As SC Benches Fight Turf Battles, Precedents and Conventions Suffer

In the Supreme Court, a battle is being fought over judicial discipline and institutional integrity.

Supreme Court. Credit: Reuters

Credit: Reuters

New Delhi: On Thursday, two benches of the Supreme Court, one presided by Justice Arun Mishra and another by Justice Adarsh Kumar Goel, requested the Chief Justice of India Dipak Misra to consider, whether a larger bench has to decide the correctness of the decision rendered by a three-judge bench on Wednesday, February 21, in a land acquisition matter.

Their reference to the CJI has plunged the apex court into a fresh controversy involving their due adherence to precedents and conventions, even as the court is struggling to recover from the aftermath of the January 12 press conference of the four senior-most judges, where they expressed their extreme discomfort with the listing of sensitive matters by the CJI before preferred benches.

In order to understand the latest controversy, we need to explain the sequence of events, and the issues involved.

The chain of events

On Wednesday, February 21, a three-judge bench, comprising Justice Madan B. Lokur, Justice Kurian Joseph and Justice Deepak Gupta, in its order in the case of State of Haryana v M/s G.D.Goenka Tourism Corporation Limited, noted that an order passed by another three-judge bench on February 8 in Indore Development Authority v Shailendra (Dead) Through LRS. & Ors, had unsettled a long standing statement of law and had very serious repercussions on land acquisition cases.

On a request from the counsel, the Lokur-led bench adjourned the case to March 7, as part-heard matter. Therefore, the action of the two smaller benches on Thursday, in referring the matter to the CJI, for his consideration, so as to place the matter before an appropriate bench, is construed as preempting the decision of Lokur-led bench to continue to hear the matter on March 7.

The Lokur bench, in its order on February 21, recorded the observation of senior counsel, Mukul Rohatgi, that when a bench of three judges does not agree with the decision rendered by another bench of three judges, the appropriate course of action would be to refer the matter to a larger bench. Rohatgi brought to the attention of the bench that one of the three judges in Indore Development Authority had expressed that view, but the other two judges had apparently overruled it.

The Lokur bench strongly disapproved the manner the bench in Indore Development Authority overruled the previous decision on the subject, by another three-judge bench, rendered in 2014. The Lokur bench expressed its concern that such overruling of decisions by a later bench of the similar strength would compromise judicial discipline, and institutional integrity.

The issue

The Indore Development Authority case was decided by a bench of justices Arun Mishra, Adarsh Kumar Goel and Mohan M. Shantanagoudar. The main issue in this case is the interpretation of Section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.

Section 24 deals with the question when the land acquisition process under the previous Land Acquisition Act of 1894 – which the LARR Act, 2013, replaced – shall be deemed to have lapsed in certain cases. Thus, the provision says that the 2013 Act would apply to cases where no award, determining compensation, had been made under the 1894 Act. The 2013 Act will also apply to cases where an award under the 1894 Act had been made five years prior to the commencement of the 2013 Act, but the proceedings had lapsed, due to absence of physical possession of the land, or non-payment of compensation.

Section 24 has a proviso, which says that where an award has been made and compensation in respect of a majority of landholdings has not been deposited in the account of the beneficiaries, then, all beneficiaries, specified in the notification for acquisition under the 1894 Act shall be entitled to compensation in accordance with the provisions of the 2013 Act.

What the Arun Mishra bench said 

The Arun Mishra bench interpreted the provision to mean that parliament used two different expressions to convey two different meanings: under the main part of section 24(2), the words, “compensation has not been paid” have been used, whereas under the proviso, the words “has not been deposited in the account of the beneficiaries” have been used.

The proviso, the Arun Mishra bench said, operates in a different field, where the acquisition would not lapse under the old Act. This distinction, the Arun Mishra bench held, is the key to deny higher compensation under the 2013 Act, to those who refused to receive compensation under the old Act, and took advantage of their own wrong of filing litigation.

Based on this interpretation, the Arun Mishra bench, declared the judgment rendered in a previous case in 2014 by another three-Judge bench as per incurium.   The previous case was Pune Municipal Corporation v Harakchand Misirimal Solanki. This was decided by the bench comprising justices R.M. Lodha, justice Lokur and justice Kurian Joseph, on January 24, 2014.

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In Pune Municipal Corporation, the R.M. Lodha-bench held that a land acquisition under the 1894 Act would be deemed to have lapsed and would be covered under the 2013 Act, entitling the landowners to higher compensation, if compensation under the old Act had not been paid to the land owner or deposited with a competent court and retained in the treasury.

The R.M. Lodha bench did not make the nuanced distinction which the Arun Mishra-bench made between different expressions used in Section 24 and its proviso, to deny the benefit of higher compensation under the 2013 Act, to those who did not receive compensation under the old Act.

