Can orders be reviewed because they relied on judgment which was later overruled? Supreme Court delivers split verdict

The dispute surrounding the Pune Municipal Corporation and Indore Development Authority judgments of the Supreme Court on Section 24 of the Land Acquisition Act of 2013, has revived again before the Supreme Court, this time on the question of the fate of a slew of cases which were decided based on the Pune judgment before the Indore judgment was delivered [Govt. of NCT of Delhi Through the Secretary, Land and Building Department and Another v. M/s KL Rathi Steels Limited and Others]..A bench of Justices MR Shah and BV Nagarathna delivered a split verdict on whether review petitions can be allowed with respect to those orders and judgments which were delivered by placing reliance on the 2014 Pune Municipal Corporation judgment before it was overruled by the Indore Development Authority verdict in 2020. Justice Shah said that such orders and judgments which were passed relying upon the earlier decision in the case of Pune Municipal Corporation, can be reviewed."The Constitution Bench of this Court in the aforesaid decision (of Indore Development Authority) has not only observed that the decision rendered in Pune Municipal Corporation (supra) is overruled but has also specifically observed that all other decisions in which Pune Municipal Corporation (supra) has been followed, are also overruled," Justice Shah stated while allowing review petitions against such orders. However, Justice Nagarathna differed stating that though the judgment in Pune Municipal Corporation has been overruled, it would only lose its value as a precedent subsequent to the dictum of the larger bench in Indore Development Authority. It cannot be a ground to not implement orders based on Pune Municipal Corporation as regards inter-se disputes between parties and delivered prior to Indore Development Authority.Hence, cases decided prior to Indore Development Authority based on the Pune Municipal Corporation cannot be reviewed, she held."Between February 21, 2018 till the date of pronouncement of the judgment by the larger bench in Indore Development Authority i.e., March 6, 2020, the High Courts were requested not to deal with cases arising under Section 24(2) of the Land Acquisition Act, 2013, and its applicability to acquisition arising under Land Acquisition Act, 1894, i.e. only insofar as acquisition initiated under Land Acquisition Act, 1894. But insofar as cases which were decided prior to the aforesaid directions issued by this Court or the High Court or cases decided even by this Court on the strength of the dictum in Pune Municipal Corporation cannot be set at naught between the parties to those cases," Justice Nagarathna ruled.Doing the same would open a pandora's box and would result in a large number of review petitions."This would open a Pandora’s Box and upset the binding nature of the decisions between the parties and be contrary to the doctrine of finality in litigation," Justice Nagarathna observed.In view of the disagreement, the matter is now likely to be decided by a larger bench of the top court..Background and arguments.The judgment was delivered on March 17 in a batch of review petitions under Article 137 of the Constitution of India 1950 read with Section 47 of the Civil Procedure Code 1908 (CPC) preferred by the Government of NCT of Delhi and Delhi Development Authority to review and recall the orders passed in a batch of civil appeals..In the civil appeals decided prior to Indore Development Authority judgment, a three-judge bench of the Supreme Court had placed reliance on its decision in Pune Municipal Corporation v. Harakchand Misirimal Solanki (2014), while dismissing/disposing off and holding and/or confirming the judgments of the respective High Courts declaring that the acquisition of the lands in question have lapsed in view of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (2013 Act). However, the decision in Pune Municipal Corporation was subsequently held to be per incuriam in 2018 in by another three-judge bench in Indore Development Authority v. Shailendra (dead) through Lrs. and Others (2018).This led to controversy because a three-judge bench could not hold a judgment of another three-judge bench to be per incuriam.In view of this, the matter was referred to a five-judge bench which in March 2020 in Indore Development Authority v. Manohar Lal and others (2020) overruled Pune Municipal Corporation.However, the 2018 Indore Development Authority judgment while holding the decision in the case of Pune Municipal Corporation to be per incuriam, had observed that the decisions rendered on the basis of Pune Municipal Corporation are open to be reviewed.Pursuant to that, the present review petitioners moved the Supreme Court stating that since the decision in Pune Municipal Corporation has been overruled, the orders passed in the respective civil appeals (as stated above) dismissing/disposing off the same relying upon the decision of Pune Municipal Corporation are also required to be reviewed/recalled..Opposing the review plea, the respondents argue that change in law in view of the subsequent decision of the Court cannot be a ground for review. It was further stated that even if the judgment in Indore Development Authority