At the turn of this century, a three-judge bench in Kunhayammed v. State of Kerala (2000) 6 SCC 359, considered the consequence of a dismissal of a special leave petition (SLP) filed under Article 136 of the Constitution.
In a nutshell, the court divided the cases into two categories: when leave is granted, and where the SLP is dismissed without granting leave. In the second category, there are two sub-categories: dismissal of the SLP without any reason, and dismissal of the SLP on merits, with or without reasons. In the second sub-category, there is usually an indication that the SLP is dismissed as being without merits, or the court may give additional reasons for dismissing the SLP without granting leave. If reasons are given, they attract the applicability of Article 141; the reasons are the law declared by the Supreme Court.
Kunhayammed has held that if leave is granted, and the appeal dismissed even without giving any reason, the doctrine of merger would apply. But, if leave is not granted, there is no merger because there is, in law, no appeal. The “merger” implies that the mere dismissal makes the High Court’s order merge with the order of the Supreme Court; the view of the High Court is now the view of the Supreme Court and binding as law declared under Article 141. On the other hand, if the SLP is dismissed without leave being granted, there is no merger. The effect: the petitioner, whose SLP is dismissed, can file a review petition in the High Court against the very judgment that he had challenged under Article 136.
There was a controversy as to whether the review petition should be filed in the High Court before the SLP is dismissed, or it could be filed even after such dismissal. This controversy was referred to a larger bench in Khoday Distilleries Ltd. v Shri Mahadeshwara Sahakara Sakkare Karkhane Ltd. (2012) 12 SCC 291. A three-judge bench, seven years later, found no reason to differ from Kunhayammed and the matter was not referred to a five-judge bench. It was held that a review petition can be filed in the High Court before or after the dismissal of the SLP, because there is no merger. (Unfortunately, there was no indication of what is the status of a judgment of the High Court, when the Supreme Court has found no ground to interfere with it on merits).
This view requires reconsideration. In several cases, notice is issued in the SLP, counters and rejoinders are filed. These cases are heard on Tuesdays – which is called “Non-miscellaneous Day” or NMD. Although leave is not granted, there is a detailed hearing with counsel or senior counsel representing both sides. If the Supreme Court finds that the view taken by the High Court is incorrect, it is the normal practice to grant leave and allow the appeal. On the other hand, if the Supreme Court sees no reason to differ from the view of the High Court, it proceeds to dismiss the petition by merely stating: “There are no merits in the petition” or “There is no ground made out for interference with the impugned judgement”, or “The SLP is dismissed on grounds of delay and on merits” (when there is a delay as well).
It is submitted that when the SLPs are dismissed after notice and a hearing on merits, the Supreme Court’s order must be treated as approval of the High Court’s view. Thereafter, no review can be filed before a High Court. Further, the High Court’s view must be taken as binding throughout India, as if it is a law declared by the Supreme Court. This, of course, cannot be a universal rule and will depend on the facts of individual cases. If the High Court has merely dismissed a writ petition on grounds of alternate remedy or some other technical ground, and the Supreme Court dismisses the SLP “on merits”, there is no principle of law that was laid down by the High Court.
A practical example will illustrate this point. In Areva T&D India Ltd. v. DCIT (2012) 345 ITR 421, the Delhi High Court considered the scope of Explanation 3 to section 32(1)(ii) of the Income-tax Act, 1961 which read as follows:-
“(b) intangible assets, being know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature not being goodwill of a business or profession”.
The question was whether the phrase “any other business or commercial rights of similar nature” must be read ejusdem generis with patents, copyrights, trademarks i.e. these rights must be also be akin to intellectual property rights. The High Court held that these rights were not ejusdem generis. The special leave petition against this order was dismissed as: “The SLP is dismissed on the ground of delay as well as on merits”.
As the SLP was dismissed without granting leave, there is no merger, and a review can lie. It is this part of the Kunhayammed judgment that requires reconsideration. It is submitted that if the Delhi High Court has given an interpretation on a legal issue and, after hearing the parties, the Supreme Court found no ground to interfere, it must be understood that the Supreme Court has affirmed the view of the Delhi High Court. It is not necessary that the Supreme Court formally grants leave and then dismisses the appeal or dismisses the SLP by repeating the view of the High Court. In either case, the High Court’s view has been approved and must be treated as binding as if it is the law declared under Article 141. In other words, other High Courts or the Tribunal should not take a contrary view to that taken by the Delhi High Court in the above example.
If the Supreme Court has found no merits in the SLP can the High Court review its own order which the Supreme Court has effectively approved?
This difficulty was noticed in Kunhayammed but not dealt with. However, in para 30 of the judgment, a reference was made to an earlier decision in Junior Telecom Officers Forum v. Union of India, (1993) Supp (4) SCC 693, where the SLP was dismissed on merits. It was noted that counsel were heard on both sides and as the court had partly interfered with the order of the High Court, the Supreme Court has exercised its appellate jurisdiction vested in it under Article 136, though leave had not been formally granted and the special leave petition not formally converted into an appeal. It is submitted that when the SLP is dismissed after detailed pleadings and a hearing, the mere fact that leave is not formally granted makes no difference. The Court has heard both sides after notice and, de facto, exercised its appellate jurisdiction. Such dismissals on merits must be seen as approval of the High Court’s order.
Another three-judge bench in Abbai Maligai Partnership Firm v. K. Santhakumaran, (1998) 7 SCC 386 dismissed a special leave petition after hearing both sides. After the dismissal, the High Court entertained a review petition after a delayed period and took a completely different view. The Supreme Court came down heavily on the High Court and termed the very entertainment of the review petition as an affront to the order of the Supreme Court. It is submitted that this decision was erroneously distinguished on the ground that the review was entertained after a 221day delay and the doctrine of merger has not been discussed.
Nonetheless, the three-judge bench decision in Abbai Maligai had effectively held that the review could not be entertained after the dismissal of a special leave petition; the fact that there was a 221-day delay makes no difference to the legal principle. If the review was filed within time, would it cease to be an affront to the Supreme Court? Therefore, the Khoday ruling ought to have referred the matter to a larger bench because the views of three-judge benches in Kunhayammed and Abbai Maligai are in conflict. The legal status of a High Court decision that is not interfered with on merits also needs to be settled.
It is submitted that a review should not be entertained after dismissal of the SLP. If the facts indicate that the impugned judgment has been considered after hearing both sides, then the dismissal on merits should be equivalent to a mere dismissal after leave is granted. The granting of leave, which converts the petition into an appeal, is a mere matter of procedure. What is important is to determine whether the order of the High Court has been examined and found to require no interference on merits. Such dismissal must render the order of the High Court binding to the same extent as if a merger had taken place.
Arvind P Datar is a Senior Advocate.