The Arun Mishra bench, however, held that this holding of R.M.Lodha bench was an obiter dictum, with no binding effect, because in Pune Municipal Corporation case, the high court had already quashed the land acquisition, which was not declared illegal by the Supreme Court. Therefore, the Arun Mishra bench reasoned that there was no need for the R.M. Lodha bench to declare the law on the subject, and since it was obiter, and therefore, per incuriam.

Justice Shantanagoudar’s dissent 

But the interesting thing here is that Justice Shantanagoudar did not agree with justices Arun Mishra and Goel on whether the decision in Pune Municipal Corporation is per incuriam or not. But the order said: “As the majority has taken the view that it is per incuriam, it is declared to be per incuriam”. In effect, therefore, two Judges of the three-Judge bench declared a previous judgment, rendered by three Judges, as per incuriam.

What happened on Wednesday

Rohatgi also submitted to the Lokur-led bench that a bench of three Judges cannot hold another decision rendered by a bench of three judges as per incuriam.

After hearing Rohatgi, the Lokur-led bench clearly held that the hearing is not concluded on the issue whether the matter should at all be referred to a larger bench or not.

When Rohatgi informed the bench that some cases have already been decided on the basis of the judgment rendered in Indore Development Authority, without the matter being referred to a larger bench, and that similar matters are likely to be decided by other benches and the high courts in the coming days, the Lokur-led bench thought it proper to restrain the high courts not to deal with cases relating to interpretation of Section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.

The Lokur-led bench also requested the concerned benches of the Supreme Court dealing with similar matters to defer the hearing until a decision is rendered one way or the other on the issue whether it should be referred to larger bench or not. “Apart from anything else, deferring the consideration would avoid inconvenience to the litigating parties, whether it is the State or individuals”, the bench had justified its order, which amounted to “stay”.

The precedents

The doctrine of precedent or stare decisis is best explained in Article 141 of the Constitution, which says that the law declared by the Supreme Court shall be binding on all courts within the territory of India. Supreme Court has held in 1955 that this provision refers to courts other than the Supreme Court.   The doctrine of stare decisis, it has been held, is not an inflexible rule of law, and cannot be permitted to perpetuate errors of the Supreme Court to the detriment of the general welfare of the public or a considerable section thereof.

The Supreme Court has held that it has the power to overrule its earlier decisions, subject to the caveat that the decision can only be overruled by a larger bench of the court. A coordinate or a smaller bench of the court would be bound by the earlier judgments of the court, the Supreme Court had held in a case, in 1995.

The reference to the Chief justice of India, for his consideration and constitution of a larger bench, is, by convention, is based on reasoning. Therefore, the reference to the CJI, by the two-judge benches on Thursday, for this purpose, without any reasoning, is against such convention.

Arguably, another convention which Justices Arun Mishra and Goel violated was that a two-Judge bench can refer a matter only to a three-judge bench, and not straightaway seek resolution by a larger bench. However, some scholars of the Supreme Court, cite precedents to the contrary.

The term “per incuriam” refers to a decision rendered by a court, in ignorance of the terms of a statute, or of a rule having the force of a statute. This could happen when the attention of the Court which has given such a decision, was not drawn to the relevant authorities or statutes by the arguing counsel. A judgment can also be per incuriam if it is not possible to reconcile its ratio with that of a previously pronounced judgment of a coequal or larger bench.

In Jai Singh v Municipal Corporation of Delhi (2010) the Supreme Court held that there should be consistency in the views as regards the decisions rendered by co-equal benches on the same issue; subsequent bench is to follow the decision rendered by the earlier co-ordinate bench, except in compelling circumstances, such as where the order of the earlier bench can be said to be per incuriam.

Some of the following precedents, culled out from a research paper, are relevant.

In U.P.Power Corporation Ltd. v Rajesh Kumar, (2012) the Supreme Court held that a judgment which erroneously appreciates or construes a binding precedent is not per incuriam.

In Dr.Chandra Prakash v State of Uttar Pradesh (2002) the Supreme Court held that in case a two-judge bench finds fault with the decision rendered by a three-Judge bench, then, in that case, the two-judge bench must restrain itself from referring the matter to the constitution bench, as judicial discipline and propriety as also the doctrine of binding precedent demands that a two-Judge bench must follow the decision given by a three-judge bench.

More relevant, in Keshav Mills Co.Ltd v Commissioner of Income Tax, Bombay North, Ahmedabad, (1965), the Supreme Court, apart from other tests, laid down the following, to reconsider and revise its earlier decisions.

“Is the court hearing such a plea (for reconsideration and revision) fairly unanimous that there is such an error in the earlier view? What would be the impact of the error on the general administration of law or on public good?… And, would the reversal of the earlier decision lead to public inconvenience, hardship or mischief?”

In another case decided in 1980, the Supreme Court held that every new discovery or argumentative novelty cannot undo or compel reconsideration of a binding precedent. Submissions sparkling with creative ingenuity and presented with high-pressure advocacy cannot persuade the Court to reopen what was laid down for the guidance of the nation, the Court observed in that case.

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