v. Manohar Lal has overruled the decision in Pune Municipal Corporation, the settled position inter parties may not be affected.The judgment in Indore Development Authority v. Manohar Lal can only be construed to be prospective in its operation and cannot reopen claims/cases which have already attained finality.It was further highlighted that in Indore Development Authority v. Manohar Lal, the Court was only concerned with the correctness of the law laid down in the case of Pune Municipal Corporation and it was not considering the appeals in relation to the said case. Therefore, it was submitted that merely overruling of the principles in the Pune Municipal Corporation by a subsequent judgment in Indore Development Authority v. Manohar Lal, will not dilute the binding effect of the said decision between the parties to the dispute.It was further argued that none of the conditions enumerated under Order 47 CPC and Order 47 of the Supreme Court Rules 2013 relating to to grounds of review, are satisfied. In support of their case, the respondents specifically highlighted that the explanation to Order 47 CPC states that the fact that the decision on a question of law on which the judgment of the Court is based has been reversed or modified by the subsequent decision of a superior court in any other case, shall not be a ground for the review of such judgment.Therefore, it was stated that no relief should be granted in favor of review petitioners..Judgment of Justice MR Shah.In his verdict, Justice Shah noted that in the 2018 Indore Development Authority v. Shailendra (dead), the correctness of case of Pune Municipal Corporation was doubted and it was later held to be per incuriam. Justice Shah highlighted that it was in this case, the Court observed that the decisions rendered on the basis of Pune Municipal Corporation are open to be reviewed leading to the present review petitions.He further noted that subsequently, the 2020 Indore Development Authority v. Manohar Lal specifically overruled the case of Pune Municipal Corporation and also all other decisions which relied on Pune Municipal Corporation.In view of the above circumstances, Justice Shah was of the view that none of the submissions on behalf of the respondents can be accepted.Highlighting the need to allow the review applications, Justice Shah observed,"It is also required to be noted that in most of the cases solely relying upon the earlier decision in the case of Pune Municipal Corporation (supra) and though the possession of the lands in question have been taken over and in many cases it might have been utilised/used by the beneficiary authorities, orders are passed declaring the deemed lapse of acquisition. The resultant effect would be to return the possession of the land/s which might have been used by the beneficiary authorities."Therefore also in the larger public interest, the review applications are required to be allowed and the respective appeals are required to be considered and decided afresh, Justice Shah stated.Hence, Justice Shah took the view that the review applications are to be allowed and the concerned public authorities should be given an opportunity to put forward their case afresh, which shall be in the larger public interest."The orders passed in the respective Civil Appeals are hereby recalled and the respective Civil Appeals are hereby ordered to be restored to their original file. Let the said Civil Appeals be considered in accordance with law and on their own merits and in light of the decision in the case of Indore Development Authority v. Manohar Lal (supra)," Justice Shah directed while allowing the review plea..Judgment of Justice BV Nagarathna.Justice Nagarathna noted that the point for consideration was whether the judgments delivered by following the dictum in Pune Municipal Corporation case, could be reviewed, reheard and decided afresh in light of the 2020 judgment in Indore Development Authority v. Shailendra (dead) which overruled Pune Municipal Corporation. Justice Nagarathna was of the view that the maintainability of the review petitions revolves around the Explanation to Order 47 Rule 1 CPC, which provides that when a decision on a question of law on which the judgment of the Court has been reversed or modified by the subsequent decision of the superior Court, it shall not be a ground for review of such judgment. She was of the view that the recalling of the judgments passed following the judgment in Pune Municipal Corporation, will have to be reconsidered in light of Order 47 Rule 1 CPC.Therefore, she noted that there are three main grounds under Order 47 CPC on which a review of a decree or order could be sought by an aggrieved person:- due to discovery of new and important matter or evidence;- due to a mistake or error apparent on the face of the record, or- on account of any other sufficient reason, may seek review of a judgment or order of this Court..It was further stated that the petitioners have relied majorly on the third aspect of the above rules. However, according to Justice Nagarathna, although the expression 'for any other sufficient reason' is wide enough to take within its scope and ambit many circumstances, Explanation to the said provision carves out an exception to the expression “for any other sufficient reason”.The Explanation to