2002 (9) TMI 102 - SC - Income Tax

Whether another Division Bench or a Full Bench had jurisdiction or competence to review an earlier Division Bench division of that particular court? Whether it could be treated as affirmed, for whatsoever reasons, by the Supreme Court on a plea that in view of the decision having been dealt with by the Supreme Court the decision of the High Court was no longer available to be reviewed? Held that - Under article 141 of the Constitution, it is the law declared by the Supreme 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 not precluded from going into the question of law arising for decision before it and in that context entering into and examining the correctness or otherwise of the law stated and either affirming or overruling the view of law taken therein leaving the operative part untouched so as to remain binding on the parties thereto. Inasmuch as in the impugned judgment, the Full Bench has not adjudicated upon the issues arising for decision before it, we do not deem it .proper to enter into the merits of the controversy for the first time in exercise of the jurisdiction of this court under article 136 of the Constitution. We must have the benefit of the opinion of the Full Bench of the High Court as to the vires of the State legislation involved. Appeal allowed. The impugned judgment of the High Court is set aside. All the appeals shall stand restored before the Full Bench of the High Court and shall be heard and decided in accordance with law.

Issues Involved:
1. Constitutional validity of the Madras City Tenants Protection (Amendment) Act, 1994 (Tamil Nadu Act 2 of 1996).
2. Application of the doctrine of merger.
3. Interpretation and application of Article 141 of the Constitution of India.
4. Precedential value of the Division Bench decision in M. Varadaraja Pillai's case [1972] 85 Mad LW 760.
5. Jurisdiction and competence of the Full Bench to review the decision of the Division Bench.

Detailed Analysis:

1. Constitutional Validity of the Madras City Tenants Protection (Amendment) Act, 1994 (Tamil Nadu Act 2 of 1996):
The Madras City Tenants Protection (Amendment) Act, 1994, was enacted by the State Legislature and came into force on January 11, 1996. Its constitutional validity was challenged through several writ petitions in the High Court. The High Court's Division Bench referred to the precedent set in M. Varadaraja Pillai's case [1972] 85 Mad LW 760, which upheld the constitutional validity of an earlier amendment (Act No. 13 of 1960). The Full Bench, however, was tasked with reconsidering the correctness of this precedent.

2. Application of the Doctrine of Merger:
The Supreme Court clarified that the doctrine of merger has limited application. It stated that the doctrine does not universally apply to all orders and judgments. Specifically, the Court noted that the doctrine of merger applies primarily to the operative part of the order and not necessarily to the reasoning behind it. The Supreme Court cited several cases, including State of U.P. v. Mohammad Nooh, AIR 1958 SC 86, and State of Madras v. Madurai Mills Co. Ltd., AIR 1967 SC 681, to emphasize that the application of the doctrine depends on the nature of the appellate or revisional order and the scope of the statutory provisions conferring the jurisdiction.

3. Interpretation and Application of Article 141 of the Constitution of India:
Article 141 of the Constitution states that the law declared by the Supreme Court shall be binding on all courts within the territory of India. The Supreme Court held that for a declaration of law, there must be a speaking order. It reiterated that a summary dismissal without laying down any law does not constitute a declaration of law under Article 141. The Court referred to cases like Krishena Kumar v. Union of India [1990] 4 SCC 207 and State of U.P. v. Synthetics and Chemicals Ltd. [1991] 4 SCC 139 to support this interpretation.

4. Precedential Value of the Division Bench Decision in M. Varadaraja Pillai's Case [1972] 85 Mad LW 760:
The Supreme Court held that the decision in M. Varadaraja Pillai's case, although cited as a precedent, was not res judicata. The Court clarified that the earlier dismissal of appeals on technical grounds did not affirm the reasoning or the law laid down by the Division Bench in that case. Therefore, the Full Bench was not precluded from re-examining the correctness of the law stated in M. Varadaraja Pillai's case.

5. Jurisdiction and Competence of the Full Bench to Review the Decision of the Division Bench:
The Supreme Court stated that the Full Bench was competent to review the decision of the Division Bench in M. Varadaraja Pillai's case. The Full Bench was not dealing with a review application but was reconsidering the precedent set by the Division Bench. The Court emphasized that the Full Bench should not feel inhibited by the earlier dismissal of appeals by the Supreme Court, as those dismissals were based on technical grounds without any declaration of law.

Conclusion:
The Supreme Court allowed the appeals, set aside the impugned judgment of the Full Bench, and restored the appeals before the Full Bench of the High Court for a fresh hearing. The Full Bench was directed to hear and decide all the controversies arising in the writ petitions, including the constitutional validity of the Madras City Tenants Protection (Amendment) Act, 1994, without being influenced by the earlier dismissal of appeals by the Supreme Court. The Court also restored all interim orders passed by the High Court and allowed the High Court to reconsider them if necessary. The hearing before the Full Bench was to be expedited due to the large number of cases affected by the decision.

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