench did not accept the view expressed in K. Rajamouli (supra). To this extent, there is some conflict between the Judgments in Gangadhara Palo (supra) and JUDGMENT K. Rajamouli (supra) which calls for resolution by a larger Bench. 11. We may also point out, in this connection, that Article 136 of the Constitution does not confer any right of appeal on any party but it confers a discretionary power on the Supreme Court to interfere in suitable cases. Clause 1 of Article 136 of the Constitution confers very wide and extensive powers on the Page 7 8 Supreme Court. Article commences with a non-obstante clause, the words are of over-riding effect and clearly indicate the intention of the framers of the Constitution that it is a special jurisdiction

of Chapter IV of Part V of the Constitution. The jurisdiction under Article 136 of the Constitution, of course, cannot be barred by statute since it is extraordinary power under Article 136. Article 136 is an extra-ordinary power which cannot be taken away by legislation. 12. We also notice that several statutes confer on aggrieved parties right of appeal to the Supreme Court in contra distinction with the powers conferred on the Supreme Court under Article 136 of the Constitution, for instance, Section 15Z of the Securities and JUDGMENT Exchange Board of India Act (SEBI), 1992 confers a right of appeal to any person aggrieved by any decision or order of the Securities Appellate Tribunal. So also various regulatory legislations provide for statutory right of appeal. To what extent, the principle of res- judicata and merger would apply in respect of a decision rendered by this Court while exercising its statutory power of appeal as well Page 8 9 as the one rendered while entertaining an appeal invoking Article 136 is not seen considered by the larger bench either in Abbai Maligai or Kunhay Ammed’ case, which is also, in our view, an

13. We notice considerable arguments are being raised before this Court as well as before various High Courts in the country on the maintainability of review petitions after the disposal of the special leave petition without granting leave but with or without assigning reasons on which also conflicting views are also being expressed by the two-Judge Benches of this Court. In order to resolve those conflicts and for proper guidance to the High Courts, we feel it would be appropriate that this matter be referred to a larger bench for an authoritative pronouncement. JUDGMENT ……………………………J. (K.S. Radhakrishnan) ….…………………………J. (Dipak Misra) New Delhi, October 19, 2012. Page 9 10 ORDER IN THE PROCEEDING PORTION

submits that he has paid the entire amount and the dispute is only with regard to the interest portion which roughly would come to Rs.1.62 crores. Considering the facts and circumstances of the case we are inclined to give a direction to the petitioner to pay Rs.1 crore to the respondent within a period of six weeks from today. There will be stay of realization of balance amount till the issue is decided finally. JUDGMENT Page 10