Order 47 Rule 1 CPC states that the fact that a decision on a question of law on which the judgment of the court is based has been reversed or modified by the subsequent decision of a superior court in any other case, shall not be a ground for the review of such judgment. Thus, the bar is for a court to review its judgment, when a court superior to it has subsequently reversed or modified a judgment on a question of law, Justice Nagarathna said.As far as this Court is concerned, a superior Court would mean a larger bench of this Court which would pass a judgment or order contrary to the judgments sought to be reviewed, she explained.Further, she also reasoned that reopening judgments in review on the ground that judgments relied upon have been overruled will lead to a situation where there would be no finality to the judgments of the Court. "If, on a question of law, a decision of a Court is reversed by a subsequent decision of a superior Court (Larger Bench in the instant case) and the same is reopened on the basis of the said subsequent decision there would be no finality of judgments of the Court even between the parties thereto. It is, hence, observed that even an erroneous judgment or order is binding on the parties thereto even if subsequently that very judgment is reversed in a subsequent decision of a superior Court. Otherwise, there would be chaos and no finality of any decision of a Court which is against public policy," Justice Nagarathna observed.If, in the mind of a Court there is a sufficient reason for the review of a judgment, it cannot be on the ground covered in the Explanation to Order 47 Rule 1 CPC, Justice Nagarathna made it clear.To substantiate her view, Justice Nagarathna placed reliance on decision in Shanti Devi v. State of Haryana, wherein it was observed that the contention that the judgment sought to be reviewed was overruled in another case, subsequently, is no reason for reviewing the said decision in view of the Explanation to Order 47 Rule 1 CPC..Justice Nagarathna then went on to explain as to what happens to the status of a judgment which has been subsequently overruled. Relying on the decision in Neelima Srivastava v. State of Uttar Pradesh (2021), she was of the view that such a judgment after being overruled, will stand denuded of its status as precedent. However, this does not mean that the said judgment of a competent court which attained finality and is binding inter-se between the parties need not be implemented even though it has been subsequently overruled. "Mere overruling of principles by a subsequent judgment will not dilute the binding effect of the decision on parties to the judgment overruled," she underscored..Mere overruling of principles by a subsequent judgment will not dilute the binding effect of the decision on parties to the judgment overruled.Justice BV Nagarathna.Considering the circumstances of the case, Justice Nagarathna observed, "The judgment in Pune Municipal Corporation having been overruled, it would only lose its value as a precedent subsequent to the dictum of the Larger Bench in Indore Development Authority and therefore, cannot be cited as a precedent. Hence, in my view, having regard to the scope and ambit of the Explanation to Order XLVII Rule 1 CPC, these review petitions are not maintainable and the judgment and the orders of this Court ought not be reviewed and the review petitions are liable to be dismissed."The judge also flagged the issue of the rising pendency in courts, and said that if the review petitions are allowed and are held to be maintainable, there would be hundreds of review petitions which would be filed seeking review of the decisions passed by various High Courts in petitions following the judgment in Pune Municipal Corporation. Doing so would open a pandora's box and upset the binding nature of the decisions between the parties, she held..Justice Nagarathna also highlighted that the decision in Pune Municipal Corporation and another decision follow its dictum was recalled by the Supreme Court on July 16, 2020. She stated that the orders passed recalling the decisions also require reconsideration.In this regard, she observed,"I must be forthright in saying that the recalling of the said Orders/Judgment dated 08.02.2018 and 31.08.2016 was done so in the absence of any arguments being advanced on the maintainability of review petitions itself as in the present cases and without taking into consideration the Explanation to Order XLVII Rule 1 CPC. I find that the Explanation to Order XLVII Rule 1 CPC is a bar to the very maintainability of these review petitions in these cases.".Lastly, she made it clear that the only relief which can be granted to the review petitioners is to extend the period for initiation of acquisition under the provisions of 2013 Act to a period of one year."Till then, in those cases where physical possession of the land has already been taken over by the acquiring body or has been handed over to the beneficiary the same shall continue to remain with the acquiring body or the beneficiary, as the case may be," she observed while disposing of the review plea..Senior Advocate Sanjay Poddar appeared for the review petitioners.Senior Advocates Shyam Divan, V Giri, Neeraj Kumar Jain and Vivek Chib appeared for the respondents..[Read Judgment]